The time has come to disrupt the disruptors

Opinion: Dean bankruptcy offers opportunity we should earnestly pursue

By Sherry Bunting, Farmshine, Friday, Nov. 29, 2019

If ever there was a time for state governments to sit down with their dairy farmers and agriculture infrastructure for a meeting of the minds… it is now.

The future is very much at stake with Dean Foods – the nation’s largest milk bottler – in Chapter 11 bankruptcy and sale proceedings, as the industry is largely signaling the buyer should be DFA.

But not so fast.

This could be an opportunity to look at the strength of Dean’s holdings and consider a different path forward, one that returns some of the regional branding power to farmers and consumers in the regions served by Dean’s 60 milk processing plants.

Dean Foods accounts for one-third of the milk bottled in the U.S., and the roots of its holdings go back to family operations with brands that were once – and some still are – household names.

In focus groups and shopper surveys, consumers demonstrate they understand what it means to buy local. They understand that buying local – especially fresh staples like milk – means keeping their dollars working in their communities. Consumers also say they want to help local farms. And they want to see clear labeling to know where their milk comes from.

Meanwhile, surveys show the gallon and half-gallon jug are still the most popular packaging among real milk buyers. Even though the category as a whole is declining, it is still a huge category and one that has not been tended or nurtured or cared for in more than a decade. In fact, the category has seen the deck stacked against it by government rules and government speech.

Taste is also important to consumers, as is nutrition. Where fluid milk is concerned, these two areas have also been lacking because checkoff-funded promotion became government speech that pushed fat-free and low-fat milk to the point where consumers have no idea what real milk tastes like – until they switch to whole milk, and they are.

Folks, this is an opportunity to chart a new path for fresh fluid milk, to breathe some life into it. We see it in whole milk sales that are rising. Just think what could be accomplished if significant resources were devoted to truly revitalizing milk.

As the dairy industry streamlines behind innovation and checkoff-funded partnerships to disrupt the dairy case — to be more like the plant-based non-dairy disruptors — there is still a majority of consumers choosing real milk, and more of them are choosing real whole milk as whole milk today is the top seller in the category, and whole flavored milk is growing by double-digits.

Can we disrupt all the disruption with a disruptive back-to-the-future original? I think so. But now is the time to hit it hard. A few years from now will be too late.

Dean Foods has the network and the facilities and the history a savvy consortium of buyers could tap into for going back to local or regional emphasis with brands. The DairyPure national branding experiment started out strong, but in the past few years has been squeezed-out by large retailers – and notably Walmart — pushing their own store brands with loss-leading strategies while hoisting the price of Dean DairyPure much higher.

And that’s part of the problem. Stores think it’s okay to loss-lead with milk, but they are not willing to eat that loss themselves. We need them at the regional dairy future table as well.

In the bankruptcy proceedings at hand, some of Dean Foods’ unsecured bondholders are protesting a rapid sale of assets to DFA in what they say equates to a “fire sale” that doesn’t maximize value. Did Dean receive a proposal from them too before filing bankruptcy? Sources indicate bondholders offered restructuring terms before the bankruptcy filing that would have changed the current picture for Dean Foods.

Will these bondholders that are opposing sale to DFA make an offer now? Can Dean Foods’ assets be sold piece by piece to be broken up more regionally? These questions don’t have clear answers at this time.

What is clear is that payments for milk by Dean to DFA are being delayed five business days as bondholders want to be sure they are truly ‘critical vendor’ payments and that there are no shenanigans between the would-be buyer and seller.

What is also clear is that Dean and DFA have a history, and that history includes the good, the bad, and yes, the ugly.

DFA was there every step of the way as mergers and acquisitions led Dean Foods on its path to become the nation’s largest milk bottler. DFA is Dean’s largest supplier of milk, and DFA leaders are on record stating that Dean Foods is the largest buyer of DFA milk.

