Milk processors grow sales one serving at a time
As sales of nondairy milks alternatives surge, the milk industry fights back with innovations in single-serve packaging and by positioning chocolate milk as a recovery beverage.
The milk industry dodged one bullet this year (thanks to the temporary extension by Congress of the 2008 farm bill, keeping milk prices stable, for now) but the numbers show there’s still a bumpy road ahead.
In the 52 weeks ended Nov. 4, 2012, sales (as measured by dollars) were stagnant and unit sales were down 2.3%, according to data from SymphonyIRI Group, Chicago. As the milk industry continues to scramble to find ways to stay relevant, alternative nondairy milk forms, like almond milk, show an increase in popularity. The refrigerated kefir/milk substitutes/soymilk category saw a 15.6% dollar sales increase, with units up 15.2% in the same time period above, according to SymphonyIRI. (Although kefir is a dairy beverage, SymphonyIRI Group tracks it with milk substitutes.)
But milk processors are not going down without a fight. Fueled by the on-the-go trend and a rise in popularity of chocolate milk as a recovery beverage, there is still promising news for the industry. Single-serve milk offerings continue to grow as processors look to add more portable milk solutions.
“In the beverage industry, portability is king,” said Vivien Godfrey, CEO for the Milk Processor Education Program. “Single-serve milks allow consumers to consume milk both in-home or on the go, without having to worry about refrigeration,” she said. Single-serve sales across all channels grew 4% last year according to MilkPEP’s All Channel Tracking study. The growth in the category when schools were excluded showed a 10.6% increase, driven mainly by restaurants, grocery and mass stores.
“As processors continue to see strong growth in the category, I believe they will continue to innovate and bring more single-serve offerings to the market,” said Godfrey.
Rebecca Leinenbach, sales program director at Prairie Farms, Carlinville, Ill. said along with offering on-the-go nutrition, single-serve packs expand milk-drinking occasions beyond breakfast. Plus, the single-serve concept offers more variety in flavor options.
A future in shelf stable
Recent studies from Chicago-based Mintel show that households with children are more likely to be interested in single-serve milk packaging. Though its studies also show that many milk drinkers/buyers prefer a refrigerated format, milk processors can increase milk-drinking occasions by communicating the benefits and multi-occasion use of aseptic packaging for children — such as in school lunch boxes and on the playground. According to Mintel, the dollar sales of Horizon Organic milk in aseptic (single-serve) packaging increased by nearly 26% to $66 million from 2010 to 2011. Single-serve aseptic packaging offers on-the-go convenience and expands milk-drinking occasions because consumers are not tethered to a refrigerated gallon jug of milk. So in addition to milk at breakfast or lunch, there are more opportunities to drink milk.
Horizon Organic, a subsidiary of WhiteWave Inc., is the category leader in single-serve shelf-stable milk, according to Mike Ferry, president of Horizon, Broomfield, Colo. The boxes are made with aseptic technology that allows milk to be stored at room temperature for up to seven months or until the date code. The boxes, made of recyclable paperboard, come in 8-ounce offerings and are available in a variety of pack sizes including: 3- 6- 12- and 18-units. Horizon’s milk boxes are available in low-fat plain, chocolate, strawberry and vanilla flavors. Ferry said that chocolate continues to be their most popular flavor.
Shamrock Farm’s single-serve line called mmmmilk is processed using extended shelf life (ESL) technology allowing for more than 100 days of refrigerated code life. According to Sandy Kelly, senior director of marketing for Shamrock Farms, Phoenix, the ESL capability has allowed for broader distribution of its line.
Chocolate is where it’s at
Flavored milk, particularly chocolate, is the clear industry leader when it comes to single-serve milk, according to Godfrey. “An extensive and growing body of research supports the many recovery benefits of low-fat chocolate milk and I believe as consumers begin to learn more about the exercise-related benefits of chocolate milk, they are more inclined to consume it after a strenuous workout,” she said.
