Is Ultra-Filtered Milk the Next Greek Yogurt? Coca-Cola and fairlife Hope So.

Is Ultra-Filtered Milk the Next Greek Yogurt? Coca-Cola and fairlife Hope So.

In the dairy category, cow’s milk isn’t usually considered the prime area for product innovation or market share growth. We’re all familiar with the concept of grocery stores placing milk at the back of the store and following a loss-leader approach to encourage shopping for other items. Contrast with the yogurt category, specifically Greek yogurt, which is viewed as highly innovative. But Coca-Cola’s fairlife premium milk was recognized as a Top Ten Food and Beverage Pacesetter by IRI with sales of $87 Million in calendar year 2015, driving growth in the “specialty milk” category from 2014.

For those who aren’t familiar, fairlife offers multiple health benefits, including higher protein, reduced sugar, and no lactose. Specifically, lactose-free fairlife provides 50% more protein, 50% less sugar, and 30% more calcium than typical milk. These benefits are achieved through a patented cold filtration process. And fairlife sells for a premium, about double the price of conventional milk and slightly more than organic.

An Unexpected Target: Adult Consumers in Addition to Parents?

Is Ultra-Filtered Milk the Next Greek Yogurt? Coca-Cola and fairlife Hope So.Typically, when identifying a consumer target for milk, a logical group to start with is households with children at home. That’s because these households will disproportionately consume milk (and many other products) relative to adult-only households. Within households with kids present, the more specific target might typically be moms (and perhaps dads) of younger children (ages 1-12).   Since many parents with kids in these age ranges are Millennials at this point, the marketing approach would be tailored to appeal to the values of these consumers, most likely a subsegment within.

The fairlife product may present some challenges for the brand in targeting families, however. While the claims about nutrition are certain to appeal to moms with the money to pay for the added benefits, the product’s much higher cost, along with its different mouthfeel may present barriers for many moms.

As we wrote about in Tuning into Mom, kid acceptance is critical for many products with heavy kid consumption. So much so that moms go to the lengths of hiding vegetables in other dishes. A good example from the bread category is Sara Lee, which drove growth with their Soft and Smooth bread that offered kids the texture and taste of the white bread they prefer, combined with the whole-grain nutrition that moms wanted. Younger children often reject a different mouthfeel, and while some parents are determined to fight the battle, others will not. Sara Lee Soft and Smooth offered a great middle position for parents who were looking to balance the health benefit with taste acceptance.

In addition to product barriers, fairlife’s package size (typically sold in 52 ounces or 1.5 liters) is small for a household with kids present who consume a large amount of milk.   It’s smaller than the typical 64-ounce container that Horizon Organic Milk is sold in, or the full 128-ounce gallon size traditional milk jug. All this suggests that the target consumer for fairlife may be adults, rather than parents, or at least that adults are more important to fairlife than other milks.

Benefit and Positioning

Personally, in my adult-only household, we’ve been buying mainly fairlife since trying it in early 2016. A friend mentioned that it was a better-tasting milk, and we agree. Previously, we were buying Horizon Organic milk exclusively, so the switch was from one premium-priced milk to another.   As an empty nester, my small household is a light milk user, so the slight cost premium was not an issue. And since we don’t use liquid milk as a significant protein source, nor are we lactose intolerant, those benefits are less meaningful. Similarly, reducing sugar consumption through milk isn’t a compelling benefit. So, to be honest, beyond taste, the product’s benefit was not clear to me.

Al Reis wrote about this point in Advertising Age when the product was introduced, suggesting that it would be better to have a clear category name and own the benefit. As he observed, the words “ultra-filtered milk” don’t roll off the tongue, nor does the category moniker of specialty milk.

Clues to the product’s positioning are found in the front panel packaging, which touts “believe in better,” and “ultra-filtered milk” which is a “good source of 9 essential nutrients, excellent source of vitamins A&D, from cows not treated with rBST.” In addition to a comparison on protein, sugar, calcium and lactose, other packaging statements are: “high-quality real milk, filtered for wholesome nutrition from farms where we take exceptional care at each step,” “Traceablity back to our own farms,” and “Pursuit of sustainable farming.” There are certainly many reasons to believe and support points, but no mention of the taste or texture.

Recent Advertising and Marketing Gives Clues

The brand has been giving some clues to its target lately in the advertising it airs, particularly with the on-demand service Hulu. Benefits center on less sugar, higher protein and sustainable farming, with just a short reference to delicious taste. The spots feature young, active families drinking either plain or chocolate milk, supporting the classic target of moms with kids. As far as adult targeting, there’s also a humorous reference to Jim Harbaugh (playing himself as the dad of his active young family), drinking fairlife to help keep his weight under control.

It will be interesting to see how the fairlife brand fares over the longer term. Can fairlife transform the larger category as Greek yogurt brands did with the yogurt category? The similarities of higher protein and different mouthfeel are striking. With the power of Coca Cola distribution and investment, the brand got off to a strong start in 2015.

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    Michal Clements

    Michal is co-author of Tuning Into Mom and an experienced consultant. Michal develops winning growth strategies and detailed go to market plans for some of the world’s outstanding organizations including McDonald’s, Gatorade, Abbott, Barilla, Tylenol, Clorox, Key Bank, Eagle Ottawa, Quaker and the Baker Demonstration School.

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