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Dairy Leaders Dig in to Build Demand

Dairy promotion and industry officials say they are exploring all innovation and marketing efforts to build dairy demand in attempt to help dairy farmers through tough economic times.

Dairy Management Inc. (DMI) leaders discussed domestic and export campaigns with nearly 800 dairy farmers and industry representatives during the 2018 joint annual meeting of the United Dairy Industry Association (UDIA), National Dairy Promotion and Research Board (NDB) and National Milk Producers Federation (NMPF), Oct. 29-31, in Phoenix, Arizona.

“Your staff, nationally and locally, understand how tough and devastating the times are,” said Tom Gallagher, DMI chief executive officer. “We don’t understand the pain the way that you do, but I want you to know we feel it. I want to express how humbling it is to work for the hardest working people, and we truly appreciate you all being here.”

Despite low milk prices, Gallagher said total dairy sales increased by 2.5 percent this year, stronger than last year’s rate over the same period, based on USDA data. He credited the ongoing growth to cheese and butter, as well as strong dairy exports due to the work of the U.S. Dairy Export Council (USDEC).

Barb O’Brien, DMI president, said the dairy checkoff’s key food service industry partners – Taco Bell, McDonald’s, Pizza Hut and Domino’s – were exploring avenues to put more dairy into their fall menus and marketing programs. More than 40 million American’s eat at those restaurant chains daily.

“My conversations with these executives illustrated just how strong our partnerships are,” O’Brien said. “These are people who truly care, and each one committed to look back at their menu, marketing, advertising and promotion plans to see what more they could do to build incremental opportunities for dairy sales on top of what was already planned and to showcase dairy farmer stories.”

She shared examples of what will be a dairy and “cheese-centric” fall with the launch of McDonald’s Triple Stack breakfast sandwich that has two slices of cheese and Pizza Hut’s new pan pizza featuring 25 percent more cheese.

Fluid concerns

Gallagher stressed the need to continue addressing declining fluid milk consumption, referencing a plan to convene a meeting of cooperative and other company leaders to push for a commitment to revitalize the category. He said DMI will focus on two key pillars to build a fluid milk strategy: invest in infrastructure that can create innovative products and packaging, and stimulate nontraditional dairy and major food and beverages companies to enter the milk business.

Gallagher pointed to the success of “fairlife” innovation and marketing as an example of the potential for fluid milk. Sales of the premium ultrafiltered fluid brand are projected to hit $420 million by the end of 2018.

Two recent pilot studies protected and increased dairy sales, Gallagher said.

• A dairy case pilot study reinforced fluid milk’s value in the grocery store and saved 4 feet of storage space that would have gone to other beverages.

• An e-commerce pilot with home grocery delivery service company Peapod is increasing sales of dairy purchases by their customers.

Undeniably Dairy: Building trust

Another leg of DMI’s marketing strategy – the Undeniably Dairy campaign – is to maintain and build consumer trust with dairy producers. Launched through the Innovation Center for U.S. Dairy last year, more than 300 dairy companies and organizations have engaged with the campaign.

“When consumers engage with Undeniably Dairy content that features dairy farmers, there is a strong and positive emotional response that is translating to stronger trust and a deeper connection to where their food comes from,” said Beth Engelmann, chief marketing communications officer for DMI.

She said marketing research commissioned by DMI revealed consumers who have engaged with Undeniably Dairy content have indicated their intent to purchase dairy alternatives decreases.

Growing exports

Gallagher underscored the need to expand the industry’s export capability and product mix to meet the dairy demands of a growing population and emerging middle class in the Middle East, Africa and Asia.

“As people live longer and economies in those countries get better, the middle class grows,” he said.

“When the middle class grows, the demand for animal protein grows with it. The key to the international market is the same for the domestic market – give the consumer what they want, where they want it and how they want it.”

Tom Vilsack, USDEC president and chief executive officer, launched the “Next 5%” initiative to build export volume from 15 percent of U.S. production to 20 percent. Through the first seven months of 2018, almost 17 percent of U.S. milk production moved out of the country, the largest percentage in history.

Unity and leadership

Unity and leadership within the industry can help reach domestic and international opportunities to grow U.S. dairy, Gallagher concluded.

“We have unity like never before in this industry,” he said. “Now, all we need are leaders to execute the plan and to help assure a great future for dairy farmers.”

National dairy checkoff organization leaders were elected during the annual meeting. Marilyn Hershey, a farmer from Cochranville, Pennsylvania, was re-elected chair of DMI. Brad Scott, dairy farmer from San Jacinto, California, was elected chair of NDB, and Neil Hoff, Windthorst, Texas, was elected chair of UDIA.

For a full list of DMI, NDB and UDIA officers, read: Dairy promotion directors elect board officers.

Dorsey honored

The NDB honored dairy farmer Tom Dorsey as the 2018 recipient of the Richard E. Lyng Award for his contributions and distinguished service to dairy promotion.

Dorsey, a dairy farmer from Caldwell, Idaho, served on the Idaho Dairy Products Commission board of directors since 2004. During his tenure as the board’s chairman from 2011-18, Dorsey led efforts to unite Idaho and Utah dairy promotion efforts, leading to the formation of Dairy West in 2017. Dorsey also served in leadership roles on the UDIA board.

“Tom exemplifies the meaning of service with more than 10 years promoting Idaho’s dairy farmers and industry, and 25-plus years serving his local community,” said Brad Scott, California dairy farmer and chair of the NDB. “He has had an important influence on our farmers and our dairy community, and we are grateful for his many contributions."

PHOTO: Tom Dorsey (center), a dairy farmer from Caldwell, Idaho, received the National Dairy Board’s (NDB) 2018 Richard E. Lyng Award for his contributions and distinguished service to dairy promotion. Presenting the award is Brad Scott, California dairy farmer and NDB chair, and Dairy West Chief Executive Officer Karianne Fallow. Photo courtesy of Dairy Management Inc.

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