Online Dairy Sales Grow as Yogurt and Cottage Cheese Lead
A report from data analytics firm Circana found that ecommerce is accounting for an increasing share of dairy sales. The findings were presented during the company’s webinar, Rising to the Top in Dairy: What Are the Opportunities to Connect with Consumers Now and in the Future. Growth in online dairy sales was recorded across nearly every retail format, including Walmart, Kroger, Albertsons, Aldi and Lidl.
Christine Boule, Circana’s vice-president for Client Insights, Food and Beverage, said ecommerce represented 13% of dairy product growth. She also reported that 113% of growth in dairy dollar sales came from ecommerce, while physical-store dairy sales declined overall. For non-dairy edible food, ecommerce accounted for 91% of dollar growth, according to the figures she cited.
Online dairy sales have recorded a compound annual growth rate of about 20% over the past four years. Most consumers who buy dairy online receive their orders through delivery. Boule said this reflected a change in the view that perishable food was unsuitable for delivery. Amazon has reported a 50% increase in monthly active consumers buying perishables since the beginning of the year; shoppers including perishables in their orders purchase an average of three times more units per order.
Cheese snack kits had the highest online penetration among dairy subcategories. Online purchases represented 22.4% of sales in that category, with the remainder bought in stores. Deli cheese had the lowest ecommerce share: 91.8% of consumers purchasing cheese from deli counters did so at a physical location. Ice cream was the only other dairy category with online sales below 10%, at 9.1%. Boule identified the risk of products melting during delivery as one factor affecting that result.
Circana’s Dairy 15 includes milk; butter, margarine and spreads; cottage cheese; cream cheese; natural and processed cheese; cheese snack kits; creams and creamers; refrigerated desserts; refrigerated whipped toppings; sour cream; yogurt; deli refrigerated dips; deli cheese; ice cream and sherbet; and frozen novelties. About 12.7% of the $19.7 billion in reported milk sales came from online purchases.
John Crawford, Circana’s principal for Client Insights in Dairy, identified yogurt and cottage cheese as leading categories because both recorded double-digit growth. Refrigerated yogurt drinks, which are not separately classified in the Dairy 15, had the strongest year-on-year increase in the dairy sector, rising 22% in dollar terms and 14% by volume. Yogurt generated 56% of Dairy 15 growth, while yogurt drinks contributed 21%, together accounting for 77%. Cottage cheese sales increased 16.9% in dollar terms and 13.6% by volume.