Last year, in an effort to promote the post-workout properties of chocolate milk, MilkPEP introduced the REFUEL|Got Chocolate Milk? campaign. According to Godfrey, recent sales data showed that flavored milk has experienced a spike in volume that began very close to the launch of the 2012 Refuel campaign. Godfrey added that recent research indicates that in a sample of athletes (marathon runners and ironman triathletes) nearly half of current users indicated that they typically consume chocolate milk in single-serve packages.
Jim Walsh, the executive vice president of sales for HP Hood, Lynnfield, Mass., emphasized the positive influence MilkPEP’s Refuel campaign has on the industry. It’s helping to combat some of the “noise” out there that milk isn’t good for you, which he insists hasn’t been scientifically proven.
“[This campaign] brings you back to milk, because it makes you feel good about drinking something that these athletes are basically enjoying after exercise. It supports the fact that this is a value-added beverage,” Walsh said.
Playing off this trend, HP Hood will be adding Hershey’s Special Dark Chocolate flavored milk to its Hershey’s milk & milkshakes line of single-serve options, available nationally in March.
Ingredient trends are going beyond just flavor as well.
“More than flavor, we’re seeing trends for added-value options like protein-fortified for muscle recovery and building,” said Shamrock’s Kelly. “Also, our calcium-fortified fat-free white milk continues to be a popular single-serve milk option.”
Marketing is the key
As seen with MilkPEP’s Refuel campaign, creative marketing has helped processors, and packaging can play a role as well. According to Leinenbach, by focusing on innovation and consumer preference Prairie Farms has become a dominate player in the single-serve category.
“During the past year, our 16-ounce single-serve labels were redesigned to closely resemble our half-pint school milk cartons,” she said. “This created a link between the products students consume at school with the products they see in retail outlets.”
She continued, “[In addition] “Our Farmers Pledge” was added to the label to identify the fact that our cows are not treated with artificial growth hormones. [And] we have also successfully spread the word about chocolate milk’s benefits as a recovery beverage by becoming the preferred dairy supplier for several professional and university sports entities.”
The Maryland & Virginia Milk Producers’ co-op sell milk in single-serve containers from two of its fluid processing plants, Marva Maid, Newport News, Va., and Maola Milk and Ice Cream Co., New Bern, N.C. When the Marva Maid plant converted to plastic packaging over 10 years ago as part of a school milk test pilot program, Marva Maid’s single-serve sales nearly doubled. Its Maola Milk also saw similar results when it converted to plastic packaging.
Though Marva’s overall sales of single serve have since leveled out, the company is seeing steady growth with its single-serve whole chocolate milk, according to Fred Calvert, COO of Fluid Operations at Maryland & Virginia Milk Producers.
On the flip-side of this plastic packaging success is Trader’s Point Creamery, Zionsville, Ind., who introduced single-serve milk in grab-and-go glass containers. “We use glass because it is the ideal packaging for our customers’ health. Made from natural, non-toxic raw materials, it is the most trusted material for protecting the purity of its contents,” said Mark Vander Kooy, director of products at Trader’s Point Creamery.
While most convenience foods are packaged in plastics and foil, said Vander Kooy, Trader’s Point is marketing its glass containers as convenient on-the-go milk without adding to the earth’s environmental burden or potentially compromising their health.
As for who’s driving the overall demand for single serve? Calvert said it’s a combination of many factors.
“Consumers on the go want healthier beverage options besides soda, and milk is a great alternative. Milk in plastic re-sealable packaging makes that possible,” he said. “[Also,] national fast-food restaurant chains have added single-serve milks to their menu as a healthier alternative, and consumers have embraced that.
In January, the Wendy’s restaurant chain added single-serve TruMoochocolate and regular low-fat milk options to its Kids’ Meal menu. TruMoo is a registered trademark of Dean Foods Co., Dallas.
