With flavored milk being reformulated, there is plenty of opportunity for growth in the special channels.

Flavored milk can be a healthful, nutrient dense and exciting product. Just ask anyone who makes it and sells it.  But as the U.S. has struggled for a grip on the obesity problem, flavored milk has also been a potential target due to its high caloric count and sugar content, so much so, that efforts to grow milk sales in channels like school lunchrooms and vending machines have been in somewhat of a limbo in recent years.

All that’s about to change.

And for school milk that’s particularly important, as flavored milk makes up about 70% of all the milk sold in school lunchrooms.

MilkPEP has implemented a program that will aid dairy processors in reformulating their flavored milk line so that each product within it will fall below a 150 calorie per 8 oz threshold.

This is a measurement that the beverage industry has voluntarily adopted through discussions with the Alliance for a Healthier Generation. The alliance is a group made up primarily of the American Heart Association and the Clinton Foundation.  A boost in vending activity will likely come about in a different manner, but we’ll get to that later.

Doug Adams, president of the Prime Consulting Group, Bannockburn, Ill., says his company has been working for more than a year with MilkPEP to help member dairies reach the 150-calorie threshold. Since August that has meant a series of workshops with individual processors.

“About 70% of current flavored milks exceed that limit at 160 to 170 calories,” Adams says. “Thirty percent were at 150 or lower, but the majority need to pull 20 to 30 calories out.”

Prime Consulting is the same company that worked with MilkPEP and Prairie Farms on the St. Louis School Milk Test which found that significant gains in school milk sales could be made through more colorful packaging, improved flavors and a wider variety of flavors.  In fact, milk sales increased by 61% in that test over a three-year period.

For the school milk reformulation project it solicited all known flavor houses working in the dairy industry, asking them to make their expertise available to the dairy companies.

“Nine flavor houses have signed on to do it, and the dairy company will pick the one that they want to go with,” Adams says.

The workshops are fairly simple and to the point.

“We first make the business case about the challenges and the opportunities,” Adams says. “We also encourage them to make flavored milk that tastes better and to offer more variety. Finally, we turn it over to the flavor house and they talk to them about different options that are available in terms of different flavor formulations and ingredients.”

As of mid-January, 18 workshops had been conducted, some of them with more than one processor.  With an August timetable for meeting the criteria, Adams expects to do more than that in the first half of this year.

So far processors are responding well, he says.

“We see this as a great opportunity for the industry,” he says. “Flavored milk could be another 200 plus million gals or 40% growth at schools.”

Supplier and processor perspectives

One of the flavor suppliers participating in the program is Givaudan Flavors, Bridgeton, Mo. 

“Givaudan has been a key player in the school milk category for some time with chocolate powders and flavor formulas,” says Marketing Mgr. Patty Baxendale.

“When it came time for these workshops Prime Consulting contacted us to find out if we would be interested, and of course we were.”

Baxendale says that despite some initial skepticism, most processors are quick to embrace the idea of reformulating their flavored milk.

“The cost difference per unit is really fractions of a penny.  Every processor we have met with has decided to improve their flavors and to add more flavors.  And they are really starting to understand the marketing aspects of it, too.”

Marketing flavored milk in any channel requires some dexterity, Baxendale says.

Half gallons of vanilla in the supermarket might not work, but 8-oz bottles in the lunchroom probably will. Also processors need to keep in mind whom their target customer is here.

“We found that in formulating flavors for kids you really need to be careful, because the flavors that kids like are not necessarily going to be the same as the flavors that adults might like,” Baxendale says.

“We tell processors they need to test things with kids, even if they do so on an informal basis, by say having sampling at a school, and we’ll support them by providing the samples. That can generate a lot of excitement among the kids because it gets them to try flavors they might not otherwise try, and it gets them excited about being part of the process.”

Smith Dairy Products, Orrville, Ohio, participated in the program and has come up with a chocolate milk that’s less than 150 calories and has no more than 20 grams of sugar per 8 oz serving.

