Dairy farmers will be attending district meetings this month and through February that are hosted by the Midwest Dairy Association.
Farmers will have the chance to hear from their board representatives and ask questions about the 15-cent per hundredweight dairy checkoff. There will be some good news to share, such as how and where dairy demand grew in 2012. Checkoff investments were used to partner with Domino's and McDonald's; new partnerships with Taco Bell and Quaker Oats also will be presented.
That's great that there is demand for dairy products, such as cheese and yogurt. However, the dairy industry has a very long ways to go to generate excitement about fluid milk. There will be some discussion on this at the meetings as the National Dairy Board recently approved $14 million in funding to address fluid consumption.
That's a huge chunk of change to invest.
Yet—what new programs, new research, new messages and marketing efforts are being considered?
There is food for thought in a recent Forbes magazine commentary written by Hank Cardello, a senior fellow at the Hudson Institute. Cardello, a long-time food industry executive (Sunkist, Canada Dry, Coca-Cola, Anheuser-Busch—just to name a few), questioned the effectiveness of fluid milk promotion and where he thought the dairy industry failed in its attempts. The article, "How the Milk Industry Went Sour, and What Every Business Can Learn From It," is available online.
Cardello reminds us that fluid milk demand has been going down for decades. U.S. milk consumption has dropped 36% since the 1970s. For those of us who are baby boomers, we've lived through that milk decline. Soda pop became the cool beverage to drink when I was a teen and it was a major event for us when our school board approved the installation of a pop machine in the high school cafeteria.
Fluid milk's free-fall, Cardello maintains, is the dairy industry's fault. He blurs the lines of milk marketing between farmers and dairy processors/co-ops a bit, but the overall intent of his message still rings true: Dairy companies overlooked these highly profitable beverage markets and dairy farmers failed to push their co-ops and milk buyers to package milk in consumer-friendly grab-and-go containers.
"In response to competitors that are draining away their business, milk producers have clung stubbornly to their "Got Milk?" campaign, a failed attempt to make milk drinking hip," Cardello writes. "They've clung to their "Real" badge while deriding highly popular soy milk and other milk-like products as 'imitation milk.'"
To boost sales, Cardello says that milk buyers should have redefined themselves as a dairy-based nutrition provider rather than as a milk business.
"By doing that, the dairy industry would have shifted its focus from milk production to marketing," he notes. "Milk companies could have been faster to recognize the opportunity to create milk-based beverages that met growing consumer demand for more refreshing drinks. They could have added popular, high-margin products such as yogurt and nutrition shakes to their portfolios, to insulate themselves from swings in the demand for milk, instead of letting companies like General Mills move in."
I appreciate reading Cardello's analysis and thoughts on this topic. I, too, have been frustrated over the years by the lack of leadership and innovation in the dairy industry to research and promote whole and low-fat milk-based beverages.
There is room for enough blame for everyone in the dairy industry—farmer/co-op board members, milk processors, the government, the national checkoff—for poor fluid milk sales.
The last innovative, nutritious all-round fluid milk product, in my opinion, was Yo-J, from Kemp's/Marigold in the early 1990s. The Forbes article also makes an excellent point—where are the dairy-based beverages specifically for us Baby Boomers? Asian markets are way ahead of us in providing functional or nutraceutical foods for various age-segments of consumers.
I'd enjoy pouring myself a nice, tall one right now—a cocktail of nutrients tailored for a middle-aged female with a taste for chocolate, occasional stiff joints, normal blood pressure, a desk job and interested in weight loss.