Commentary: Lack of innovation has hurt milk sales

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PHOENIX, Ariz. ― Everyone knows that fluid milk consumption has been declining for years.

A major reason: Lack of innovation among milk processors.

I want to thank Alan Bernon, senior advisor and president of the affiliate division at Dairy Farmers of America, for providing clarity on this at an industry meeting this week in Phoenix. 

Bernon participated in a panel discussion on innovation and was brave enough to field the moderator's $64,000 question: Why didn’t milk processors see the need to innovate sooner?

For years, processors didn’t think they had to because milk was a product with so many positive attributes, Bernon said. Then, as other beverages continued to take market share (or “share of stomach”) away from milk, the processors wondered what innovation would cost.

Now, they are looking back at four decades of declining milk sales and saying “we can’t afford not to invest,” he said.

Too bad that time was lost. But as the old saying goes, “Better late than never.”

Over the years, we as a magazine have attempted to keep this issue in the forefront ― and pass on creative ideas.

Here in the Kansas City area, for example, the Shatto Milk Co. has developed a loyal following because of its creativity with fluid milk. Recent rollouts have included blueberry-flavored milk (in glass bottles), as well as mint chocolate and apple pie.

A few years ago, I attended the Alltech Symposium in Lexington, Ky., and company founder T. Pearse Lyons suggested branding milk for different age groups, which I thought was a good idea. Then, at this week’s meeting, I heard similar ideas expressed. Barb O’Brien, president of the Innovation Center for U.S. Dairy, said that by the year 2020, one-third of the U.S. population will be over the age of 55. It piqued my curiosity, since I am already in that age category, so I asked her to be more specific on how milk might be marketed to older Americans. She said the protein in milk is an important attribute, since it helps older adults keep their muscle tone. Having containers that are smaller than the traditional gallon jugs might be a good idea, as well.

After listening to Bernon, O’Brien and a representative from the Shamrock Foods Co., I felt good knowing that innovation in fluid milk marketing is well under way.

From my vantage point ― responsible for putting out an online newsletter every day ― I process a multitude of stories from professional health journals, the vast majority of which support the nutritional value of milk. Over the course of a year, I see 40 or more of these stories and try to pass them on to my readers. It always amazes me that a beverage like bottled water, with little or no nutritional value other than its ability to keep a person hydrated, is so successful when fluid milk is experiencing a sales decline.

The only thing that is holding milk back is a lack of innovation. Fortunately, it appears that fluid milk processors have gotten the message and are doing something about it. 

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Wisconsin  |  November, 15, 2013 at 08:46 AM

Let's be frank here, the real reason there's been so little innovation has nothing to with platitudes about how good milk is and therefore we didn't need to help business with innovation, its a heck of a lot more to do with the following: 1. manufacturers were focused on minimizing their cost of milk by gaming federal orders and pooling through the classified pricing system rather than out there growing revenue and sales by competing for market share through the introduction new innovative products that consumers will want to buy. 2. the disastrous restructuring that went on in the fluid milk sector with companies only concerned with maximizing share price and short term profitability and zero interest in investing in innovation and product development. It was all about rationalizing plant infrastructure and taking out overhead costs, to heck with innovation, who needs that!

Pennsylvania  |  November, 15, 2013 at 09:09 AM

In our area, several private processors, or small local processors, have already taken the initiative and have produced new and delicious milk flavors to market. As a part of the dairy promotion team, we have gone to grocery stores and their local stores to promote these products, with a great deal of success. If the small processors can do this, what is the excuse that large processors have for not doing the same?

Vermont  |  November, 18, 2013 at 11:08 AM

Yes, Bill! Yes, Dale! I think innovation is about more than just new flavors though. It's also about new packaging, new perceptions. Health-conscious consumers don't want 16 or 20 oz containers in convenience stores - that's a lot of calories/fat/carbs to consume and a lot of waste if you stick to the 8 oz recommended serving size. Horizon got it right with their 10 oz convenience size - especially with the $$ price tag that goes with it (particularly on a per cwt. basis). If processors approached fluid milk sales with the same zeal producers approached efficiency we would be in a very different place.

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