Milk Sales Are Up, but Don’t Bet on White Milk

Flavored milk is the shining star of the refrigerated milk category.

January 25, 2022

Chocolate Milk

ALEXANDRIA, Va.—Sales of white milk have dropped 2.3% year over year, but flavored milk increased 5.1%, reports Dairy Foods. IRI research data for the 52 weeks ended Nov. 28, 2021, show that dollar sales in the overall refrigerated milk category fell 1.5% to $14.27 billion for the fiscal year.

Unit sales of white milk stumbled, with a 5.6% drop to 4.07 billion. However, 4 of the top 10 milk brands (Hood, Prairie Farms, Fairlife and Organic Valley) did see positive growth in dollar and unit sales, with Fairlife posting a 19.7% gain in dollar sales and a 19.2% increase in unit sales. Conversely, the Dairy Pure brand’s dollar sales fell 67.1%, and its unit sales decreased by 65.7%.

The bright spot in the refrigerated milk category was flavored milk. Unit sales for the category rose 2.1% to 663 million. Seven of the top 10 brands (private label, Fairlife, Borden, Prairie Farms, Hood, Promised Land and Darigold) chalked up dollar and unit sales increases. Prairie Farms saw the highest gains, with dollar and unit sales up 20.7% and 15.9%, respectively. At the other end, TruMoo saw a 32.9% decrease in dollar sales and a 34.1% drop in unit sales.

According to this month’s Category Close-Up article in NACS Magazine, gross margins for the fluid milk category in convenience stores rose in 2020, from 23.23% to 23.82%, which helped boost gross profit per store 9.2% to a total of $11,859 yearly.

“What the pandemic in 2020 did was remind shoppers that c-stores often stock pantry essentials, like fluid milk, and those shoppers will be more apt to think of c-stores for future fill-in grocery trips,” said Jayme Gough, research manager, NACS. “Despite shoppers feeling comfortable returning to grocery stores for their staples, NACS CSX data show monthly fluid milk sales are higher than 2020 in all but one month so far in 2021.”

Private-label milks, including plant-based milks, stand out in the private-label space. In total U.S. multi-outlets for the 52 weeks ended Oct. 3, private-label milk was at a 49.3% market share and had dollar sales of $7.3 billion, a little less than half of the $15.3 billion for national ($7.9 million) and private-label brands.

According to 7-Eleven, about 8 out of every 10 Americans buy private-brand products to save money. Millennials have a particular affinity for the value and quality that the brands offer, the chain said, and are contributing to the growing popularity of retailer brands.

The opportunity for improved profits is a big motivator for retailers considering private-label products. “In some cases, margins could be 25% versus 18% for a national brand,” said Roy Strasburger, president of StrasGlobal, in a recent NACS Magazine article on private labels. Marketing and promotional control over the brands is another benefit, allowing c-stores to become destinations for products not available anywhere else. “If done successfully, it’s not the store pushing the product, but the product pushing the store,” Strasburger told NACS Magazine.