Editor's note: The CEO Corner contains editors' compilations of business news from top publications, which they have tailored for the dairy industry. A recent article in the June issue of Fortune highlights just how much more of a bright spot the yogurt category could be for the dairy industry if it weren’t for the “shipwreck” that is General Mills’ Yoplait brand.
The article, titled “General Mills loses the culture wars,” says that the top 10 yogurt brands in the U.S. have enjoyed rising sales, except for one – Yoplait. According to the article, the yogurt brand’s sales have dropped 30 percent over the last two years.
“Yoplait’s shipwreck was so epic that its effect overwhelmed the combined sales increases for all other yogurt companies last year and caused the category in the U.S. to decline by 2 percent,” the author of the article, John Kell, writes. “It’s struggling even in a category where others are growing.”
The USDA confirms a similar overall trend for the yogurt category. Per-capita yogurt consumption peaked in 2013 at 14.9 pounds per person per year. The most recent data available (2015) shows that yogurt consumption is at 14.7 pounds per person per year. That variation is a 1.3 percent change. Since Yoplait’s sales are down significantly and they were formerly the number one U.S. yogurt brand before being overtaken last year by Chobani, they are almost single-handedly responsible for a stall in the per-person consumption of yogurt in America.
How much more milk would be instantly marketable if this 1.3 percent decline in yogurt consumption were to disappear overnight? More than 123 million pounds of extra milk would have a home. That’s the equivalent of the annual milk production from 5,400 cows.* It may not seem like much, but news reports indicate 11 dairy farms in Pennsylvania will lose their milk market to make room for just 2 million pounds per year in a processor’s milk vats. That extra milk off the market would relieve pressure in a lot of little places.
After reading the Fortune article, I don’t get the sense that the decline in yogurt consumption is because demand has peaked, but rather that one of the major players in the market hasn’t pulled its full weight or caught up with current consumer trends.
As one Yoplait executive who was interviewed admitted, “It’s no secret we were late [to Greek-style yogurt.]”
*I used a 1.5-to-1 conversion factor for farm-gate raw milk to Greek-style yogurt. My calculation assumes that all of the pickup in milk sales would be from Greek yogurt. This style of yogurt accounts for more than 50 percent of all yogurt sold in the U.S. today. The article quoted said that General Mills’ attempt at a Greek-style brand “flopped.”
New nutrition labels delayed at least past July 2018
The Wall Street Journal reported on June 14 a requirement for new nutrition labels that placed added emphasis on added sugars will be delayed. Some in the dairy industry were concerned whether the labels would unfairly penalize some sweetened dairy products, such as flavored milk or ice cream. Food packagers had until July 2018 to comply. The FDA deferred the requirement to comply indefinitely, dispelling for at least a few more years uncertainty about how consumers might change their consumption habits of sweetened dairy products under the new labels.
Why promotion checkoffs are becoming digital ‘librarians’
An interview with the CEO of the U.S. beef promotion board brought an interesting insight to the forefront. Polly Ruhland says consumers no longer receive intelligence about how food is produced in single, easily managed information streams. Rather they are confronted constantly with entire libraries of information about food production. They need a librarian to help them find what they are looking for.
“If you walk into a library and you’re looking for a book, you may wander around the library and see exactly what catches your attention, and a title may catch your attention, and you pull that book out and look at it for a while,” Ruhland said. “And in fact, something in that book might tease your attention a little bit so that you look for another book. This is a lot like the digital ecosystem and how it works. You go looking for one thing and you may easily bounce around to all kinds of different information. And just like a library, these things are linked in ways that help you travel paths. And those paths are determined by folks that are managing the information and that help direct you in ways they’d like to go.”
In other words, producers need their promotion staff to act as librarians to guide consumers to the information that piques their interest. It’s a strategy that may work for your own social media efforts. Find out what grabs your followers’ interest. Tell them what you know about the subject, but don’t pretend to know it all. Back up your thoughts with fact-based media. You increase your credibility by being a “librarian” who gives directed selections. Imitate the best librarian in PBS history by letting them know “you don’t have take my word for it.” 
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Walt Cooley
- Editor-in-chief
- Progressive Dairyman
- Email Walt Cooley
PHOTO: Illustration by Kristen Phillips.
