Checkoff is Bringing Change to Fluid Milk

Paul Ziemnisky Executive Vice President of Global Innovation Partnerships Dairy Management Inc.

Paul Ziemnisky of Dairy Management Inc.

For many consumers, times have changed. Most families don’t eat the way they used to. They are snacking more and eating traditional sit-down meals less. Thus, they no longer rely solely on the white gallon jug to serve their families’ needs. Milk alternatives are on the rise, representing around 10 percent of milk’s decreased consumption. This means that 90 percent of losses are to beverages that meet consumer needs for thirst quenchers, such as water, and energy-boosters, like coffee and single-serve energy drinks.

Fluid milk needs to evolve to meet changing consumer expectations and deliver a better product – where, how, and when people want it. Sometimes, it means fluid in a very different package, delivered in ways the industry didn’t anticipate 10 years ago, such as grab-and-go, aseptic, shelf-stable sports recovery drinks.

Making fluid relevant in new world

That’s why the checkoff started an unprecedented initiative five years ago with eight partners, including dairy cooperatives, milk companies and a retailer, to spur innovation across the dairy category and turn around fluid milk sales. These partners committed to investments in innovation, brand-building, marketing and infrastructure improvements.

Your checkoff invested by providing consumer behavior insights and dedicated staff expertise in brand marketing, innovation, product science, packaging development, nutrition consulting and social responsibility.

Our fluid milk revitalization initiative has two primary goals:

  1. Stabilize milk sales through modern innovation that lets “milk be milk.” Examples include expanded flavors, value-added nutrition and improved, modern packaging.
  2. Grow sales by positioning milk as a key ingredient in other beverages. Examples include ready-to-drink coffee, energy drinks and smoothies.

And like other checkoff partnership strategies, we leverage category leaders to create a catalytic effect, encouraging other brands and companies to invest in marketing and product innovation.

Progress with partners

Your fluid milk partnerships are making 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.

Partners also are committed to new product development, testing and launches, including:

  • 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 demand for food-based sources of natural energy. After a successful test launch in limited markets, a broader launch is planned later in 2019.
  • Darigold. The northwest co-op launched a value-added “FIT” 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, decadent flavors such as Belgian Chocolate, Salted Caramel and Cherry Cordial. At no additional 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 their Stok brand.

 

 

 Retail matters

Last year, we expanded our efforts to work with retailers, who represent nearly 70 percent of total milk volume. We formed the Milk Revitalization Alliance that brings together major players – including MilkPEP and milk brands – to work with national and regional retailers as “category advisors.” We’re helping retailers understand the value of milk to their store traffic, sales and profits by focusing them on five strategic areas: category management and assortment; shopper and category insights; packaging; innovation; and marketing, in-store merchandising and communications to remind consumers of milk’s importance in their everyday lives.

The checkoff is actively leading innovation sessions with top retailers to help build their fluid milk product pipelines.

Despite declines, milk is a $1.4 billion category and remains a must-have in 94 percent of U.S. households today. Your checkoff promotion program believes in fluid because it matters to farmers’ bottom line and often sets the pace for other dairy product sales.

Fluid milk sales can improve, but only through a continued commitment by processors, retailers and brands to invest in changes to meet changing consumer demands, which is why the checkoff is pushing for those changes on your behalf.

1 Comment

  1. I’m reminded by the MOVIE LINE …” SHOW ME THE MONEY”. I found the article well written , factual and encouraging. Recognizing the situation is the best way to move forward. I make a special trip to store for gallon of milk. While I know my household is in minority. Milk is the first food I gave my babies. That must say something in the nutritional value and need in our diet.

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