Producers Helped Meet ‘Unmet Demand’ by Driving Dairy Sales in 2007 

Posted: December 19, 2007
Rosemont, IL – Dairy producers, through their promotion investment, focused on meeting consumer needs in 2007 to help drive demand for and sales of U.S.-produced dairy products and ingredients. To help make the change from being a production-driven industry to a more consumer-driven industry, which provides consumers the products they want instead of only what the industry currently produces, the dairy checkoff has teamed with food, beverage and health professional partners to help spur innovative ideas that make dairy products more available and that meet the taste, nutrition, convenience, and other needs of today’s consumers. 

“The opportunity to turn unmet demand into sales is right now, right in front of us,” said Tom Gallagher, chief executive officer of Dairy Management Inc.™, which manages the national dairy checkoff program, identifying "unmet demand" as the gap between current and potential sales. “Sales growth is possible if the industry has the fortitude to address the challenges ahead of us.” 

Gallagher highlighted several accomplishments in 2007 that helped meet unmet demand, as well as ongoing and new efforts that will continue to build dairy sales in 2008 and beyond. These include: 

1.      New Look of School Milk reaches more than 9,200 schools. Dairy producers, through their promotion investment in the New Look of School Milk program, help schools offer milk the way students want it — served cold in plastic, single-serve bottles on the school meal line. Today, more than 55 individual milk processors provide more than 9,200 schools with the new milk offerings, reaching more than 5 million students. The checkoff’s school efforts represent 55 million pounds of additional milk sold over the last year alone. 

2.      Subway® offers single-serve milk at 20,000-plus restaurants nationwide. Partnering with quick-serve restaurant chains helps the dairy checkoff increase milk sales by offering milk in plastic, single-serve bottles. Today, the dairy checkoff partners with several major fast-food restaurant chains, representing nearly 60,000 restaurants nationwide, to offer these new milk offerings. Food industry partners extend checkoff promotions and bring additional resources and expertise to producer-funded marketing efforts. These efforts represent more than 250 million pounds of additional milk sold. 

3.      Foodservice partnerships boost cheese sales. Developing innovative new menu items helps drive growth and boost cheese sales in the pizza category. The checkoff partnered with Domino’s Pizza® to develop the new Cheesy Garlic Bread Pizza that was offered at more than 6,000 restaurants nationwide. To further build cheese sales, the dairy checkoff is partnering with a national restaurant chain and a major cheese manufacturer to test the inclusion of string cheese with kids’ meals. Partnerships with national restaurant chains extend checkoff promotions and bring additional resources and expertise to marketing efforts that increase cheese sales, resulting in more than 1 billion pounds in additional milk sales over the past four years. 

4.      Dairy ingredient marketing helps ensure future demand. By working with industry partners to develop new products and/or improve existing products using dairy ingredients, the dairy checkoff helps meet consumer needs and increases sales for U.S.-produced dairy ingredients. For example, Kellogg’s® Special K2O Protein Water and Special K Protein Snack Bars use 450,000 pounds of whey protein annually. Various Schwan’s® products, including Wolfgang Puck Frozen Pizza, Freschetta Build & Bake Pizza, Toastwich grilled cheese sandwiches, and trans-fat free school pizza, move more than 150 million pounds of additional milk annually. Future opportunities to build sales include expanding ingredient categories and meeting U.S. and global demand for proteins, milk powders and other emerging ingredient categories. 

5.      Dairy aisle reinvention efforts help build category sales. Dairy producers are building sales at the supermarket by partnering with retailers on a “dairy aisle reinvention” project that identifies new ways to position milk, cheese and yogurt in the dairy case and throughout the store. New merchandising ideas aim to increase traffic and sales in the dairy aisle. Partners include Kraft® Foods, Dannon®, Marva Maid, and major regional retail partners. This fundamental shift in how the industry perceives dairy will help build and sustain sales long term. 

6.      U.S. dairy exports continue to grow. In the first six months of 2007, U.S. dairy exports increased 32 percent from a year ago. Dairy producers fund export development that helps build new markets for U.S.-produced dairy products and ingredients. Today, nearly one-half of all new milk production (on a total solids basis) is sold internationally. Without international markets, excess milk solids would be a burden to the United States, as production growth would be greatly limited. 

7.      Promotion efforts educate the public about modern dairy farming. Consumer research shows that a positive public image of dairy producers and the dairy industry helps maintain consumer confidence in U.S.-produced dairy products and ingredients. As part of an ongoing effort to promote the image of dairy producers, the checkoff launched a new virtual tour at www.dairyfarmingtoday.org that allows the public to experience life on a dairy farm. The dairy checkoff also provides materials (news releases, fact sheets, photos, infographics, recipes, and more) to help producers better communicate with neighbors and community leaders.   

8.      Dairy and beef industry collaborate to address nutrition challenges. The National Dairy Council® (NDC) and the Beef Checkoff Program teamed up to develop an education model for nutrition that’s based on a product’s entire nutrient package, rather

than focusing on “good” or “bad” foods based solely on fat/sugar levels and total calories. NDC and the Beef Checkoff Program helped found the Nutrient Rich Foods Coalition, which aims to educate the public about healthy eating habits by focusing on what they can eat, based on a food or beverage’s complete nutrition package, rather than what they should avoid, such as calories, fat or sugar. 

9.      Health professional partnerships build awareness for 3 servings of dairy a day. The National Hispanic Medical Association and the School Nutrition Association are the latest health professional organizations to partner with the NDC to educate the public about dairy’s role in a healthy diet and the need to consume three servings of milk, cheese and yogurt daily. They join other health professional partners, such as the American Academy of Pediatrics, American Academy of Family Physicians, American Dietetic Association, and the National Medical Association, in providing materials about dairy nutrition to more than 250,000 health professionals nationwide. 

10. Innovation programs stimulate new products, processes and packaging to grow dairy sales. Innovation helps grow dairy sales. For instance, the dairy checkoff works with industry partners to develop new dairy products that meet consumer needs. Examples include “plus” products, such as fortified milk and cheese products, and “minus” products, such as reduced-lactose or lactose-free products. In 2008 and beyond, dairy promotion will continue to focus on creating customized dairy products that meet specific consumer needs and grow volume sales. 

For more information about dairy checkoff successes or to learn more about specific programs, visit www.dairycheckoff.com. 

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Dairy Management Inc.™ (DMI) is the nonprofit domestic and international planning and management organization responsible for increasing demand for U.S.-produced dairy products on behalf of America’s dairy producers. DMI manages the American Dairy Association®, National Dairy Council® and U.S. Dairy Export Council®.