If DFA purchases “substantially all” of Dean’s assets, we know more rapid consolidation of the fluid milk market will occur. DFA’s leaders — as well as the leaders of all the prominent organizations in the dairy industry, including the dairy checkoff — have been clear if we’re paying attention. The future they see is in moving away from investing in fresh fluid milk and moving toward ultrafiltration and aseptic packaging and blending and innovating for beverages that can be supplied to anywhere from anywhere without transporting milk’s water-volume by tanker.

Those are more of the ingredients for a monopolization of milk that may not even be considered by the Department of Justice. Without another offer or series of regional offers on the table, DFA would stand as the only option — other than complete failure of the firm under bankruptcy. This, alone, could put the sale to DFA on the fast track as sources talk about bankruptcy clauses that allow purchases to occur — without DOJ approval — when failure is the only other option.

So while consumers are consciously being pursued by the industry and dairy checkoff to move them away from their habit of reaching for that jug of milk and toward new beverages that contain milk — or are innovated new varieties of milk, or are blended and diluted with plant-based alternatives — what happens to the dairy producers in communities whose relevance is tied closely with retaining fresh fluid milk as a nurtured market and being a producer of a ‘local’ and fresh product? These producers are also forced to pay into the dairy checkoff that is developing these alternatives, not promoting or educating about fresh whole milk, and in effect funding their own demise.

Who will tend this store, nurture these customers, satisfy consumer desires to buy-local and ‘help farmers’ and their new-found eagerness to learn more about real fresh whole milk nutrition?

If states and regions don’t work to keep fresh milk facilities in their midst, the global message on ‘sustainability’, ‘carbon footprint’, ‘flexitarian diets,’ and ‘planetary boundaries’ will overtake the public consciousness, and the choices disrupting and diluting the dairy case will overtake fresh fluid milk.

In business today, that’s all we hear: Innovate and disrupt. Maybe it’s time to disrupt the disruptors, to put together a fresh fluid milk branding and packaging campaign that makes milk new again.

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And the winner is: MILK!

By Sherry Bunting

INDIANAPOLIS, Ind. – It’s a roar not soon forgotten when the field of 33 drivers rounds the curve to the paddock straightaway and the pace car exits the track. The thrill of the Indianapolis 500 is unmatched in motorsports, and the refreshing, replenishing, refueling and revered beverage associated with this great race is MILK — Real Dairy Milk!

Wait for it… The patriotic blend of freedom and speed after the recognition of our military, the moment of silence and playing of Taps for fallen heroes, the Blue Angels flyover, the singing of America the Beautiful and the National Anthem, and Back Home in Indiana, the anticipated “Drivers Start Your Engines”, the breaking free of the pace cars as the field of Indy cars passes the paddock with Old Glory in tow!

For 103 years, on the Sunday of Memorial Day weekend, a patriotic display, Blue Angels fly-over, recognition of our military and moment of silence for our fallen precede the 500-mile race at the Indianapolis Motor Speedway (IMS).

And for 83 years, the legendary race is complete with the ice cold Drink of Milk in Victory Circle — deemed the “coolest trophy in sports”, awarded for the “greatest spectacle in racing,” also known as the largest single-day sporting event in the world.

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2012 Milkman Dave Forgey (left) of River-View Dairy Farm, Logansport and his rookie Duane Hill of MayHill Farm, Fountain City.

Dave Forgey of Logansport was an Indy500 spectator for years before having the chance to be the ‘Milkman.’ As a dairy farmer he was enthusiastic when the Indiana milk promotion board began choosing dairy farmers, instead of executives, to be the ones to give the famed bottle of milk to the winning driver each year. After serving as the ‘rookie’ in 2011, he was lead Milkman in 2012.

“As dairy farmers, we bring a personal touch to the award, that brings it to the common level of the fans. At the end of the race, the Milk is always first,” said Forgey with a broad grin standing in front of the IMS Pagoda race day morning talking to fans in 2012.

The job of the Indy500 Milkmen (or women) begins long before Sunday, and continues throughout the year in venues such as Rotary Club presentations and small town parades, as well as other competitive events that capitalize on the Winners Drink Milk slogan of American Dairy Association Indiana.

