DMI’s mission has undeniably strayed

By Sherry Bunting, Farmshine, August 23, 2019

CHICAGO, Ill. – Since Dairy Management Inc (DMI) was formed, it has grown to include (and control) many agencies and partnerships that put much of the work into the zone of “proprietary,” even to the 81 voting DMI board members.

In the portion of the most recent 2017 IRS 990 form, where DMI is asked to describe its program accomplishments, the responses specify that, “DMI partners with foodservice industry leaders to help create dairy-based innovation to drive dairy sales and build trust in dairy products.”

The response describes 2017 activity in detail. 

While the work done to boost cheese use by restaurant chains resulted in increases of milk equivalent tonnage that are quite impressive, according to DMI (look for more on that in a future article), it is the fluid milk sector reinvention that we will examine here.

In its 990 description of fluid milk partnerships, DMI states: “The dairy checkoff program, working with committed milk processors, embarked on a comprehensive revitalization strategy to reinvent the milk experience for consumers.”

What does that mean? 

DMI explains: “The focus includes milk as a standalone beverage as well as an ingredient in other beverage segments such as coffee, tea, smoothies, energy drinks and more.”

As part of this “comprehensive revitalization” effort, the DMI board approved partnerships since 2010 with eight companies they deem as leaders and innovators in the milk and beverage arena, including: Dairy Farmers of America (DFA), which just recently launched the Live Real Farms Dairy + Almond and Dairy + Oat ‘milk’ comprised of half low-fat lactose-free dairy milk and half almond or oat beverage; Darigold/Northwest Dairy Association, which among other new fluid milk products markets a fat-free creamer it calls ‘fat-free half-and-half’ (a contradiction in terms).

Also among the eight are these current partners as of 2017: The Kroger Company, which sources 80% of its milk to Select Milk Producers / Fair Oaks;  Shamrock Farms, which partnered with DMI on the Rockin Refuel brand found in chains like Subway nationwide; and Coca-Cola/Fairlife.

Specifically, the 990 form reports that, “The Checkoff program supported Lactaid innovation, marketing and health professional outreach, which spurred innovation and growth in the lactose-free segment overall.”

The 990 description states that the dairy checkoff supported innovation in extended shelf-life brands as well.

But its signature is fairlife, according to the 2017 form 990, which states: “DMI assisted and invested in the national 2015 launch of fairlife milk. The goal was to create a national fluid milk brand leveraging the resources and scale of Coca-Cola. Fairlife has been a tremendous success and continues to grow, achieving dollar sales of $250 million,” according to DMI.

“This is a feat that fewer than 1% of new products achieve,” DMI states further, adding that, “About 50% of consumers repeat their purchase of fairlife, a good predictor of its success moving forward. Based upon fairlife’s initial success, fairlife’s owners have announced (in 2017) the addition of two new production lines to meet consumer demand.”

Those production lines, according to DMI, were planned for installation in 2018. Production lines are also planned for Canada as the product was piloted there in 2018.

According to DMI, a new fairlife plant in Arizona is set to begin production in late 2019.

Other partnership products, such as Shamrock’s Rockin Refuel and the coffee and tea latte drinks with Shamrock and with Kroger were mentioned in the fluid milk portion of DMI’s 990 description of accomplishments.

In summary, states DMI, “Our partnerships are already stimulating change in the industry and fundamentally changing the way the fluid milk industry does business by driving investment in modern infrastructure and by creating new products.”

In fact, according to the DMI 990 form, the agency states that the lactose-free milk segment grew by 15% in 2016 and 11.5% in 2017.

Meanwhile, diet and health professionals are increasingly recognizing the benefits of regular whole milk and the A2 milk on digestive sensitivity. This is something that is not promoted by any mandatory dairy checkoff organization and whether it is conventional whole milk or A2 milk, there is no need to further process the milk to obtain the benefits on digestive sensitivity or lactose intolerance.

For example, New York City registered dietician, certified diabetes educator and author Laura Cipullo writes: “When someone eats full-fat dairy versus low-fat dairy, the fat will actually delay the absorption of the milk’s sugar (lactose). As a result, blood sugar rises more slowly over a longer period of time. Consequently, insulin follows this same pattern. Less circulating insulin means less risk for development of insulin resistance and diabetes.”

This was further supported at the recent hearing in Harrisburg, Pa. that focused on getting whole milk back in schools.

