Consumers have changed over the years, said Molly Pelzer, Midwest Dairy CEO. During a recent dairy checkoff update at the Nebraska State Dairy Association convention in Columbus, Pelzer said that producers need to meet consumers where they are and connect with them to share their story to build trust in dairy.
“Ethical eating today means there is a belief basis for food choices consumers make, and they like sharing those choices with family and friends through social media,” Pelzer said. “Consumers today shop at multiple locations, and they might shop online. They might pick up their dairy at the grocery store, or they might go to a convenience store for their milk throughout the week.”
Health information surrounding dairy also has changed. Pelzer, who is a registered dietitian, noted that health discussions used to center around calories and nutrients in food. “Now, consumers want to talk about how food is produced and processed, and how it got to the table,” she said.
While plant-based beverages are a competitor to dairy milk, the top competitor is probably bottled water, Pelzer said. “There are so many flavors and carbonation options in bottled water,” she explained. “We tend to focus on plant-based alternatives, but bottled water is the No. 1 competitor to milk.”
With challenges comes opportunity. “Full-fat dairy, lactose-free and high-protein options are capturing consumers,” Pelzer said. “Dairy is at 94% of all households in the U.S., and 43% of consumers are buying both plant-based and cow’s milk. Plant-based beverages are being bought because of perceived health benefits, but dairy milk is trusted by consumers. It is nutrient-rich and tastes great. Dairy is a powerhouse of nutrients with unique benefits.”
The theme of the checkoff is, “One plan. One team. One voice,” with a commitment to collaborate in unity among the checkoff team, nationally, regionally and locally. “We had a small increase in our sales profile last year through domestic sales,” Pelzer said. “Commercial use of dairy has exceeded production once again, so we also know that the checkoff is making a difference.”
On the international stage, the checkoff team is working to give consumers an excellent dairy experience, Pelzer explained. It is advancing U.S.-sourced dairy products at Pizza Hut, Domino's, KFC and other well-known American restaurants abroad.
“People in different countries like to eat Western food,” Pelzer said. That’s why these partnerships between dairy farmers and the restaurants in those other countries help to drive demand.
Domestically, the team also has forged partnerships with food service companies such as Pizza Hut and Domino's. Taco Bell has used embedded scientists to help food service workers understand how to use dairy.
“McDonald’s restaurants embracing butter has been a huge deal,” Pelzer said. “Research from the checkoff on full-fat dairy” has been a driving force in many of these new partnerships. “Now, we are starting a new era and getting back to retail — grocery and convenience stores,” she noted. “That’s where consumers experience dairy. They tend to select those foods at the grocery store. Three out of every 4 gallons of milk sales come from retail.”
For grocery retailers, dairy has the profit rule of “3-10-20.” This means that it takes up 3% of the shelf space, provides 10% of the store sales and 20% of the store profits. “It’s a win-win relationship when we collaborate together,” Pelzer said.
The team also recognizes the importance of convenience stores for regular milk purchases. “When our team looks at what we can do to make demand soar, we look for ways to drive traffic to the dairy shelf,” Pelzer said. “We want to make sure we are marketing to shoppers before they come to the store, while they are at the store and as they leave the store as well.”
A partnership with Casey’s General Stores looks at a commitment by Casey’s to be that “fill-in milk trip” for consumers in their neighborhoods. “They realize that local dairy resonates with their customers, so they have brought local dairy farmers to their Facebook posts,” she said. “Three million people follow Casey’s on social media. Almost 7,000 followers have engaged with them when they posted about dairy farmers, and they are reaching the demographics that are important to us, including women ages 25 to 34.”
School lunches are another key component to domestic dairy sales. Ten percent of all dairy sales are made through schools. “On average, school milk has been on decline,” Pelzer said. “We have worked with a company to research some of the largest school districts in each state, including Nebraska.”
Several ways they are working to improve school milk consumption include the return of 1% milk and flavored milk to the menu; expanding school breakfast programs; adding bulk milk dispensers to reduce waste; adding yogurt and yogurt smoothies; and offering many different flavors on a rotational basis for students to try.
One school study at the Millard school district, which is the third-largest in Nebraska, added pizza ovens to three high schools, smoothies to three high schools and six middle schools, and hot chocolate milk to six middle schools. The impact in 2019 included sales of 430 gallons of yogurt, an increase of 3,866 pounds of cheese over 2018, and an increase of 1,770 gallons of milk over 2018 usage.
Learn more about efforts to improve dairy demand online at midwestdairy.com.