A s shoppers increasingly demand clean, simple and healthful beverages, the appeal of milk has never

been stronger.

From millennial parents to empty nesters, grocery shop-pers increasingly are on the hunt for “clean” foods and beverages. In fact, “Clean Supreme” ranks as the No. 1 food product trend for 2017, according to Innova Market Insights.1

This demand for clean that now crosses every category is especially present in dairy. A growing number of milk shoppers are opting for products that use sustainable farming practices, all-natural ingredients and pure processing. And because many of these clean-minded shoppers are willing to pay extra for products that meet their high standards, the quest for clean represents an opportunity to reinvigorate dairy and ramp up profits.

As consumers continue to put their trust—and dollars—toward products that deliver sustainability, safety and quality, it’s even more important for retailers to invest in dairy offerings that meet those demands.

Clean hits the mainstream“Clean” foods and beverages—items produced to safe, sustainable standards from farm to table—were still fair-ly fringe until recently, primarily the province of special-ty stores and hyper health-conscious consumers. Today, however, clean consumption is undeniably mainstream, and a significant growth driver for grocery.

In the past decade, all kinds of shoppers have begun

HOW SHOPPER DEMANDS ARE CHANGING DAIRY

MillennialsAmount of sugar

All natural

Amount of protein

Sodium levels

Free from preservatives

Generation XOn sale

All natural

Amount of sugar

Hormone free

Trans fats

Baby boomersAmount of sugar

Sodium levels

Trans fats

Contains artificial sweeteners

High fructose corn syrup

Top concerns of food shoppers

Source: C+R Research, 2016

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The Quest for Clean

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loudly demanding pared-down labels, pure ingredients, and transparency across every step of the supply chain.2

In fact, millennial shoppers are proving to be some of the most conscientious ever to hit the grocery store. One in 3—more than any other age group—say they are “extremely” or “very” concerned about safety in the U.S. food supply.3 They’re most likely to consider clean eating a lifestyle versus a diet, and are significantly more likely to pay a premium for clean products, including dairy.4 The fact that the incoming generation of shoppers feels so strongly about clean eating—a commitment sure to deepen as they age into parenthood—also suggests that this is a long-term shift in lifestyle, values and expecta-tions.

Delivering a clean product lineupResearch shows that consumers feel more positive about brands that deliver clean claims (see sidebar on page 4). Retailers can get in on the goodwill—not to mention the sales gains—by stocking trusted brands with clean credentials.

Shoppers are looking for a range of healthy, sustainable choices in the dairy aisle, with purchase criteria ranging from animal welfare to specific ingredients or even pack-aging materials. All that underscores the importance of

Shopper attitudes about clean labeling

Source: Nielsen, “Global Ingredient and Dining-Out Trends Report,” 2016

73%68% 64%

Feel positively about companies that are transpar-

ent about their product sourcing

Are willing to pay more for foods and

beverages that don’t contain undesirable ingredients

Follow a diet that prohibits certain

ingredients

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stocking a variety of organic, plant-based and free-from items alongside traditional dairy offerings. Retailers need to offer a range of product claims, and price points, to deliver the value that different shoppers may seek.

Dean Foods’ TruMoo chocolate milk has become the nation’s leading refrigerated flavored milk5 in just a few short years, coupling a great-tasting, high quality prod-uct with clean label claims that meet today’s consumers’ demands. “We know that consumers are looking for real food with real ingredients,” says Wendy Poer, director of marketing for TruMoo. “We recently reformulated TruMoo with ‘No GMO Ingredients.’ This new claim joins our other ‘NO’ claims: no high fructose corn syrup, no artificial growth hormones, no artificial sweeteners, colors or flavors. We want to make sure that our ‘No’s’ translate to the consumer’s ‘Yes!’”

