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Checkoff Watch: Success with partners takes the dairy checkoff global

Tom Gallagher for Progressive Dairyman Published on 05 May 2017

When your dairy checkoff changed its basic strategy from simply doing generic advertising and promotions to working with partners that handle your milk, very few people probably realized what a huge impact on sales it would mean.

That was in 1999, and the results have been outstanding. Our partners, including food service giants such as McDonald’s, Domino’s and Taco Bell, retailers such as Kroger, dairy companies such as Shamrock and brands such as Coca-Cola, have invested hundreds of millions in research, development, infrastructure and marketing to make and move new dairy-friendly products that consumers have been asking for.

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Products that, until now, the dairy industry wasn’t offering.

Since then, hundreds of millions of additional pounds of milk have moved through these channels. Our strategy, the strategy put in place by dairy farmer checkoff leaders, is working. Thanks in large part to the partnership with your dairy checkoff, Domino’s moved more than 230 million additional pounds of milk in 2015 versus 2014, and since the partnership started in 2008, Domino’s has increased its overall cheese use by a remarkable 43 percent.

But it’s not limited to domestic sales. It’s gone worldwide.

Global U.S. dairy sales await

Last fall, the checkoff entered into an exciting international partnership with Yum! Brands, the parent company of KFC, Pizza Hut and Taco Bell, to extend the work we’ve been doing with them domestically since 2013 to move more U.S. dairy products.Grow U.S. Dairy Sales Internationally

 

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Since 2014, our partnership here with Pizza Hut in the U.S. has moved 250 million pounds of milk from limited-time offers alone.

The potential of a much broader relationship? Yum’s brands are big around the world. For instance, KFC has roughly 75 percent of its 20,000 worldwide outlets outside the U.S.; imagine what we can do to move dairy there with a checkoff representative on-site.

Some people wonder why we’d want to try to increase dairy sales through what they consider a “fried chicken place” that doesn’t use a lot of milk. Well, what better place to add dairy? For instance, we envision the combination of cheese and chicken sandwiches – irresistible.

Good news? If they do well with dairy, U.S. dairy farmers do well.

To start, we have agreed to pilot programs with Pizza Hut in Southeast Asia – Pizza Hut’s second-largest business unit outside of the U.S. – and with KFC in Latin America, where we can use our own employees to help understand what local consumers want and how to meet those needs with U.S. dairy.

Glabal Pizza Hut innovation: Multiplier effect

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Pizza Hut is already sourcing much of the cheese for their stuffed-crust pizza in Southeast Asia from the U.S., and we aim to increase that.

Plus, Mexico is our largest export market overall, so we want to take advantage of that relationship to keep the dairy flowing.

There are many opportunities to develop innovative products that work with existing menu items as well as new offerings, such as sauces and pizzas. As we begin this larger relationship based on several years of success, the sky is the limit.

This all works seamlessly with the strategy of the U.S. Dairy Export Council – also started by and overseen by dairy farmers – which works to facilitate American dairy sales globally. What the world used to see as a market of last resort – the U.S. – is now moving one of seven tankers of milk overseas as we become more competitive in product quality, delivery and price.

Working with global partners such as Yum will further fuel the desire for more U.S. dairy, especially as economies improve and an expanding middle class demands more protein.

We are already working to hire dairy checkoff employees we can put into Yum’s overseas offices to make sure dairy remains a prominent part of their menu development initiatives. That has helped us in our other partnerships and, recently, Kroger was so impressed with one of our checkoff dairy scientists they hired her as their very own. That bodes well for future dairy work with the company.

Our partnerships with companies domestic and international are in the best interests of U.S. dairy farmers because they move more milk in new places – and they create attention in the market that causes our partners’ competitors to do the same things in order to keep up with the leaders.

That’s how dairy farmers planned it.

We look forward to sharing more exciting news about advances in dairy promotion through your checkoff. In the meantime, if you have thoughts or questions, please contact us directly through Dairy Management Inc. – we want to hear from you.  end mark

Gallagher is the CEO of Dairy Management Inc.

Your Dairy Checkoff in Action – The following update is provided by Dairy Management Inc. (DMI), which manages the national dairy checkoff program on behalf of America’s dairy producers and dairy importers. DMI is the domestic and international planning and management organization responsible for increasing sales of and demand for dairy products and ingredients.

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