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Whether you look at dollar sales or unit volume, when it comes to private label grocery sales, there is the dairy category. And then there is every other.
Milk, cheese, yogurt, butter. All of them are in the top 20 private label categories for 2011 sales, according to Nielsen records compiled for the 2012 PLMA Private Label Yearbook. Milk and cheese are the top two categories in dollar sales, with private label milk owning a whopping 60.8 percent share of the market. Only eggs – which often are lumped into the dairy category – come close to milk’s share with private label accounting for 71.4 percent share of eggs sales.
Butter and margarine are 17th in private label dollar sales. Yogurt is 11th in private label unit volume sales, while milk ranks first in that category, and cheese is fourth.
So it was with those dominant private label stats in mind that PLBuyer sent three of its secret shoppers to check out the dairy aisles at retailers in Colorado, Missouri, and North Carolina in early October. We asked them to evaluate how their local grocers market and merchandise their private label dairy products.
In addition to looking for in-store merchandising, shoppers recorded prices of comparable private label and national brand milk, cheese, yogurt, and butter, then conducted their own taste tests in one of those categories.
Here, we provide you with the insight we’ve gleaned.
SIDE BY SIDE
Generally speaking, all the retailers our shoppers visited were stocking private label dairy products next to their national brand competitors on the shelves or racks. However, only Ingles in Asheville, N.C., was advertising in-store for their private label dairy products, according to Bill K. Both Price Chopper and Walmart’s Neighborhood Market did not advertise in store for their own dairy items, nor did they have tags directly comparing prices.
That might be a factor of the overwhelming presence of private label in the categories, as retailers might not see the need for in-store recognition of their own brands in this category, as they do in others.
Shopper Michael G. reported that the Price Chopper in Kansas City, Mo., did not shelve the dairy products we selected together. Cheese was shown on the opposite side of the store from the milk, with the yogurt and butter positioned in between the two. He said that other refrigerated products such as eggs and tortillas – as well as a freezer with packaged meals – were positioned around those products rather than grouping them together.
As with many commodity-driven items, margins in the dairy products our shoppers checked were thin. The largest price difference recorded was in stick butter. A 1-pound box of Land O Lakes stick butter cost $4.79 at the Price Chopper, while the Best Choice private label was $2.95. At the Ingles, a 1-pound box of unsalted stick butter cost $4.58 for the Land O Lakes brand and $3.88 for the Laura Lynn private label version.
Price differences were much slimmer in milk at Walmart, where there was a 40-cent difference in gallons between the Great Value version and the Meadow Gold brand, as well as at Price Chopper, where there was a 10-cent difference between the Price Chopper version and the Anderson-Ericcson brand.
One other interesting note: National brand sales did affect the price comparison in a couple of categories. At the Ingles, Bill K. reported that both the Kraft and Laura Lynn cheeses were on sale for 3/$5, while the Dannon yogurt was on sale at 4/$3, making its price cheaper than the Laura Lynn version.
At the Price Chopper, Michael G. said a loyalty card discount was available on the Kraft cheese to price it at 2/$5, considerably cheaper than the $3.25 price of the comparable Best Choice version.
Sometimes private label versions of comparable products come out even or ahead in taste tests. In the case of shopper Christina R., though, Walmart’s own brand of milk did not measure up.
“I tried the Great Value Vitamin D gallon of milk, and it did not taste great at all,” she said. “I would spend more on a brand-name milk in this case.”
Christina R. did say that she would buy Great Value items in cheese, yogurt and butter, but that she would avoid the private label milk.
For both Bill K. and Michael G., their taste tests found basic equivalence in the categories. Bill K. tried the Laura Lynn cheese and said there was “nothing unusual about it. Certainly not gourmet cheese, but fine.”
Michael G., meanwhile, went for the Price Chopper milk and found it “equivalent to the regional/local dairy brand (which in his case was Belfonte) in taste and freshness.”
Bill K. saw that the private label versions in the categories did not try to mimic the package design of the national brands, even though the package dimensions for each generally were similar.
Michael G. said he usually bought the Belfonte brand of milk rather than a national brand or private label milk because of the dairy makers’ proximity to his store.
“On the belief (not always true) that the closer the dairy, the fresher the product, and the longer I can expect it to stay fresh in my refrigerator,” he said. He said that he sometimes checks the dairy code on the milk if he was buying a different brand to see where it came from.