Chad Vincent, Dairy Farmers of Wisconsin
Chad Vincent, Dairy Farmers of Wisconsin
MADISON, Wis. – Despite the many challenges of 2020 brought on by the novel coronavirus pandemic, this year has seen dramatic growth in dairy product consumption. From specialty cheeses and single-serve snack size options to butter and milk, dairy categories are faring well at the supermarket.
Consumer eating habits changed as a result of shutdowns. People began cooking more and eating the majority of their meals at home. Thus, more dairy found its way into shoppers’ carts, leading to a spike in butter, cheese, milk and other dairy products.
On Oct. 7, the Dairy Signal, hosted by the Professional Dairy Producers of Wisconsin, welcomed Chad Vincent, CEO of Dairy Farmers of Wisconsin, and Brandon Scholz, president and CEO of the Wisconsin Grocers Association, to discuss product trends and challenges faced by grocery stores trying to meet the change in consumer preferences and demand.
“The transition of families having meals together as well as cooking at home has really changed the dynamic of the shopping experience,” Scholz said. “But it also challenges grocers to rethink their stocking and how they’re merchandising to their customers. The eat-at-home component is going to remain strong.”  
From the time the pandemic emerged in the United States, Vincent said butter sales are up 37%, cheese is up 20% and milk is up 6%. Over the last eight weeks, dairy is seeing double-digit growth, and milk remains up 2%-3%. This historic jump in dairy consumption comes on the heels of a 40-year decline.
Reports from DMI Research show that cereal consumption is up double digits, and the occurrence of people eating together before dinner time is up 25%. Cheese of all kinds – prepackaged, sliced and specialty – is a staple on many grocery lists now more than ever as people turn to it for cooking and snacking. Specialty cheese, in particular, is flying off the shelves with sale numbers up by double digits.
“We’re seeing massive growth in this area, and that’s great for Wisconsin because we make about half of the specialty cheese in this country, and 98% of grocery stores in the U.S. carry Wisconsin cheese,” Vincent said. “The vast majority of specialty cheese goes through grocery, so the processors that had specialty cheese and grocery distribution are doing great. A number of cheese companies are having record years.”
In response to a rise in snacking, some processors are serving up cheese with convenience in mind. Belgioioso has come out with bags of 1-ounce servings of cheese, and Sartori is doing 8-ounce bags of pre-cubed cheese.
“We can’t keep the prepacks and small-size cheese options on the shelf,” Vincent said. “This is great because the more cheese that gets sold, the more milk that gets sold out of Wisconsin.”
Grocery stores remained open throughout the pandemic to keep food on peoples’ plates but not without facing challenges.
“It has been a roller coaster ride in the grocery industry,” Scholz said. “Retailers, warehouses and the entire supply chain has struggled quite a bit at times while simultaneously keeping their doors open and trying to meet the needs of customers and employees. I rarely come across a grocery store that has enough people on staff. One store said they have 200 openings they could fill tomorrow.”
Scholz said he is astounded by the low numbers of COVID-19 cases in the grocery sector.
“It’s amazing we’ve seen fewer cases of positive COVID-19 tests as well as sickness, hospitalization and death in this industry since these folks deal with the public every single day,” Scholz said. “This is testimony to the safety and sanitization procedures grocers have in place in their stores to protect their employees and customers.”  
Customer shopping patterns have changed, and their trips to the store have been reduced. They buy more but are also forced to substitute and buy things they are not used to buying – whether it be a different kind of meat or type of produce. Keeping shelves stocked has been a challenge for grocers, who often receive less than what they order.
“Stores are not getting 100% of their orders in, which is why you might not see something on the shelf that was there last week,” Scholz said. “It’s a continuing problem grocers have to deal with. There’s consistency in our dairy industry, which is fantastic. But in canned goods and other things you see on the shelf, it’s not so consistent. Items are missing.”
When groceries were forced to shut down salad bars and self-serve items, stores got creative and began catering towards pick-up-and-go options, replacing those slots with precut cheese and sandwich meats instead.
“We’re certainly happy with the relationships we have with our dairy farmers in Wisconsin,” Scholz said. “That’s one of the categories throughout this challenge in which we’ve had good supply. Our relationships with dairy farmers have gotten even better. They’ve always been good, but they’ve been taken to a new level, which is very valuable.”  
The pandemic caused an explosion of online orders, pushing ecommerce to become a prominent part of the grocery business. Throughout the pandemic, online ordering skyrocketed, increasing by 350%.
“The way we’re shopping has changed dramatically,” Vincent said. “The trend of people shopping electronically has grown to what was projected for five years from now. Ecommerce purchases of milk are up 125% and up 114% for cheese. It’s amazing.”
Scholz agreed.
“Back in March, some stores might’ve had 2%-3% of their business online, and some stores had zero,” Scholz said. “It jumped to the point where it was 30% of their business. It scaled back to about half that but is now at a level where it’s going to stay.”
Keeping food flowing to families in need and children who are missing out on school lunches continues to be an important item on the to-do list for the state and Dairy Farmers of Wisconsin.
“We’ve been working with some really great food bank partnerships as well as Google logistics,” Vincent said. “This is a way for cheese to get to where it needs to at a cost advantage. But it’s not donated; it’s purchased for these markets. As long as these relationships are good for farmers, and processors can keep their nose above water on it, it’s a great plan for people who need food. It’s great for humanity. But a long-term donate product model is not sustainable.”
Of fluid milk, 6% goes into schools, which has not all been lost.
“We’re working hard to figure out how to get meals and dairy products to kids to make up for the lost lunches,” Vincent said. “We have folks working with school districts, and instead of giving kids a carton of milk, they’ll give them a gallon to take home with a bunch of premade meals for the week.”
Committed to moving dairy products, Dairy Farmers of Wisconsin has seven people around the country whose job is to call on the major retailers and find ways to get Wisconsin cheese and dairy into stores and moving through at an accelerated rate.
Meetings between Dairy Farmers of Wisconsin and cheese buyers have turned virtual – a change which has shortened the cheese-buying process and produced excellent outcomes. Dairy Farmers of Wisconsin ships cheese to buyers in advance, and during a virtual meeting, they bring on a dairy farmer who talks about and shows their farm. Buyers are making decisions on the spot and bringing in five to six new Wisconsin cheeses at once.  
“We look forward to taking our relationships with dairy farmers to a new level, especially as they work with grocers to put merchandising plans into place at the retail level to grow sales,” Scholz said. “The experience has been great so far.”