By Sunday, the Milkmen are focused on keeping the Milk iced for Victory Lane and promoting milk and dairy farming to race-day fans. They ask all the drivers to choose between Whole, 2% and fat-free and have those selections ready since they don’t know who the winner will be. Whole milk has been topping the choices 2 to 1 over the past few years, and two top drivers, Ed Carpenter and James Hinchcliffe in 2019 said they would return to the buttermilk choice of 3x winner Louis Meyer in 1936, if it were an option!

In short, the Indy500 milkmen are charged with protecting the future of this unique sports award ruled tops for its “cool factor” according to Sports Illustrated writer Pete McEntegart, who in his si.com column ranked milk #1 among the Sports World’s top-10 unique trophies.

And in a recent interview, champions rate the Milk as the top tradition of this famed race that is certainly steeped in many traditions.

“It is certainly a tradition that everyone respects. What else can we do that is this national and international in scope?” Forgey observes. He said he came home to find an email from a friend in New Zealand who saw the whole thing on television.

“The fans are interested. They want to talk about our dairy farms,” says Forgey. When fans realized he was giving the bottle of mlk, they wanted to know how he qualified for the job. When Forgey explained that he and his rookie are Indiana dairy farmers, the fans were eager to know more. Of course, they also want to see the milk. Standing by the milkmen in front of the IMS Pagoda on race day morning, enthusiasm for “the milk” is evident. Fans paused to take pictures, and ask questions.

“There is always a lot of excitement for the milk among the racing fans,” says Forgey. “They know the tradition. They know about the milk. And when we can help them connect it back to the farmer, that generates interest.”

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Thanks to Louis Meyer, 3-time winner who started the Winning Drink of Milk!

Initiated 83 years ago when the first three-time winner, Louis Meyer, asked for buttermilk to quench his thirst after the grueling 500-mile race, the Drink of Milk tradition has endured. Today, scientific evidence shows Louis Meyer knew what he was doing back in 1936, when he turned after that grueling race to the unique, natural and un-matched combination of hydrating re-fuel found in Real Dairy Milk with it’s healthy maitrix of fat, protein, carbohydrate, a dozen essential nutrients and refreshment. In fact, in those days, buttermilk was the name given to full-fat milk with extra heavy cream! Today’s drivers tend to choose Whole Milk (standardized at 3.25% fat) more than the reduced fat (2%) or fat-free options.

ADA Indiana coordinates the Indy500 Drink of Milk promotion today, and 45 years ago they added to the heritage by sponsoring the “Fastest Rookie” award on the Tuesday before the big race. The coveted award recognizes the first-year driver who achieves the fastest four-lap average speed from among fellow rookie competitors during time trials.

“The rookies are very interested in the milk and getting their pictures taken with the milk,” says Forgey.

Fast forward to 2016 with the 100th running of the Indy500 and what a celebration it was! Nearly half a million people attended in person. To put this into perspective, the largest-ever attendance of the NFL Superbowl was just over 100,000 people. The 100th running of the Indy500 in 2016 clocked in at 350,000 in the gates and another estimated 100,000 outside the gates just wanting to “be there.”

Prairie Farms, American Dairy Association Indiana and the IMS together gave commemorative, specially-packaged bottles of milk to fans for a winning milk toast and they were available in stores throughout the region.

After 500 miles, 200 laps, 54 lead changes and 13 different leaders, the winning of the 100th Indy500 came down to a fuel strategy that put Alexander Rossi — the 9th rookie ever, and the first since 2001 — into Victory Lane at the Indianapolis Motor Speedway for the sweet taste of victory — the 80th traditional ice cold drink of milk, delivered in 2016 by Milkwoman Janet Dague, a dairy farmer from Kewana, Indiana and rookie Joe Kelsay of Kelsay Farms, Whiteland.

“I was so excited to see our rookie win the 500,” said Dague, an avid race fan and dairy farmer after delivering the Drink of Milk to Rossi in Victory Circle. “I was jumping up and down, cheering when he crossed the finish line. I even said to Joe ‘I told you I wanted our rookie to win!’

