An innovative approach to the traditional US milk category

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An innovative approach to the traditional US milk category

Article Date: 10/04/2015 

 

Emmet Doyle, North America Office, Bord Bia - Irish Food Board 

In the US, fluid milk sales have been declining for the past four decades. In recent years, this is due to the rise in popularity of alternative beverages, including plant-based milks such as almond milk. Euromonitor projects that traditional pateurised milk sales will fall by as much as 10.8% between 2014-2019.

Such poor category performance, coupled with an increase of health-conscious consumers, has led to innovation in the dairy category. Fairlife milk which was launched in the US in February 2015, is a premium-priced, value-added milk, costing on average double the price of standard milk. At Walmart in Secaucus, New York, fairlife whole milk 52 fl oz* (1.54 litre) is priced at $3.98 or 7.7¢ fl oz, while Walmart’s own brand whole milk is $3.27 for 1 gallon or 2.6¢ fl oz.

However, fairlife contains 50% more protein, 30% more calcium, 50% less sugars and no lactose compared to traditional milk. Fairlife, using its patented ultra-filtration technology ,can extract and recombine the components of milk, adding additional protein molecules and extracting the lactose molecules. No additional protein powders or nutritional supplements are added, so the milk remains natural.

To eradicate the distribution problems which many start-ups face, Select Milk Producers, the owners of fairlife, have gone into partnership with the Coca Cola Company, which will oversee all distribution through their Minute Maid division. The idea is to adopt a similar approach to Simply Orange, Coca Cola Company’s premium orange juice line, where product awareness and trial was achieved through mass market advertising and in-store sampling.

US consumers are divided on fairlife due to its association with Coca Cola and fairlife’s high price point, but according to Mike Saint John, President of North America’s Minute Maid division, retailers in Denver who ran a pilot test grew their milk sales for the first time in 40 years.

It will be interesting to note whether higher priced innovative products in traditional categories can be accepted by the masses and become a staple in consumers’ diets or whether such products remain niche due to their premium price point and additional nutritional offerings.

For more information, please contact emmet.doyle@bordbia.ie  



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