SEATTLE — If you give Americans a cookie, will they finally start buying milk again?
Dairy producers are betting on it. Facing an unprecedented and protracted slump in demand, the industry is coming up with innovations. That includes new flavors like wild blueberry, dips like fiesta sour cream, new packaging, and, sometime next year, cartons with cookies attached.
“People love cookies in milk,” said Tony Sarsam, chief executive officer of Borden Dairy Co., which is planning the cookie-marketing strategy for 2021. “It will be a size that you can actually eat in the car. Put it in the cup holder, and you can dip the cookie.”
Sure, it might be a bit of a long shot — trying to lure people with cookies when they’re ditching milk to be healthier. But for an industry that pumps out about $35 billion of the stuff annually, the bid to win back demand is starting to get desperate. Producers are pushing more flavored options, creating dairy-based products, rebranding to boast about dairy’s benefits, basically pulling out all the stops. Two of its giants filed for bankruptcy reorganization in recent months: Dean Foods Co. and Borden.
U.S. consumption of cow milk has fallen about 2% each year since the 1970s, government data show. The industry’s been saddled with consumer concerns over health and environmental impact. Plus, in the last decade, plant alternatives swooped in.
Some expect things will only get worse. A 2019 Statista report forecasts consumption in the U.S. will drop further to 155.3 pounds per person in 2028 from an estimated 161.7 pounds last year. The tally was 194.9 pounds in 2010.
Milk used to have superstar status in the United States. Hark back to the Leave It to Beaver days when a frothy glass was as ubiquitous on dinner tables as it was poured over cereal.
But even by the time the “Got Milk?” ads rolled out in the 1990s, with celebrities from Bill Clinton to Britney Spears donning a white beverage mustache, consumption was flagging. There were warnings of the links between high dairy intake and heart disease, cancer, and weight gain.
In the last decade, environmental concerns mounted — cattle emit the greenhouse gas methane as part of their digestive process. Starbucks Corp. just announced a shift to emphasize nondairy options to reduce its carbon footprint.
Producers say innovation is the cure. Borden has a series of products in the pipeline, with seven dairy dips hitting the market this month, and new light chocolate- and vanilla-flavored beverages that target adult women to be launched by the end of the year. The company plans to double its spending on product innovation over three years, Sarsam said, without providing a dollar figure.
Dairy Farmers of America, the cooperative that plans to buy some of Dean’s assets, is investing in manufacturing plants to make more shelf-stable products, which can be stored at room temperature until opened. The group also sees flavors as a key area for growth and has experienced recent success with wild blueberry and coffee under its Oakhurst brand, according to Doug Dresslaer, director of cultural innovation.
“Consumers’ demand for energy, comfort, health — you will see a lot more products introduced to meet those needs,” said Paul Ziemnisky, executive vice president of global innovation partnerships for marketing group Dairy Management Inc. “Valued-added beverages are in that arena, like high protein and low sugar.”
Groups like the National Milk Producers Federation are fired up about the Dairy Pride Act, legislation introduced in Congress to force the Food and Drug Administration to police labels. Under the proposal, labeling something “milk,” for example, must mean the product comes from a “hooved mammal.”
Meanwhile, marketer Dairy Management is emphasizing the innovative farm practices and new technologies that have helped make the industry greener. Fluid milk accounts for only about 2% of total greenhouse gas emissions in the U.S., according to the group.
“Milk has better nutrition components than alternative competitors, it does better in a taste study, and is significantly cheaper — so it’s just about reinventing itself,” said Tom Bailey, a senior analyst at Rabobank.