During the hearing and rally, registered dietician and nutrition professor Dr. Althea Zanecoskey stated that whole milk provides ‘satiety’, helping those consuming it stay fuller, longer. She said studies show how children consuming whole milk, compared with low-fat (1%) milk, had lower body fatness and less risk of obesity. They also had higher vitamin D status. It took three cups of low-fat milk to get the vitamin D status seen in children after consuming just one cup of whole milk. Vitamin D is a nutrient of concern, according to medical professionals finding it lacking in children and youth.

Whole milk, in and of itself, checks all the boxes.

According to Cipullo, the milkfat found in whole milk “calms digestive sensitivity.”

In fact, according to various expert comments at the USDA Dietary Guidelines docket in the Federal Register, the beneficial milkfat consumed in Whole Milk, reduces the amount of lactose per 8-oz serving, and even more important, as stated above, the milkfat in Whole Milk slows the absorption of the lactose.

Cipullo explains: “Full-fat dairy is lower in lactose, making it easier for individuals with lactose intolerance to digest compared to low-fat or no-fat dairy,” she writes. “Meanwhile one specific fatty acid contained in dairy is known to aid in gastrointestinal health, and according to a 2013 review from Polish researchers, may actually hold promise in the treatment of IBS and promoting healthy gut bacteria.”

While the innovators partner with dairy checkoff to “reinvent the milk experience”, there is evidence now that a simple solution — that would benefit all dairy farmers paying into the mandatory dairy checkoff from all markets — would be to promote and support real, simple, un-fooled-around-with whole milk.

USDA’s oversight and the flawed Dietary Guidelines are the only obstacles standing in the way, despite a growing list of research-based information showing that whole milk holds beneficial keys to health, not harm, when it comes to long-term cardiovascular disease risk, obesity, body mass index, diabetes and other metabolic disorders, digestive health and sensitivity, vitamin D status, nutrient density, nutrient absorption, satiety (feeling fuller, longer), memory and cognitive focus, as well as mood and mental sharpness. Not to mention the more than a dozen essential nutrients that ride along when people choose whole milk because it tastes good instead of opting for empty calories from other non-dairy beverages.

DMI shows its goals for innovation, further processing, blending, and marketing of ‘dairy-based’ or ‘dairy-included’ beverages as a market-building path for the future.

But at the same time, stronger promotion of the original, purely perfect Real Whole Milk would resonate with consumers, because most do not know anything about milk, and when they learn the truth, it opens their eyes to whole milk as a choice.

Whole milk could be ‘reinvented’ just as it is, with better packaging and the freedom to actually promote it. But due to USDA’s control of the message and direction of dairy checkoff, and the proprietary nature of the many partnerships that the checkoff funds, it may be time to reinvent the mandatory dairy checkoff.

Does milk need reinventing?  Simply-unfooled-around-with whole milk checks all the boxes for health and flavor. Meanwhile, DMI states in a 2017 IRS form 990 that it has a “comprehensive revitalization strategy to reinvent the milk experience for consumers.” Since whole milk was pulled from schools in 2009, more young people are growing up believing they are lactose intolerant. Meanwhile, the innovations brought to market with DMI partners over this time period are dairy-based low-fat lactose-free and blended beverages. However, a growing body of research shows science-based reasons why the fat-free and low-fat milk consumption promoted to youth by the dairy checkoff through FUTP60 and GENYouth, in partnership with USDA, may actually be creating much of the new and milder forms of digestive sensitivity that could be avoided by simply consuming regular whole milk. Graphic by Sherry Bunting

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Is mandatory dairy checkoff funding real milk’s demise?

Through futuristic lens: Is it time to end USDA control of dairy promotion?

No matter what innovations they come up with in the future, real dairy milk will always be the completely natural, minimally-processed, clean-label product with the superior combination of complete protein, healthy fat, and long list of essential natural nutrients, not additives. Treating real dairy milk like a cheap commodity must end. Innovative marketing may be more important in today’s times than innovative manufacturing processes. Government rules make it difficult to truly promote real dairy milk. It’s time to re-think the government oversight of the mandatorily farmer-funded milk promotion business so that truly competitive promotion can happen. (Istock photo).

By Sherry Bunting, Farmshine, March 29, 2019

“It’s not that the bad guy came and took it (fluid milk sales), it’s that us, the dairy industry collectively, did not keep growing and innovating and doing what we should do. Instead of getting in a lather about plant-based food companies, let’s do what we are supposed to be doing as an industry. Let’s do marketing. Let’s do innovation. Let’s have dairy-based protein in 3-D printers and whatever comes next. That’s where we need to be.”

