Head of the Class

Head of the Class
by Shonda Talerico Dudlicek
With the future of fluid sales on the line, the
paper-plastic debate is dominating the dairy packaging scene.
How do you get kids to
drink more milk? Some in the industry say it’s all in the packaging.
Amid a packaging landscape strewn with tamper-evident
seals, full-body shrink sleeves and reclosability, it’s the paper vs.
plastic debate that seems to be making the most noise. In what’s
shaping up to be a watershed issue for the struggling fluid segment,
processors and pundits alike are taking sides in the argument over the best
way to win over a new generation of milk drinkers.
Final results came in this month from the St. Louis
Milk Test, sponsored by Carlinville, Ill.-based Prairie Farms Dairy Inc.,
the Milk Processor Education Program (MilkPEP) and the St. Louis Dairy
Council. Begun in January, the test involved about 165,000 students
introduced to new multi-colored paperboard packaging, improved formulations
and new flavors to determine which products are most popular with children.
Milk sales increased an average of more than 12 percent per school.
Meanwhile, Dairy Management Inc. (DMI), with its own
studies long finished, is aiming to convince processors that for getting
kids to stick with milk after they graduate, there’s a great future
in plastic.
The Paper Chase
“This test confirmed our hypothesis that
marketing efforts including enhanced packaging and new and improved flavors
can significantly increase school milk sales,” Victor Zaborsky,
senior marketing manager for the International Dairy Foods Association
(IDFA), Washington, D.C., says of the St. Louis experiment. “What was
somewhat surprising was the huge increases in sales realized by schools
that incorporated a number of marketing tatics to promote the new milk. The
best-performing schools had increases of 35 percent.”
The 290 participating schools are divided into three
groups, each of which receives a different combination of enhanced paper
cartons with colorful graphics and new flavors (a control group of 120
schools got no changes in milk offerings).
The driving force behind the St. Louis Milk Test is
Prairie Farms’ chief executive officer Roger Capps, who wanted to
test gabletop cartons with enhanced graphics and a variety of flavors.
“We’re not fighting plastic. I’m not going to get into
that argument. [But] for school milk, it would cost 5 cents more per unit.
In school milk, you can improve the packaging with quality graphics,”
says Capps, whose company packages milk in both materials.
“As an industry, the way we were treating our
school milk program would cause children, by the time they hit eighth
grade, to become tired of milk. By high school they’d get sports
drinks and Cokes from a machine. Drinking milk is a pleasure. The key is to
not lose young people.”
The folks at Cantrell, N.C.-based Blue Ridge Paper
Products, which makes the gabletop paperboard cartons for Prairie
Farms’ school milk program, say it really isn’t even the
packaging that makes the difference. “It’s the variations,
choice and promotion,” says John Latham, Blue Ridge senior analyst in
business planning. For example, in the St. Louis test, school cafeteria
workers wore “got milk?” buttons and asked students if they
wanted to add on milk to their lunch.
While the industry universally wants milk consumption
to increase, Latham says, plastic bottles cost up to a nickel more per
unit, “for packaging that taxpayers have to pay for in our school
districts.”
Blue Ridge ran its own marketing test following the
IDFA packaging test and came up with the same results. After 10 weeks,
sales showed a 10 to 14 percent increase with the promotional materials and
a 16 to 20 percent increase in flavor consumption.
Latham says rural school districts tend to prefer
paper cartons because they crush flat and weigh less. “Recycling or
recovery isn’t economical when there’s no close source for
selling this,” he says. And Pam Paris, Blue Ridge’s director of
marketing for school milk programs, argues that paper is superior for
graphics because its shape yields four square sides. “Graphics can
send a positive message to students to increase milk consumption,”
she says.
Paper’s other assets: “Paper is 10 times
more effective than plastic at keeping products cold,” Latham
asserts. “Kids’ warm fingers withdraw the chill from the
product when they put their fingers around the plastic. Paper retains a
colder temperature longer, past the 30-minute milk period.”
Ultimately, Latham says, processors must emphasize the
marketing and promotional areas in their school milk programs. “Dairy
processors need to look at school milk as a business,” he says,
“not a bid.”
Also on the paper trail, Orrville, Ohio-based Smith
Dairy has been revamping the paperboard cartons it uses for its school milk
program.
“We’re trying to explore some better
options to make our cartons exciting, user friendly and attractive,”
says CEO Steve Schmid. “School milk is not a huge amount of the
business, but is a significant chunk of the business. We can’t ignore
it. We can be a little more proactive.”
Smith Dairy has done some vending with its plastic
bottles alongside paper cartons on the school cafeteria line. “But
we’re not a vending company,” Schmid says. “Plastic has
eye appeal. [But] not everyone wants plastic.”
