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Industry must address fluid milk sales

Tom Gallagher Published on 18 November 2011

A recent Progressive Dairyman article on fluid milk sales contains several important points that all dairymen should understand. Click here to read Kaczor's article "Fluid milk sales head for 25-year low: Is anyone watching?" in the October 12th issue of Progressive Dairyman. I’d like to add several thoughts to the conversation.

Milk sales analysis usually includes a statement to the effect that other beverages have “stolen our share” of stomach. The reality is, no one stole our share of stomach – we, as an industry, gave it away. Experience shows, again and again, if we give consumers what they want, where and how they want it, milk sales will increase.

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Nowhere is this more obvious than in schools – just think about how the competitive beverage set looks next to our cardboard containers. Innovation is sorely lacking.

Milk at retail, sold in gallons and half gallons – representing 78 percent of all milk sold – is a commodity and, as such, is very responsive to the huge price swings we experience. This dynamic requires a strategy that brings value back to the category, with brands developing strong identities and innovation.

Generic groups, meanwhile, should support brand marketers by providing pre-competitive information and research that supports new claims and consumer insights, rather than feeding the commodity mindset that is unintentionally created by generic advertising.

The point about children and the good work of the Dairy Council of California is important. The National Dairy Council’s Fuel Up to Play 60 program to educate youth and increase dairy sales is in more than 70,000 schools from coast to coast, reaching 36 million students.

Partners in this effort include the National Football League, the USDA, every significant health organization in the U.S. and processors/manufacturers. In the end, however, product experience for children in school when they are making the choice on what to eat and drink trumps everything.

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Schools may represent only 7 percent of current consumption, but the experiences these children have affects 100 percent of future consumption.

The milk industry cannot continue to look outside itself to blame others or find solutions to the problems we face. Milk processors, along with generic groups such as Dairy Management Inc. and others, must make fundamental changes before we give up even more ground. PD

—Tom Gallagher
Chief Executive Officer
Dairy Management Inc.

Dairy Management Inc. (DMI) manages the national dairy checkoff program on behalf of America’s dairy producers.

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Tom Gallagher
Chief Executive Officer
Dairy Management Inc.

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