By Dorothy Noble
The dairy industry has been facing economic hardships, uncertainty and challenges. But Paul Ziemnisky, executive vice president of Dairy Management Inc., is bullish about the future.
“Per capita consumption rose 2.6% this year, primarily due to cheese. And, despite tariffs, exports continue to grow,” Ziemnisky said at a recent dairy innovation forum in State College, Pa.
His outlook was rosy compared to current data showing that exports of cheese and dry whey to Mexico and China were down sharply from a year ago as a result of souring trade relations, especially with China.
DMI administers the national dairy checkoff. Ziemnisky said recent partnerships with Pizza Hut, Taco Bell and McDonald’s have increased cheese consumption considerably.
“Innovation in both domestic and global markets continue," he said, adding that opportunities in food service are also proving to be successful.
Milk consumption trends
Consumption of milk is largely driven by age. He said kids have a larger role in choosing family drinks, accounting for the rising popularity of flavored milk. Protein drinks, chocolate smoothies and Gatorade-type beverages are also becoming more popular, he said, especially in households with more athletically active children.
There has been significant beverage innovation outside fluid milk, leading to fights over retail shelf space that fluid milk has been losing. Milk is still a powerhouse, though. Ziemnisky said 95% of households still drink milk, and sales of flavored milk have grown 60% with chocolate milk leading the way.
Still, dairy isn’t innovating as fast as the competition. “Dairy hasn’t kept up,” he said.
Ziemnisky said marketers should think of milk as a beverage, not as a necessity, to grow more milk-based products.
Flavor is important, he said. There are now tea-flavored milks being sold, and even root beer, creamsicle and chocolate milk floats. Creamers still sell well, he said, because of flavor. But marketing takes time and investment.
“You must have a successful marketing team,” he said, noting that Fairlife, developed by Coca-Cola, took three years and significant consumer market investment to get 2% share. “You can’t just put the box on a shelf,” he added.
Consumers are willing to pay a premium for value-added products, he said, and protein adds lots of value to milk.
“Why not put protein out front? Put it on the label. Be loud. We own it,” he said. Lactose-free milk is another growth area, he added.
Noble writes from western Pennsylvania.