The dairy checkoff gives producers a voice in the marketing chain after milk leaves their farms, and that helps grow sales, said Tom Gallagher, CEO of Dairy Management Inc., which manages the national dairy checkoff program.
While brands are focused on market share, producers need growth in all dairy product categories, Gallagher said during the UDIA/NDB/NMPF annual meeting in Orlando, Fla.
“The checkoff is the producer’s voice to grow categories and increase sales,” Gallagher said.
Among the checkoff’s priorities, Gallagher said, is to work with partners such as McDonald’s, Domino’s and Quaker, and encourage them “to do something they wouldn’t do otherwise, or to do it faster, to meet consumer demand and grow sales for everybody.”
As an example, Gallagher cited the transformation and regeneration of the pizza category. The dairy checkoff has worked with Domino’s and others to improve quality and place more cheese on pizzas. Checkoff partnerships with Domino’s and others have moved more than 6 billion additional pounds of milk the last three years. The checkoff also is growing sales of U.S. cheese in the Pacific Rim.
Another example is stimulating formulation of dairy products in quick-serve restaurants. “The work with McDonalds has moved more than 2 billion additional pounds of milk over the last three years,” Gallagher said. “It also has stimulated others in the category to follow McDonald’s lead in dairy innovation.”
A new partnership with Quaker will explore other opportunities. Quaker has committed to building consumer awareness of preparing oatmeal with milk instead of water.
Gallagher said 9 billion servings of oatmeal are prepared annually but less than 30 percent of those are made with milk.
“Each one percent increase would mean an additional 30 million pounds of milk sold,” he said.
All told, DMI’s partnership strategy combines $200 million of checkoff investment with nearly three times that amount of “other peoples’ money” to help drive dairy sales.
“Without the checkoff’s partnerships, there would be no Dairy Export Council, no pizza effort, no school programs, no nutrition and product research. None of this happens without your checkoff,” Gallagher said.
Building Consumer Trust
Gallagher said the checkoff is engaged in image-building efforts that are designed to reach consumers who he considers to be “more complex to market to than ever before.”