Fuel growth through transparencyNow is the optimum time for retailers to get ahead of the curve. The number of clean claims across food and beverage is growing at over 70 percent annually, and brands that meet shoppers’ clean demands are thriving. In the past five years, products displaying clean labels saw a 5.6 percent boost in dollar sales and accounted for 30 percent of share in total food and beverage sales.6

If today’s grocery shopper views these product attributes as “nice to have,” the shopper of tomorrow will consider them table stakes. But as consumer demand for clean products grows, so too will expectations for clear-cut

evidence of those clean credentials. Currently, there are no official definitions for the terms “clean” and “natural,” and as a result many consumers say they do not fully understand what, if anything, those claims actually mean. A 2016 Consumer Reports study found that nearly half of respondents held incorrect beliefs related to both definitions and regulations around the term “natural.”7 Similarly, nearly half (45 percent) of U.S. respondents in a 2016 global survey from Canadean expressed confusion regarding the meaning of “clean.”8

To truly succeed on the quest for clean, brands and re-tailers need to commit to specific, tangible steps toward greening up their offerings—and then transparently communicate those efforts to their customers.

Shoppers who say these attributes would entice them to pay more:

Source: Kantar Retail ShopperScape, April 2016

36%

23%

17%14%

18%

Locally grown or

made

Transparent/ honest about ingredients,

sourcing, etc.

Responsibly sourced

Non-GMO Certified organic

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Content of this article provided by Dean Foods Company. Dean Foods is a lead-ing food and beverage company and the largest processor and direct-to-store

distributor of fresh fluid milk and other dairy and dairy case products in the United States. Headquartered in Dallas, Texas, the Dean Foods portfolio includes Dairy-Pure®, TruMoo®, and well-known regional dairy brands. Dean Foods also makes and distributes ice cream, cultured products, juices, teas and bottled water.

Contact:Dean Foods2711 North Haskell Ave., Suite 3400Dallas, TX 75204(214) 303-3400www.deanfoods.com

CASE STUDY: DairyPure® When Dean Foods consolidated a number of its regional brands under one national brand umbrella, it saw an opportunity to raise consum-er awareness of its high quality standards across its production network to generate brand loyalty and drive consumer demand.

The DairyPure® brand developed around its exclusive Five Point Purity Promise®, which starts on the farm with cows that are fed a healthy diet and are never treated with artificial growth hor-mones, continues to production where all milk is tested for antibiotics and is continually quality tested throughout processing, and finishes with shipment and delivery via Dean Foods’ expansive refrigerated distribution network. The Five Point Purity Promise guarantees that all Dean Foods milk is always delivered fresh from a local dairy.

Dean Foods introduced DairyPure milk with its Five Point Purity Promise in May 2015, and it quickly began to eclipse its competitors. Within the first year, the brand saw $1.2 billion in multi-outlet re-tail sales (a 12 percent share) and $386 million in con-venience sales (a 34 percent share).9 Today, 42 percent of U.S. households put DairyPure milk in the fridge.

In addition to its commitment to quality and the Five Point Purity Promise, as the DairyPure brand extended beyond milk to multi-ingredient dairy products, focus was brought to bear on product formulations and

clean labeling. Clean labeling, in fact, has been an im-portant differentiating strategy that has helped boost margins for retailers.

DairyPure’s success demonstrates that shoppers will pay for high quality dairy products that can also pro-vide the clean attributes they prize. The peace of mind that shoppers enjoy by serving their families clean dairy products can lend a halo effect to the entire store, boosting trust and loyalty—as well as overall store profits.

1 Innova Market Insights: http://www.prnewswire.com/news-releases/clean-supreme-leads-top-trends-for-2017-601079836.html2 Innova Market Insights: http://www.prnewswire.com/news-releases/clean-supreme-leads-top-trends-for-2017-601079836.html3 The NPD Group/Food Safety Monitor, October 20164 Kantar Retail ShopperScape, April 20165 IRI, total U.S. multi-outlet + convenience, flavored milk category, YTD data ending July 9, 20176 Nielsen Product Insider, 20177 Consumer Reports: http://www.consumerreports.org/food-safety/peeling-back-the-natural-food-label/8 Food Business News: http://www.foodbusinessnews.net/articles/news_home/Consumer_Trends/2016/02/Consumers_not_clear_on_clean_l.aspx?ID=%7B7B-

7BE175-2049-4403-B1D9-A1CB8F76CFBB%7D9 IRI data