Smith Dairy hasn’t finalized the graphics for
its cartons, but plans to add another color before the redesign is
introduced this fall. “Prairie Farms added some pizzazz to their
paperboard cartons,” Schmid says. “They’re the ones who
showed us it can be done.”
Passionate About Plastic
Tom Gallagher, CEO of Rosemont, Ill.-based DMI,
respects those who prefer paperboard. But, he contends, packaging is the
problem.
Three years have passed since DMI’s
producer-funded School Milk Pilot Test, in which 12 processors served milk
with plastic packaging, and enhancements in flavor, variety and
temperature, at school districts around the country; sales rose 22 percent
in high schools and 15 percent in elementary schools.
Today, more than 40 processors are actively converting
their school milk to plastic, Gallagher says. “We’re putting in
front of our children an unacceptable depiction of packaging that has not
stayed competitive,” he says of paper cartons. “We do not need
another study.”
Gallagher cites the growth in milk sales at
Wendy’s and McDonald’s after the chains switched to plastic
bottles, motivated by the test results. Store operators who hoped to boost
weekly sales of 40 to 50 cartons by 10 units per store are now selling 275
to 325 bottles per week.
“The industry can grow the fluid milk business
– not with another study, or how to talk to consumers. But at
schools, if we change the packaging, we’ll grow the business,”
Gallagher says. “Why don’t [kids] like paper? They can’t
open them, can’t drink it. We’ve got to wake up here. This is a
different era.”
Gallagher argues the increased sales in the St. Louis
test are more due to flavors than packaging. “At the end of the day,
you have to look at what happened in McDonald’s and Wendy’s and
see that 90 percent of consumers prefer plastic,” he says, predicting
that every major foodservice chain will switch to plastic packaging within
the next two years.
“How long do you think we’ll be able to
keep a school milk program if kids stop drinking milk?” Gallagher
says, noting the average consumer drinks less than 8 ounces of milk a day
— a consumption crisis for a segment in a 21-year decline.
“That’s 55 million kids a day. How much is that worth to us?
How many other products have that direct product placement?”
Gallagher agrees too many processors view school milk
as an insignificant part of their business, noting that producers would
favor anything to boost fluid numbers. “But these 40-plus processors
looked at it and said, ‘The school milk program is 7 percent of my
current volume, but what about all of my future volume?’” he
says. “Look at what the soda companies do and how much they’re
willing to keep water and juice in plastic bottles in vending machines.
What would soda do if it had 55 million opportunities?
“Dairy processors should use their school milk
program as the future of milk consumption, as a business. Plastic and
flavors in the school milk program is a big change. We just can’t let
the industry get distracted from the high prize, which is plastic.
It’s not even a debate — it’s common sense.”
Garelick Farms, one of the original processors in
DMI’s pilot test, now offers school milk in both paperboard and
plastic bottles. The Lynn, Mass.-based unit of Dean Foods Co. ran its own
test after DMI’s and came up with similar results, says Jerry Finn,
senior director of Garelick’s fluid milk sales.
“We saw the value of plastic bottles in our
10-ounce bottles in Boston by our profile with Dunkin’ Donuts,”
Finn says, explaining how Garelick stocks a four-sided glass cooler with
single-serve milk and juice bottles near the restaurant’s entrance.
When Garelick offered 10- and 16-ounce bottles from high school down to the
lower grades, “sales catapulted when kids were eager and saw the
opportunity to get these bottles like they get at Dunkin’
Donuts,” Finn says. “They picked those over the gabletop, or
what I like to call ‘Leave it to Beaver’ packaging.”
Finn says consumption rose 32 to 35 percent when
Garelick offered single-serve plastic bottles (made by Portola Packaging
Inc., New Castle, Pa.), noting that the Tewksbury, Mass., school system
served only increased by nine students.
Garelick started out offering 16-ounce plastic bottles
in high schools, but demand drove them into the lower grades. “When
you have little Johnny in sixth grade drinking out of the cardboard cartons
and his older brother Joe in 11th grade can have strawberry and chocolate
milk in plastic bottles, Johnny wants to be like his bigger brother,”
Finn says. “Kids were buying three times and four times the milk a la
carte, so they forced us to offer plastic bottles with the
meals.”
Additionally, Garelick was able to take advantage of
Northeast Dairy Council funding to provide school cafeterias with large
four-sided glass-front coolers with fans to circulate air over the bottles.
“When the flow of air gets around these bottles, it gets them ice
cold at 35 degrees. It’s almost like there’s an air curtain
pulled around it in these coolers,” Finn says.
Another advantage of plastic single serves, Finn says,
is that they’re stored and shipped in shrink wrap, adding more
protection. In crate storage, gabletops are exposed to the elements in
Garelick’s territory, like New England snow and muddy boots.
