Three themes — the dairy economy, trade, and plant-based imitators — prevailed above all others at this year’s joint annual meeting of the National Dairy Promotion and Research Board, the National Milk Producers Federation, and the United Dairy Industry Association. Due to a looming November 27 comment deadline established by the Food and Drug Administration, taking back the term “milk” drew the greatest sense of urgency among the trio of pressing topics.
“I feel like a dog that’s been chasing the school bus for years,” commented National Milk Producers Federation’s (NMPF) Jim Mulhern of his efforts over the decades to get the Food and Drug Administration (FDA) to enforce existing rules regarding the standards of identity for dairy products. “We caught the school bus. That school bus is FDA, and the federal agency might finally do something on the use of dairy names by plant-based substitutes,” continued Mulhern, who got his start working for a dairy co-op and then spent time on Capitol Hill before joining NMPF.
“The plant-based food and beverage industry has used FDA’s inaction as a cover to sell consumers a product that is heavily processed to look like real milk, but it doesn’t deliver what matters most: a consistent, high-quality package of nutrients,” said the dairy leader to those gathered at the Phoenix, Ariz., dairy meeting. “This is contrary to the national goal of a healthy population and FDA’s mission to promote transparency and fairness.”
The data speaks for itself. In a survey commissioned by Dairy Management Inc., the IPSOS research group found that:
Seventy-three percent of consumers believed that almond-based drinks had as much or more protein per serving than milk. Reality: Milk has eight times more protein.
Fifty-three percent of consumers believed that plant-based food manufacturers labeled their product “milk” because their nutritional value was similar. Reality: That is not the case.
Misinformation was more prevalent among those who only bought plant-based drinks. Of those buyers, 68 percent strongly or somewhat agree those drinks have the same nutritional content as dairy milk. Reality: Those beverages do not.
“This is our last, best chance to stop companies from using fake milk labels,” said Mulhern of the November 27 deadline established by FDA to make comments. “We live in a country that is overfed and under nourished. Dairy delivers nutrients to the human diet.”
All in attendance were reminded of the avenue to submit comments on the item Docket No. FDA-2018-N-3522 “Use of the Names of Dairy Foods in the Labeling of Plant-Based Products.”
Dairy also must innovate
“Innovation matters — fairlife has, by itself, outsold the entire growth in the collective plant-based beverage category last year,” said Mike McCloskey, co-founder of fairlife. “We need to take back our dairy markets,” he urged fellow dairy farmers. “It not only takes innovation for beverage milk, but investment in infrastructure,” added his wife and business partner, Sue McCloskey.
As for results, fairlife had $143 million sales in 2015, $240 million in 2016, $333 million in 2017, and a projected $420 million for 2018.
“Coca-Cola has 20, $1 billion brands, and fairlife will soon be the next,” predicted Mike Saint John, CEO for fairlife. And Saint John should know, as he was on the team that brought Coca-Cola’s Simply Orange to the marketplace, which is now one of those $1 billion brands.
When it comes to innovation, “fairlife has 13 times the protein found in almond juice or what marketers call almond milk,” said Saint John. In a good news story for dairy, Saint John added, “Fifty-five percent of fairlife sales have come from taking sales away from plant-based juice, other juice and juice drinks, water, tea, and sports drinks.”
“I believe a rising tide will lift all boats. We need to promote milk,” said Saint John. “Milk is the world’s original health drink.”
“Milk prices are top of mind for dairy producers,” said Marilyn Hershey, a Pennsylvania dairy woman who is chair of the Dairy Management Inc. board of directors. “In the same breath, dairy farmers want to see innovation.”
“We are way past the crisis point on fluid milk,” said Tom Gallagher, CEO of the National Dairy Board and United Dairy Industry Association. “We don’t need any more studies, we need action.”
To that end, Gallagher told the audience that the dairy checkoff will be working with five more fluid milk partners in addition to the fairlife initiative. “They will be working on lactose-free, chocolate milk, packaging, value-added, ingredient use, brand marketing, and infrastructure,” said Gallagher.
“We are committed to more, new, and better. Our staff knows we work for hardworking dairy farmers. We understand that dairy farmers are going through tough times,” said Tom Vilsack, CEO of the U.S. Dairy Export Council. As for results . . . through the first eight months of the year, U.S. dairy exports were on a record pace. That is expected to slow a bit.
“When China enacted retaliatory tariffs on dairy, U.S. commodity sales essentially stopped,” the former USDA Secretary told the audience. “However, consider yourself lucky, as for dairy farmers, there will always be demand for dairy products worldwide. That isn’t the case for other farm products due to retaliatory tariffs from China,” said Vilsack.
Even with that perspective, American Farm Bureau Federation President Zippy Duvall had this to say about dairy’s four years of dismal dairy prices, “When I look across agriculture, I don’t know if there is another commodity that’s had it tougher than dairy.” When discussing the entirety of American agriculture, the former dairy farmer added, “Farm labor is the biggest limiting factor in American agriculture.”
Despite those insights, everyone in attendance was reminded to keep their collective eye toward the future.
“By 2066, we will need to grow dairy exports to between 25 to 42 percent of all U.S. milk production if milk output grows as projected by Hoard’s Dairyman,” Gallagher informed the audience.
“Overall, 15 percent of all food eaten by people in any country is produced by another country,” said Stan Ryan, CEO of Darigold. That means 15 percent of all food eaten is exported by one country to another.
“We predict that 75 percent of our co-op’s growth will be outside our borders,” he added. Their co-op based in the Pacific Northwest finds it cheaper to ship product to Singapore and China than to Chicago, Ill.
“The ceding of domestic control and investment in U.S. dairy processing is one of my greatest concerns,” said Peter Vitaliano, who heads up economic policy at NMPF. “Canada and the EU have been investing a great deal in U.S. processing assets,” he went on to say.
“The situation got so dire in Australia that there is no longer a dairy co-op in that country,” noted Randy Mooney, NMPF chairman. “The U.S. dairy sector cannot become the next Australia.
“We need to somehow put together an organization in which dairy cooperatives can go out and borrow money to reinvest in processing,” said Mooney. “We cannot allow foreign investment to overtake our domestic markets.”