“Our school milk sales are good right now, due to several factors,” says Penny Baker, Smith’s dir. of marketing.  “We have an 8-oz yellow HDPE bottle that we introduced last January and it’s about 30% of our school milk sales now and it’s coming along. We still sell a lot of paper, too, but the plastic is growing.” In the 2007-08 school year, Smith is introducing its reformulated flavored products.

“The milk chocolate is already in line, and we are looking at the strawberry and vanilla,” Baker says.

Smith does a lot of limited edition flavors too with things like Cookies and Cream, Baker says.

Meanwhile, Massachusetts-based HP Hood is also in the process of revamping its school milk line, and has worked with the MilkPEP program, too.  

“It’s our hope to deliver both nutritionally superior and delicious tasting flavored milk in time for the 2008 school season,” says Hood’s VP of Communications Lynn Bohan.

Processors interested in setting up a workshop should contact MilkPEP.

Keep on rockin' in the lunchroom

Reformulation might be the big issue for school milk in 2008, but promotion continues to be one of the key drivers of school milk sales, and the industry continues to show that it is second to none in this arena.

Consider the recent announcement concerning the Milk Rocks! campaign.  

Award-winning, multi-platinum country superstars Rascal Flatts are joining up with the successful campaign to promote health and nutrition while giving their fans a chance to win a once-in-a-lifetime opportunity to sing with Rascal Flatts live on stage.

The “Be a Milk Rockstar” grand prize also includes a VIP concert experience featuring a private meet-and-greet with the band in the winner’s own “dressing room” for the night-a fully customized Gibson Guitar tour bus parked backstage, from where they will host a concert webcast. After the concert, the lucky winner will also score a meeting with a Lyric Street Records A&R representative.

Beginning March 1, fans can register at www.milkrocks.com to pick their favorite of five available Rascal Flatts songs and upload their own karaoke-style video recording of the tune, to be voted on by the Milk Rocks! online community.  The top ten vote earners will win the first prize of exclusive signed Les Paul Gibson guitars, plus Rascal Flatts CDs and posters signed by the band.  From the top three, the grand prize winner will be hand-picked by Rascal Flatts  themselves on April 15 to receive the unforgettable, deluxe concert experience (performance date TBD).

 Lyric Street Records’ Rascal Flatts, just the latest stars to join the highly successful Milk Rocks! campaign, have become one of the most successful acts in music, with over 15 million albums sold, nine #1 songs and 17 top 10 hits.

The band also recently won the CMA “Vocal Group of the Year” for the fifth consecutive year.

New York-based MilkMedia’s milk carton side-panels and lunchroom posters are table-talk in more than 95,000 elementary, middle and high schools nationwide, spreading the word on health, nutrition and exercise on up to 24 million branded cartons of milk per day.  Directed at ‘tweens (ages 9-13) and teens (ages 14-19), Milk Rocks! makes milk “cool for kids” in schools, on the web and in concerts with today’s brightest stars.  The Milk Rocks! program, which launched in September 2007, has recently been featured in Billboard and The Hollywood Reporter, and has attracted American Idol star Elliott Yamin, Hilary Duff, The Cheetah Girls, Mandy Moore, Aly & AJ and dozens of other artists from many major and independent record labels.

About vending

As for the next frontier in vending, that might be a bit harder to forecast at this point.

A year ago, Florida-based Bravo! Foods appeared to be the verge of  a vending breakthrough, but the dissolution of its partnership with Coca Cola Enterprises may have left vending (temporarily) in the lurch.

Industry analysts say that the next breakthrough in vending will most likely involve aseptic milk in existing machines owned by one of the major soft drink companies.

Last year Glendale, Calif.-based Nestlé began shipping an 8-oz aseptic package of its Nesquik brand. Schools and other foodservice locations were a prime target for the package, Nesquik Brand Manager Cathy Dean told Beverage Industry magazine. The company also saw the package as a grab-and-go item in convenience stores, grocery stores and the club channel.

No indication yet whether that package could get heavy play in the vending channel.