Dean Foods Slimming Down, Shoring Up

Dean Foods is in the process of reshaping its brand portfolio and is reportedly becoming more and more centralized in terms of sales and organization.

As part of its optimization and cost saving program, the Dallas-based dairy giant said it was changing its selling structure, described by the company as limited and local, to become a national selling powerhouse. Dean, which currently produces 35 of its own brands and for private labels, is moving towards a smaller portfolio.

“Over time we are going to have to make some decisions concerning where we want to go with this business,” Gregg Engles, Dean chief executive officer, said, commenting on the company’s fresh milk operations, Fresh Dairy Direct, at a meeting in Boston. “We have a number of items within our company that we need to clarify.”

Despite the company’s No. 4 position in the U.S. ice cream market, Engles said that he has more long-term plans for the product. “While this business is profitable, we don’t believe that we have a strategically strong position,” he said.

In tandem with strong volume growth (+2.4% over last year) and a favorable commodity environment, the company is seeing early benefits from its strategic initiatives across the manufacturing and distribution network. The company, which is on track to reach its goal of $75 million in cost savings this year, is targeting $300 million in the next three to five years.

Additionally, in 2009, Dean Foods will spend an extra $20 million in IT, supply chain and R&D investments to improve overall efficiency, Engles said.

Dean operates more than 100 plants nationwide; its brands include Dean’s, Mayfield, Purity, Meadow Gold and WhiteWave.


USDEC Urges Feds to Help Take on Exports

As the U.S. dairy industry grapples with depressed global markets and reduced export sales, government can play a key role in improving the competitiveness of U.S. suppliers, Tom Suber, president of the U.S. Dairy Export Council, said at a recent hearing convened by the U.S. House Agriculture Committee’s Subcommittee on Livestock, Dairy and Poultry.

“Congress and the administration could pursue a number of measures that USDEC believes would help us maintain and improve our global competitiveness and permit us to more rapidly regain export markets as economies improve,” he said.

In the first five months of 2009, the value of U.S. dairy exports was down 52% from last year’s record pace, according to the latest U.S. Department of Agriculture/Foreign Agricultural Service data.

Ultimately, the return of consumer demand will come with the restoration of economic growth, Suber said. And virtually all forecasts foresee a medium- to long-term return to dairy demand expansion that exceeds the supply capabilities of the traditional exporters, leaving opportunities for U.S. suppliers to fill the gap.

As a result, Suber called for maximum use of the Dairy Export Incentive Program to help U.S. suppliers compete with subsidized exports from the European Union and aggressive pricing from New Zealand. He also asked that Congress maintain funding for the Market Access Program and the Foreign Market Development program at their full Farm Bill authorization levels of $200 million and $35 million, respectively.

Additionally, he referenced the U.S. violation of its cross-border trucking obligations with Mexico under the North American Free Trade Agreement. After the United States refused to allow Mexican trucks to deliver into the U.S. market, Mexico implemented new retaliatory tariffs, a move that puts U.S. dairy exports at risk. Finally, Suber asked the subcommittee to be prepared to assist the industry in accommodating the impact of increasing globalization on both the domestic and export markets.

In the meantime, an Innovation Center task force will be developing strategic recommendations for a path forward in the face of a more integrated and global dairy industry, which Suber said it is prepared to share with the subcommittee.


Dairy Industry Takes Pledge on Climate Change

The dairy industry signed on to a climate-change initiative during the World Dairy Summit in Berlin.

Signed Sept. 24 by seven organizations on behalf of the world’s dairy associations and companies, the Global Dairy Agenda for Action is an industry pledge to reduce carbon emissions as part of its contribution to help address global warming. This pledge builds on past performance to address climate change.

The declaration also seeks the support of policy makers to provide a supportive regulatory policy environment that recognizes the important economic, social and environmental contributions of the dairy industry.

“This Agenda for Action represents an unprecedented level of cooperation across national borders and along the dairy supply chain. The global dairy community and its partners have pooled resources, knowledge and projects to achieve a more sustainable future,” said Povl Krogsgaard, deputy managing director of Denmark-based Arla Foods.

“From production of feed for dairy cows to processing, packaging and distribution of milk, many elements contribute to the dairy industry’s commitment to reducing greenhouse gases,” said Richard Doyle, president of the International Dairy Federation. “It makes good sense to reduce GHG emissions; it saves money and improves efficiency in production.”

The Global Dairy Agenda for Action encompassed five points:

• Promote the development of a standard methodology framework for assessing the carbon footprint of milk and dairy products based on robust science.

• Promote adoption of world’s best practices within the global dairy sector.

• Advance the establishment of tools to facilitate measurement and monitoring of emissions both on-farm and in dairy manufacturing.

• Promote improved farmer understanding of agricultural emissions and opportunities to reduce greenhouse gas emissions on farm.

