CA: CMAB – New Strategies, New Tactics in the Face of COVID-19

Joel Hastings

John Talbot

Dairy promotion in California, as elsewhere, has taken on a whole new look and feel as a result of the impact of the coronavirus pandemic. This according to CEO John Talbot speaking on a live video webinar on May 28.

He said the existential threat to public health and the economy, has created “unprecedented fear, uncertainty and doubt among our consumer population.” As a result, he said he and his staff reviewed the many implications of the situation examining the shift in consumer buying patterns at retail, the shutdown of the food service i.e. restaurant industry and the resulting problems created in the food chain.

In his presentation, Talbot described the current consumer situation and buying statistics in dairy, the planning principles adopted and how some of the major CMAB marketing programs have been changed as a result.

He cited the statistics from retail that included the huge surge in buying at the time of the stay in place orders, which has been followed by still higher than “normal” dairy purchases. These increases have been spurred also by the bump up in “dairy carriers” such as cold cereal, which had been declining, and frozen pizza which had not been showing much growth. Another factor is the big increase in e-commerce with a 78% increase in “click and collect” for store pick up and a 22% increase in home delivery.

He said the bad news is the drop in food service, historically almost 50% of dairy sales. He said retail increases had not offset loss of sales in restaurants.

He described the principal elements of the new planning principles as 1) farmers first, who are under huge new pressures; 2) flexibility, with so much changing so fast;  3) unprecedented opportunity with such a huge increase in in-home meal preparation and dining; 4) channel and packaging mis-alignment,  with food service product not readily available for retail; 5) concentrating on core products and core markets and 6) innovation, since a recessionary economy typically is most disruptive for established brands.

An early priority was to work with grocers to insure dairy products were available and to have the signs limiting purchases taken down. CMAB contracted with a firm that worked with some 324 stores in the biggest chains to actually stock shelves and remove signs. This resulted in an additional 250,000 units of product that wouldn’t have been otherwise available to buyers since grocers were overwhelmed.

 





 

Work was done with Raley’s, Savemart and Instacart to have California milk and dairy products, with the “Real California” logo prominently identified on websites as consumers placed online orders. Also online was the development of a California Cheese Select gift box available for home delivery priced at $55.00

To continue engagement with consumers, the emphasis for June Dairy Month has been shifted from sustainability to buying local, including a new partnership with the California Grown program, and work with the California Dairy Council to share videos of farm tours which have already had 6000 views of four farms (see story in this issue). A new program with the athletic trainer and the dietician of the San Francisco 49’ers stresses the importance of dairy in balanced diets and workout regimens.

A strategy for some restaurants has been to sell food products to consumers… the new grocery stores. CMAB has partnered with the two major food service restaurant suppliers – Sysco and U.S. Foods – to feature dairy in some 300 outlets.

Another project has been to work with California based pizza companies to supply pizzas to hospital staff.

 





 

Talbot also talked about the export market for California dairy where volumes have been impacted more moderately, down 1.8% nationally in the first quarter of 2020. There have been some trade disruptions but Taiwan, South Korea, Hong Kong and even China have been operating relatively normally, even in the face of 42% tariffs as a result of the trade wars. It has just been announced that Vietnam, another growing market, has removed the tariffs that had been on U.S. dairy products.

Talbot expressed optimism about the long term growth prospects for ESL (extended shelf life) fluid milk products in all of China and Southeast Asia.

After his 25-minute presentation, questions were field from the audience by Talbot and members of his staff who responded directly.

Here is thelink to the recording of the Golden State Update: 

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