eDairyTalk10115
If present trends continue, fluid milk sales could drop another 10 billion lb. annually by 2024.
But, as the investment portfolios disclaimers always state, past performance is not necessarily indicative of future results. Let’s hope so.
And there are signs that fluid milk’s continual decline is beginning to flatten, says Tom Gallagher, Dairy Management, Inc. CEO. I visited with Tom Gallagher and Ryan Anglin, a Bentonville, Ark., dairy farmer who heads up the dairy checkoff fluid milk effort, here at World Dairy Expo Wednesday.
New fluid products such as ‘fairlife’ from Coca Cola , Live Real Farms energy drinks
from Dairy Farmers of America, and DairyPure from Dean Foods are all adding excitement to the dairy case. As importantly, these companies are adding promotion dollars and marketing savvy to produce fluid milk. “That kind of brand advertising is unheard of in the dairy space,” says Gallagher.
“The consumer for ‘fairlife’ is not waiting until milk drops to $2.09/gallon,” he adds. The ‘fairlife’ consumer is a higher end, more affluent customer who is willing to spend more for a premium product. With the introduction of ‘fairlife’ and these other products, higher income consumers now have products they can call their own.
Plus, specialty milk sales are having a spillover effect to the conventional milk dairy case. For example, ‘fairlife’ market data shows that the product is not only taking a bite out of soy and almond “milk” sales, it is boosting conventional milk sales as well, says Anglin.
Gallagher also believes there is some potential for international sales of fluid milk. A U.S. Dairy Export Council study done recently suggests China could absorb 1.3 billion lb. of imported fluid milk. It likely won’t move to China as a commodity product, but as a branded milk product marketed through restaurant chains such as Kentucky Fried Chicken and McDonalds. As such, it will be less subject to global price volatility and decrease sales when prices spike, he says.