By “our rookie,” Dague was referring to Rossi earning the 42nd Fastest Rookie award given annually by the ADA-Indiana at a special dairy-and-racing-focused luncheon on the Tuesday before the race. There, Rossi was honored as the qualifying rookie with the fastest 4-lap average speed on qualification day, at an average 228 mph.

Dague described Rossi as “so gracious about winning. I think because of the rookie luncheon that just took place, he understood how important this was for the ADA-Indiana and every other dairy farmer around the world,” she explained. “In every picture, he made sure to take a drink of the milk and even made sure our logo was facing front and center. We couldn’t ask for a better spokesperson.”

The whole crew was celebrating that win with their milk, along with race fans given commemorative bottles on the 100th anniversary. Owners Michael Andretti and Bryan Herta were toasting each other, drinking their milk. Andretti, in particular, was happy to taste the elusive beverage right from driver Rossi’s official bottle while Rossi did his victory interview with ESPN, and their chief mechanic was next for the taste of victory!

Rookie Milkman Kelsay was excited to be there for the first time with the Drink of Milk in that 100th year of the Indy500.

“To have the spotlight shine on the nutrition of milk in this way is just awesome,” he said during the parade honoring military and the heritage of the race on the day before. “It is an honor to represent fellow dairy farmers who are back home milking and feeding and listening to the race on the radio. It has been a humbling experience so far. It seems as important to the fans as it is to dairy farmers. Even one of the police officers mentioned what an honor it was to meet us, saying he would be sure to keep me safe if something happens.

“We just thank Louis Meyer for starting this trend over 80 years ago that we can highlight the healthy choice of milk and deliver that message to a global audience here at the Indy500,” Kelsay adds.

“What better way could we as dairy farmers promote our product than to be out in the forefront of this event, which is so significant worldwide?” says Forgey, who appreciated the honor of spending 2011 and 2012 representing the dairy farmers in Indiana and across the U.S., who work hard to produce a healthy product.

After all, #WinnersDrinkMilk because #RealMilkAlwaysWins #TasteTheVictory

2018 winner: Milk!
Hubs and I at the 100th Indy500 in 2016 in the paddock straightaway. He has followed the race his entire life. I was drawn in when we met in 1978 and was happy we could cover the 100th Anniversary run for Farmshine as farm media in 2016!

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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FDA admits almonds don’t lactate, but here’s the rest of the story…

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They’re even taking her ‘moo!’ Investor-heavy high-tech startup companies are (with USDA’s help) taking her DNA to give food-grade yeast her protein-producing ability in a fermentation process to make “animal-free milk and dairy.” They’re editing her cells to grow muscle blobs in bioreactors for “animal-free boneless beef” and using her unborn bovine fetal serum as the culture media for the so-called ‘clean’ ‘animal-free’ cell-cultured meat growth. And they are taking her “moo” with website invitations to “join the ‘Moo’-vement or to get ‘moo-ving’ for all the dairy you love with none of the cows.” Meanwhile, FDA is poised — in a multi-year nutrition innovation strategy — to expand standards of identity for milk/dairy and meat/beef to accomplish nutrition innovation goals that, themselves, are being questioned and in the end may give these companies the license to steal. Photo by Sherry Bunting

FDA nutrition innovation strategy poised to ‘modernize’ how milk, beef defined as high-tech labs make cow-less versions of both

By Sherry Bunting for Farmshine, July 27, 2018

WASHINGTON, D.C. — As President Ronald Reagan famously said: “The nine most terrifying words in the English language are: I’m from the government and I’m here to help.”

Last week’s news that the Food and Drug Administration (FDA) will “help” the situation of imitation milk labels was followed by specifics from FDA Commissioner Scott Gottlieb.

He revealed in a live interview with Politico: “An almond doesn’t lactate, I will confess.”

