Milk's Biggest Competitor May Surprise You

5/26/18 Farm Journal Report
It's not just plant-based milk products competition with consumers' appetite for milk today, it's also another popular item in the beverage case. ( Farm Journal )

A trip to the grocery store or convenience store today can often be complicated with consumers overwhelmed by the choices.

“The beverage case is an expanding case, it’s a competitive case and it’s a consumer case full of choice,” said Michael Dykes, CEO of International Dairy Foods Association (IDFA).

While competition is on the rise, the reality is since the 1970s, fluid milk consumption has dropped 11 gallons per person. Milk's biggest competitor today is something commonly found in the beverage cooler.

“Water is our number one competitor,” said Dykes.

Bottled water consumption was forecast to reach 391 billion liters by 2017; a sharp jump from the 212 billion liters consumed in 2007. While bottled water is growing in popularity, IDFA said it’s looking into changes in consumer buying habits.

“Today we have over 15 choices, and we have a change in society,” said Dykes. “We’re not sitting down for breakfast like we were in the 70s with eggs and bacon and a glass of milk or maybe like we were in the 80s or 90s with a bowl of cereal and banana and glass milk. We’re now grab-and-go.”

It’s that mentality that industries - like dairy- are catering to with milk products that have extended shelf life and are easy to consume on the run.

“I think we’re starting to see that in the yogurt side with the more drinkable yogurts and we’re seeing that with squeeze pouches,” said Dykes.

“It's not just a change in the product, but also a change in the packaging, that is adding to the need to compete with bottled water's change in appearance.

“Do you want water in a square bottle or do you want it in a round bottle,” said Dykes. “Do you want one with a flip lid or you want one with a screw lid? Those are all things - until we step back and think about those - that’s innovation not just in the product, that’s innovation in packaging. We have to think about that in terms of dairy.”

However, certain milk products now contain a health-desired ingredient that bottle water doesn't have.

“We’re seeing milk with extra protein levels,” said Dykes. “We’re seeing innovation in Fairlife with the ultra- filtered milk where we have extra protein.”

It’s that added protein helping provide a new revenue stream for producers.

However, the confusion with consumers around all dairy products starts at home. A recent survey by the Innovation Center for U.S. Dairy found 7 percent of all American adults think chocolate milk comes from brown cows. That's 16.4 million consumers who have no idea how their milk is produced.

It's that confusion that groups like the National Milk Producers Federation (NMPF) are trying to help clear up with education.

Dairy farmers are fighting back against deceptive advertising by using humor to get the industry's point across. A new video is the most recent piece of the industry's “Peel Back the Label Campaign.”

The video features actors mimicking food executives, discussing terms like “non-GMO” and “natural”. According to the NMPF, the campaign's global is to promote truth and transparency in food marketing.

The campaign started in August and launched the industry's mission to quench a change in demand.

“I think the other thing is consumers are looking for cleaner labels, shorter labels, simple labels and labels with ingredients that you can understand,” said Dykes. “I think that is one of the major explanations in my mind to why we’re seeing what we’re seeing with butter demand.”

NMPF said it’s also working to make sure there's not unfairly labeled products on the market today.

“What our focus has been - as we see the rise of these imitation dairy products made from plant sources - that people understand that they are not getting the same amount of nutrition when they buy an almond beverage as when they are buying real milk,” said Chris Galen, NMPF senior vice president of communications.

The alternatives may be eating into demand, but quantifying the amount is something that's still in the works.

“It's been a rise that's been talked about a lot in the media, but in terms of the market place, these ‘alt milks’ are maybe 6 or 7 percent of the overall white beverage market,” said Galen. “The question is how much of that is new people buying products where they wouldn’t buy real milk anyway, or are they indeed shifting away from traditional real milk and moving toward the plat-based, fake milk.”

It’s wholesome products dairy groups say give their products a competitive edge.

“A lot of that has to do with getting the product in the places where people are going to consume it,” said Galen. “Whether that's in the school lunch program or at sporting events, it's reminding people that milk is a food and it provides a unique nutritional profile that a lot of other foods can't replicate.”

Dykes said it's a conversation also entering the Farm Bill, with IDFA and other groups pushing to get more dairy into Supplemental Nutrition Assistance Program (SNAP).

“There’s nothing as nutritious as a glass of milk,” said Dykes. “Only one in 10 Americans are getting the recommended three servings a day of dairy and about nearly half the household SNAP recipient households have children. We think it’s good policy. We think it’s good nutrition.”

He said the move would also incentivize those consumers to follow the suggested dietary guidelines. It’s expanding choice that could serve up new options to all consumers, with the ultimate goal of driving new demand around the globe.

 

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