HP Hood’s Walsh agrees about the demand for healthier beverage options and believes consumers are responding to the current marketing campaigns.
“They’re basically saying, I get [the] message, I understand that it’s good for me and I’m tired of the same old sugar beverages.”
But, as Calvert added, “single-serve sales [alone] aren’t enough to replace the decline in gallons sold.”
That seems to be the consensus among many milk processors who spoke with Dairy Foods: single-serve helps, but it’s not going to solve all the problems.
MilkPEP’s Godfrey believes that ultimately milk’s turnaround will come from a combination of economic relief and marketing. Processors will have to continue to innovate and bring new products to market, with focused marketing spending to keep milk’s very relevant benefits top-of-mind, she said.
California dairy industry impacts student health through milk nutrition education
Reaching school-aged children with information about the health benefits of milk and dairy foods is a top priority for dairy processors and producers in California. For more than 95 years, through Dairy Council of California, the dairy industry has provided free nutrition education curriculum, programs and resources to schoolchildren and their families.
This past fiscal year, more than 2 million students went through one of Dairy Council of California’s nutrition programs, which are taught in 86 % of the state’s eligible elementary schools.
Presented as the dairy industry’s contribution to community health, the programs are developed by a staff of educators and registered dietitians at Dairy Council of California, and target students in kindergarten through 12th grade. The programs are distributed to and implemented by teachers, and include nutrition curriculum and lessons plans that build upon each other, so knowledge gained one year is reinforced and expanded on in the next.
In other words, the California dairy industry is reaching students each year throughout their education with messages about the value of including milk and milk products in their diet every day.
According to the organization’s CEO Tammy Anderson-Wise, Dairy Council of California achieves this kind of penetration and success because of the carefully developed and nurtured relationships they have built within the schools, and through strategic partnerships with state and other organizations that support the schools.
“We consistently deliver comprehensive programs grounded in science and come from a balanced perspective that includes all food groups, rather than focusing on just one or two food groups,” said Anderson-Wise.
Teaching families the value of milk
Anderson-Wise adds that Dairy Council of California is constantly looking for ways to build on its nutrition education offerings and increase its impact.
“Currently we are in the process of revising our kindergarten through fifth-grade programs to strengthen the parent component so the nutrition lessons learned at school, which address the value of milk and milk products, can be reinforced at home,” said Anderson-Wise. “Parent involvement further helps students retain the information they learn and, help us achieve long-term behavior change in students.”
Dairy Council of California saw this to be true after recently evaluating its third-grade program, Shaping Up My Choices, which already includes family homework. Teachers involved in the evaluation indicated they liked the family homework because it has a double benefit of reinforcing the information in students’ minds while teaching parents new content. Teachers said their students enjoyed sitting down with their parents to do the homework, and some teachers received feedback from parents that their children were reading labels and naming the food groups in the grocery store.
“Including family lessons in our programs engages the parents and makes them a partner in providing healthier food choices to children at home,” said Anderson-Wise. “Choices that include milk and dairy products.”
Evaluation shows industry impact
Along with the impact the third-grade program makes at home, the program also has potential to positively affect the overall health of students in this age group. According to a presentation at a recent American Public Health Association conference, the evaluation of the program, which used testing criterion looking at reach, efficacy, adoption, implementation and maintenance, found Shaping Up My Choices has the potential to have a moderate to high public health impact.
This impact stems from a decades long commitment made by the dairy industry to improve the health of young people with the irreplaceable package of nutrients offered in milk and dairy products as the cornerstone.
It is important for the dairy industry to continue to support organizations like Dairy Council of California throughout the country, because developing healthful eating habits that include dairy products at an early age is not only critical for the long-term health of students, but also the dairy industry.
To find out more or learn how to bring Dairy Council of California programs and resources to your community, visit www.HealthyEating.org.
The Dairy Council of California is based in Sacramento, Calif. Its mission is to educate consumers through science-based nutrition education curricula.