Now there’s the sound bite everyone wants to hear, and the media and social media worlds went wild. But what does it really mean? Here’s the rest of the story and how to get involved.

Gottlieb said publicly that FDA plans to start gathering public comments before taking next steps in “redefining the rules for milk products”.

What he didn’t say in the Politico Pro Summit on July 17 is that FDA has already published a hearing and comment notice in the June 27, 2018 Federal Register for a July 26 hearing that covers three topics related to “modernizing” standards of identity, and the comment period ending August 27, 2018.

Will the government’s offer to ‘help’, in this case, result in more dishonesty and skulduggery, tricking consumers into eating what they may not otherwise choose and allowing investor-heavy startup companies to steal from farmers and ranchers, not only the identity of the products they produce, but also the very commodity-promoting checkoff dollars the government mandates they pay?

FDA already has a standard of identity for milk, and almost 100 dairy products, that it has chosen to ignore for more than a decade on any product except actual dairy milk.

Here’s the rub… If real dairy milk does not have added Vitamin D (when fat is removed Vit D is added to bring it back to full-fat levels of Vit. D), it can be deemed “mislabeled” by FDA and unable to call itself MILK.

But, if there are almonds and soybeans in your milking parlor — by all means, have at it,  label it milk — with or without Vit. D — not to mention without real milk’s levels of protein, quality amino acid profile and 9 essential nutrients.

You see, the standard of identity for milk is enforced when it comes from a cow, but not when it comes from a plant. And yet, because there is a standard of identity for milk — a nutritional and functional expectation — the plant-based knock-offs get to hijack that profile without being held to it and can selectively market from it with ‘more xxx’ or ‘free of xxx’ statements without stipulating what they are deficient in. (Example: Almond milk labels should say “88% less protein” if they are going to differentiate from the standard of identity they are hijacking).

By its own admission, FDA has maintained a non-enforcement posture on plant-based imitation beverages. Described as “enforcement discretion,” FDA has looked the other way and the dairy foods industry was either asleep at the wheel or developing imitations on the side, while these imposters were flooding the dairy case.

Meanwhile the companies investing in the imitations were free to do their market development and consumer confusion while securing space in the dairy case.

The timing of Gottlieb’s comments last week is even worse, given FDA’s launch of a multi-year nutrition innovation review as part of the agency’s nutrition innovation strategy revealed in March that seeks to expand standards of identity for products like milk and meat.

FDA meetings are happening quickly and quietly in various areas of imitation animal protein labeling and regulation. Yes, they are public meetings, but no one really knows about them.

Milk and dairy products have already been on the receiving end of identity-theft for more than a decade, and now that griddle is heating up to pancake both dairy farmers and ranchers (cattle are the target) with new plant-based mixtures, but even more horrifying are the genetically-edited cellular protein blobs or white-substance-exuding yeast grown in bioreactors yearning to be beef and milk.

There are new identity-thieves lurking about and guess what? USDA — the government — is the source of the bovine gene-edited cells and bovine gene-sequenced yeast in the heavily-investor-funded tech food startup companies that are the real focus of FDA’s recent moves.

With patents in hand — and funding from their big investors to scale up manufacturing — they seeking regulatory and labeling authority under FDA to be meat/beef and milk/dairy — without the cows.

FDA had a hearing on cell-cultured proteins July 12, and comments on regulation and labeling for this are due September 25.

A hearing on standards of identity was held by FDA on July 26 (after Farmshine press time), and comments are due August 27. (Look for more on this in next week’s Farmshine).

Dairy and beef producers need to become actively engaged in these moves by FDA because the main organizations that represent them — National Milk Producers Federation and National Cattlemen’s Beef Association — are on record stating these cell-cultured products should be subject to regulation under USDA like real meat and dairy. They are mainly seeking a level playing field in the marketplace, not opposing their classification as meat, milk, dairy.

(NMPF is vigorously defending milk’s standard of identity against plant-based imitations on nutritional grounds, but seeking a level playing field on the cell-cultured proteins).

