Dairy Checkoff Responds to the COVID-19 Pandemic

Joel Hastings

Determining the behavior and motivation of consumers as they emerge from the COVID-19 crisis will be a priority for Dairy Management, Inc., the dairy checkoff organization.  This, according to CEO Tom Gallagher speaking in a phone press conference on May 19. Gallagher explained that the buying and eating habits of “post-COVID” consumers will determine how dairy will direct its messages going forward.

He looked at various sectors like food service, when 50% of food was consumed in all kinds of restaurants before the coronavirus hit. At the depths of the shutdowns, fast food restaurant sales had dropped 42% and have now recovered somewhat to 22% lower than pre-corona levels. Full-service restaurants dropped off 80% and have now moved up to 60% lower, with the improvement driven largely by take-out sales.

At the height of the initial shut down, 70% of consumers themselves said they would not be comfortable eating meals away from home. That figure has now come down to 50%.

At retail grocery stores, fluid milk sales had been down about 5% from year earlier figures before the disease hit. At the height of panic buying for two weeks, sales were up 34%. They have settled back to a 10% increase.

Historically, about 3% of fluid sales related to breakfast cereal, which had been dropping before the pandemic. At the height, cereals jumped 70% and have now settled back to 17% higher than year ago figures. And while all beverage sales are up, including dairy alternatives, none have increased like fluid milk.

Frozen pizza sales, another big use of dairy, had been relatively flat. But at retail during the two-week height, sales went up 130% and have now settled back to 39% higher.

“Ultimately, [dairy] sales will be determined by what the consumer does after this,” Gallagher said. What will that post-COVID consumer do is the question and DMI will be focusing research to monitor what and why.

Gallagher had opened his comments saying that certain fundamental work of DMI continued to be supported – like the research on the benefits of dairy fat – but that most of the staff time, energy and budgets had been focused on responding to the crisis.

On that same call, Barb O’Brien, DMI president, described the mobilization of dairy resources at the state and regional level along with other food service partners to provide support for school meals being served to students and their families. Also, support for food pantries with dairy products as well as refrigerators has resulted in literally hundreds of thousands of gallons of milk being provided to people in need.

She said that at the same time, helping farmers retain consumer trust in the face of grocery store limits and milk dumping stories has been crucial. She said that working with grocers large and small and their organizations, virtually all the signs limiting purchases have been taken down.

O’Brien said watch for a major media event on May 21 celebrating high school graduates headlined by a late-night celebrity host all supported by dairy farmers.

Alexis Glick, CEO of GENYouth, described the support for school food programs generated by her organization with funds coming from industry partners including the NFL. Individuals in sports and entertainment have been mobilized for these efforts. Grants totaling over $33 million have been made available to 12,000 schools.  Partnering with the software company SAP, an app has been developed and made available to students and their families, allowing them to find the closest feeding stations.

On the export front, former Ag Secretary Tom Vilsack reported as CEO of the Dairy Export Council. He said U.S. dairy exports in the first quarter of 2020 were 44 million metric tons higher than a year ago. He said Southeast Asia has become the number one market for U.S. milk powder, surpassing Mexico. He described a variety of activities in the region including China aimed at supporting U.S. sales. He predicted sales might level off mid-year followed by a rebound later in the year.

 

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