By Vivien Godfrey, CEO, Milk Processor Education Program
Facing a thirty-year decline in milk consumption, MilkPEP realized that it was imperative to understand and identify the most significant factors contributing to the decline in per capita milk consumption, as well as prioritize the largest, practical short- and longer-term growth opportunities for fluid milk. We also wanted to move beyond planning our programs a year at a time and identify ways that we could begin capturing opportunities over the next three to five years.
To assist in creating an actionable, strategic roadmap for the milk industry for the next three to five years, MilkPEP enlisted the expertise of The Monitor Group to work on Phase One. Monitor specializes in helping organizations strategically unlock their growth potential and developed a foundation of information that MilkPEP will eventually use to shape the long-range plan for the fluid milk industry.
Monitor was tasked with helping explain the most significant factors contributing to the decline in per capita milk consumption, as well as set priorities for the best and most practical short- and longer-term growth opportunities for fluid milk. These insights will be used by MilkPEP to prioritize opportunities for fluid milk, according to size of prize and likelihood of success.
During the course of this project, Monitor reached out to nearly 5,000 industry stakeholders and consumers to understand opportunities for the future, as well as barriers and drivers to milk consumption.
The work revealed several important findings with respect to food and beverage consumption in the United States, the most notable being that beverage consumption per capita has been flat for decades. This means that for milk to gain market share, it must steal share from other beverages as opposed to growing the category. In the case of milk, the fiercest competitor is water; its growth and ubiquity in our lives makes it a key target for milk processors.
Innovation Extremely Powerful
According to the findings, significant innovation - in products, branding, delivery systems and business models - has been extremely powerful for water marketers and other key food and beverage competitors. For milk to be competitive, processors must follow suit by creating new products that deliver value-added solutions to meet consumer needs.
Fortunately, milk is not alone in this battle; it can and should leverage the power of complementary foods and beverages, such as cereal. Throughout the last decade, milk complements have proven themselves to be significant drivers of consumption.
In terms of ways in which milk can drive both volume and value for the industry, Phase One of the work helped us understand that consumer occasions explain beverage consumption more powerfully than do demographics. In other words, time and place play a primary role in the decisions that people make with respect to beverages, including milk. Demographics also play a role, but our first opportunity for growth is in distinct occasions, with priority occasions against relevant demographics a second focus.
Principles and Focus
Phase One provided a framework for enabling MilkPEP to support growth in value and volume against these opportunities. This includes a number of important principles:
- Take fewer, bigger bets that will sufficiently unlock the potential of priority opportunities instead of spreading investment over a wider range of opportunities;
- Focus in-market messaging and programs on specific consumer behaviors linked to occasions that matter instead of focusing on broad claims and information about milk;
- For newer areas of opportunity, provide the industry with insights that will enable processors to unlock value for themselves; and
- Strip out any work that does not directly support priority opportunities to change consumer behavior that year.
The work also identified three areas of focus for the industry:
- "Defend" breakfast in the home. Given the enormity of the volume associated with breakfast consumption, we cannot let this core volume slip.
- "Extend" traditional milk-consumption behavior into lunch and dinner meals in the home. These meals already have some milk penetration in them, and even a small increase of milk consumption at these occasions will move the needle
- "Create" new milk-consumption behaviors between meals. Our primary focus will be post-workout chocolate milk consumption.
MilkPEP's work with Monitor is only the beginning. We must now work diligently to share the findings with the processor community and translate the consumption occasion priorities identified in Phase One into a concrete set of actions for MilkPEP over the next three years.
MilkPEP is excited about this project and the promise that it holds for the future of milk. If you have not seen a copy of the initial findings or would like to schedule a private meeting to review the report and discuss its implications, please contact Julie Buric, MilkPEP vice president of marketing, at jburic@milkpep.org or (202) 220-3547.