Posted: Thursday, July 14, 2011 1:00 PM
Expert pushes for innovation: 'Milk has to be able to travel'
Lifestyle changes in the United States over the last 35 years have led to a steady decline in fluid milk consumption.
Per capita consumption of fluid milk fell 21.5 percent from 1975 to 2009, according to USDA.
Families no longer sit down together to share breakfast and dinner, with Mom pouring several glasses of cold milk for the meal, said David Pelzer, senior vice president of strategic communications for Dairy Management Inc., which manages the dairy checkoff.
The problem is the industry has treated milk as a commodity instead of giving consumers what they want, where they want it and how they want it, he said.
While milk hasn't kept up with the times, competing beverages have picked up market share, he said.
"We have to do things differently. Everybody's on the go. Milk has to be able to travel," he said.
Nonetheless, 70 to 75 percent of milk is still sold in gallon containers, he said.
Packaging is definitely an issue, said Wilson Gray, extension livestock economist with the University of Idaho in Twin Falls.
"The (individual-serving-size) 'jug' has helped, but it took the industry 40 years to think outside the carton," he said.
Another issue is that those white, plastic, gallon containers are distributed with little to no branding or marketing, Pelzer said. The industry inadvertently contributed to the marketing problem with its generic "got milk?" campaign.
While per capita consumption has continued to drop over the decades, fluid milk sales remain fairly steady due to population growth, said John Wilson, senior vice president and chief fluid marketing officer for Dairy Farmers of America.
Per capita consumption is clearly going down over the long term, but it's been particularly troubling the last 18 months, he said.
Consumption dropped about 2.5 percent in January 2010 from the year-ago level, more than 3 percent in June 2010, and about 4.5 percent in October 2010. April was down 2.1 percent from April 2010.
"Part of what's going on is people are consuming more yogurt as a substitute for milk," Wilson said, adding that milk is also losing sales to bottled water.
The challenge is to promote the health benefits of milk, he said.
Growing health awareness has led to other challenges, Gray said.
Some schools have banned flavored milk because of the sugar content, and plain milk is less appealing to youngsters. Soy milk has taken market share from cow's milk.
In addition, people's real or perceived intolerance to lactose has led to a drop in consumption, Pelzer said.
But the good news is fluid milk is not a mature market, he said. Individual serving sizes of milk have taken off in fast food markets just from changing the container. So have specialty beverages that contain milk, such as coffee drinks, smoothies and frappes.
There is a lot of opportunity for growth, but milk has to step into the modern world of marketing, he said.