The cheese you’d be enjoying made its way from the U.S. courtesy of an initiative launched by Associated Milk Producers Inc. (AMPI), a cooperative owned by dairy farm families from Wisconsin, Minnesota, Iowa, Nebraska, South Dakota and North Dakota.
AMPI saw what Dairy Management Inc. (DMI) and the checkoff-founded U.S. Dairy Export Council (USDEC) have seen: There is plenty of room for U.S. dairy foods beyond our borders. Maybe the most compelling point to back this up is the fact that 96% of the world’s population resides outside of the U.S.
And many countries have a growing middle class with a taste for Western cuisine, including pizza and cheeseburgers. In fact, according to the Daily Dairy Report, cheese consumption in China has risen from 43,000 metric tons in 2012 to a projected 239,000 next year, an average annual increase of more than 55%.
Recognizing this opportunity, AMPI unveiled a twofold strategy in early 2020. First was to expand its premium processed cheese business in China with food service operators, including an upscale U.S.-based burger chain through a partnership with an in-market distributor. AMPI felt it could improve previous cheese offerings on specialty burgers, with slices being smaller than what we’re accustomed to in the U.S. AMPI also believed its premium processed cheese was a step up in taste, quality and functionality.
This early success has led to an expansion of its cheese being used on menus in an additional 800-plus burger locations in China.
Reaching into the Middle East
The second part of its strategy was to find similar success in the Middle East region, where AMPI partnered with a company that focuses on exporting dairy ingredients and finished dairy products for the retail, food service and food manufacturing industries. Momentum for AMPI’s cheese is beginning to grow there as well, with the co-op in pursuit of more untapped opportunities.
Throughout this process, AMPI turned to the dairy checkoff for support. AMPI, no stranger to the checkoff through its participation with the Innovation Center for U.S. Dairy and USDEC membership, recognized an opportunity to partner with DMI’s Global Innovation Partnerships (GIP) team to leverage additional marketing expertise and insights.
USDEC has enjoyed a 26-year international presence representing the interests of farmers and U.S. dairy companies. Farmers’ vision to create USDEC has long paid off with nearly 17% of U.S. milk production heading into markets outside of our country.
USDEC has offices and staffs in the Middle East, Mexico/Central America, China, Japan, Southeast Asia, Vietnam, Hong Kong, Taiwan, South America, South Korea and Europe. USDEC employees live in these markets and understand the culture and customs. They speak the language, and they know how to identify opportunities for U.S. dairy growth.
Leaning on USDEC’s market intelligence expertise, AMPI leveraged an opportunity for U.S. dairy suppliers to apply for a tariff waiver for certain products in China. AMPI secured the waiver, and it has resulted in significant savings for the cooperative and dairy farmers.
Replicating partnership model
Our work with AMPI and other cooperatives is just one way we are expanding U.S. dairy’s international presence. DMI and USDEC enjoy a hand-in-glove relationship that has led to the checkoff replicating its domestic food service partnerships business model internationally. Our first venture with a partner came with Pizza Hut in 2017 in Asia Pacific, where we found a consumer base hungry for pizza made with U.S. cheese.
There are many learnings when you enter an international market, and it’s important to meet the needs and palates of global consumers. We recognized an opportunity to expand U.S. cheese use through pizza. For instance, in Japan, pizza is well loved but seen as a special-occasion offering and not eaten as frequently as in the U.S. Pizza makes up 14% of quick-service restaurant sales in the U.S.; in Japan, it’s 1%. So there is huge upside potential in growing frequency for pizza in this region.
As such, two years after we launched a partnership with Pizza Hut Asia Pacific, we partnered with Domino’s Japan to help launch the New Yorker, which uses 2.2 pounds of U.S.-sourced cheese. The good news for dairy farmers is: The volume of U.S.-sourced cheese has doubled, through many partnership efforts, since our first launch with Domino’s Japan.
This success paved the way for our newest international pizza partnership with Alamar Foods Company, which owns 455 Domino’s stores in the MENAP (Middle East, North Africa and Pakistan) region. Our partnership will focus on about 300 Alamar locations in Saudi Arabia and the United Arab Emirates with a goal of increasing U.S. cheese sales.
These examples show how the dairy checkoff and the GIP team I work with effectively play the role of convener and trusted resource for our partners and cooperatives looking to grow their international business, such as AMPI.
Our support and knowledge can help them move faster to achieve our common goal: Drive sales and trust for dairy farmers and the products they produce, not just in the U.S. but in places far from home.
Your Dairy Checkoff in Action – The following update is provided by Dairy Management Inc. (DMI), which manages the national dairy checkoff program on behalf of America’s dairy farmers and dairy importers. DMI is the domestic and international planning and management organization responsible for increasing sales of and demand for dairy products and ingredients.
- Senior Vice President
- Global Innovation Partnerships
- Dairy Management Inc.