Industry Editorial: Milk as a Beverage? Get Serious.

By David Phillips

A couple days after the last of the 2004 tropical disturbances hit Florida, I was in Tampa attending the new BevExpo. Not surprisingly, I came away thinking about milk's role as a beverage.

David Phillips, Chief Editor

A couple days after the last of the 2004 tropical disturbances hit Florida, I was in Tampa attending the new BevExpo. Not surprisingly, I came away thinking about milk's role as a beverage.

There were good sessions about school milk and milk vending, and I heard some buzz from the show floor about the big CSD companies backing off their efforts to launch or build dairy beverage brands. It has been more than a year since Raging Cow and Swerve made news, and they certainly haven't cornered the market on fun beverages made with milk. The rumor at BevExpo was that the wildly fluctuating cost of milk had the folks from Dallas and Atlanta backpedaling.

It figures that the Federal Milk Marketing Orders might be the only thing noxious enough to keep the soft drink companies and their marketing expertise from stealing milk's franchise.

BevExpo's program on milk vending highlighted recent legislation that precludes any kind of contract from interfering with the sale of milk in schools. This means that school administrators are free to install as many milk vending machines as they like, despite any pouring-rights agreement they might have with a soft drink distributor.

USDA has decided to postpone hearings on a proposal to broaden definitions of Class 1 milk to include dairy-based beverages. Both IDFA and NMPF agree that this is an idea that needs further study and comment.
The agency released a Congressional report on the economic effects of U.S. dairy policy. (see Washington watch p. 15). The report concludes that federal dairy programs have little overall impact on the market and that small benefits to farmers may be offset by higher retail prices and unneeded governmental expense. IDFA sees the report as a mandate for a major overhaul of federal policy, and will push to make such wholesale changes part of the 2007 farm bill.

Selling milk in today's competitive environment is certainly not a cake walk. But there are some opportunities here.

The nation is re-examining nutrition at numerous levels. School administrators have become more selective about the food and drinks they offer to students. The fizzy drink companies may be having second thoughts about entering the dairy arena. And, in Washington, some serious discussion is brewing about revamping dairy policy. This might just be a good time for dairy processors to get serious about making milk a beverage.