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DMI Tom Gallagher.jpg DMI

Dairy industry ‘done taking it’

Dairy executive stresses unity and leadership key to evolving marketplace and activist pressure.

Dairy Management Inc. (DMI) chief executive officer Tom Gallagher told more than 800 dairy farmers and industry representatives that to thrive in the future, industry-wide unity and leadership will become more important than ever.

This is crucial as anti-animal agriculture groups pose a growing threat to the dairy industry by working to eliminate the checkoff, Gallagher said during his address at the 2019 joint annual meeting of the United Dairy Industry Assn., National Dairy Promotion & Research Board and National Milk Producers Federation in New Orleans, La.

Gallagher provided a foundation for why he believes the checkoff has become a target of these groups, explaining how U.S. Department of Agriculture data show that per-person dairy consumption has grown by 73 lb. since the dairy checkoff began in 1983. He said DMI’s mission is to not only grow sales but to build consumer trust by sharing how farmers care for their animals, land and employees.

Groups that oppose animal-based food production, he said, are looking to erode and eventually eliminate the checkoff, knowing that it is the last line of defense between farmers and consumers.

“Make no mistake, they only have one goal: to eliminate all animal agriculture in this country,” Gallagher said of these groups, adding that they seek to create a divide among U.S. dairy farmers based on factors such as their size or production style and that they are “infiltrating consumer trust.”

“This, ladies and gentlemen, is your biggest issue,” Gallagher said. “Lab-grown [dairy alternatives] is going to come, and we’ll deal with it. Plant-based beverages are here, and they’ll have a share, and we’ll deal with it.

“We’re done taking it,” he continued, urging farmers at the meeting to share these groups’ agenda with their peers around the country. “These anti-animal agriculture people aren’t going to defeat you,” he said.

As Gallagher concluded his presentation, he emphasized the need for all farmers, regardless of their size or farming style, to remain united.

“Unity doesn’t mean don’t question, don’t challenge, don’t ask the hard things,” he said. “This room represents thousands of farmers who have elected you to co-op boards, national milk boards, promotion boards. Yeah, let’s argue, let’s disagree, but let’s do it together, and when we make a decision, let’s ... not let the activists divide us. Through unity and leadership, we will secure a strong future for dairy.”

Dairy revitalization

DMI president Barb O’Brien followed Gallagher with an overview of seven strategic areas in the unified marketing plan to drive sales and trust. She said the collective efforts prove that dairy remains a powerful category, with more than $100 billion in annual retail sales, and household penetration of dairy is strong. She cited consumer research showing that cheese is in 98% of U.S. homes and milk is in 94%.

“This puts to rest the naysayers’ claim that dairy is dead,” O’Brien said. “Dairy is alive and well and in households across the country.”

O’Brien provided an overview of the checkoff-led fluid milk revitalization work designed to address foundational elements of infrastructure, innovation and branded marketing.

“The issues facing milk are not about consumer awareness,” she said. “You can’t look at those household penetration numbers and say consumers aren’t aware of the category. The issues were more fundamental and required working with the middle of the chain, with co-ops, processors and retailers, who controlled the product and how it went into market.”

As a result of this work, O’Brien said cumulative new product sales of 1.3 billion lb. of milk have resulted from checkoff partnerships with companies such as Darigold, Shamrock, fairlife, Kroger and others. O’Brien emphasized that the fluid milk work continues and said DMI is teaming with MilkPEP on an effort targeting the country’s top 10 retailers. Among its goals is to ensure dairy’s rightful place in retail locations coolers across the country.

“What we want to do is represent [farmers] so you have a voice at the table,” said Paul Ziemnisky, executive vice president of DMI’s global innovation partnerships. “The competitors out there selling against milk are telling retailers to get rid of 4 ft. of conventional milk space [in the dairy case], that it’s dead. We went in with Darigold, and we met with [retailer] Albertson’s and showed them the facts and how powerful milk is to them. We preserved our shelf space. That’s what we want to do: to make sure retailers understand the power of dairy.”

Checkoff partnerships such as with McDonald’s also have been pivotal in moving more dairy. Divya Reddy, a DMI food scientist who works on site at McDonald’s headquarters, said the chain’s commitment to revitalize its McCafé line of specialty drinks has benefitted dairy farmers. She said 90% of McCafé beverages contain dairy, and products such as lattes have more than 70% milk.

“Dairy is a key ingredient to McCafé,” she said. “We have seen year-over-year growth of fluid milk since the very successful relaunch of McCafé in 2017.”

O’Brien said this work has created a catalytic effect that has led to 7% growth in milk-based coffee beverages across all of the foodservice sector.

Reddy also shared that McDonald’s will be rolling out a 1% chocolate milk with 25% less sugar nationwide in January that was developed with checkoff support.  

Beth Engelmann, DMI chief marketing officer, said after two years of engaging consumers with the Undeniably Dairy campaign, results are being achieved in long-term trust measures.

“With 350 dairy companies and organizations participating in Undeniably Dairy, we have been able to generate over 5 billion media impressions for content that is sharing dairy farmers’ stories,” she said. “That reach has translated into positive movement -- a six- to eight-point increase in consumer trust in dairy farmers and in their commitment to taking care of the land and their animals -- and we are also seeing an increase in their belief that dairy is superior to plant-based protein.”

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