By Tom Gallagher
In a year of economic turmoil for the dairy industry, your investment in the dairy checkoff helped drive sales through targeted partnerships and innovation in 2009. The dairy checkoff took immediate action to help increase demand for and sales of U.S. dairy products by adjusting more than $35 million to further focus on immediate- and long-term sales.
These efforts, aligned with long-term strategies to grow sales, worked with and through the dairy and food industries to extend producers’ investment. As a result, dairy checkoff efforts – along with low retail prices – helped drive between 2.5 and 3.5 billion pounds of additional milk sales in 2009. Examples include:
• Partnering to create a “Legend.” Dairy producers began a partnership with Domino’s Pizza® to help revitalize the pizza category and build cheese sales. In February, Domino’s introduced its American Legends™ pizzas, which are six specialty pizzas that use up to 40 percent more cheese than the chain’s traditional pizzas. Domino’s invested four to five times the amount dairy producers invested, and due to the success of the specialty pizzas other chains are increasing cheese on their pizza offerings as well.
• Reformulating school pizza. National and local dairy checkoff organizations are working with industry partners to create a school pizza that will meet increasingly restrictive school nutrition guidelines, while also meeting kids’ taste preferences. School pizza is the most popular entrée in schools, and therefore is an important priority for growing long-term sales.
• Growing dairy sales at McDonald’s®. As part of a multi-year partnership between dairy producers and McDonald’s, the chain launched its McCafe® specialty coffee offerings – which use up to 80 percent milk – in its 14,000 restaurants across the country. McDonald’s also launched its Third Pounder Angus Burgers, three new burger options with two slices of cheese per sandwich, resulting in additional 6 million pounds of cheese sold.
• Creating new opportunities for lactose-free milk. Dairy producers partnered with milk processor HP Hood® and its Lactaid® brand to make innovative milk products available to the nearly one in four Americans who have either left or are at risk of leaving the milk category due to actual or perceived lactose intolerance. Bringing these lapsed consumers back to milk could require an additional 2.5 to 5 billion additional pounds of milk each year.
• Bringing new products to new locations at retail. Dairy producers worked with General Mills Yoplait® brand to develop a new line of frozen fruit and yogurt smoothies that use an innovative yogurt chip technology and require 8 ounces of milk. In 2009, General Mills rolled out the smoothies at grocery stores across the country – and for the first time featuring the yogurt chips in the frozen foods section. The company said the new yogurt smoothies were among its most successful product tests ever.
• Growing ingredient sales at foodservice. The dairy checkoff worked with Starbucks® Coffee Company to build U.S. dairy ingredient sales with the help of a third flavor in the Vivanno™ Smoothie line, which uses whey protein and fluid milk. In all, these smoothies account for more than 3.7 million pounds of whey protein and 550 million pounds of fluid milk annually.
• Maintaining momentum for single-serve milk. Dairy checkoff staff continues to work with individual processors, schools and foodservice chains to ensure that consumers have the fluid milk products they want, when and where they want it. Today, more than 70,000 restaurants across the country and 11,000 schools offer white and flavored milk in single-serve, plastic, resealable bottles.
• Focusing on dairy health and wellness. The National Dairy Council®, the nutrition education and research arm of the dairy checkoff, maintains and grows support for dairy’s nutrition and health benefits by working with health and marketplace leaders. The “Fuel Up to Play 60” program, a partnership among dairy producers, the U.S. Department of Agriculture and the National Football League® , helps combat childhood obesity by encouraging schools to implement physical activity and good nutrition, including dairy.
• Fostering industry collaboration. In 2009, the Innovation Center for U.S. Dairy (established by dairy producers through their checkoff) brought industry leaders together to develop action plans, which are aligned with dairy producer priorities. The Innovation Center, which focuses on health and wellness, product development and information, sustainability, consumer confidence, and globalization, has brought together more than 180 companies and nearly 400 individuals to protect and grow sales.
• Strengthening global markets. Dairy producers, through the U.S. Dairy Export Council® (USDEC) continue to help protect global markets for U.S. dairy. Despite the global economic recession, more than 9 percent of U.S. milk production was exported (through October 2009).
• Enhancing dairy farmer image. In 2009, national and local dairy checkoff organizations helped recruit thousands of dairy producers to tell their story to the public. Dairy checkoff staff developed and enhanced training workshops that help dairy producers and allied industry communicate on on-farm issues, including animal car and environmental stewardship, through community relations, presentations to local organizations, one-on-one communications, and social media.
Despite ongoing challenges, the U.S. dairy industry’s future is bright. By engaging industry partners, leveraging dairy’s health and wellness benefits and fostering industry innovation, we can grow sales.
Tom Gallagher is chief executive officer of Dairy Management Inc. (DMI), the domestic and international planning and management organization that works to increase sales of and demand for U.S.-produced dairy products and ingredients on behalf of America’s dairy producers. For more information on dairy checkoff programs, visit www.dairycheckoff.com.