This form of e-commerce is especially popular among the millennial consumer, who represents more than $200 billion in spending power, the most of any generation in the U.S. Unfortunately, they also represent a segment that is declining in milk consumption.
Part of our strategy of the dairy checkoff is to identify opportunities where dairy can be emphasized or even introduced into new possibilities, such as those in the e-commerce industry. This is an area that is big business. In 2017, retail e-commerce sales worldwide exceeded $2 trillion, according to a report by eMarketer.
So we began exploring more about this business beyond the traditional bricks-and-mortar outlets where dairy has been a mainstay for decades. And we followed our checkoff strategy of seeking a potential partner that could bring expertise and resources to the table.
Alignment with farmers’ values
Peapod fit the bill nicely, starting with the fact it met another important aspect the checkoff seeks in partners: The company’s values and hard work ethic align perfectly with those of our dairy farmers. Peapod is a family-owned company that has been involved in the grocery delivery business for almost 30 years.
Today, Peapod is the largest online grocery delivery store in the U.S. with more than 40 million orders delivered to date. It is available in 24 metro markets across New York, New Jersey, Connecticut, Rhode Island, Massachusetts, New Hampshire, Illinois, Wisconsin, Indiana, Pennsylvania, Maryland, District of Columbia and Virginia.
Peapod didn’t need to be sold on dairy – milk and other products have been offered on its platform for some time. But through DMI, Peapod began to understand the farmer story and the hard work you put into producing nutritious products every day.
Your story resonated with them because they understand how it’s often the story that sells the product to the customer.
Results a reason for optimism
Originally, we agreed to a one-day pilot test on National Farmers Day (Oct. 12) that would use the farmer story to promote sales of fairlife milk on Peapod’s channel. This would give us an idea if we could lift sales in this untapped territory for the checkoff. However, Peapod began to see a greater potential and extended the one-day promotion to a five-week period.
Peapod used videos and the story of fairlife’s founders at its site in offering a $6 promotion for two 52-ounce products. The result showed what’s possible for dairy in the e-commerce world. Sales of fairlife were up well over 100 percent over the same time period of a year earlier. Total fluid milk sold through its platform was up 8.5 percent. More encouraging was that fluid milk sales didn’t dip during the sixth week after the promotion ended.
This work has given the checkoff what we need, which is proof there is a place for an e-commerce strategy in our plan to grow sales and build trust. Bricks-and-mortar retail as we know it isn’t disappearing … but neither is e-commerce. So this isn’t an “either/or” proposition for us. We’ve got to meet consumers where they are.
We’ll look for ways to possibly expand our work with Peapod or others that are significant players in the e-commerce realm.
And as we continue to evolve this strategy, it will be done with the checkoff conducting careful evaluation that the people we work with align with your values and can deliver an impact to your bottom line.
PHOTO: Image courtesy of DMI.
Your Dairy Checkoff in Action – The following update is provided by Dairy Management Inc. (DMI), which manages the national dairy checkoff program on behalf of America’s dairy farmers and dairy importers. DMI is the domestic and international planning and management organization responsible for increasing sales of and demand for dairy products and ingredients.
- Executive Vice President
- Dairy Management Inc.