Restaurant patrons want milk

Dairy Foods, June, 2002

WASHINGTON--New research from the Fluid Milk Strategic Thinking Initiative (FMSTI), reveals that restaurant-goers want milk if it's promoted more, available in a variety of flavors and fat levels, and offered in branded, appealing, resealable plastic packages.

The data was collected during an on-going, three-part foodservice study that will identify ways to sell more milk in quick-serve restaurants, mid-scale restaurants like Denny's, or Old Country Buffet, upscale casual dining restaurants such as Applebee's, or Outback Steak House and cafeterias in office buildings and plants.

"We're learning that consumer demand for milk in restaurants is much higher than most restaurant operators expect," said International Dairy Foods Association v.p. of Marketing Tom Nagle. "With the explosion of new and exciting flavors and innovative packaging, consumers will order milk with a meal if they know it's available.

"We also see from consumer response that milk can serve as a catalyst for increased restaurant revenue in terms of increasing average check amounts and creating additional meal and snack purchases," Nagle said.

The first part of the research project, completed in 2001, found that restaurant operators view milk as a commodity beverage that has low consumer demand, little innovation and low profits.

The second part of the test explored consumer perception of milk in restaurants through focus group interviews. Consumers said they don't order milk in restaurants because they "don't think about ordering milk." They felt that milk served in restaurants isn't cold enough, and that, because milk in a restaurant usually comes in a glass and the "sell by" or expiration date cannot be seen, it isn't "fresh."

Contrary to operator perception, consumers had very positive reactions to milk in branded, value-added plastic single-serve packages. They said they would buy flavored and white milk in restaurants if it were offered in this type of packaging.

The third part of the effort, an in-market test, begins this month The test will use feedback from operators, processors and consumers to identify the best way, or combination of ways, to increase milk sales in restaurants.

FMSTI is a marketing think tank of the National "got milk?" Milk Mustache Campaign.

Top 10 Vendors of Refrigerated Yogurt and Yogurt Drinks (supermarkets
only)

                   Dollar Sales  % change  Unit Sales  % change
Vendor              (millions)   vs. Yago  (millions)  vs. Yago

Yoplait USA Inc.       $793        13.9%      885        11.8%
Dannon                 $646         8.2%      559         1.5%
Private Label          $313         8.6%      522         1.9%
Kraft Foods            $155       -12.2%      197       -10.6%
Stonyfield Farm         $84         9.9%       54        -6.0%
Colombo                 $62       -10.3%       78       -14.3%
YoFarm                  $42        31.0%       55        25.1%
Meadow Gold Dairy       $30         3.9%       20        -8.8%
Johanna Foods           $27         5.6%       53        -1.1%
Crowley Foods           $26        -7.0%       42        -7.4%

For 52 weeks ended April 21, 2002

Source: Information Resources Inc.