A Fluid Staple

The milk category in convenience stores has been trending upward.

A Fluid Staple

January 2023   minute read

By: Sarah Hamaker

Got milk? For a growing number of Americans, the answer is no. Total fluid dairy milk volume across all channels dipped 2.2% in 2022 (January through September), according to the U.S. Department of Agriculture. However, retail milk dollar sales rose 11%, receiving a boost from higher prices, according to IRI.

Milk has long been a staple in many convenience stores, especially during periods of disaster or uncertainty, when many families rely on these retailers for home essentials. “Despite a decline in overall fluid milk consumption in the U.S., milk sales in convenience stores have been trending upward for the past couple of years,” said Jayme Gough, research manager, NACS.


According to the NACS State of the Industry (SOI) Report of 2021 Data, per store, per month sales of milk increased over 2020, in part because many consumers limited trips to larger outlets like grocery stores and made short, targeted shopping runs. In 2021, monthly sales of the category mirrored those of 2020, promoting the idea that many consumers found convenience stores a great option for products like milk during the pandemic and carried over those shopping habits into the new normal. For 2022, monthly sales through the second quarter have been higher than both 2020 and 2021 for all but January.

The fluid milk category is one of the smaller ones in convenience retail, accounting for just 1.30% of in-store sales in 2021, a slight decrease from 2020. However, gross margins for milk increased in 2021 from 29.83% to 32.41%, which helped boost gross profit per store 14.4% to a total of $830 per store, per month. “From 2020 to 2021, category sales jumped 5.2% to a total of $2,562 per store, per month,” Gough said. “This indicates fluid milk continues to be an important part of a retailer’s merchandise mix, especially because people who come in to grab a gallon or half gallon of milk often pick up other items, too.”

People are buying less dairy milk, though they are spending more as prices have gone up.”

“For dairy milk, we see a similar trend in c-stores as in the broader retail landscape—it’s a huge category but volume trends are sluggish,” said Stephen Dean, vice president of foodservice, small format for Oatly. “People are buying less dairy milk, though they are spending more as prices have gone up.”

Milk sales have been about the same at Piedmont Milk House in Duluth, Minnesota. “The category doesn’t fluctuate much at all at my store,” said owner Andy Verhel. “It’s a convenience to have gallons, half gallons and pints of milk for our customers, especially the ones with younger kids.”

Unit sales of milk have been strong at Crosby’s, a Lockport, New York-based chain with 86 locations in New York and Pennsylvania. “Gallons and half gallons have declined in units, but pints have been up, and the overall dollar amount for the category has increased, too,” said Lenny Smith, general manager and vice president for Crosby’s.

Boosting the category have been upticks in flavored and alternative milk sales. “The milk category has bright spots within it, such as rising sales of lactose-free milk,” said Scott Wallin, vice president of industry media relations and issues management for Dairy Management Inc.


Of the largest subcategories, flavored milk showed the most dramatic increase in per store, per month sales during both 2020 and 2021, as well as through the first half of 2022. Flavored milk represented 34.8% of category sales in 2021, according to NACS SOI data. 

That tracks with sales at Crosby’s. “Our flavored milks have had positive growth,” Smith said. The stores stock cookies-and-cream, chocolate, vanilla and strawberry flavored milk year-round plus seasonal milks, like pumpkin, during the holidays. “The pumpkin flavored milk does surprisingly well for us,” Smith said.

At Piedmont Milk House, chocolate is the only flavored milk on hand, and it’s a customer favorite. “We have steady sales of our chocolate flavored milk,” Verhel said.

Gough sees the interest in flavored milk as a carryover from the pandemic. “While this increase might be partly explained by children being home more during the pandemic because of illness or school closures, parents also could have gotten into the habit of buying flavored milk at convenience stores and continued to purchase the beverages when out and about with their kids,” she pointed out.


As more customers choose oat, soy, almond and other milk alternatives over cow’s milk, convenience stores are giving them those options. Plant-based milk falls into the “other milk” subcategory, accounting for 6.5% of the fluid milk sales in 2021, an increase from 6.0% in 2020, according to NACS SOI data.

“Almond milk is still the lion’s share of the plant-based milks,” Dean said. “But trends are softening as prices have gone up around 15%. Oat milk continues to grow even with increased prices, as it’s still a relatively new segment and lots of people are trying it for the first time.”

While Piedmont Milk House sticks to cow’s milk, Crosby’s will be adding oat and almond milks to a new set in the fluid milk category in mid-2023. “The milk category is continually changing, and our customers are no longer only interested in animal milk,” said Smith. “I think it’s important to look at the needs and wants of all of our customers, and that includes adding alternative milk products.”

Wallin pointed out that convenience stores should see growth in lactose-free milk as well. “For example, lactose-free milk has been a continuous segment of gains with a historical dollar life of 13% per year between 2017 and 2021 and a volume uptick of 12% at retail overall, according to IRI,” he said. “While this subcategory is less developed in c-stores, it is posting a very strong dollar growth (up 23.4% in 2022 through September) and volume growth, up 10.4% during the same time period.”

Crosby’s carries three varieties of lactose-free milk and has seen a corresponding lift in unit sales of this subcategory. “We’ve definitely seen demand for lactose-free milk grow in recent years and see the convenience industry as a whole a bit behind the curve in selling lactose-free and plant-based milks,” Smith said.

Oat milk continues to grow even with increased prices, as it’s still a relatively new segment and lots of people are trying it for the first time.”


While milk is a staple, retailers could see more growth by expanding their offerings into flavored milk and alternative milk, as well as providing incentives for shoppers. For example, Crosby’s has a milk club as part of its rewards program that gives customers every 10th half gallon free. “Our milk club has been growing steadily,” Smith said.

Crosby’s also runs specials on milk, such as a two-for-three gallon promotion that boosted sales. “We’re very aware of how our fluid milk units are doing each week, given the competition from dollar stores and other outlets,” Smith said. “Since we’re in so many rural areas, we want to stay competitive with our fresh milk category through our merchandise mix, occasional specials and milk club.”

Fluid milk will remain an important category for small format stores like convenience. “We’ll likely see consumers continue to migrate toward plant-based milks, especially as operators seek to attract more millennials and Gen Z shoppers, who buy a lot more plant-based products than prior generations,” Dean said.

The Power of CSX Data

CSX, the engine behind category metrics and NACS State of the Industry data, provides current and customizable tools for financial and operational reporting and analysis in the convenience industry. Retailers can measure their company by any of the myriad metrics generated via our live database. Contact Chris Rapanick at (703) 518–4253 or [email protected] for a complimentary executive walkthough.

Sarah Hamaker

Sarah Hamaker

Sarah Hamaker is a freelance writer, NACS Magazine contributor, and romantic suspense author based in Fairfax, Virginia. Visit her online at sarahhamakerfiction.com.

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