Dairy farmers and grocers associations say current consumer habits are new normal
Dairy Farmers of Wisconsin and Wisconsin Grocers Association leaders say the current state of e-commerce and ordering groceries online is here to stay as the new normal.
DFW CEO Chad Vincent and WGA president and CEO Brandon Scholz were interviewed on the Dairy Signal webinar, sponsored by Professional Dairy Producers of Wisconsin, last week where they were asked about the state of the relationship between the dairy and food retail industries. Shelly Mayer, executive director of PDPW, moderated.
Vincent said dairy purchases in general are up across the board, with milk purchases via e-commerce up 125% from last year. He said it makes sense that milk and other dairy products, like butter, are so popular now because people have gotten used to cooking meals at home rather than going out to eat, and people are also working at home, more tempted to cook a full breakfast or eat a bowl of cereal instead of grabbing something on the go.
"You're at home and you're cooking more, which is why you're seeing milk and butter and dairy increase because everybody's using it to cook," Vincent said. "Honestly, it's one of the most economical delivery systems of protein and healthy foods on the planet."
It's also good that grocery stores are back to stability now for the most part, Vincent said, because they're the ones dairy farmers need to keep in business so product can get out to consumers and farmers can continue working. He said butter sales are up 37%, cheese 20% and milk 6% since this time last year, despite the market being on a decline since the 1980s farming crisis. Vincent also said consumers may be looking to stock up again like in the spring because of anxiety surrounding continued spikes in COVID-19 spread.
Scholz also said grocers are suffering from anxiety themselves, because even though the industry has gotten more stable since the pandemic began, labor is hard to find because grocery and retail workers face the public so often – a dangerous task during this time. He added that the constant sanitation of all high-touch surfaces has not gotten easier with time, and the industry has never had more eyes on it from government agencies due to public health concerns.
"Nobody wants to not comply. We need to do what we have to do to keep places safe for our customers and for our workforce," Scholz said. "We've kind of run from the pandemic into anxiety – an anxiety that says what's going to happen next week, next month?"
As consumer shopping patterns settle into a wide acceptance of e-commerce due to exposure concerns, so do our ways of working, Vincent said. He believes we will never go back to normal in the workforce either, instead continuing to balance a work-from-home lifestyle with occasional visits to the office, instead of working eight hours in a cubicle. Vincent said he's surprised by how much productivity has gone up despite many people working from home.
"I'm looking forward to the day where we actually have people back in (to the office) and are able to do more things face to face, but I think that we've learned that people can be incredibly productive regardless of where they are," Vincent said. "We're seeing productivity measures that we have not seen, ever."
Scholz said in some ways e-commerce is still a business concern because of the popularity explosion, since it's an easy way for people to have as little contact with the public as possible while still getting essential shopping done. He said in some situations, people have had to wait days to pick up their groceries because the orders can't be filled fast enough, and even one grocery store in his association is building a drive-thru to handle online orders. Scholz said the grocery industry has seen a 350% increase in online food shopping.
Vincent said the specialty cheesemakers of Wisconsin are especially benefiting right now for two reasons: he said if times are good, people buy specialty cheese to celebrate, and if times are bad, people buy it for a cheap sense of luxury. No matter the reason, specialty cheese sales are up 15% since last year, a huge boon to Wisconsin's dairy farmers since they supply half of the nation's specialty cheese.
What's important right now is the strength of the relationship between the dairy and grocery industry, Vincent and Scholz agreed. They said people worked hard to come together and fix the holes in the supply chain that occurred back in the spring, and they are still working with local food pantries and government agencies to get dairy products where they need to go most, like families with children. Scholz said the pandemic has created learning experiences for everyone involved.
"We may not have a playbook, but if we get a curveball this fall or next year, it won't be the 2x4 across the head – it'll be okay," Scholz said. "We've got to deal with this, we better figure out how to solve it and move forward. That experience all gathered in the last six months has paid off big time."
Dairy Farmers of Wisconsin even created a database of all the food pantries and food banks in Wisconsin, since Vincent said there had never been one before. Its creation made it easier to plan the logistics of working together and distributing product to where it needed to go, Vincent said, while also helping processors get rid of excess product so they could continue running down the line of people waiting to get their animals and milk in. He said DFW helped many farmers, processors and pantries make business connections that are beneficial for everyone.
"(We're) trying to basically be a matchmaker and put these things together, and I don't see that stopping anytime because as long as it's good for the farmers and then the processors can keep their nose above water on it, it's great for people that need food," Vincent said. "I just want to make sure that we're building something that's sustainable, rather than building up a demand and a need and then all of a sudden, not having the ability to deliver the product."