Reversing The Trend
by Julie Cook Ramirez
Milk processors continue battling to regain share of
stomach at home and school.
In the black-and-white
world of “Leave it to Beaver,” milk was a given at the dinner
table. Fast-forward to the 1970s and “The Brady Bunch” —
even though the times, they were a-changin’, Greg, Marcia, Peter,
Jan, Bobby and Cindy nearly always opted for a glass of milk.
But as the ’80s and ’90s approached,
things began to change. Not only were families drinking far less milk at
home, but lucrative contracts between school districts and juice and soda
companies significantly cut into the amount they consumed there as well.
School milk sales plummeted — from 3 billion half-pints in 1970 to
1.8 billion in 1980, then 181 million in 1990 and 103 million in 2004.
Not about to admit defeat, several major industry
groups — including Dairy Management Inc. (DMI) and the National Dairy
Council (NDC), both in Rosemont, Ill.; and the International Dairy Foods
Association (IDFA), Washington, D.C. — leapt into action.
“Without a doubt, building life-long dairy
consumption starts with kids,” says Tom Gallagher, DMI’s chief
executive officer. “We have a captive, impressionable audience, and
we must provide milk the way they want it.”
Head of the Class
It seems their efforts are finally paying off. Last
summer, the Washington, D.C.-based Milk Processor Education Program
(MilkPEP) announced that its St. Louis School Milk Test had resulted in an
overall average increase in milk sales of more than 12 percent per school.
The test, which involved 165,000 students at nearly 300 schools,
experimented with multi-colored paperboard packaging, improved flavor
formulations and new flavors of milk provided by Prairie Farms to determine
which proved most popular with children. MilkPEP says those results, if
applied nationally, would translate into more than 600 million additional
unit sales annually.
“The St. Louis test demonstrated the importance
of in-school promotion and in-school activities related to milk,”
says Tom Nagle, vice president of marketing for IDFA. “We’re
trying to figure out what optimum merchandising looks like in a school, so
that we can get as close to that as possible.”
The producer-funded New Look of School Milk program
has also proven quite successful, more than doubling the number of schools
offering milk in plastic, resealable bottles with more than 3,700 schools
participating during the 2005-06 school year, compared to 1,500 during the
2004-05 school year. “The paradigm of school milk is really changing,
and that’s a great thing for the future, but it’s a slow
build,” Nagle says. “You are looking at changing a long-term
behavior of kids, which translates into increased consumption over time,
but it does take time.”
Armed with studies showing more kids will choose milk
at school if it comes in reclosable plastic bottles, DMI has been
encouraging processors to switch to plastic, as well as broaden their
flavor offerings. Among those rising to the challenge is Borden Dairy in
Conroe, Texas, which has been aggressively working to win back
students’ hearts, minds and stomachs.
While participation by grade schoolers has remained
fairly steady, middle and high school students were another story, says Ray
Platter, Borden Dairy’s executive vice president. “It just
didn’t seem like the cool thing to do to pick up milk with your
school lunch,” he explains.
TOP 10 WHOLE MILK BRANDS* | ||||
$ Sales (In Millions) | % Change vs. Year Ago | Unit Sales (In Millions) | % Change vs. Year Ago | |
Total Category | $3,124.2 | -5.7% | 1,193.3 | -5.7% |
Private Label | 1,985.6 | -7.3 | 760.9 | -6.5 |
Borden Milk Products LP | 49.6 | 3.2 | 17.4 | 2.5 |
Horizon Organic | 43.6 | 21.1 | 11.4 | 14.5 |
Lactaid 100 | 31.4 | 2.9 | 8.8 | 0.7 |
Garelick Farms | 31.0 | -5.0 | 13.8 | -6.1 |
Tuscan Farms | 30.7 | -3.4 | 12.6 | -3.7 |
Pet | 30.0 | 3.2 | 11.0 | 1.8 |
Prairie Farms | 28.4 | -6.0 | 11.8 | -4.1 |
Mayfield | 27.1 | -0.4 | 8.0 | -4.7 |
Dean’s | 25.4 | -5.6 | 11.3 | -7.5 |
* Total sales in supermarkets, drug stores and mass merchandise outlets, excluding Wal-Mart, for the 52-week period ending January 22, 2006. SOURCE: Information Resources Inc. |
Discussions with school foodservice officials led
Borden to devise more attractive packaging, larger bottles and more
innovative flavors, including Dulce de Leche, Orange Dream Delight and
Choco-Mint. “The children in the middle schools and high schools seem
to be more attracted to milk if you put it in a larger bottle,”
Platter says of the current 11-ounce container.
For its efforts, Borden won the first-ever Leadership
in School Nutrition (LISN) Award, sponsored by the NDC to acknowledges
positive partnerships between processors and schools through innovations in
milk programming using plastic packaging. (Visit www.lisn-awards.com for
more information — Ed.)
Healthy Halo
While the future of school milk sales looks promising,
milk sales in traditional outlets continue to decline. Overall, sales of
fluid milk in supermarkets, drugstores and mass merchandisers, excluding
Wal-Mart, fell 2.2 percent in dollars and 2.7 percent in units during the
52-week period ending January 22, 2006, according to Chicago-based
Information Resources Inc. (IRI). A closer look reveals that whole milk
suffered the greatest losses, with both dollar and unit sales plummeting
5.7 percent. Skim/lowfat milk sales dropped 1.0 percent in dollars and 1.3
percent in units, while flavored milk sales fell 0.8 percent and 3.4
percent, respectively.
These figures come as no surprise to Matt Samson,
marketing director at Garelick Farms, Franklin, Mass., who says consumers
are conflicted when it comes to milk. Bolstered by good news linking dairy
and weight loss, they are motivated to drink more milk. While they like the
creamy taste of whole and 2% milk, health-conscious consumers are concerned
about the fat content but find that skim milk just doesn’t cut it
when it comes to taste and mouth feel.
Responding to such consumer feedback, Garelick
introduced Over the Moon milk, which claims to deliver the rich, creamy
taste of milk but with less fat. Over the Moon is available in a 1% variety
that is said to taste like whole milk and a fat-free variety that
supposedly tastes like 2%. Samson says developing such a product
didn’t pose much of an R&D challenge, as it merely entailed
adding back more calcium and protein, two nutrients consumers are seeking
more of anyway.
“People consider milk to be one of
nature’s perfect products and don’t want to feel like
we’re altering that,” he says. “Since calcium and protein
are naturally present in milk, they are comfortable with us using these
nutrients to fortify Over the Moon, and they appreciate that this natural
fortification delivers the product’s ultimate benefit of better
taste.”
Meanwhile, organic milk is growing by leaps and
bounds. Dean’s Horizon Organic leads the pack, reporting growth of
more than 21 percent for its whole, skim and lowfat offerings for the year
ending January 22, according to IRI. Other processors are jumping on the
bandwagon, with both brands and private labels adding organic line
extensions.
While many processors tend to view organic milk as a
competitor, Nagle says it’s not a matter of organic milk
cannibalizing traditional milk sales, but of one segment of the category
boosting overall consumption.
“It’s hard to think about organic milk
cannibalizing regular milk because organic milk is regular milk with some
specific added-value benefits to the consumer,” he says.
“People often view it as a separate part of the business, but if you
look at it from our perspective, which is, ‘what are total national
sales and consumption of fluid milk,’ it’s part of the mix
— it’s just a value-added segment with a strong brand
orientation. That’s different than the rest of the core volume, which
is more commodity-driven and less branded.”
Julie Cook Ramirez is a freelance journalist based in
the Chicago area.
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