“Cafeteria staff wipes off the tops of the cartons,” Finn says,
“but kids are still putting their mouths on them.”
Furthermore, he says, plastic bottles are more space efficient in
crates for delivery; drivers only need to make three shipments of milk
weekly instead of four, and they’re able to store more milk on
location.
As such, plastic is an easier sell to school systems,
Finn says. Garelick has been able to increase its milk volume, and 5
percent more students are taking school lunches.
Breaking Down
For some, the debate is within plastic itself. William
Horner, CEO of organic processor Naturally Iowa, says his member dairy
farms were looking for a niche and found it in NatureWorks PLA bottles,
made from 100 percent corn.
“The company didn’t see itself as a viable
competitor in the commodity dairy industry. If we produced just organic
milk, we would still not be in the unique niche we felt would be needed to
succeed,” Horner says. “So we asked Iowa State University to
independently test PLA’s viability for bottling dairy products. After
extensive testing, we were convinced the product had what it took to do the
job.”
PLA (polylactide acid, a polymer made from corn
dextrose) provides the convenience, look, feel and performance of
petroleum-based plastic packaging while minimizing environmental impact.
NatureWorks PLA bottles look and feel like traditional plastic packaging,
but are compostable.
“Now I’m more convinced than ever that
this packaging is revolutionary for dairy products,” Horner says.
“I couldn’t tell the difference. The neat thing about these
bottles is that they go back into the earth after 100 days, and
they’re made from a renewable resource.”
And the consumer response? “We know from our
market tests that people were flabbergasted and amazed and any other word
you can think of to describe it,” he says. “When they hold it
in their hands, they can’t believe it’s corn.”
The Clarinda, Iowa-based processor sells its organic
milk in corn-based half-gallon containers, and is pursuing grab-and-go milk
and yogurt bottles.
Horner says the unusual bottles prompted nationwide
distribution in organic food retailers. “Frankly, we can be more
selective where we can go with this because of the bottle,” he says.
“Stores were just as interested in that as they were in us.
It’s a big deal for our member dairy farmers.”
Environmentally friendly packaging provides a
promotional advantage for products such as organic milk. “Retailers
and brand owners are constantly looking for ways to enhance their brand
image and increase customer loyalty, while helping their products stand out
from the clutter of the beverage case and dairy aisle,” says Brian
Glasbrenner, NatureWorks business development manager.
Horner says his company has new packaging concepts in
mind, and plans to start a blowmolding division to help smaller dairies
enter this arena.
First Ice Cream, Now …
Hitting the dairy case this summer are new scround
cups with updated graphics from Kaukauna, Wis.-based Bel/Kaukauna for its
cold-pack cheese spreads. Al Dummer, director of marketing, says the
scrounds — made by Omaha-based Airlite Plastics Co. — were
designed “from the ground up to be bold and innovative, appealing to
customers across the age spectrum. It was a standard round with graphics on
the cup, and our competition had the same. We wanted to stand out from the
crowd. We wanted to create our own new cup and mold so we would have a
unique shape, quality and eye appeal. We have a premium product and we had
nothing to suggest that.”
A shrink-film label delivers bolder graphics so
Kaukauna cheese really pops off the shelf, Dummer says. “The logo is
new and does a great job of displaying the brand name and reinforcing the
Wisconsin heritage of the company,” he says. “Also the bold
banner below the brand name allows consumers to easily differentiate
between flavors.”
The redesign offers a more contemporary look to
attract younger consumers; the company reports most cold-pack consumers are
over 55. Research also showed most consumers scooped their cheese out of
the cup for serving “because the cup was kind of boring,”
Dummer says. “Now the packaging is more exciting, so they can display
the packaging on their table while entertaining.”
The new packaging extends to the Kaukauna brand in
8-ounce and 16-ounce cups and WisPride brand in a 12-ounce cup.
Lids feature a full-color label that displays the
product well in a retail bunker display unit. Formerly, lids were blue for
sharp cheddar and red for port wine varieties; now they’re all blue
with a high-resolution, four-color variety label in the center. “Some
grocers display the product on the dairy shelves, up high so you can see
the cup,” Dummer explains, “while others put them in the dairy
bunkers so you can see the brand when you’re looking down.”
Pushing the Envelope
While there seems to be excitement in dairy packaging
among processors and industry promoters, a seasoned observer has a markedly
different view.
Bob Messenger, editor and publisher of online industry
newsletter The Morning Cup, longs for innovative products that are truly
new, not revamped or improved.
“There’s nothing new in dairy packaging.