• Support sharing information and aligning research efforts to develop cost-effective mitigation technologies for both on farm and manufacturing applications.

The declaration is being signed by Eastern and Southern African Dairy Association, European Dairy Association, Pan-American Dairy Federation, Global Dairy Platform, International Dairy Federation, International Federation of Agriculture Producers and Sustainable Agricultural Initiative Platform.

For more information, visit www.dairy-sustainability-initiative.org


MilkPEP honors ‘rock stars’ of innovation in boosting milk sales.

The dairy industry’s top performers gathered at the House of Blues in Cleveland to attend the Milk Processor Education Program’s third annual Peppy Awards ceremony Aug. 5. Surrounded by memorabilia from the country’s hottest rock stars, the proud nominees for the 2009 MilkPEP Awards patiently waited to learn if their innovative and successful milk marketing initiatives would earn them a MilkPEP Award this year.

For the third consecutive year, the MilkPEP Awards shined the spotlight on sales and marketing professionals who utilized MilkPEP promotions to increase milk sales by integrating their brands into MilkPEP materials for a winning combination. More than 150 entries were submitted for recognition in six categories – retail, schools, grassroots, Hispanic, producer/processor coordination and channel expansion.

A total of 34 MilkPEP awards were presented, including one category winner for each of the six categories as well as winners for subcategories for the individual programs during the year:

Retail

Category Winner: Vince Front, account manager, Kroger (Columbus Division); Halloween
Refuel With Chocolate Milk: Sarah Drake, sales and marketing, Broughton Food Co.
Halloween: Keith Gauthier, corporate sales manager, Turner Holdings
Drink Well, Live Well Sweepstakes: Kim Lenahan, marketing coordinator, H. Meyer Dairy
Liquid Sunshine: Randy Eronimous, director of marketing, Darigold
Get More Mileage With Milk: Kim Lenahan, marketing coordinator, H. Meyer Dairy
Other/Retail: Mitzi Gerber, sales representative, Reiter Dairy


Schools

Category Winner: Vince Varjabedian, sales manager, Borden Milk; Refuel Your School
Refuel Your School: Karie Mire, human resources manager, Borden Milk
Body By Milk: Cindy Ono-Lam, dairy category director, Safeway
Halloween: Kim Buice, account manager, Borden Milk


Grassroots

Category Winner: Keith Telaak, marketing specialist, Upstate Niagara; Finish Line Kits/ Refuel With Chocolate Milk
Campaign for Healthy Weight: Barry Wood, sales representative/marketing coordinator, Goldenrod Dairy
Drink Well, Live Well Events: John Mitchell, zone sales manager, Southern Belle Dairy
Milk Mustache Mobile Tour/Chief Health Officer: Veronica Rendon, director of corporate sales, Heartland Farms
Milk Mustache Mobile Tour/Drink Well, Live Well: Sheri McCrary, marketing and communications manager, Borden Milk
American Heart Association Walks: Ramona Finn, foodservice representative, Purity Dairies Inc.
American Heart Association Walks: Ron Mele, account manager, Swiss Dairy
Finish Line Kits/Refuel With Chocolate Milk: William Saldivar, business manager, Super Store Industries
Finish Line Kits/Refuel With Chocolate Milk: Aaron Wockenfuss, nutrition communications director, Dairy Farmers Inc.
Halloween: Diahann A. Smith, multicultural communications manager, Dairy Farmers Inc.
Halloween: Al Streeter, corporate marketing director, Roberts Dairy
Other/Grassroots: Steve Jasper, sales representative, Cream O’Weber


Hispanic

Category Winner: Ron Mele, account manager, Swiss Dairy
Liquid Sunshine: J.C. Montenegro and Hugo Valdez, sales executives, Hygeia Dairy Co.
Other/Hispanic: Diahann A. Smith, multicultural communications manager, Dairy Farmers Inc.


Producer/Processor Coordination

Category Winner: Kim Lenahan, marketing coordinator, H. Meyer Dairy, and Jan Berendsen, school marketing manager, American Dairy Association Mideast; Schools
Retail: Sheri McCrary, marketing and communications manager, Borden Milk, and Theresa Wagner, director of dairy confidence, Dairy Max Inc.
Grassroots: Robin Chaddick, marketing communications manager, Velda Farms, and Darcy Nichols, director of integrated communications, Dairy Farmers Inc.
Vending: Craig Patterson, general sales manager, Turner Dairy, and Betty Brdar, school marketing manager, Mid-Atlantic Dairy Association

Channel Expansion

Category Winner: Susan Angeletti, marketing manager, Galliker Dairy Co.; Vending
Food Service: Barry Wood, sales representative/marketing coordinator, Goldenrod Dairy


Each year, a Grand Peppy Award is presented to the processor that demonstrated creativity and winning strategies across a variety of channels. The 2009 grand prize was awarded to Kim Lenahan, formerly of H. Meyer Dairy. Lenahan maximized H. Meyer Dairy’s investment in MilkPEP programs by successfully integrating the H. Meyer Dairy brand in POS, grassroots events and materials for schools. A strong relationship and coordination with her local Dairy Council contributed to Kim’s success and outstanding results for H. Meyer Dairy.