Trust me, food and dairy manufacturing companies and investors have already hired the best and the brightest and are already involved in this FDA process — cheering for the other team.

Here’s an example: Perfect Day ‘animal-free milk’ is on the market after receiving its patent in February and raising $24.7 million in first-round startup funding from investors to scale-up manufacturing.

This company has a business-to-business (B2B) model, according to an interview with Reuters, and is already working with some of the world’s largest dairy food and beverage manufacturers. Its website states that the product is just like milk in terms of proteins, but without the cholesterol, saturated fats, lactose, and environmental impact of cattle. Just think what this portends for the dumping of even more fat-free real milk from the market.

In fact, a primary foreign investor indicated support for the Perfect Day (fake milk) startup because it aligns with United Nations Sustainability Goals for 2030. (There’s that S-word again. I hope we are paying attention to how the S-word and cattle are getting along these days). Continental Grain is a big investor in both the Memphis Meats (fake meat) and Perfect Day (fake milk) startups, while Cargill and Tyson are investors in the Memphis Meats startup.

These high-tech food sciences are attracting big high-tech investors at a rapid rate because they are viewed as “disruptor technologies,” and their websites and promotional materials hold nothing back. Milk, meat, beef, dairy – no words are off limits in their branding and marketing.

In effect, while the government forces dairy and beef producers to pay a checkoff tax for promotion of their commodities, beef and dairy — and the names of products associated with those commodities — the government is looking the other way or now potentially encouraging more identity-theft as techies enter the food space to market proteins using the dairy and beef profiles and images, without paying one dime.

As for Perfect Day, this fake-milk is made by genetically altering food-grade yeast, taking DNA from a cow and sharing its protein-producing qualities with the yeast. (Sourced from the USDA, the genetically-altered yeast are cultivated to produce ‘dairy’ protein).

This process results in a microbe that is combined with a sugar substrate (food for the microbe) to feed, grow and exude in a fermentation process the company says is like “craft-beer-style-brewing,” producing protein “building blocks” for making dairy milk, yogurt and cheese. Perfect Day’s website says: “Dairy reinvented: Sustainable. Kind. Delicious.”

The end game is to provide a ‘base dairy’ protein that looks and tastes like milk, for inclusion in manufactured dairy products like cheese, ice cream, pizza, yogurt, and to work “synergistically” with the dairy foods industry as — according to the website — “a complement to cow-based milk that takes some of the stress away from the factory-farming system, rather than replace dairy cows entirely.”

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Memphis Meats and other companies on the fake meat side are doing similar things with cell-culturing to grow cellular protein blobs in laboratory bioreactors.

In each case, the ultimate goal is to decrease the need for cattle — be they dairy or beef bovines.

Think about this for a moment. Even at a 1 to 3% inclusion rate in common dairy foods or ground beef, these lab-cultured proteins and genetically-altered yeast give processors even more control over supply, demand and pricing of milk as well as boneless beef, and if standards of identity allow this, or if FDA enforcement discretion looks the other way – consumers will never know the integrity of their food has been changed.

If FDA modernizes its standards of identity to accomplish the goals as outlined by Commissioner Gottlieb — including a reduction in saturated fat consumption despite revelations that saturated fats are healthful not harmful — it is entirely possible that FDA’s new guidance could allow these protein “innovations” in standardized dairy and meat products, without being considered mislabeled and with no indication to consumers.

Gottlieb has already established FDA’s desire to accomplish certain nutritional goals by spurring innovation with more “flexible” standards of identity.

Ahead of the July 26 hearing, FDA published its intention to cover three aspects in the standards of identity discussion: 1) Protecting consumers against economic adulteration; 2) Maintaining the basic nature, essential characteristics, and nutritional integrity of food; and 3) Promoting industry innovation and providing flexibility to encourage manufacturers to produce more healthful foods.

FDA’s Federal Register notice also says the following: “Our intent is that modernizing standards of identity to improve the nutrition and healthfulness of standardized foods will promote honest and fair dealing in the interest of consumers and achieve the goals of the Nutrition Innovation Strategy.”

