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Perspective:
Dairy Marketing

Dairy consumption at the confluence of life stage and shifting demographics

John Talbot

As CEO of the California Milk Advisory Board (CMAB), John Talbot brings more than 25 years of marketing and brand management experience to his role representing the No. 1 dairy producing state and building awareness and demand for California milk and dairy products across the United States and internationally. He contributes this column exclusively for Cheese Market News®.

There are some fundamental shifts going on in consumer dynamics right now. Some may be more pronounced here in California, but all are worth our attention as we continue to evolve the dairy story.

From some recent quantitative consumer research, we see that there are several discordant forces influencing dairy consumption. First, you have the confluence of life stage events and shifting demographics changing the complexion of our consumer audience.

Then on top of that, there is an overlay of plant-based food messaging and the endless exasperation of misinformation on the nutritional value of food conspiring to devalue our products.

The big surprise from all this is we see strength coming from an unexpected place — millennials — and market softness coming from an important core segment — baby boomers. In 2017, California millennials were up +7.4 percent in milk, +2.3 percent in cheese and +11.6 percent in butter, significantly higher than the U.S. average. Conversely, the dairy declines are coming from mainstream baby boomers, who were not only down in dairy but also down significantly in meat, chicken and eggs.

So, what’s going on?

The influence of life stage events on consumer behavior is nothing new, but its relevance today in evaluating our two largest demographic cohorts, millennials and baby boomers, is enlightening. When considering the millennial generation, the clear factor is they’re now in the prime of their child bearing years. Despite a continued decline in the general birth rate, the dialogue around appropriate health care and nutrition for young families is at a full pitch. On the other end, those invincible boomers are retiring at a rate of 10,000 per day and have lots of time to contemplate life. More importantly, they’re confronting their own mortality for the first time as family and friends start to face serious illness.

What makes this more interesting in California is the interaction between these life stage events and a significant shift in ethnic makeup. At nearly 40 percent, Hispanics now make up the dominant share of the population while Caucasians are only 38 percent and the fast-growing Asian segment is 14 percent. Then overlay the incessant drum beat of the vegan agenda and its more popular but less intense cousin, the plant-based food movement, and you have a shifting consumer base with a new food agenda and a mind-numbing cacophony of misinformation.

With that as the context, let’s look a little closer at millennials. In California, Hispanics make up 45 percent of the millennial generation and they bring with them a 15 percent higher birth rate than the general population as well as significantly higher per capita consumption of dairy products. They also love to grocery shop, spend more per store visit, and have much less interest in vegan foods compared to the general market. This strength and growth among millennials is very good news and should be encouraging to all markets with growing Hispanic populations.

Boomers on the other hand are a very different story. California boomers still account for one-third of all dairy sales but are declining and the segment is made up of 52 percent Caucasians who have lower per capita consumption than Hispanics. In typical California fashion, all these newly minted retirees are out to live aggressively active lifestyles while also determined to avoid the maladies they see slowing down their family and friends. Subsequently, they’re in a determined search for new ways to stay healthy. There is extensive interest and experimentation going on with a slew of diets ranging from veganism at one extreme to Paleo, Whole30, Keto and a host of others, many of which are not dairy-friendly.

Google Search analysis shows the greatest interest in veganism is among Californians, followed by those in other western states. Californians are 57 percent more likely to claim “I am a vegan” than the national average. Even though the majority don’t follow the strict vegan doctrine, the vegan narrative around health is having a broad impact as it translates into the more popular “plant-based food” movement. A plant-based diet is considered healthier, better tasting and more flexible. It’s more about reducing animal product consumption, not eliminating it.

According to Health Focus International, 26 percent of consumers ate less meat in last 12 months, 48 percent want to eat more plant-based food, and 29 percent follow a Flexitarian diet. Health, weight loss and general wellbeing are the main reasons to reduce consumption of animal food products but very interestingly, most people couldn’t answer when asked why plant-based food would be better for their health. To general consumers, plant-based food is cool, and it makes them sound smart and in-the-know. They use it to justify their shifting food consumption habits even if they don’t stick to it religiously.

There are many loyal dairy consumers getting caught up in the experimentation, and we must be very careful how we address those who may be a little more adventurous. We find dairy and dairy “alternatives” in the same refrigerators and consumers don’t seem to have anywhere near the problem with that as we do.

They’re already consuming both. Telling consumers they are wrong is not going to gain their loyalty, we must show them how we fit in.

We can’t combat veganism, or even plant-based food, as an all-or-nothing proposition. It’s not about plant versus animal. We must embrace the idea of BALANCE. We should rejoice in the value of all healthy, wholesome foods that, IN BALANCE, provide the greatest nutritional value and emotional security. In a time when consumers are completely confused by all the different extremist health and nutrition claims out there, the idea of balance just innately makes sense.

We need to stop talking about dairy “alternatives” — that just legitimizes them. Identifying these products as “alternatives” and then telling our consumers they are wrong to buy them is not a recipe for success. Sure, there’s a vital role for science and education and we need to push hard to get facts in front of them. But facts alone will not influence people today. We must reconnect with the VALUES that make dairy great — wholesomeness and indulgence. We need to position ourselves in new and refreshing ways around the positive merits of our products, not the negative features of others.

If you think about it, milk is the ultimate plant-based food. Cows eat plants and otherwise useless plant byproducts and in turn create one of the most wholesome products in the world. In honor of June dairy month, raise a milk toast to plant-based foods!

CMN

The views expressed by CMN’s guest columnists are their own opinions and do not necessarily reflect those of Cheese Market News®.

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