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Checkoff Watch: Revitalizing fluid milk for today and for the future

Contributed by Paul Ziemnisky Published on 06 August 2019

From kids having a glass of ice-cold milk with their favorite cookie to grandparents offering milk with their grilled cheese sandwich on brisk fall days, milk has a storied history among American families. And while times have changed over the last 50-plus years, milk remains a staple in 94 percent of U.S. households today.

But the fluid milk category must evolve. Consumers continue to steadily decrease their milk consumption – a decline that started in the 1970s. We all know the reasons: declines in cereal consumption; more people eating meals away from home; lack of product, packaging and marketing innovation among major companies and brands; and increased competition in the beverage category.

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Specific to competitive beverages, milk alternatives represent around 10 percent of decreased consumption. This means 90 percent of losses are to beverages that meet consumers’ needs for thirst-quenchers (water) and energy-boosters (coffee and single-serve energy drinks).

Revitalizing fluid milk

That’s why five years ago the checkoff started a bold, unprecedented initiative with eight partners, including cooperatives, companies and a retailer, to spur innovation across the dairy category and stem the decline in milk sales. These partners were selected based on criteria that included a commitment to invest in innovation, brand-building, marketing and, if needed, plant and other infrastructure improvements.

Checkoff contributions to fluid milk partnerships included consumer insights (e.g., shopping behaviors and changing usage occasions) along with dedicated expertise in brand marketing, innovation, product science and packaging development, nutrition consulting and social responsibility. Partners have clearly defined commitments, goals and requirements, all of which are regularly reviewed and reported to our farmer board.

The fluid milk revitalization initiative has two primary goals:

  • Stabilize milk sales through innovation that lets “milk be milk.” Examples include innovation in flavored options, value-added nutrition and improved packaging.

  • Grow milk sales by positioning milk as a key ingredient in other beverages. Examples include ready-to-drink coffee, energy drinks and smoothies.

Showing progress with partners

Your fluid milk partnerships are starting to make an impact. Over the last five years, processors have committed to more than $700 million in plant, equipment and other infrastructure updates. Companies have nearly doubled their advertising budgets (not including the Milk Processor Education Program, or MilkPEP) compared to spending when we launched the revitalization strategy in 2014.

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Partners also are investing in product development and testing/launching products. Examples include:

  • Dairy Farmers of America. This partnership created the “Live Real Farms” brand that recently introduced a line of whole milk-based smoothies that deliver on consumer demands for food-based sources of natural energy. After a successful test launch in limited markets, a broader launch is planned this year.

  • Darigold. Launched a value-added FIT milk product that has 40 percent less sugar and 75 percent more protein per serving than whole milk.

  • Fairlife. The checkoff’s partnership with fairlife concluded at the end of 2018 after the brand demonstrated that consumers want – and will pay for – value-added milk. Last year, total brand sales exceeded $450 million. Fairlife also has driven innovation among its competitors in the value-added milk space – bringing other new product offerings such as Horizon Protein and Meijer Protein to consumers without the use of additional checkoff funds.

  • Kroger. In January, Kroger launched its flavored whole-milk line called Primo Pastures. Consumers can indulge in great-tasting, adult-themed flavors such as Belgian Chocolate, Salted Caramel and Cherry Cordial. At no cost to farmers, Dean’s quickly followed with the introduction of its True Moo “After Dark” flavored milk products.

  • Shamrock Farms. In 2016, Shamrock Farms launched its ready-to-drink “Cold Brew + Milk” to meet consumer demand for specialty coffees. Following this introduction, several other major players entered the retail specialty coffee game, including Coca-Cola coffees under the Dunkin’ and McDonald’s licensed brands and Danone with its Stok brand.

Expanding to retail channels

In 2018, we also expanded our efforts to work with retailers, recognizing their role in stabilizing milk sales as they represent nearly 70 percent of total milk volume. That’s why we formed the Milk Revitalization Alliance that brings together major players – including Dairy Management Inc. and state and regional promotion organizations, MilkPEP and brands – to work with major national and regional retailers as “category advisers.”

This means helping retailers understand the value of milk to their store traffic, sales and profits, and helping them realize ways to grow milk in the short and long term by focusing on five strategic areas: category management and assortment, shopper and other category insights, packaging, innovation with retailer branded labels and shopper marketing, in which MilkPEP takes the lead by supporting retailers to improve in-store merchandising and communications to remind consumers of milk’s importance in their everyday lives.

Your research and promotion program believes in fluid milk – it matters to farmers’ bottom line and offers numerous nutrition and health benefits. Fluid milk sales trends can improve but only through dedicated commitment and investment in innovation and marketing by processors, retailers and brands to meet the needs of today’s – and tomorrow’s – consumers.  end mark

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 farmers 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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