News

Will you come back to milk?

Dairy Management Incorporated (DMI) has formed partnerships with seven companies in an effort to reverse the downward trend of fluid milk consumption.  The companies: Dairy Farmers of America (DFA); Darigold/Northwest Dairy Association; The Kroger Company; Maryland & Virginia Milk Producers Cooperative; Shamrock Farms; Southeast Milk Incorporated and Coca-Cola have committed more than $500 million collectively over the next few years.  DMI’s commitment is roughly $30 million.  The purpose: “to aggressively pursue growth opportunities for fluid milk through infrastructure, capital, human resources and marketing investments.”

DMI CEO Tom Gallagher says they interviewed over 50 companies to find those seriously interested in investing in the effort.  The money will be spent on everything from plant and infrastructure development to brand marketing.  Gallagher says these companies are not interested in selling commodities, they want to sell branded products.  As an example: FairLife, a lactose-free dairy drink already test-marketed and set for national distribution through Coca-Cola’s Minute Maid system.  He notes the industry had generic milk commercials back in the 80’s and 90’s which were very popular but did nothing to drive sales.  They hope that partnering with companies to develop and promote specific products will enjoy success similar to those used to promote cheese.  “If you look at what we have done with domestic cheese in the last five years has been phenomenal.”  Like those partnerships with Domino’s, McDonalds and others, these partnerships could be extended in the years to come.

Gallagher notes the 40-year decline in fluid milk consumption was mainly due to the industry’s failure to be innovative with products and marketing.  “We gave this business away,” that market is there and companies like Coke and Pepsi and others see this as an opportunity for growth “because we didn’t do our job.”  He points to FairLife as a product that is specifically targeted for consumers who have switched to alternative milk products from soy, almond and coconut sources.  Another area showing potential growth is recovery drinks where chocolate milk is already enjoying increasing popularity with athletic trainers.

Gallagher stresses the need for patience, it took 40 years to get to this point so don’t expect it to completely turn-around in two or three years.  But remember,  “These companies are pretty smart companies, they are not getting into this to lose money.”

 

Gallagher talks about the effort: