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Where is Our Milk Being Produced, Who is Buying it ? Rick Naczi ADADC Inc. The number of occasions of milk drinking per capita has “slipped” over time as well for younger kids and adults age 50. Kids 0-5 had 2.4 fewer milk occasions/week in 2012 vs. 2006. Source: Kantar Worldpanel.

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The number of occasions of milk drinking per capita has “slipped” over time as well for younger kids and adults age 50

Kids 0-5

had 2.4 fewer milk occasions/week in 2012 vs. 2006

Source: Kantar Worldpanel


Monthly “slipped” over time as well for younger kids and adults age 50MilkHistorical Snapshot: Milk Sales Maintain Downturn Through 2013 YTD; Average Prices Still Remain Down $0.20 From December Of 2012

Milk Sales % Chg- based on ADADC Multi-Outlet

Annual Average % Chg.

$4.32

7/14/2013

-4.1%

7/14/2013

Note: Milk includes White Milk, Eggnog, Buttermilk and Kefir milk segments

Source: IRI DMI Custom database,

ADADC Multi-Outlet.

Multi-Outlet (MULO) retail channel includes: Grocery, Drug, Walmart, Club, Dollar, Military, and AO Mass stores


Declining sales growing population falling per capita consumption
Declining Sales + Growing Population = Falling Per Capita consumption

Since 2002, fluid milk through all channels has declined over 4%, while population has grown almost 12%

* Includes all milk products, buttermilk, eggnog and other misc. products

Source: USDA/AMS


Beverage Milk Consumption by Age

Annual Eatings Per Capita

Percentage of households with children under age 18

Source: GfK Consulting


How will this gr o w i n g consumer base affect us beverage categories in 2020
How Will this consumptiongrowingConsumer Base Affect US Beverage Categories in 2020?

  • Boomers getting older

  • 12% of population age 65+

  • Fast growing

  • +36% 2010-20 versus +6% Other Age Groups

  • Growth of 15 million

  • Between 2010-20

People Age 65+


How will this gr o w i n g consumer base affect us beverage categories in 20201
How consumptionWill this growingConsumer Base Affect US Beverage Categories in 2020?

  • Largest minority group

  • 16% population

  • Fastest growing

  • +33% 2010-20 vs +6% Non-Hispanic

  • Growth of 17 million

  • Between 2010-20

HISPANICS


In 2012 fluid milk declines most significantly through retail the major channel
In 2012, Fluid Milk Declines Most significantly through Retail, The Major Channel

2011 Milk Sales

Share by Channel

Foodservice

14.2%

Schools

7.2%

Retail

Measured through IRI

69.8%

Sources: Prime/MilkPEP All Channel Tracking, 2011;

NPD/Crest;

SymphonyIRI, DMI Custom DB Multi-Outlet Data (MULO), includes: Grocery, Drug, Wal-Mart, Club (ex. Costco), Dollar, Military and Mass Stores. Excludes Convenience Stores.


ADADC Multi-Outlet Milk Sales/Pricing: Retail, The Major Channel Milk Sales Are Down Nearly -3% For 2013 YTD, As Prices Begin Increasing

ADADC Multi-Outlet – Data Through 7-14-2013

Volume % Chg. vs. Year Ago

Total Fluid Milk Volume Share

2013 YTD - ADADC

Average Price Per Volume

Grocery outlet declining while All Other outlets are growing, as consumers find lower average prices at Club stores

All Other outlets have much lower prices than traditional Grocery stores

“All Other” Outlet includes: Walmart, Club, Dollar, Military, AO Mass

Source: IRI DMI Custom database,

ADADC Multi-Outlet.

Multi-Outlet (MULO) retail channel includes: Grocery, Drug, Walmart, Club, Dollar, Military, and AO Mass stores


Volume growth by beverage category
Volume Growth by Beverage Category Retail, The Major Channel

Source: Beverage Marketing Corporation


Fastest growing milk segments
Fastest Growing Milk Segments Retail, The Major Channel


Adadc multi outlet milk segments 2013 ytd jul 14th
ADADC Multi-Outlet Milk Segments: Retail, The Major Channel 2013 YTD (Jul 14th)

Share

of Milk

% Chg

vsYago

Snapshot based on combined ADADC Multi-Outlet

Source: IRI DMI Custom database,

ADADC Multi-Outlet.

Multi-Outlet (MULO) retail channel includes: Grocery, Drug, Walmart, Club, Dollar, Military, and AO Mass stores


ADADC Multi-Outlet Milk Segments: Retail, The Major Channel 2013 YTD (Jul 14th)

Share

of Milk

% Chg

vsYago

Snapshot based on combined ADADC Multi-Outlet

Source: IRI DMI Custom database,

ADADC Multi-Outlet.

Multi-Outlet (MULO) retail channel includes: Grocery, Drug, Walmart, Club, Dollar, Military, and AO Mass stores


Adadc multi outlet milk segments 2013 ytd jul 14th1
ADADC Multi-Outlet Milk Segments: Retail, The Major Channel 2013 YTD (Jul 14th)

Snapshot based on combined ADADC Multi-Outlet

Share

of Milk

% Chg

vsYago

Share of % Chg

Milk + Non-Dairy Yago

Source: IRI DMI Custom database,

ADADC Multi-Outlet.

