At a recent industry meeting, I had the opportunity to speak to a McDonald’s executive about the partnerships his organization has formed with the dairy industry.
What struck me the most was this: Dairy is much more proactive in forming these partnerships than the other food commodity groups that he works with. In fact, dairy is unique.
Dairy producers can be proud of the way their checkoff money is being used to form partnerships with companies like McDonald’s and Domino’s Pizza.
For instance, there are six dedicated dairy-checkoff employees, including a food scientist, an equipment engineer, a nutritionist and others, who work side by side with the McDonald’s menu development team on a full-time basis.
McDonald’s keeps coming out with dairy-friendly items, such as the McCafé beverage line, sandwiches that utilize cheese, and new desserts.
I also want to mention Domino’s.
During the past three years, Dairy Management Inc., which manages the national dairy-checkoff program, has worked in partnership with Domino’s to improve the pizza category in general and Domino’s pizzas in particular. Historically, pizza has accounted for about 25 percent of the cheese consumed in the U.S.
Over the past three years, DMI has spent approximately $30 million in partnership with Domino’s. That money is leveraged with Domino’s own marketing efforts to create higher pizza sales, which also means increased cheese usage.
Currently, the company offers a carryout special, offering three-topping, large pizzas for $7.99 on Mondays, Tuesdays and Wednesdays. According to Brandon Solano, vice president for marketing and retail innovation at Domino’s, that particular promotion would not have happened without DMI’s financial assistance. So far, money from DMI has provided about one-third of the media marketing support for the carryout specials, he said.
Solano acknowledges that the $7.99 pizzas are sold at a deep discount, but it is worth it to their stores because enough extra pizzas are being sold. “It is a really thin margin for us, but with the DMI media support, we sold a lot of pizzas,” he said.
Overall, Domino’s pizza sales are very strong, he says.
Dollar sales were up 9.9 percent for Domino’s in 2010 compared to 2009. And, the volume of cheese sold was up 23 percent during that same time period. In the case of McDonald’s and Domino’s, dairy checkoff money is being leveraged with the companies’ money to create more bang for the buck.
Six years ago, I began to hear that DMI would move away from generic advertising of milk and cheese to a more partner-centered approach. Thanks to the visionaries at DMI, this has unfolded with tremendous results.
In retrospect, I can see now that the generic-advertising approach, while it may have made dairy farmers feel good to see their advertising on TV, really just made milk and cheese into commodities. The new value-added approach gives milk and cheese an important role in the success of specific menu items. Hat’s off to the partnership approach!