If milk is totally standardized taste, then it wouldn't make sense for one brand to charge more than another at the grocery store. After all, higher prices would discourage all but the most ardent supporters and leave the remainder to spoil.
Nevertheless, I figured all milk as the same until I decided to start buying from the local mom/pop grocer because they had contracted with a local dairy and were undercutting the megamart generics by 10% or so. Took that gallon home, opened it up and had a glass. It was awful. I actually took it back thinking it may have spoiled. Picked up a different bottle from a different batch, and it tasted the same. That particular dairy just produced what I would call crappy milk. I figure most larger milk suppliers mix milk from various dairies or have contracts with large farms to supply all their milk, in order to have a uniform taste.
Certainly, I see a benefit to pasteurizing (instead of ultrapasteurizing) and homogenizing (instead of ultrahomogenizing), but can only meet you half way as I am not sure if it is or isn't worth it. Also, I think the glass bottles are plain clear (which is too bad - I would have preferred a smoke colored bottle)
you are seeing the impact of how different grocery stores make money.
you want to know how much milk should really cost in your area? go to walmart.
walmart charges the lowest price of milk around your neighborhood (not taking into account any type of supermarket coupons). I would guess walmart is the biggest single seller of food and beverage in the U.S, so they have quite lucrative contracts with local milk wholesalers that deliver tons of milk to walmart and accordingly make very little off each gallon. walmart itself makes pennies off each gallon too.
if you then go to your local supermarket...you will pay upwards of 35%-45%
more for the same milk. This is mass-produced generic milk..no difference in taste.
you go to a gas station..chances are the prices will only be 20%-25% more than walmart.
my point is the price you pay includes the price the store is making. gas stations make little off milk, and in fact, lose a little bit on milk. They instead want to sell you soda, coffee, etc....high margin items.
there are a ton of variables that go into cost, but its safe to say that all milk producers generally make the same percentage off of their operations. Some producers might have less of an infrastructure and therefore can charge a lower price to the supermarkets, while others may charge more due to more plants etc. It rarely has anything to do with taste or smell or whatever.
Thats why the ads for milk you see in the weekly circulars are usually because of the price they are charging (which alot of times is only meant to get you into the store).
Any commercial for milk that talks about how much better it is than competitors is simply put out there to sell more milk (obviously) and they end up having to charge more because of their high advertising budget. People are a weird animal though and people generally associate better quality with higher price (apple ring a bell..haha).
although milk is a commodity, having a good brand helps. Just like gas, if you are in a new area and you see a Mobil station or Jim's Gas Pump, chances are high you will go to Mobil even though its the same gas. You are afraid Jim might be selling you "bad" gas. So with milk, there are probably local brands around your home that people think is better than the generic kind, but its mostly just in the buyer's mind and perception of the brand.
its because of this that any food/beverage business is highly competitive and all that work just to make probably close to 6%-7% return on equity (or less).
