DMI's Gallagher outlines consumer trust plan

Growing sales of dairy here and abroad and increasing consumer trust highlight dairy checkoff priorities, DMI chief executive officer says.

Growing sales of dairy here and abroad and increasing consumer trust highlight dairy checkoff priorities Dairy Management Inc. (DMI) chief executive officer Tom Gallagher delivered during the 2016 joint annual meeting of the United Dairy Industry Assn., National Dairy Promotion & Research Board, and National Milk Producers Federation in Nashville, Tenn.

Speaking to more than 800 dairy farmers and industry representatives, Gallagher unveiled how DMI, which manages the national dairy checkoff, will partner with Yum! Brands, the parent company of Kentucky Fried Chicken (KFC), Pizza Hut and Taco Bell, to bring U.S. dairy to international markets.

Gallagher said this is another example of how dairy farmers and importers benefit by working “with and through” powerful foodservice partners to sell more dairy. He said checkoff partners such as McDonald’s, Domino’s, Taco Bell and Pizza Hut have helped move more than 5.5 billion lb. of additional milk over the last 52 weeks through domestic cheese sales.
He’s optimistic that a similar approach can work internationally with Yum! Brands. DMI will work with KFC and Pizza Hut on pilot programs that will focus on increased cheese and butter use in the Asia-Pacific, Latin American and Caribbean markets.

“Our strategy is to take what has worked so well -- and resulted in those 5.5 billion lb. of additional milk sold -- into international markets,” Gallagher said. “It would be expensive and difficult for a brand to go to China or other countries and create a brand identity.

“What we’re trying to do is take somebody such as Yum!, who already has thousands of franchises and a footprint in place, and move U.S. dairy through them,” Gallagher added.

Gallagher said another top mission of the checkoff is to grow consumer trust in dairy, emphasizing that “it’s time dairy farmers took the microphone back” from voices who oppose animal agriculture.

Gallagher said an industry-wide social responsibility plan that kicks off in 2017 through the Innovation Center for U.S. Dairy (a company founded by the checkoff to foster collaboration among farmers, cooperatives and other dairy companies) will be a monumental first step.

The plan will be owned and implemented by players throughout the dairy value chain to help build long-term trust in dairy, with the knowledge that trust has an impact on sales. Gallagher said consumers want to know how their food is produced, so adding the social responsibility plan also will protect dairy farmers’ freedom to operate.

Zach Myers, a North Carolina dairy farmer and chairman of the National Dairy Board, said farmers have a critical role to play in this work.

“Consumers have overwhelming trust in farmers. We need to take that seriously and not do anything to betray that trust,” Myers said. “Nobody has the passion for what we do like we have, and nobody can tell our story like we can. It’s our ultimate responsibility, by whatever means we feel comfortable, to tell our story to consumers to maintain that trust.”

Gallagher said the dairy industry’s response to become part of this effort has been “unprecedented” as it faces increased pressures from dairy customers and consumers alike about subjects such as food safety and animal care.

“We have so many great things to talk about. We need to do it consistently, day after day and on an industry-wide basis,” he said. “People want to believe in animal agriculture, and right now they’re confused.”

Gallagher added that this means addressing subjects such as the responsible use of antibiotics. “While broaching the topic may be seen as troublesome to some, we can answer that (responsible use of antibiotics) in a very effective way, and if we speak with one voice, we can win the day,” he said.

Gallagher touched on other checkoff successes that he said are making a difference for dairy farmers. Among them:

  • Butter is back. Sales of butter have been on a steady increase over the last two years. Gallagher cited efforts such as National Dairy Council-led research that is helping make dairy fats more acceptable in the eyes of consumers. Another key factor was McDonald’s shifting from margarine to butter in 2015, a move that is driving dairy use through the world’s largest restaurant chain and causing others to follow suit.
  • Impact of fluid milk partners. Checkoff partnerships with seven fluid milk companies are beginning to turn around a decades-long decline in sales. Gallagher said these partners saw growth of 175 million lb. of milk over the last two years. By comparison, the rest of the category saw a decline of 1.7 billion lb. over the same time period.
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