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You may have heard a rumor that dairy is dead, but this couldn’t be further from the truth. Dairy is, in fact, a marketplace powerhouse.
Maine dairy farmer Jenni Tilton-Flood talks with Dairy Management Inc. experts Paul Ziemnisky, Executive Vice President of Global Innovation Partnerships, and Madlyn Daley, Senior Vice President of Consumer & Market Insights, for the Your Dairy Checkoff podcast about how dairy is doing in the marketplace. They also discuss how national and local checkoff teams are working together to help drive dairy innovation and grow sales at retail and restaurants.
Daley said dairy’s biggest proof point of success at retail is found in this statistic: at $61.9 billion, dairy ranks second only to liquor in retail food and beverage sales. In fact, dairy is found in about 97 percent of U.S. households.
Meeting Production Needs
Milk production has grown 64 billion pounds in the past 20 years, Ziemnisky said. This growth creates new opportunities for your dairy checkoff team to discover new markets and innovative products.
Dairy farmers saw the need to meet increased production and drive sales abroad when they created the U.S. Dairy Export Council (USDEC) through their checkoff in 1995. The program is working as USDEC-led efforts helped sell about 18 percent of farmers’ production around the world in 2022.
Farmers also had a vision years later to take their successful foodservice partnership model that has worked very well in the U.S. and adopt it internationally. DMI now works internationally with companies such as Pizza Hut and Domino’s to help drive sales of U.S.-produced cheese on pizza. Ziemnisky said the learnings from the checkoff’s domestic partnerships are translated globally as pizza sales continue to grow as more people around the world are eating pizza regularly.
Power of partners
The dairy checkoff works with powerful global foodservice leaders domestically, including McDonald’s, Taco Bell and Domino’s, to keep dairy top of mind and help drive menu innovation. Last year, the checkoff added a new partner to the mix – Raising Cane’s - to open the door for opportunities, including adding cheese to chicken sandwiches and other items offered by this fast-growing chain.
Ziemnisky said partners bring many financial resources to the table, including advertising dollars, while the checkoff offers expertise in consumer insights, marketing, product development and regulatory knowledge. He said partners outspend the checkoff at a 20-to-1 ratio that produces and promotes dairy-friendly menu items.
Ziemnisky said the checkoff is exploring opportunities with coffee creamers and used sales figures to illustrate the gap. Sales of real dairy milk are at $15 billion compared to $2 billion for non-dairy alternatives. However, coffee creamer is the inverse, with non-dairy products at $4 billion compared to $140 million for real dairy creamers.
This is just one example of how the checkoff is identifying ways to deliver dairy’s many versatile, fun and nutritious benefits for consumers of all ages.
“Our job is to help farmers unlock those growth spaces,” Ziemnisky said.
Real Dairy vs. Alternatives
It’s often reported that the plant-based beverage category is inching closer and closer to dairy. But Daley says these reports don’t always represent the full picture and often overlook how large the real dairy category is in comparison. She said real dairy had a $3.8 billion gain in a one-year period versus $260 million for non-dairy products.
Sales overall also show dairy as a leader -- $80 billion of real dairy was sold over a one-year period versus $4 billion of plant-based beverages.
How Checkoff Benefits Farmers
Ziemnisky said consumers continue to explore health and wellness research and are adopting a food-as-medicine approach to feel their best. The checkoff’s role is to use research that shows dairy can deliver on important attributes to consumers and collaborate with respected organizations such as the Mayo Clinic.
The checkoff also continues to work with the Dairy Foods Research Centers network, which farmers created more than 35 years ago to provide innovative, science-backed solutions related to consumer demand, business needs and trends. Scientists at more than 20 universities comprise the network’s six regionally based centers.
One exciting area focuses on milk’s functional benefits, such as immunity, calm, energy and digestive health that consumers are now seeking. Specifically, some studies have how milk is a good source of several nutrients that can help maintain immunity (vitamin A, protein, zinc, vitamin D). An amino acid found in dairy foods -- tryptophan – is linked to supporting sleep.
DMI’s product research scientists and those across the research center network are working to overcome challenges to reach a point where these properties can be harvested, purified and concentrated on a commercial scale, leading to new products and marketing claims about these benefits.
“We believe we’re at the tip of the iceberg with bringing a lot more functional foods to market,” Ziemnisky said.
What’s Happening With Fluid Milk
Dairy consumption habits continue to change, Daley said. While there is a decline in fluid milk consumption overall, she said there are success stories to celebrate. One is increased sales of higher protein and lower sugar products, thanks to product innovation.
Another area of growth is whole milk as consumers are falling back on research to understand they can enjoy full-fat products. Another positive space is lactose-free milk products designed to meet the needs of consumers who seek these offerings.
Finally, the checkoff is working closely with the processor-led Milk PEP team to deliver even more health and wellness benefits, including how milk hydrates better than water.
Dairy has enjoyed generations of being a staple in homes across the country. Checkoff-led partnerships and innovation are producing results that are helping to ensure it maintains its place and grows in new and exciting ways, putting to rest the “dairy is dying” narrative.
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