Checkoff’s Partnerships Putting U.S. Dairy on International Menus

Amy Wagner Executive Vice President, Global Innovation Partnerships Dairy Management Inc.

It’s sometimes staggering to think that 95 percent of the global population lives beyond our U.S. borders.

That represents a world of opportunity for U.S. dairy.

Putting more of your products into the international marketplace has been a mission of the farmer-founded U.S. Dairy Export Council (USDEC) since its creation in 1995. USDEC has succeeded in moving more than 15 percent of your production into other countries, but President and CEO Tom Vilsack sees room for more. In 2017, USDEC unveiled its “Next 5% Plan” designed to export 20 percent of U.S. solids by 2022, a strategy that is critical as milk production continues to exceed domestic demand.

Dairy Management Inc. (DMI) shares this vision and through our foodservice partnerships, we have a strategy to help us get there.

In the U.S., we have partnered with globally recognized leaders such as McDonald’s, Taco Bell, Domino’s and Pizza Hut that have yielded many successes for dairy farmers over the last decade. We provide these partners with support on product development from food scientists. We also share science-based information on dairy’s nutrition profile, as well as marketing insights on trends and products that resonate with today’s consumer.

This work has resulted in a successful model that we’ve now taken into the international marketplace through our partners. And we’re doing it in collaboration with USDEC to help us reach the 5-percent goal.

Pilot partnerships yield results

We launched two pilots in 2017 with Pizza Hut and KFC, companies owned by Yum! Brands, Inc., which has a strong international footprint. Yum! has 45,000 restaurants in more than 140 countries and about 60 percent of its profits are generated from outside the U.S.

Yum! saw the same opportunity we did, that there is appetite for more dairy-centric offerings in their international restaurants.

The Pizza Hut pilot focused on restaurants in the Asia-Pacific region, which represents 16 countries and nearly 5,000 stores. And for KFC, we focused on its Latin America and Caribbean region, which is comprised of 40 countries and territories and approximately 1,200 stores.

Our international objective is the same as it is here: create menu offerings that use U.S. dairy and surround it with messaging that builds trust in and a love for U.S. dairy. And we followed our strategy of bringing our checkoff resources and expertise to the table to help assure success.

A dairy checkoff food scientist worked with the KFC team to create a pipeline of chicken and cheese ideas that will be in the marketplace later this year.

Our work with Pizza Hut resulted in the launch of five pizzas in the Asia-Pacific region that feature U.S.-produced cheese. We also worked with the Pizza Hut team to produce TV commercials that create awareness of U.S. cheese by including a “U.S. Cheese” logo.

These new products and marketing efforts contributed to U.S. cheese use at Pizza Hut growing by 29 percent in 2017 over the previous year. We’ll soon have results for 2018, but we already see the potential for dairy in this market.

Room for more

These two pilots were crucial to DMI as we learned a lot about dealing in the international marketplace. There are specific country and customer specifications as well as different palates and dietary expectations than what we see in the U.S. DMI is fortunate to have USDEC’s expertise to help navigate our mission, which was streamlined as we worked toward the same goal.

Both organizations are confident there is plenty more room for U.S. dairy in the international diet. The success of these pilots allows us to seek opportunities with other checkoff partners who share an interest of growing overseas sales.

The timing couldn’t be better as global demand for dairy remains strong and consistent. Several factors account for this, including fast-rising populations, health-conscious middle-class consumers who want more dairy and can afford it and an increasing appetite for Western-style foods.

The possibilities are enormous. And the checkoff has a foundation in place that will give U.S. dairy a place at the international table.

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