These were the words of Tom Gallagher, CEO of Dairy Management Inc. (DMI) to his dairy checkoff board recently as shared here, and in the March 20, 2019 edition of Farmshine from a video of his comments.

A glimpse into what that might mean was revealed at the IDFA (International Dairy Foods Association) convention in January, where DMI’s vice president of global innovation partnerships, Paul Ziemnisky told attendees that 95% of households have milk and buy milk, but that these households engage in “fewer consumption occasions”, according to a recent convention report in Dairy Foods magazine.

To increase ‘consumption occasions’, DMI has been investing checkoff dollars toward innovations in “milk-based” beverage growth, he said.

Through its Innovation Center for U.S. Dairy, DMI has invested checkoff dollars in these types of “pre-competitive” innovations in the past — an example being fairlife.

It is interesting that in both Gallagher’s comments to the DMI board and in the presentation by DMI’s Ziemnisky’s to processors, the term dairy-based or milk-based is used.

As we’ve reported previously, the direction of dairy innovation over the past 10 to 20 years has not been lacking in its drive to pull out the components of milk for inclusion in a variety of products — taking milk apart and putting it back together again — in a way that is new and different or in a way that presents milk and dairy as a new product.

Expect to see this type of innovation increase via these investments of dairy checkoff dollars into developing combination beverages that include pieces of milk in entirely new beverages.

This is what is meant by innovation.

At the IDFA convention, DMI gave processors a glimpse into some of the innovations they are working on to address four consumer targets that DMI has identified:

1)      A milk- and nut-based combination beverage,

2)      A milk with lavender and melatonin to promote sleep,

3)      A yo-fir product (kefir plus yogurt) beverage,

4)      A milk beverage that provides just a hint of flavor,

5)      More concepts in high-protein milk-based beverages,

6)      A ‘plosh’ blend of tea, coffee and milk, and

7)      An all-natural concept of milk blended with fruit.

As the overall beverage sector is exploding with new beverages of all kinds every year — some winners and some losers — DMI is looking to do more in the re-creation of dairy in the beverage space with new combination beverages that include milk, or components of milk, but are not identified as milk. These beverages will compete with non-dairy beverages, but in a sense, this track would further compress real dairy milk into its age-old commodity posture. Of course, those who are engaged in promotion of real dairy milk can position it as the wholly natural choice in a beverage sector of further processed combinations and concoctions.

Something to watch and be aware of is that PepsiCo – a company the dairy checkoff organizations are forming stronger bonds with — is on the frontier of turning drink dispensing machines into a hybrid of 3-D printing and multi-source create-your-own beverage dispensers. On the CNBC’s early-morning Squawk Box business news a few months ago, this concept was discussed showing a prototype where consumers can create their own unique beverage by pushing buttons for a little of this and a little of that. Millennials look for unique and “personalized” foods and beverages — we are told. And we see this trend in the “craft beer” category, for example.

A caveat to follow in this trend is the importance of labeling by USDA and FDA as the new gene-edited cell-cultured animal-based proteins and genetically-altered vat-grown yeast-produced dairy-based proteins move from the lab to the market in the next 12 to 24 months via partnerships between the billionaire-funded food technology startup companies and the world’s largest agricultural supply-chain companies. 

While everyone is watching what happens in the cell-cultured fake-meat category and the partnerships there with Cargill, most of us do not realize how close the dairy versions are to scaling-for-market — since Perfect Day company partnered last fall with ADM (Archer Daniels Midland). That partnership is predicated on ADM providing the facilities and mechanisms to ramp up the production of ‘cow-less’ so-called dairy proteins, and USDA research labs do the gene-altering to provide the seed-source of yeast for the process.

As these other proteins are introduced into the food supply, it is yet unclear how – exactly – they will be identified and differentiated in the marketplace. While the dairy and livestock sectors pushed hard to soften the distinctions of proteins in food from animals that have been fed GMO crops, the downside of USDA’s new Bio-Engineered (BE) food labels is that these fake proteins that are on the horizon may not be labeled or differentiated when they are a part of the final food or beverage product.

On the bio-engineering side of animal-based cell-cultured fake-meat protein production (cell-blobs grown in bioreactors), USDA and FDA are still working out the details of their combined food safety requirements.

But on the bio-engineering side of the yeast that have been genetically-altered to possess bovine DNA snips to exude ‘milk’ protein and perhaps other components (grown to exude dairy protein and components in fermentation vats), there is far less discussion of inspection or oversight.

As for the labeling of both types of bio-engineered protein, there is little discussion of how foods containing them will be labeled.