It’s one of the most disappointing categories. It’s boring and
predictable,” Messenger says, declaring there’s been nothing
new in milk since the Chug. “This might be all the dairy industry
needs. It’s their comfort zone. They might be making money, but they
don’t like to rock the boat. There’s been no
edge-of-the-envelope packaging. No one is willing to entertain
risk.”
Messenger entertains it himself with some suggestions.
“In the milk segment I’d love to see chocolate milk in a
collapsible pouch that you can stuff into your fridge and that fits in
every nook and cranny,” he offers. “I’d love to see
pocket milk, squeeze milk — something that shouts convenience.
… Squeezable butter — I’ve seen whipped, but I think
squeezable would shout convenience. There’s been big talk about
flavored milk or developing milk that’s more appealing to kids. What
about dark blue, black or red milk? … You’ve seen those water
bottles with the spigot or spout? Why are there no milk bottles with those?
There may be an issue with stickiness or clogging, but at least something
in that direction.”
Messenger charges the dairy industry has become too
complacent, resting on the “got milk?” program.
“It’s a problem that’s typical of commodity products in
an industry. You have to keep striving for new, unique, entertaining and
appealing products,” he says. “I love the category — I
just think it’s boring. I think the industry needs to get
cracking.” m
Shonda Talerico Dudlicek is a freelance journalist and
a former managing editor of Dairy Field.
Other Trends Guide Packaging
From tamper-evident seals
and snap-off rings to custom-shaped packages and metallic graphics,
processors’ packaging demands are many.
“Everyone seems to be going to shrink sleeves
due to the high graphics and 360-degree coverage,” says Howard
Millstein, president of Chatsworth, Calif.-based Ameri-Seal Inc.
With the rise of the private label sector, PL
processors are requiring packaging on par with national and regional
brands, says Brian Metzger, director of business development at SleeveCo,
Arlington Heights, Ill.: “Shrink-sleeve labels continue to enjoy
tremendous popularity.”
Rich Szyperski, technical services manager at
Evergreen Packaging Equipment, Cedar Rapids, Iowa, sees a trend toward
higher barrier property to increase shelf life.
One of the newest innovations to help ensure integrity
of the cold chain is Avery Dennison’s TT Sensor, a
time-temperature indicator label. The Strongsville, Ohio-based Industrial
Products Division of Avery Dennison created this active label technology
for the seafood market and recognizes valuable applications for dairy
processors for milk gallons, yogurt cups and cheese packages. The sensor
label has a yellow dot that, if the product experiences a change in
temperature, turns to pink.
Atlanta-based MeadWestvaco Packaging reports that
consumers are most concerned with portability, space management and
accessibility. The company’s multipack has a consumer-friendly
handle; its opening feature is child-friendly, making it easier to dispense
product. Pouch products will be useful in dairy applications, like
drinkable yogurt, in demand by on-the-go moms and kids, says Paul Spitale,
senior project manager of worldwide technology.
After an exclusive two-year arrangement with Sargento
Foods, Lake Forest, Ill.-based Pactiv is now marketing its Slide-Rite
zipper to other dairy-based companies. Marketing manager Larry Rebodos says
there’s an untapped market for the closure, especially as
manufacturers continue to grow their product lines to include items like
individually wrapped snacking cheeses.
Tetra Pak, Vernon Hills, Ill., is a supplier of
multi-layered, high-barrier cartons for single-serve milk consumption.
School vending is a logical extension of the brick package, especially for
shelf stability, says Jeff Keller, vice president of strategic business
development.
Outlook Group Corp., Neenah, Wis., and Aviso Packaging
LLC, Ossian, Ind., are bringing new technology to natural cheese packaging
for retail and foodservice markets.
“The packaging technology for natural cheese
products has not changed significantly in over 30 years,” says Joseph
Baksha, president and chief executive officer of Outlook Group. “The
new technology we are introducing enables cheese producers to wrap their
cheese in film that is thinner, tougher and less expensive than the film
currently being utilized.”
Aviso co-owner Keith Flesch said he saw the need for a
more efficient and cost-effective type of film. “We developed the
technology to enable cheese producers to benefit from the added strength,
longer shelf-life and lower cost of co-extruded film,” he says.
Bob Koch of Multivac Inc. says new packaging solutions
provide portability and ease of preparation, support healthy eating and
create visual appeal on retail shelves. Taking advantage of these trends
can help manufacturers grow their product lines, Koch says.
Multivac offers the R530 Zipline, an automated
rollstock system in which slider zippers are applied to packages in-line.
“Americans tend to eat on the run … [and] cheese, which travels
easily and provides a source of energy, is an important part of this
trend,” Koch says.
“Manufacturers can give consumers the
convenience they need by packaging cheese with features such as resealable
closures or by creating individually wrapped, ready-to-eat portions.”
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