Moving milk

Dairy Field, Aug 1999 by Cook, Julie

Fluid processors increasingly offer on-the-go products.

Americans may be enjoying a hearty chuckle thanks to the high-profile milk mustache and got milk? marketing campaigns, but that doesn't necessarily mean they are drinking more milk.

According to IRI sales data in food, drug and mass merchandising outlets for the 52-week period ending March 28, 1999, whole milk dollar sales rose 5.5 percent, while skim and low-fat dollar sales rose 1.4 percent. However, volume sales dropped 0.4 percent for whole milk and 3.8 percent for the skim/low-fat category. Furthermore, USDA per capita sales figures for 1998 show whole milk consumption dropping for the 25th straight year. Consumption of both lowfat and skim milk also declined. Meanwhile, consumption of flavored milk and milk drinks enjoyed the only increase, from 10.6 to 11.4 pounds per person.

"The got milk? campaign reinforces the behavior that is already happening with milk," says Dan Williams, vice president of marketing and sales, Dairy Farmers Of America (DFA), Kansas City, Mo. "They are definitely humorous and great fun, but they are not adding usage occasions or stealing them from any other fluid category either."

The tide may be turning, however, as manufacturers develop more innovative ways to present their products to the consumer.

Today it seems amazing that the milk industry displayed little interest in selling its products in single-serve plastic containers when the issue was initially addressed several years ago. The idea of competing with soft drinks and other popular single-serve beverages was considered an impossible feat that stirred up some controversy, notes to Susan Ruland, vice president of communications for IDFA.

Ruland recalls serving as moderater for panel discussion on the topic at a convention; following the session she was greeted with surprising reactions

THE WAY WE WERE

In 1926, per capita milk consuption continued to rise. The trend was attributed to efforts to eradicate bovine tuberculosis and increased pasteurization of milk. from attending processors.

"A guy walked up to me and he was furious," she recalls. "He said 'You can't do this. You can't make milk try to compete with Pepsi or Coke. It's too expensive. It will never work.' Here we are today with companies introducing single-serve plastic pints and seeing double-digit and triple-digit sales growth, compared to their old packaging for those same products."

Most notable is the landslide of single-serve resealable plastic milk containers. Although it wasn't the first single-serve package on the market, Dean Foods' Milk Chugs have garnered significant attention while ringing up considerable sales for the company as the innovative packaging is rolled out through various regional subsidiaries. Vice President of Marketing Jim Page reports success beyond the expectations of Franklin Park,ILL.-based Dean.

Success can breed controversy, and the single-serve milk bottle is certainly no exception. Imitation may be dubbed the highest form of flattery, but when Phoenix-based Shamrock Foods Co. introduced its mmmmilk single-serve line, Dean threatened litigation for trademark infringement.

Dean claims exclusive rights to the Milk Chugs bottle-shape, but Shamrock officials say their company has been using that bottle shape for more than 75 years. In a separate case, Dean filed suit against Producers Dairy Foods Inc. of Fresno, Calif., alleging trademark infringement. Producers uses a singleserve bottle provided by Shamrock.

Bill McCabe, vice president of marketing for Smith Dairy Products Inc., Orrville, Ohio, notes that single-serve containers have done more than make it more convenient for consumers to enjoy milk on the go. The new shape and size of the dairy staple has also significantly boosted profit margins for both processors and retailers.

"The cost per gallon actually increases by doing the single-serve," says McCabe. "Consumers are paying a lot more per gallon. If we sell our 16ounce for $1-the typical price in a convenience store - the consumer is paying $8 per gallon."

Meanwhile, Smith Dairy's new entry into the plastic single-serve milk category with Moovers includes characteristics that would be difficult to copycat. Unlike other single-serve milks, Moovers offers a 60-day shelf life and is packaged in amber-tinted PET bottles. After two years of development, the UHT-processed product hit the shelves last year and is delivering more than good sales.

"Warehouses haven't been able to deal with milk within their time frame before, but now with 60 to 90 days of shelf life, it's not a problem for them," says McCabe. "This is opening up a lot of new distribution for us, as it will in the future for many other processors."

Chick Powell, vice president of milk marketing for DMI, agrees that expanding shelf life bodes well for the milk industry's future. "It takes some of the pressure off the single-service distribution and vending patterns, rather than having to turn milk around in four or five days or a week," he says. "If they can get another week to a week and a half out of it, that will open up a significant avenue for distribution of products."