Leveraging Shopper Insights for the Organic Farm to Table Story Much has been written about the demise of dairy and fluid milk in particular This session will focus on successful marketing from an Organic Farmer Owned perspective the State of Sales in fluid dairy including headwinds in the ID: 816310
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Slide1
Slide2Navigating the Perceived Demise of Fluid Dairy
Leveraging Shopper Insights for the Organic Farm to Table Story
Slide3Much has been written about the demise of dairy and fluid milk in particular. This session will focus on successful marketing from an Organic Farmer Owned perspective, the ‘State of Sales’ in fluid dairy, including headwinds in the category as well as highlighting several segments that are bringing growth and innovation.
Slide4Who is Organic Valley?
Slide5What makes Organic Valley Different?
We are an organic, farmer-owned cooperative focused on:
Preserving small family farms
Increasing Organic Dairy Consumption & Agricultural Farm Land Producing Organically
How do we do it?
Providing a sustainable pay price for the farmer guaranteed on a yearly basis
Commitment to quality product
Slide6Farmers are Front and Center in our Marketing and Outreach
Customers and Consumers are invited to farm tours…
Organic Valley farm
Stony Pond Farm in VT
Slide7Organic Valley - The Pasture Raised Difference
Slide8Experts and Consumers Influence Milk and Organic Consumption/Purchasing
Motivation to purchase organic includes sustainability which consumers view as a combination of
Animal welfare
Climate change
Agricultural impact
American Academy of Pediatrics’ new Milk consumption recommendations for Infants and Young Children emphasizes importance of Milk
Source: American Academy of Pediatrics, 9.18.19
Source:
Hartman Organic & Natural 2018
Suggested Daily Water & Milk Intake for Infants & Young
Children
6-12 months
12-24 months
2-5 years
Water
4-8 oz/day
0.5-1 cup/day
8-32 oz/day
1-4 cups/day
8-40 oz/day
1-5 cups/day
Milk*
None
16-24
oz/day
2-3 cups/day
16-20 oz/day
2-2.5 cups/day
*Children ages 12-24 months are advised to drink whole milk and children
2 and older nonfat (skim) or low-fat (1%) Milk
Slide9Organic Shopper Motivations
Hartman Group, Organic & Natural 2016.
Slide10Who is the Organic Shopper?
Top Items in an Organic Milk Basket:
Organic Milk shoppers more likely to shop the perimeter
(incl other dairy, fruits/vegetables)
Free Range and Pasture Raised Eggs
Cage Free Eggs
Broccoflower
Fusilli
Kids Yogurt
Fruit Sauces
Berries
Tortellini
Yogurt Drink
Fresh Raspberries
9 out of 10 Households purchase Organic Products
Key demographic groups choose organic:
Millennials
Hispanics, Asians
Households with children <18
Source: Spins/IRI, 2018; Numerator Shopper Metrics, 52 weeks ending 1.26.2020
Organic Shoppers shop more frequently and spend more per trip
Nearly 30% Higher Basket Spend with Organic Milk
Organic $85.75 vs.
Total Milk $66.24
Slide11Organic Retail Trends
Source: Organic Trade Association’s 2018 Organic Industry Survey
Slide12State of Sales – Organic Market
Total U.S. Retail Dollar Sales – Natural and Conventional MULO Channels, 52 Weeks Ending 12/29/19
Organic is 2
nd
largest contributor to absolute $ growth in Total Food and Beverage
Top 10 Organic
Categories
Dollar Sales
% Growth
Produce
$4,239.4 M
3.9%
Refrigerated Milk
$1,568.6 M
0.2%
Refrigerated Juices & Functional Beverages
$946.8 M
5.5%
Bread & Baked Goods
$900.4 M
11.0%
Refrigerated Eggs
$791.8 M
2.0%
Wellness Bars & Gels
$720.8 M
8.6%
Shelf Stable Baby Food
$632.9 M
3.9%
Frozen Entrees
$583.2 M
(1.5%)
Refrigerated Yogurt & Kefir
$562.4 M
1.1%
Shelf Stable Soup
$549.6 M
1.5%
Slide13State of Sales - Top Organic Brands
(Total Organic F&B)
Total U.S. Retail Dollar Sales – Natural and Conventional MULO Channels, 52 Weeks Ending 12/29/19
Organic Valley is:
Top 5 Brand
(excl PL)
#1 Brand in Natural
Channel
Slide14State of Sales – Fluid Dairy Challenges
Industry Reporting thru 12/29/19
5 Yr CAGR
-2.8%
Slide15State of Sales – Plant Beverage
Industry Reporting thru 12/29/19
Almond is king.
While the overall category has grown, Almond has maintained the majority share (66% L52 wks).
Source: SPINS | MULO & NATURAL | 52 Weeks Ending 12/29/19
Plant Beverage +34% over the last 6 years
Slide16State of Sales – Fluid Dairy Growth Segments
Industry Reporting thru 12/29/19
Organic Milk – Flat
Grassfed Milk +121%
Lactose Free Milk +91%
Ultrafiltered Milk +132%
Source: SPINS | MULO & NATURAL | 52 Weeks Ending 12/29/19, 12/30/18, 12/31/17, 12/25/16
Slide17Organic Valley’s Innovation Journey
What’s on-trend with consumers?
Organic
More Protein
Less Sugar
Mission Based/Brands with a Purpose
Indulgence in moderation
Better-For-You/Clean Ingredients
Keto – Fat is back
What is winning in Dairy?
Organic
Grassfed
Lactose Free/
Ultrafiltered
What does this lead us to?
Slide18Organic Valley’s Innovation Journey
Positioned to Win
Organic
Lactose Free
Higher Protein
Less Sugar
Slide19Organic Valley’s Innovation Journey
Slide20Thank You!
Scott Maney Category Strategy & InsightsCheryl Straight Category Strategy & Insights
Slide21Questions?
https://www.facebook.com/OrganicValley/videos/10154443945580825/
https://www.facebook.com/OrganicValley/videos/2203654419741593/