MD_DA901 DA MD DA901 Organic Dairy Retail Overview MADISON, WI. January 27, 2012, (REPORT 04) ORGANIC DAIRY RETAIL OVERVIEW NATIONALLY ADVERTISED PRICE COMPARISON: Organic Dairy Overview. Organic dairy advertising volume reached the highest level since mid-October last year. Organic dairy ads this period numbered over two and one-half times higher than two weeks ago. Of total surveyed newspaper ads, 33% contained organic dairy content. There were slightly over twice as many organic milk ads as organic yogurt ads. Organic milk ads placed by supermarkets were at the highest level since early September last year. Organic half gallon milk ads are at the highest level since mid-June last year, with a number of ads running in Southeast region newspapers. This is particularly noteworthy when contrasted with the widely discussed tightness of organic milk nationally, and particularly the shortages and periodic absence of varied brands of organic half gallons in some Southeast and Northeast stores. A more detailed discussion of unique characteristics this survey period, occurs below in the section "Organic Milk Half Gallons". Organic yogurt advertising also increased over the last five reporting periods, to the highest level since late October last year. In fact, this period's 1,246 organic yogurt ads totals more than all organic yogurt ads for the last three reporting periods combined. Advertising information presented is compiled from surveyed newspaper supermarket ads for the period January 14, 2012, to January 27, 2012, identifying weekly "specials" and containing organic dairy content. Surveyed ads reflect advertised "specials" and not the range of non-advertised supermarket cooler prices. Regional Organic Dairy Ad Trends - Current Period. Unlike two weeks ago when the Northeast and Midwest significantly lead the regions in organic dairy weekly newspaper advertising, there was far greater evenness among the regions this period. The Northeast Region has 25.0% of current ads, followed by the Midwest with 21.8%, South Central with 16.3%, Southeast, 15.7%, Southwest, 14.5% and Northwest, 6.6%. Organic Milk. Organic milk ads appeared in all six regions. The Southwest led, with 25.9%, followed by the South Central, 24.2%, Midwest, 22.2%, Southeast, 15.6%, Northwest, 10.9% and Northeast, 1.2%. Organic Milk Half Gallons. The national weighted average advertised price for organic milk half gallons decreased 66 cents to $2.68, following a 28 cent decrease the prior period. The top of this period's price range, $3.99, is a 50 cent increase. The range bottom, $2.50, one cent above the record low, is a 79 cent decrease. HALF GALLON ORGANIC MILK ADS REGIONAL % and WEIGHTED AVERAGE ADVERTISED PRICE REGION %___ WTD. AV. ADV. PRICE $ NE 01.6 3.99 SE 20.1 2.83 MW 28.6 2.75 SC 21.7 2.55 SW 19.3 2.50 NW 08.8 2.50 US 2.68 A significant factor influencing the increased volume, pricing and regional composition of organic half gallon milk ads this period, is a national supermarket chain advertising it's store brand of organic milk half gallons. Particularly noteworthy is the magnitude and pricing of these ads during a period of significant focus on the tightness of organic milk supplies and even many stores "sold out" of various brands, particularly in the Southeast. Thus, while shoppers generally are finding supplies of organic milk are tight and occasionally sold-out, this retail chain has engaged in widespread consumer advertising of its' store brand at prices rivaling historic lows in terms of this survey series, another demonstration of the growing influence of organic milk sold as store brands. This period's survey found newspaper ads for this national retail chain in all regions except the Northeast. This organic milk, for the most part, is bottled in a single plant in Kansas, using organic milk produced in Texas, then shipped throughout the regions of the United States. Advertised retail pricing for this organic milk is not uniform, ranging from $2.50 to $2.79 to $2.99 to $3.00 for a half gallon. A price of $2.50 during this time of shortages nationwide is noteworthy for being only 1 cent above the record low weighted average advertised price (as well as absolutely lowest noted price) for organic half gallons, dating back to the Fall of 2009. For example, in the Southeast, the full range of prices is found. Atlanta, a city with some sold-out organic milk of other labels noted, has ads for this store brand at $3.00, with ads in Tennessee and Mississippi being $2.79 and $2.99. Some ads in North Carolina state a price of $2.50. Other ads stating a $2.50 price are in California, Louisiana, Texas, Arizona, Colorado, Kansas, Oregon, Washington, Ohio and West Virginia. Ads stating a price of $2.79 can also be found in Kentucky and Illinois. Arkansas is a state with newspapers also advertising a price of $2.99. Organic Gallons. Following four consecutive periods of ads for organic gallons, there are no ads this period among surveyed newspapers. This reflects the de-emphasis in ads for organic gallons which developed during 2011, which had only 23% of the ad volume annually for organic gallons compared with 2010. 