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October 30, 2020
Addressing dairy farmers and industry representatives, Dairy Management Inc. (DMI) leaders reflected on strategically adjusting business plans due to the impacts of the COVID-19 pandemic and attributed this year’s results to industry unity, agility, speed and relentless relationship building.
“The system farmers have put in place works, and in normal times, we celebrate those successes,” DMI president Barbara O’Brien said while speaking at the virtual 2020 joint annual meeting of the United Dairy Industry Assn., the National Dairy Promotion & Research Board and the National Milk Producers Federation. “What the last seven months has proven is that it also works in difficult times -- frankly, times we couldn’t have imagined.”
DMI chair Marilyn Hershey, a Pennsylvania dairy farmer, added: “When I think of the dairy checkoff this year, I think of the action and deep relationships and collaboration that make action possible. The staff pivoted within the plan to drive immediate impact.”
Consumption reaches 60-year high
DMI chief executive officer Tom Gallagher said one of the year’s highlights was the U.S. Department of Agriculture’s per capita report that showed that dairy consumption reached 653 lb. per person in 2019 -- a 60-year high for dairy.
“That comes as a shock to a lot of people who say dairy is dead,” Gallagher said. “They think about the decline in fluid milk, but they don’t think about all of the other areas that have grown exponentially.”
Gallagher pointed to four factors he said had the biggest impact on the continual rise in dairy consumption:
Growth of cheese demand in the foodservice channel, helped by strong checkoff relationships with foodservice leaders;
The turnaround of pizza, dating to 2008, when DMI began partnerships with Pizza Hut and Domino’s to showcase cheese and increase its use;
The success of the U.S. Dairy Export Council (USDEC), created by farmers in 1995 to send more U.S. dairy to more countries. That year, U.S. dairy exports were valued at $982 million, and by 2019, the value was $6 billion -- a 511% increase during that period, and
The resurgence and consumer acceptance of milkfat and butter, in part due to research efforts led by the farmer-founded National Dairy Council.
Gallagher credits these successes to farmers who took leadership in creating the dairy promotion program through a congressional act in 1983. Per capita growth has increased by 80 lb. since that year.
Changing course due to COVID-19
O’Brien addressed how DMI responded to the COVID-19 pandemic, found ways to move more dairy to those in need and executed this year’s strategy on a compressed timeline. She summarized five “impact” results the checkoff achieved:
GENYOUth, an organization founded by the checkoff, created the COVID-19 Emergency School Meal Delivery Fund, which generated nearly $10 million in cash and in-kind support of other people’s money to 9,000 schools to get food to students in need.
Pizza “has been a superstar through the pandemic,” O’Brien said, noting that frozen pizza has experienced double-digit growth at retail, and checkoff partners Pizza Hut and Domino’s have averaged 10% sales growth over the last two quarters. O’Brien cited efforts with Pizza Hut, Papa John’s, Leprino Foods and Dairy Farmers of America that moved tens of millions of extra pounds of cheese from May through August.
At no cost to farmers, a new promotion in Subway’s 21,000 stores will generate funds for GENYOUth’s emergency school fund while building awareness for America’s dairy farmers, dairy products and Fuel Up to Play 60.
A multimedia campaign on National Farmers Day earned more than 900 million impressions across media and digital channels for the U.S. dairy industry’s 2050 Environmental Stewardship Goals, the Net Zero Initiative and the commitment by Nestlé to support the U.S. dairy industry’s journey with up to $10 million over five years.
Checkoff teams across the country continued to share the story of dairy’s essential role in communities and farmers’ ability to assure a safe, consistent supply of dairy products. Paid media integrations and digital content garnered more than 1.6 billion media impressions and increased trust in farmers and the belief in farmers’ essential role.
Engaging Gen Z with dairy sustainability story
Gallagher focused on a more recent checkoff initiative aimed at reaching Generation Z consumers (early teens to 20s). More than 90% of Gen Z members play video games, so DMI established partnerships with four influential Minecraft gamers who have a collective reach of nearly 120 million social media followers. Each gamer did a virtual tour of a dairy that resulted in dairy-focused Minecraft content that highlights farmers’ priority on animal care and the environment.
He said this strategy is critical to reach a generation of consumers who no longer use traditional media to hear industry or company messages.
“If we wanted to run an ad for people like me or most dairy farmers, we might run something on traditional television, but this age group doesn’t watch commercials,” Gallagher said. “So, you have to go where your key consumer is, and gaming is where they are.”
The first video, created by gamer Preston Playz, was released Oct. 27 and received more than 900,000 views and 40,000 likes within the first 48 hours.
“The reach of this program is enormous, and the money spent is minimal,” Gallagher said. “In terms of cost effectiveness and messaging, I guarantee you this will be the most effective communications program we have had since the start of the checkoff.”
Focused on the future
Gallagher concluded his remarks with a glimpse toward the future, specifically the “Dairy 2030” initiative. He said this effort brings together the best thinking within the dairy community, futurists, academia and business to ensure preparedness and a strong future for the dairy industry.
He referenced a quotation from former President John F. Kennedy: “Change is the law of life, and those who look only to the past or present are certain to miss the future.”
Gallagher said, “I want to emphasize two points: The vast majority of our time and effort is on today, the here and now and doing the best job we can with our mission of building sales and trust, but as everyone knows, you have to think about the future. Let’s not be a little bit behind; let’s be way ahead.”
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