It wasn’t so long ago that U.S. magazines and television were littered with milk moustache advertising touting the benefits of drinking milk poured from those handy gallon jugs.
But the days of generic advertising for the commodity have now been replaced by a combination of partnerships, innovation, and building public trust, explains Tom Gallagher, CEO for Dairy Management Inc., the company that manages farmers’ milk marketing efforts in the US.
Farmers annually contribute about $370 million to marketing through the U.S. dairy checkoff – 15 cents for every 100 pounds of milk marketed. Two-thirds of that money is channelled through Dairy Management Inc., which works to increase sales and demand for dairy products and ingredients. Gallagher outlined the shifting focus of marketing efforts at a seminar at the World Dairy Expo last week.
Gallagher told farmers that the idea of advertising the commodity and trying to sell the gallon jug is dead. Those efforts have been replaced by brand incentives for major food retailers. Today, the majority of milk marketing is focused on building partnerships with food giants such as McDonalds, Coca-Cola and Yum! brands, such as Pizza Hut and Taco Bell. Many of the partnerships are rooted in innovation: in many cases, dairy farmers pay for product development specialists to work with food retailers to develop new branded products that showcase milk and cheese ingredients.
For example, Gallagher points to the “Quesalupa” stuffed taco recently developed for Taco Bell. It utilizes five times the cheese of a regular taco. The Quesalupa has driven the equivalent of more than 60 million pounds of fluid milk sales during its limited-time promotions and was backed by a significant marketing budget from Taco Bell.
Dairy Management Inc. has also worked with McDonald’s to switch from margarine to butter in its more than 14,000 stores, and support its All Day Breakfast to drive incremental sales of butter, cheese and milk, which are prominent breakfast ingredients. Overall, breakfast foods now make up 45% of sales at McDonald’s.
Dairy Management reports that its product development work with pizza chains like Domino’s and Pizza Hut as well as quick-serve restaurants such as McDonald’s and Taco Bell has driven 230 million pounds of milk sales from cheese-related limited-time offers since 2014.
While overall milk sales continue to trend downward, Dairy Management reports that its checkoff milk partners have actually increased sales by 305 million pounds, which has eased the decline.
But innovation and partnerships is only part of the marketing equation. Gallagher says it’s also vitally important for farmers to share their story with consumers who have no connection to the farm and very little understanding of how their food is produced.
He notes that antibiotic use and animal welfare issues continue to erode consumers’ trust of modern dairy farming, and it’s important for farmers and their representatives to “grab the microphone” and tell their story.
Click here for more coverage of World Dairy Expo.