Just three months ago, U.S. Agriculture Secretary Sonny Perdue announced the new National Bio-Engineered Food Disclosure Standard that will be implemented in January of 2020. It is the result of the July 2016 law passed by Congress that directed USDA to establish one national mandatory standard for disclosing foods that are – or may be – bio-engineered.

USDA Agricultural Marketing Service (AMS) has developed the List of Bio-Engineered Foods to identify the crops – and foods – that are available in a bio-engineered form throughout the world and for which regulated entities must maintain records that inform whether or not they must make this bio-engineered food disclosure.

Some are voluntarily complying already, as I have seen this BE statement in very small print on small containers of some Kraft ‘cheese’ spreads.

The bottom line in this mandatory BE labeling requirement is that it only pertains to the main ingredient of the further-processed food or beverage and only if there is “detectable” genetically-altered material in that food. This means that the BE labeling may not apply to fake meat or fake dairy. In the case of the fake meat, the bio-engineering is the editing of DNA to grow muscle (boneless beef for example). In the case of fake dairy, the bio-engineering is yeast altered to include specific bovine DNA, but the resulting cow-less ‘dairy’ protein would have no detectable difference, its creators say.  

All animal protein checkoff programs have a tough road ahead. If farmers and ranchers continue to fund promotion of the foods and beverages that come from dairy and livestock farms, these fake iterations of the real thing will benefit unless promotion can be targeted to the real thing and consumers see the difference on a label in order to make a choice for the real thing.

This all sounds so futuristic and like science-fiction, but in foods today, this is where we are headed and our checkoff programs should be aware and should be able to stand up for the real thing. They should be allowed to lobby regulators for fair treatment and distinct labeling because the government requires farmers to pay these checkoff deductions to promote their products. Thus, if the government does not provide a clear path to distinguish fake from real, then the fairness of requiring a checkoff should no longer be considered valid.

As for dairy farmer checkoff funds, specifically, the future is here and DMI is already moving down that road to innovate dairy-based or milk-based products that dilute the meaning of dairy and milk in the marketplace – in effect paving the way to new innovations and products in which real dairy-farm-produced milk components can be replaced by fake-dairy components from genetically-altered yeast grown in ADM fermentation vats.

Perhaps checkoff funding should be directed in these difficult and changing times toward true promotion of what is real. We see that starting to happen with the “love what’s real” campaign, launched by the Milk Processors Promotion and Education Program (MilkPEP) and supported by DMI’s Undeniably Dairy social media campaign.

More than ever, the future of our dairy farms will rely upon promotion of what is REAL – moreso than using dairy farmer checkoff funds to find ways to put pieces of milk into other products or into 3-D Printers. Profile those components. Provide the benefits of real dairy components for the manufacturers that are moving into 3-D printing of personalized foods and beverages, but keep the powder dry for a full-out real dairy campaign. If USDA does not allow real dairy farmer checkoff funds to talk about why they are so much better than the fake stuff that is here and that is coming… then it is time to get the government out of the promotion business and return these funds to dairy farmers so they can voluntarily use them to promote their real products, their true dairy brands.

In a future of murky food sources – farmers must be able to stand up for what they produce. They must be able to promote Real Milk that is unfooled-around-with, that is from the cow they have fed and cared for.

With the food revolution here, dairy promotion will need a marketing revolution to welcome people back to what’s Real — especially as more household decisions are made by people growing up without knowing what Real Whole Milk tastes like.There’s an idea. Real Whole Milk is tastier, healthier, with a truly cleaner label than about anything else that is here or that is coming to compete with it in the beverage sector.

Ditto for Real Yogurt and Real Cheese, etc. in the food sector. Undeniably Dairy – the dairy checkoff program – has a nice ring to it. Love what’s Real has a great message to it. But if dairy farmers can’t use their mandatory funds to take the fake stuff head-on, then it’s time to stop taking mandatory checkoffs and allow farmers to use their money to promote their product – no holds barred.

When the competition is funded by Silicon Valley billionaires, has the backing of major food and agriculture supply-chain companies, is sourcing genetically-altered material from USDA, and does not have government requiring distinctive labeling – then dairy farmers need a level playing field to use their hard earned $350 million plus to put a stake in the ground to promote why Real is better. Checkoff staff often say the competition is doing brand advertising and “we can’t.”

That being the case, perhaps give the money back to the farmers so they can form voluntary promotion groups or voluntarily give the funds to the brand that receives their milk to get in the game of head-to-head advertising instead of, in essence, funding a path to their own substitution and demise.

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