PHOENIX, Ariz. – Through their checkoff, the nation’s dairy farmers and importers have the “collective power” to innovate, change and grow sales and trust, said Tom Gallagher, CEO of Dairy Management Inc. (DMI), which manages the national dairy checkoff program.
“While it’s difficult to imagine one person affecting demand for their product, through the checkoff they have a voice, a very loud voice that can dominate the marketplace,” Gallagher said.
Dairy farmers and importers can realize this power through their checkoff. Through its numerous partnerships, DMI is turning potential sales into actual sales by innovating product, packaging and consumer messaging, Gallagher said. He made these comments this week at the joint annual meeting of the National Dairy Board, National Milk Producers Federation, and United Dairy Industry Association in Phoenix.
Gallagher said the checkoff works to “multiply the checkoff’s investment with other people’s resources and money, to increase sales and build consumer trust, and ensure homes for increasing dairy production.”
Where will those homes be? Gallagher offered examples in global and domestic markets.
Export market – Studies by Rabobank and the Bain Company project that billions of potential dairy sales are available globally. This includes 1.3 billion pounds of potential sales of UHT milk in China by 2020.
Domestic market – “This is still where the vast majority of your product goes,” Gallagher said. “The domestic market is not a mature market – there are substantial areas for growth.”
Closing that gap is a “great opportunity for the checkoff,” he added.
“We do this by innovating so we can get people – whether in Singapore or Atlanta – the dairy products they want, where they want them and how they want them. Our goal is to stimulate the industry to turn potential sales into actual sales," he said.
Sales increase when companies innovate product, packaging and messaging to consumers, he said. The checkoff’s role is to “get companies to do things they wouldn’t have done, or do them faster, and to use other people’s resources to meet dairy checkoff priorities.”
Gallagher offered these examples of how the checkoff has turned potential sales into actual sales.
1) Pizza – Since the start of the partnership with Domino’s in 2009, 10 billion pounds of additional milk have moved through the pizza category.