By Jeff Manning

It is hardly profound to observe that per capita consumption of Class I white milk has been in a nose dive for decades. It is not for lack of a high-quality product or for trying.

Since the early 1990s, dairy producers and processors have spent upwards of $2.5 billion behind some of the most creative, long-standing generic marketing programs around. And, every year, Americans consume less white milk out of a glass. In 1990, annual per capita consumption of milk was 25.61 gallons, according to the USDA. In 2000, Americans drank 22.99 gallons. In 2010, the average was down to 20.8 gallons.

The dairy industry was and remains critically important to me. I was part of the industry’s efforts to stem the tide, serving as the first executive director of the California Milk Processor Board from 1993-2004. I was in the room when Got Milk? was first presented and helped guide the program through that first decade. This included licensing Got Milk? to the national dairy boards and almost every major food brand in the US, including Nabisco, Nestle and General Mills.

A call for fundamental change by dairies

Unless we embrace a fundamental strategic change, the trend is going to continue until someday the only white milk consumed in the United States will be out of a baby bottle or a Starbucks cup. It hurts to say it, but milk out of a glass, all frosty and white, will effectively become obsolete.

Why have we struggled to slow or reverse the decline in white milk consumption? Here are some reasons:
• We have insisted on telling people what they have always believed deeply: Milk is good for you. (Consumer know this yet they reach for Coke Zero or Gatorade instead).
• Milk in a gallon jug hasn’t changed much in decades.
• We now compete not only with water-based brands, but also “milk” from nuts and grass and beans.
• Cold cereal consumption is in decline.
• Snacking is taking over meals 24/7.

So why do we still believe that we can sell Class I white milk out of a glass?

Milk is superior to water as an ingredient

There is a potential strategy that could help stabilize milk consumption. It is does not require any change to the production and processing of milk. Nor does it require massive investments in new equipment. And there is not even a tiny change in the regulations.

The idea is to position milk as superior to water as an ingredient. Then the dairy industry must work with the largest food and beverage brands in the world to develop innovative, flavorful, high-margin, value-added beverages that start with milk. These are beverages that delight and satisfy consumers, from toddlers to millennials to boomers (and us oldies who will have our own sippy cups).

This is not a new idea. Howard Schultz intuitively knew it. He created the Starbucks empire on the back of milk. What is a tall latte if not 12 ounces of milk with a dash of espresso? While the dairy industry cannot take credit for the espresso drink craze, we benefit hugely from it. Just calculate milk consumption by adults in the form of coffee drinks.

Consumers like these new milk-based dairy foods & beverages

A large scale (4,500 respondents), national 2014 research project for the California Milk Advisory Board strongly reinforced the ingredient potential for milk, as well as the enormous leverage of large, well-known consumer packaged goods (CPG) brands. Fourteen milk-based, value-added concepts were developed and tested in national, online research. Each concept was presented simply, with one core visual and a couple of paragraphs of copy. The concepts included: Yoplait Probiotic Milk, Lipton Milk Tea, Clif Bar Protein Milk and Cheerios Cereal Milk. Below are some of the conclusions and insights.

• Big, well-known, highly respected brands were critical. While some were more impactful than others, there is absolutely no doubt that a brand like Power Bar or Yoplait added intrinsic value.
• Implied health claims could be exceptionally powerful. These ranged from protein to probiotic. Importantly, milk-based beverages that include a variety of ingredients and fortifiers can get closer to implied claims than white milk alone.
• Adults were surprisingly open to trying new, added-value, milk-based beverages. “Intent to try” scores, the key measure in this concept research, were as high 60%.
• Some concepts were especially effective with African-Americans and Latinos. This is very encouraging, given the demographic shifts at play in the United States.
• Physically fit adults were, not surprisingly, most open to the concepts. This is significant in light of the pervasive message that Americans need to get fit.
• While teens were not included, many parents felt that their teens would be receptive. Imagine a range of heavily branded, milk-based beverages aimed at teens.
• The branded milk enhancer concepts performed exceptionally well. Based on the water enhancer category (estimated at over a billion dollars), small, squeeze bottles of milk flavoring were exceptionally well received.

The dairy industry has the opportunity to build a new identity for white milk. While we have opened discussions with CPG companies, we must expand our efforts to help Nestle, Nabisco, General Mills and other food companies to develop and test new, mass market beverages built on milk, not water.

Jeff Manning served as the executive director of the California Milk Processor Board and managed the Got Milk? campaign for its first decade. In 2005 he launched Got Manning?, a consultancy with a focus on reigniting brands and categories. Contact him at jeff@gotmanning.