In the midst of ongoing troubling reports about the pandemic, there may be some encouraging news for the dairy industry. Retail sales of dairy products have increased, just one of many changing buying behaviors resulting from COVID-19.
Whether it’s butter’s astounding 45% increase in retail sales from the previous year or milk’s more modest 8% growth, those in the dairy industry hope the trend will stick. There’s still immediate concern over decreased demand in food service, but stronger retail sales may be a hopeful sign that dairy is poised for a comeback over the long term.
Why Consumers Return to the Familiar
The year 2020 is arguably among the most stressful years in our lifetimes. And, what do we do when everything seems to go wrong? We reach for the familiar. That’s because the brain is wired to crave predictability in the midst of uncertainty. It’s one reason why millions of Americans have been binge watching favorite TV shows, listening to music from their high-school days and reading old books.
Starting something new and unfamiliar feels like a lot of effort and might come with unexpected surprises. Nostalgia plays a big role in people’s desire for normalcy, and couldn’t we all use a few less twists and turns these days?
These natural tendencies may help explain consumers’ return to familiar dairy products and classic American eats from their childhoods. A glass of milk with cookies, buttered toast and jam and a heaping serving of mac and cheese fly in the face of popular diet trends, but it’s what they instinctively reach for when seeking comfort.
Unlike some trending foods like plant-based “milks,” everyone knows where real dairy comes from and appreciates the strict chain of custody required in dairy operations. The pure simplicity of real dairy is appealing and familiar, whereas the production processes required to turn various grains into liquid form can seem perplexing and uncertain.
Of course, the biggest factor bringing consumers back to dairy is the satisfyingly great taste and superior nutrition, making them question why they ever gave it up in the first place. The significantly lower price point doesn’t hurt either.
Food Service Sales Still Struggling
Even though consumers are stocking up on dairy products from their local grocery stores, restaurants and other food service businesses continue to struggle to manage their supply chains and inventory. Restaurant closures in early spring 2020 resulted in a rapid decline in demand for dairy products. With the shutdown of an entire market sector, many dairy farmers ended up having to dump their milk.
Schools also shut down, causing even greater strain; school lunches in particular account for 7% to 15% of milk sales. Demand will continue to be influenced by whether schools offer virtual learning versus in-person classes. Some school lunch programs have continued despite virtual learning, with buses transporting meals instead of students.
Controlling Volatile Dairy Pricing for Food Manufacturing
Despite its struggles in recent months and years, there are opportunities for the dairy industry. One real dairy product that has maintained a strong market share and continues to keep pace with plant-based alternatives is all-natural whey protein concentrate. Unlike milk, butter, cream and cheese, whey protein remains relatively price stable, even during times of uncertainty.
When produced as part of the cheesemaking process, whey protein isolate, such as Grande Ultra®, can add a boost of protein to snack bars and beverages. If maintaining shelf life and reducing fat and calories in soups, sauces and baked goods are the goal, Grande Bravo® functional whey protein is a product of choice. Want to reduce sodium in mac and cheese or other cheesy applications? Then Grande Gusto® cheese replacement can deliver.
Whey protein also appeals to consumers and food manufactures alike for its attractive price point, experiencing much less price volatility than other forms of dairy. Contact Grande Custom Ingredients Group to see how whey protein can improve your formulations and profits.