Digest Highlights: Cheese consumption is a bright spot. NMPF continues dairy label enforcement fight. Dean challenges continue. Find a summary of these stories and updates on previous Progressive Dairyman news stories here.
Gallagher: Cheese carrying the day
Cheese continues to be the foundation for increased dairy product consumption and sales, according to Tom Gallagher, chief executive officer of Dairy Management Inc. (DMI). Gallagher provided an update on dairy checkoff activities to about 800 dairy farmers and industry representatives attending the 2017 joint annual meeting of the United Dairy Industry Association, National Dairy Promotion and Research Board, and National Milk Producers Federation (NMPF) in Anaheim, California.
U.S. per capita dairy consumption reached 591 pounds (milk equivalent, fat basis) in 2016. At 36.3 pounds per person, cheese consumption reached its highest level ever, fueled by at-home use and out-of-the-home ingredient use. Read: Fluid slide continues, but there’s some good news regarding dairy consumption
“It’s growing and will continue to grow. In fact, domestic cheese has carried the day in terms of sales the last four or five years,” Gallagher said.
Gallagher said the long-term trajectory of per capita dairy consumption remains on a positive path thanks to the checkoff’s work with partners, including McDonald’s, Domino’s, Taco Bell and Pizza Hut. He shared how DMI’s “go-to-market” approach proactively works in partnership with the supply chain to expand dairy markets and helps to fill a market need.
“Our job is to figure out where to use resources in the market chain,” Gallagher said. “Unmet demand is the key. Demand is not the function of what people buy – it’s the function of what we offer them. If we offer innovative products, whether it’s global or domestic, we know we can increase consumption.”
Update: DAIRY PRIDE Act and plant-based products
Jim Mulhern, National Milk Producers Federation (NMPF) president and CEO, said he remains committed to achieving passage of legislation requiring the U.S. Food and Drug Administration (FDA) to enforce existing food labeling standards limiting the use of dairy terms on nondairy products.
Senate (S. 130) and House (H.R. 778) versions of the DAIRY PRIDE Act (Defending Against Imitations and Replacements of Yogurt, milk, and cheese to Promote Regular Intake of Dairy Everyday Act) were introduced in early 2017. The requires FDA to enforce labeling regulations (CFR 131.110) defining “milk” as a product of a cow, with similar definitions for yogurt and cheese products.
Mulhern told those attending the organization’s 101st annual meeting that the U.S. regulatory system for food labeling is failing consumers. He said that in the absence of a strong federal role in food labeling, nutritionally inferior imitators will continue to pass themselves off as suitable substitutes for real milk.
• A coalition led by the Plant Based Foods Association (PBFA) is lobbying against the DAIRY PRIDE Act. PBFA is a trade association representing 88 makers of plant-based foods, including plant-based “milks, cheeses, ice cream and yogurt.” PBFA said Campbell Soup Company recently joined the association. The company makes Bolthouse Farms Plant Protein Milk.
• DanoneWave, the newly combined business unit of WhiteWave Foods and the U.S. dairy operation of global food company Danone, will invest up to $60 million in its plant-based beverage manufacturing operation in Rockingham County, Virginia. DanoneWave will receive a $700,000 performance-based grant from the Virginia Investment Partnership (VIP) program. Additional funding and services to support the company’s employee training activities will be provided through the Virginia Jobs Investment Program.
DFA acquires Cumberland Dairy’s extended shelf life processing
Dairy Farmers of America (DFA) acquired Cumberland Dairy; a family-owned processor of ultrapasteurized dairy products located in Bridgeton, New Jersey. Terms of the deal were not announced.
Cumberland Dairy was founded in 1933. It serves some of the nation’s top quick-service restaurants, convenience and grocery chains, wholesale food distributors, fine-casual restaurants, and dessert concepts to a variety of customers.
The business will continue to operate as Cumberland Dairy, and employees will retain their current positions. The Catalana family and existing management team will continue to manage all day-to-day operations, including customer relationships, milk procurement and production.
Innovation Foods LLC, a juice and beverage manufacturer founded by the Catalanas in 2008, is not included in this transaction. It will remain independent and wholly owned by the family.
Dean’s challenges continue
Quarterly net sales were down while costs were up, cutting into profits for Dean Foods, company officials told stockholders, Nov. 7.
Third-quarter 2017 sales of all Dean products totaled 608 million gallons, a 6.6 percent decline from the same quarter a year earlier. Dean’s share of the U.S. fluid milk market declined 50 basis points (one-half of 1 percent) year-over-year. Based on USDA sales data, Dean said 2017 year-to-date (January-August) U.S. fluid milk sales had declined 2.2 percent.
Dean’s raw milk costs in the third quarter of 2017 averaged $16.67 per hundredweight (cwt), up about 7 percent from the second quarter, and 10 percent more than the third quarter of 2016.
Wisconsin license plate measure
Formal efforts to replace the “America’s Dairyland” slogan on Wisconsin motor vehicle license plates is underway. Republican state Rep. Scott Allen, who represents an urban district in southeastern Wisconsin, put out a call for co-sponsors of a proposal setting the plan in motion.
This draft bill (LRB 4632/1) requires the Wisconsin Department of Transportation (DOT) to contract with an art education association to conduct a contest in 2018. Wisconsin high school students would be invited to submit entries, with the art association and governor selecting the winning entry. The DOT would begin issuing new plates in July 2019. The words “America’s Dairyland” are not required to be used, but are not prohibited from consideration either.
In a letter to state lawmakers, Dairy Business Association (DBA) president Mike North urged them to stay away from co-sponsoring the proposal. DBA said the “ill-conceived measure … would discredit our heritage, insult those responsible for one of our state’s most powerful economic sectors and foolishly undermine our state’s brand image.”
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