8 Ounce Organic Milk. There were 644 ads for 8 ounce organic milk during this reporting period, up slightly from last period. This being the only category of organic milk ads which increased in annual numbers 2010 to 2011, it is further noteworthy that this period's total number has not been reached since mid-September last year. All ads are priced $1.00. Regional emphasis shifted from the Midwest and South Central regions last period, to the Southwest, South Central and Northwest this period. 8 OUNCE ORGANIC MILK ADS REGIONAL % and WEIGHTED AVERAGE ADVERTISED PRICE REGION %___ WTD. AV. ADV. PRICE $ NE 00.0 ---- SE 00.0 ---- MW 00.0 ---- SC 32.9 1.00 SW 48.8 1.00 NW 18.3 1.00 US 1.00 Organic Yogurt. Almost all organic yogurt ads ran in newspapers in the Northeast, which had 88.3% of all organic yogurt ads this period. The Northeast frequently dominates organic yogurt advertising among surveyed newspaper ads nationally. Second was the Northwest with 9.5% followed by the Midwest with 2.2%. 4-6 Ounce Organic Yogurt. Exactly one half of organic yogurt ads surveyed nationally are for 4-6 ounce yogurt. The national weighted average advertised price decreased 7 cents to $0.68. No change occurred in the top of the price range, $1.00, while the bottom decreased 7 cents to 60 cents. 4-6 OUNCE ORGANIC YOGURT ADS REGIONAL % and WEIGHTED AVERAGE ADVERTISED PRICE REGION %___ WTD. AV. ADV. PRICE $ NE 95.5 0.66 SE 00.0 ---- MW 04.5 1.00 SC 00.0 ---- SW 00.0 ---- NW 00.0 ---- US 0.68 Organic Greek Yogurt. All organic Greek yogurt ads ran in newspapers in the Northeast, constituting 25% of this periods' organic yogurt ads. Pricing was 63 cents per container. Other Organic Yogurt. The remaining organic yogurt ads were for yogurt in either 32 ounce or 16 ounce containers. Comprising 16% of organic yogurt ads, all 16 ounce containers were advertised in the Northeast, priced $2.50. Ads for 32 ounce containers, priced $3.69, all ran in newspapers in the Northwest and represented 9% of organic yogurt ads. Organic Cheese. Newspapers in the Northeast also contained all 196 ads for organic cheese. All organic cheese ads were for a national brand of 6 ounce shredded natural cheese. SUPERMARKET PRICE COMPARISON: Madison, Wisconsin Prices. Non-advertised organic milk, yogurt, butter and cheese prices in a range of food stores in Madison, Wisconsin are compared for this two week period. Madison stores included a big-box sized local supermarket; 2 regional chain supermarkets; a smaller but full product line food market; and 2 natural food stores; a national discount big box chain store also selling food; and a large local cooperative grocery store. Organic milk available in Madison stores included 2 national brands, 4 private label store brands, and 3 small local or near-by creamery brands, one featuring non-homogenized milk. Cheese available included 2 national brands, 2 store brands, and cheese from 5 other cheese makers. A table summarizing the survey results follows: ORGANIC MILK, YOGURT, CHEESE & BUTTER PRICE RANGE 2012 REPORTING WEEK 04 MADISON, WI LOW HIGH RANGE (In Dollars) GALLONS: Whole 5.49 6.99 1.50 Reduced Fat (2%) 5.49 6.99 1.50 Low Fat (1%) 5.49 6.99 1.50 Nonfat (Skim) 5.49 6.99 1.50 HALF GALLONS: Whole 3.49* 4.19 1.10 Reduced Fat (2%) 3.49* 4.19 1.00 Low Fat (1%) 3.49* 4.49 1.40 Nonfat (Skim) 3.49* 4.19 1.10 CHOCOLATE HALF GALLON: 3.09 5.69 2.60 YOGURT .79 1.29 0.50 CHEESE - 8 OUNCE BLOCKS: Mozzarella 3.40 5.75 2.35 Mild Cheddar 3.79 5.99 2.20 Monterey Jack 3.79 5.99 2.20 Pepper Jack 3.89 5.99 2.10 CHEESE - 6 OUNCE STRING Mozzarella 3.99 5.09 1.10 Colby Jack 3.89 4.99 1.10 BUTTER - 1 POUND 4.79* 6.19 1.94 *=Price change from prior reporting period Organic dairy price ranges in surveyed Madison supermarkets increased at the bottom of the price range for half gallons of organic milk and organic butter. The price range bottom for half gallons of organic milk increased from $3.09 to $3.49. Organic butter's lower price range increased from $3.99, to $4.79, for the same brand, a store brand. 11:00C eric.graf@ams.usda.gov