How can FDA pursue this course in the face of what has been revealed in the past three to four years? It appears that bringing these B2B products to market, along with the FDA nutritional innovation strategy, are happening ahead of the battleground brewing for the next round of Dietary Guidelines.

It appears they want to modernize standards of identity for dairy within less than one year, to get them in place before the current flawed dietary guidelines are challenged in the 2020 cycle, which begins in earnest in 2019.

Numerous investigations and scientific reports and studies show that the saturated fat avoidance of more than 30 years was not only never proven to be healthful, it is now shown to be harmful. And the rhetoric from the United Nations and various Sustainability projects continues to focus on cattle as being bad for the planet, despite evidence to the contrary.

FDA wants comments that specifically talk about how the agency can use standards of identity to encourage the production of more healthful foods, to take into consideration technology, nutrition science and marketing trends, and to assess what consumers expect these standards to tell them.

Is FDA about to help the food industry blur the lines of food integrity to trick people into eating according to USDA/HHS flawed set of dietary guidelines (and UN environmental sustainability assumptions)?

That would be the ultimate dishonesty, and much worse than the 10-plus years of ignoring dairy identity theft already happening daily in the supermarket dairy case. Expanding the standard of identity, depending upon how it is accomplished, would give large, powerful, multinational food corporations a true license to steal.

Last week, the American Dairy Coalition (ADC) launched a “Protecting Milk Integrity Initiative” to advocate for the proper use of federally standardized terms established for the word “milk” on product labels. ADC is a coalition of dairy, ag and livestock producers, and they are devoting a branch of their organization to work specifically on “providing clarity and consistency for consumers across the nation,” the organization said in a July 17 news release.

ADC is getting the word out that it believes the dairy industry must speak up to ensure the FDA understands how important it is, not only for the current standard of identity for milk and dairy products to be upheld, but for it to be fully enforced — restricting the use of the word “milk” on all future plant-based or alternative product labels.

They point out that the price of milk continues to decline while sales of plant-based alternatives are up 61% over the past five years with projections of more market share gains in the future.

Don’t be fooled by FDA’s admission that almonds don’t lactate. Instead of the enforcement of milk’s standard of identity that dairy farmers have been waiting for, FDA has already quietly launched its process for modernizing standards of identity to achieve specific (and flawed) nutritional goals.

To comment on Docket No. FDA-2018-N-2381 for “FDA’s Comprehensive, Multi-Year Nutrition Innovation Strategy,” due August 27, 2018, use the docket portal at https://www.regulations.gov/docket?D=FDA-2018-N-2381.

To comment on Docket No. FDA-2018-N-2155 for “Foods Produced Using Animal Cell Culture Technology, due September 25, 2018, use the docket portal at https://www.regulations.gov/docket?D=FDA-2018-N-2155 .

To mail comments for either one, reference the appropriate docket name and number in your letter and mail to: Dockets Management Staff (HFA-305), Food and Drug Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852

In addition to commenting, a petition has been developed by the American Dairy Coalition’s Protecting Milk Integrity Initiative, and signatures are being collected to submit with public comments. ADC is also taking donations to raise funds to fight this cause.

More information about Protecting Milk Integrity Initiative, visit American Dairy Coalition

To learn more about the July 12 FDA cellular protein hearing (fake meat) and July 26 standards of identity hearing (fake milk), stay tuned to future editions of Farmshine for full reports ahead of the deadlines for commenting to FDA on both.

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CAPTIONS

FAKE MEAT and FAKE MILK

New Harvest and Memphis Meats testifed to FDA on July 12 that cell-cultured ‘meats’ are inevitable. They showed diagrams of how gene-edited bovine DNA and culture media are combined in bioreactors to make cellular blobs they want to call ‘boneless beef’ — without the cow. Similar diagrams can be found for Perfect Day and their phrase: ‘all the dairy you love with none of the cows’ at their website perfectdayfoods.com. Screenshot of materials displayed during FDA hearing by Sherry Bunting