Igniting innovation in fluid milk and milk-based beverages to meet the growing demands of both foreign and U.S. consumers is the objective of seven wide-ranging partnerships announced by Dairy Management Inc. (DMI).
These seven partners are committing an unprecedented investment to unlock innovation and put milk back in the center of the rapidly growing health and wellness beverage market.
The partners come from across the supply chain and include Dairy Farmers of America (DFA); Darigold/Northwest Dairy Association; The Kroger Company; Maryland & Virginia Milk Producers Cooperative Association Inc.; Shamrock Farms; Southeast Milk Inc; and The Coca-Cola Company.
They plan to work aggressively to pursue growth opportunities for fluid milk through infrastructure, capital, human resource and marketing investments.
“These dairy partners are making an unprecedented investment over the next few years – more than half a billion dollars in capital and other resources,” said Tom Gallagher, CEO of DMI.
“With our checkoff resources and dedication to fluid milk innovation, we’re excited to see how unique partnerships will help us drive ingenuity and generate new offerings and sales in the fluid milk category.”
Gallagher said the partnerships are intended to be "catalytic," to "ignite others to do similar things."
The companies bring strong financial, technological and marketing capabilities to the partnerships; DMI’s commitment is assisting in product development, consumer insights, nutritional consulting, technical and formulation support, and introductions to perspective marketplace partners.
The seven partnerships will work to meet consumer needs through a variety of efforts including new products, new channels, enhanced distribution, merchandising and more.
The goal, Gallagher said, is to change dairy's place in the beverage category, "getting back the spot we had 40 years ago."
He pointed out that despite efforts spent on award-winning advertising campaigns promoting milk over the years – including MilkPEP and California Milk Processor Board campaigns like "Got milk?" – fluid milk consumption still dropped.
When asked if the market still has a place for the traditional gallon of milk, Gallagher said, "We need to rethink the at-home volume. Maybe it's the gallon, maybe it's something bigger, maybe it's something smaller, but people are eating differently at home, and preparing foods differently."
He continued, "We don't have the magic answer for how to increase at-home consumption in a country where fewer and fewer people are eating meals together at home. That is one of our intentions to bring these partners collectively together, [to discuss] 'Where can we go from here?' "
Although the intention is that these new partnerships will help turn the tide of declining U.S. milk consumption, Gallagher acknowledged that it'll take time.
"I know there is going to be a lot of skepticism about whether this category can turn around. I hear it all the time: 'Can this really happen?'
"I'm going to say this: These companies who are investing this kind of money, they're pretty smart companies. They're pretty sophisticated. And they're not getting in this business to lose money. With the likes of Coke and some of the other big companies, with the kind of marketing muscle they have behind it, I believe we're going to see a change."
Neil Hoff, Texas dairy farmer and United Dairy Industry Association chairman, said, “We know that growing the fluid milk business won’t be quick or easy, but we believe these seven partners put us on the right footing. We see health and wellness and demand for protein as a consistent need for U.S. consumers, and also for consumers around the world.”
Gallagher reassured dairy producers that DMI won't stop its other dairy marketing support activities. "We're just saying there's a huge opportunity in fluid and we're focusing on it, but we're not stopping all the rest of the aspects of it.
"It does help dairy farmers to feel good about how their checkoff dollars are spent, and so we need to spend it wisely. We're spending it with our partners and getting a tremendous bang for our buck in this aspect."
Paul Rovey, an Arizona dairy farmer, chairman of DMI and chairman of United Dairymen of Arizona, weighed in, “As a farmer, I am proud to see farmer-led organizations and other leaders committed to revitalizing fluid milk.” PD
—Compiled by Progressive Dairyman staff from DMI news release and press conference recordings
