Fluid Milk Category Management – A Retail Approach to Improving Milk Sales

From " Milk – It Does a Body Good " to " Got Milk? " to " 3-A-Day for Dairy, " you've seen the advertisements and commercials aimed at increasing demand for fluid milk and dairy products. Generic advertising of dairy products has been around for many years and has been shown to increase consumer demand and improve the net returns to producers who fund the activities. However, in recent years, strong increases in media advertising costs have prompted a shift in investments to other types of demand-enhancing activities. One such example is a new store-level marketing effort by the American Dairy Association and Dairy Council (ADADC) focused on implementing retail category management (CM) programs for fluid milk products in the dairy case – the Dairy Case Management Program (DCMP). Implemented in over 600 retail grocery stores in New York State and funded by New York dairy farmers, the program is intended to improve the management, appearance, and operation of the dairy case, with the ultimate goal of increasing per capita fluid milk consumption. CM involves managing product categories as strategic business units and customizing them on a store-by-store basis to satisfy consumer needs. The expectation of increased sales provides an incentive for retailers to adopt CM programs. However, to milk producers who fund