Once again this year, Dairy Foods presented a special award to a milk marketing professional who exemplified innovation and creative execution of a MilkPEP promotion. The 2009 Dairy Foods Pioneer in Innovation Award was presented to Pam Crist, a brand manager with Shamrock Farms. Crist partnered with Dairy Management Inc. to create Rockin’ Refuel, a brand-new chocolate milk recovery SKU. Building on the Refuel with Chocolate Milk program, Rockin’ Refuel was specially formulated with additional protein and marketed as an ideal post-workout beverage to replenish muscles after physical activity. Sales of Rockin Refuel exceeded expectations and resulted in two new flavors being added to the line including strawberry and vanilla.

New 2010 milk marketing platform revealed

The awards ceremony was the culmination of the annual two-day National Dairy Sales and Marketing Meeting, at which MilkPEP introduced the new 2010 milk marketing platform, “Building Strong Families.” Designed to remind moms that an easy way to build a strong family is to ensure that milk is on the table during every meal, the campaign will leverage cross-promotional opportunities with key national brands in relevant food categories. “Building Strong Families” launches in January with national television and print advertising as well as public relations and grassroots support throughout the year. Retail POS and unique, customizable materials are available that allow processors to integrate their own brand in MilkPEP promotions.

The 2010 promotions also feature support for the Hispanic market with a complementary Spanish-language promotion for each general market promotion. Processors are encouraged to take advantage of these materials since providing a Hispanic-friendly experience can impact retail choices, even among the acculturated.

Processors can help increase milk sales and become eligible to win their own milk mustache ad by signing up and participating in these exciting 2010 programs. Processors can sign-up by calling the Milk Hotline at 800-945-MILK.  Sign-up deadlines vary and processors are encouraged to register early for individual promotions to ensure timely delivery of materials.

Free, downloadable and customizable graphics and materials are available online at www.milkpep.org.


Tillamook Cheese Celebrates Years of Excellence

Contributed by Jay Allison

The Tillamook County Creamery Association was formed in 1909 as a farmer-owned cooperative when small independent cheese plants in Tillamook County, Ore., joined together to form the company. It has since earned a reputation as one of the nation’s premier makers of cheese.

Throughout the years, TCCA expanded its dairy product line to include a variety of naturally aged cheeses, butter, premium ice cream, sour cream and yogurt. In addition to keeping up with current technologies, TCCA values heritage, which is demonstrated by the approximately 120 multigenerational farmers who make up the cooperative.

Over the past century, TCCA and the farmer-owners have remained committed to the core values of quality, consistency and great taste that their consumers have come to expect. To accomplish this they use the highest-quality, freshest milk that arrives daily to make Tillamook products. The all-natural cheddar is made slowly and aged with time, to develop that perfect flavor and texture for which Tillamook cheese is best known.

In addition to valuing tradition, TCCA also cares about the treatment of its cows. Therefore, its farmer-owners certify that Tillamook cheese is made with milk from cows not treated with the artificial growth hormone rBST.


New in the grocery aisle

Tillamook was one of the first companies in the sliced cheese category to offer the consumer-friendly rigid pack. Released last year, the 8-ounce packaged shingle slices come in seven different varieties. Features of the new packaging include an easy-to-open lid and improved slice separation that eliminates the need for paper in-between slices.

TCCA also enhanced its shredded cheese line with five news flavors: Classic Cheddar; Vintage White Medium and Medium; Mexican; two new Italian blends; and Colby Jack.

TCCA also recently came out with a flavored cheese line and plans to add more varieties in the future. Current flavors include the Smoked Black Pepper White Cheddar, Garlic White Cheddar, Garlic Chili Pepper Cheddar, Habañero Jack and Horseradish White Cheddar.

Tillamook’s limited edition anniversary cheese, the three-year aged Vintage White Extra Sharp cheddar wheel, is currently available at select retailers. It is the sharpest of our cheddars, and the company expects it to become a new household favorite.


Looking ahead

In anticipation of the 100th anniversary, TCCA launched a new Web site, TillamookFanClub.com, which complements TillamookCheese.com and is an instrumental tool that allows TCCA to continually engage its most loyal fans. TCCA also launched its first online store where visitors can purchase their favorite Tillamook Cheese products at TillamookCheese.com/store.

The folks at TCCA have a great deal of pride in their history as a farmer-owned cooperative and in continuing to deliver quality dairy products to its customers. The co-op is proud to celebrate 100-year-old traditions and excited to share its anniversary products and events with loyal fans.   n

Jay Allison is vice president of sales and marketing for Tillamook Cheese.