Dairy checkoff dollars beef up sales

To drive dairy innovation at the food-service level and beyond, the dairy checkoff has partnered with McDonald’s to promote McCafe specialty coffee beverages, Angus burgers and single-serve milk in plastic, resealable containers.

This multiyear partnership kicked off with the introduction of McCafe specialty coffee beverages, which contain up to 80% milk and today are available in nearly 14,000 McDonald’s restaurants across the country.

Key Points

• The dairy checkoff has partnered with McDonald’s to lift cheese and milk sales.

• Angus Third Pounders may use up to 6 million pounds of cheese per year.

• McCafe coffee specialty beverages contain up to 80% milk.

“McDonald’s franchises spent $100,000 for McCafe machines in each store,” says Paula Meabon, vice chairwoman of the National Dairy Board, “but they’re selling a lot of milk through those machines.”

Publicly released data indicates McDonald’s sales increased 4.3% in July (compared to July 2008 data), a jump the company credits in large part to the specialty coffee beverages.

Other menu development ideas could include yogurt smoothies, espresso drinks and single-serve flavored milk options.

“Partnering with McDonald’s helps us stretch our dairy promotion dollar,” Meabon notes. “The dairy checkoff is so important, especially now when times are tough, to sell more dairy products. We couldn’t build consumption of milk and dairy products if we only promoted dairy when milk prices are up.”

More cheese, please

McDonald’s recently launched a national marketing campaign to promote its three new Angus Third Pounders, which use two slices of cheese per burger.

“The Angus burger is increasing cheese sales,” Meabon says.

Estimates indicate the new line of Angus burgers may use up to 6 million pounds of cheese per year. In addition to American cheese used on two of the sandwiches, one burger features Swiss cheese, a first for McDonald’s. Last summer, other food-service companies followed suit and began developing and marketing cheese-friendly burgers and other menu items.

“McDonald’s burger sales have increased sales by making a more healthy product with dairy,” Meabon says.

How much is the partnership with McDonald’s costing dairy farmers?

“We’re putting in $6 million to promote McDonald’s products, and McDonald’s is spending four times that much to promote Angus burgers and McCafe specialty coffee beverages,” Meabon explains. “Partnering with McDonald’s really stretches dairy farmers’ promotion dollars and gives us a much bigger bang for our promotion buck.”

Make mine milk

Five years after launching single-serve milk in plastic, resealable containers, McDonald’s continues to promote milk by investing in advertising, in-store signs and other marketing efforts.

Most recently, milk was featured as part of a special tie-in with “Ice Age: Dawn of the Dinosaurs,” a children’s movie. McDonald’s was the first national restaurant chain to offer milk in plastic bottles; nearly 70,000 restaurants across the country now offer this product.

“Collectively, this drives short- and long-term sales by recapturing milk as the beverage of choice for kids because over 1.2 billion times a year kids get the product they want in the format they want it,” Meabon says.

All totaled, dairy producers have invested $6 million with partners on single-serve milk at food service — while the companies they partner with collectively invest more than $130 million each year to promote and sustain the kids’ milk franchise, according to Meabon.

This article published in the February, 2010 edition of WISCONSIN AGRICULTURIST.

All rights reserved. Copyright Farm Progress Cos. 2010.