The Dairy Case Management Program: Does It Mooove More Milk?

Dairy farmer check-off contributions are used to fund a variety of generic commodity promotion programs. Historically, generic advertising of fluid milk and cheese have constituted the majority share of check-off budgets for dairy products. In recent years, however, slow growth in dairy farmer check-off revenues, combined with sharp increases in media advertising costs, has prompted a shift away from generic advertising to other nonadvertising commodity promotion activities. Recently, new store-level marketing efforts by the American Dairy Association and Dairy Council (ADADC) have focused on implementing retail category management (CM) programs for fluid milk products in the dairy case – the Dairy Case Management Program (DCMP). This program aims to improve the management, appearance, and operation of the dairy case in retail stores, with the ultimate goal of increasing per capita milk consumption. Retailers have long recognized category management as a promotional tool for marketing their products, and grocery retailers have applied various methods of using space in dairy cases to encourage consumers to buy dairy products. The CM process involves managing product categories as strategic business units and customizing them on a store-by-store basis to satisfy customer needs. The expectation of increased sales provides an incentive for retailers to adopt CM programs. However, to milk producers who fund DCMP efforts through their checkoff investments, the underlying expectation is that these activities will increase consumption. A CM program aimed at understanding consumer preferences and strategically redefining a category accordingly should increase sales growth. It is reasonable then to hypothesize that a successful multi-store/market application could increase overall market sales volume and per capita consumption levels. To test this hypothesis we investigate a case-study application of the DCMP in the Hudson Valley region of New York State.