Multi-Outlet (MULO) retail channel includes: Grocery, Drug, Walmart, Club, Dollar, Military, and AO Mass stores


Milk s strengths do not fully align with consumer beverage needs
Milk’s Strengths Do Not Fully Align With Consumer Beverage Needs

Source: Kantar World Panel

12 months ending March 2012


Competitiveness ramped up
Competitiveness Ramped Up Needs

Today

The number of choices Consumers have at retail has exploded in the past 40 years

2000’s

  • Milk

  • Soft Drinks

  • Coffee

  • Juice

  • Bottled Water

  • RTD Juice

  • Teas

  • Wellness

  • Sports Drinks

  • Flavored Teas

  • Functional Bevs

  • Energy Drinks

  • Enhanced Water

  • RTD Coffee

  • Almond Drink

  • Coconut Bevs

  • Vegetable/Fruit Blend Juice

  • Sparkling Juice

  • Fusion Drinks

  • Fermented Tea

  • Coconut Water

  • Milk

  • Soft Drinks

  • Coffee

  • Juice

  • Bottled Water

  • RTD Juice

  • Teas

  • Wellness

  • Sports Drinks

  • Flavored Teas

  • Functional Beverages

  • Energy Drinks

  • Enhanced Water

  • RTD Coffee

  • Almond Drink

  • Coconut Bevs

1990’s

  • Milk

  • Soft Drinks

  • Coffee

  • Juice

  • Bottled Water

  • RTD Juice

  • Teas

  • Wellness

  • Sports Drinks

  • Flavored Teas

1980’s

  • Milk

  • Soft Drinks

  • Coffee

  • Juice

  • Bottled Water

  • RTD Juice

  • Teas

1970’s

  • Milk

  • Soft Drinks

  • Coffee

  • Juice


Total U.S. new milk product introductions account for only 5% of all new beverages introduced worldwide

Source: Innova


Many new U.S. products were familiar forms, flavors 5% of all new beverages introduced worldwide

Outside the box

TruMoo Limited Edition Halloween Orange Color Vanilla Milk

Friendly Farms Pumpkin Spice Milk

Shamrock Farms' Rockin' Refuel Protein Fortified Low Fat Strawberry Milk Drink

Lucerne Protein + Refuel Protein Fortified Dairy Beverage: Chocolate

Core Power 26g Protein Honey

Source: Innova


Beyond our borders milk multi taskers
Beyond our borders 5% of all new beverages introduced worldwideMilk Multi-Taskers

  • Vitamin B for Energy, Immune System

  • Fiber for Intestinal Health

  • Vitamin A for Healthy Eyes

  • Coconut Water for Hydration

  • Glucosamine for Healthy Joints

Skimmed Milk Drink Enriched with Plantsterol.

Scientifically proven. Skimmed milk drink with additional plantsterol. Actively reduces cholesterol.

NesfluidHydra Nutrition Renforce Cocoa Flavored Milk Drink with Coconut Water. For enhanced hydration

NutricimaBliss Smoothie Fruit Milk: Orange and Pineapple. Contains vitamins A, C, and E for immunity; vitamin B complex for energy

Jalea Vital with vitamin B6 to boost the immune system

Vanilla flavored semi-skimmed milk with added vitamins and minerals. With vitamin A for healthy eyes.

Japan: Yakult Compressed Healthy Glucosamine Dairy Drink: Apple. Includes glucosamine to strengthen chondrocyte. Also include chondroitin for the endurance of cartilage. Added 20% of apple citrus to give refreshing flavors.

Fibre to boost intestinal transit

Source: Innova


Worst of the worst
Worst of the Worst 5% of all new beverages introduced worldwide

Walgreens - East Windsor, NJ

Stewarts - Ballston Spa, NY


Cvs new hyde park
CVS New Hyde Park 5% of all new beverages introduced worldwide

Before

After


Walgreen s nyc and western ny
Walgreen’s NYC and Western NY 5% of all new beverages introduced worldwide


Specialty coffee accounts for significant and growing share of fluid milk through restaurants
Specialty Coffee Accounts for Significant and Growing Share of Fluid Milk Through Restaurants

Servings of Milk and Specialty Coffee are used to gauge Milk’s performance at restaurants:

  • as servings of milk

  • as ingredient in other beverages such as specialty coffee and shakes

    - Specialty Coffee drinks often contain at least an 8 oz. serving of Milk*

* As determined by review of ingredient/nutrition data on Starbuck’s and McDonald’s websites

Source: NPD/Crest


McDonald’s: Despicable Me & Fluid Milk of Fluid Milk Through Restaurants

Milk Jug Packaging

Promotional Materials

McPlay App


Safeway: Make It with Milk of Fluid Milk Through Restaurants

April 2013: 2 weeks in 1400 stores nationwide

  • Results

  • Higher sales volume

  • Retailer support

  • Loyalty program activation

  • Online consumer engagement

Quaker

17%

Milk

5%

  • Next Steps

  • Monitor long-term behavior change

  • Expand to more retailers for sustained effort

  • Make It with branded Milk

  • Support with print campaign and social media



Thank you rnaczi@adadc com
Thank You Followed [email protected]


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