Friday, April 10, 2020

Dairy Foods: Back to Basics. What we thought was impossible, is happening!

Photo source: Dairy Farmers of Wisconsin

I hope that you, your team and all of your families are staying healthy, safe and sane. Thank you to all the dairy farmers, haulers, processors, distributors, retailers and innovators…for your time and energy to keep refrigerators and freezers stocked. Please be smart. Stay active. Eat healthy. Keep clean. Be kind. We can do this. Xo 

Happy Easter! Happy Passover! The calendar says it’s “Good Friday.” Let’s make it a great Friday. Don’t let the sad state of affairs regarding the dumping of milk overshadow the fact that retail dairy sales are booming. So is home delivery!

Cow Belle is a home milk delivery service in Pennsylvania. Started by Angie Rondolet in 2016, the business has only experienced steady growth. About three weeks ago, as the pandemic crisis hit the U.S., Cow Belle’s orders skyrocketed. Instead of the usual 120 to 160 deliveries per week, the company is up to around 325 now. 
Cow Belle works closely with small local farms and currently can’t keep up with massive demand. This is a stark contrast to the many farms that are sadly dumping milk right now.

Ms. Rondolet had a business plan that included adding a partner over the next year or two. She’s now accelerated the plan and would accept a partner to take over a route immediately.

Indeed, demand for dairy products is strong.

Yesterday I spoke with my friend Julie Smolyansky, CEO, Lifeway Foods, Morton Grove, Ill. In between our usual banter, she shared that Lifeway kefir is experience record orders and shipments. While the last few years have been challenging because of the plant-based movement, the tides have changed.

In markets where the company’s drivers restock refrigerators, they are doing it twice a day. This is about 200 cases of 32-ounce bottles of kefir, or 1,200 bottles of kefir selling in one supermarket in one day!

The dairy supply chain remains strong, reports the International Dairy Foods Association (IDFA), Washington, D.C. Further, demand for dairy products at retail remains very strong, with total store dollar growth for dairy products up 60% overall, compared to the same weeks from last year, according to the most recent IRI data. These data also demonstrate year-over-year volume growth for refrigerated dairy milk (34%), shelf-stable dairy milk (29%), powdered milk (307%), natural cheese (66%), butter (105%), ice cream (36%), and yogurt (23%). At the same time, frozen, prepared foods with dairy—such as pizza—remain strong.

Photo source: Dutch Farms

All types of cheese sales are experiencing growth. Families are cooking more, making shreds an attractive topping for pizza, tacos and casseroles. Yes, that’s right casseroles. Cocktails and casseroles are two of the most widely circulated recipes on the internet right now.

Sandwiches are back, making cheese slices an attractive filler. And healthy snacking and mini meals are on top of mind, as many quarantined are exercise challenged. Calories matter, making nutrient-dense, reasonably priced foods such as yogurt and snacking cheese staples in most households. 

Cheese is also on the menu for Easter Sunday brunch. Aldi’s Emporium Selection brand currently is offering three spring-themed limited-edition products all made in England and imported into the U.S. There’s a Wensleydale Cheese with raspberry and white chocolate in a pink waxed egg shape. The other egg shape is white waxed and is aged English cheddar. There’s also a yellow-waxed, chick-shaped Wensleydale with lemon and honey.  

Thank you, Aldi, for your holiday-inspired cheeses. Thank you, Dutch Farms, today’s blog’s sponsor, for all your forms and flavors.

With all this great news, I hesitate to share that the dairy industry expects to lose $5 billion to $10 billion in sales over the next six months as restaurants and schools remain closed, according to Andrew Jerome, director of external and member communications at IDFA. The challenge the industry is facing is oversupply. Dairy farmers, unlike other sectors of the economy, cannot just shut down, as cows continue to produce milk. The sudden shift in the U.S. domestic market, as well as weakened export demand, has left about 10% of the normal U.S. milk supply without a home.

Prior to COVID-19, foodservice accounted for roughly 50% of all food sales, meaning Americans ate roughly half of their meals (and lattes) outside the home. When milk doesn’t have a home, the entire dairy value chain is upended and put into financial hardship, and stronger retail demand—while a saving grace—won’t cover the losses, according to Mr. Jerome.

This morning, Dairy Management Inc. (DMI), Rosemont, Ill., shared details of a letter to USDA Secretary Sonny Perdue, whereby the association is shifting its business plan to better help farmers weather the growing challenges they face amid the COVID-19 pandemic. DMI, which manages the national dairy checkoff on behalf of 35,000 farmers, has prioritized work focused on three key areas: schools, hunger, and foodservice and industry partnerships.

In the letter, DMI President Barb O’Brien said the checkoff’s mission of building sales and trust on behalf of U.S. dairy farmers and importers will prioritize limiting milk disposal and redirecting supply to serve those in greatest need over the next two months. Details of the effort include:

Ensuring access to school meals: By working through the farmer-founded GENYOUth organization, local promotion groups, USDA, and technology and food companies, such as Domino’s, YUM! Brands and others, the goal is to ensure school children continue to receive meals. This is critical not only for the health of children but to maintain the 7% of fluid milk that flows through the school channel.

GENYOUth created the “For Schools’ Sake—Help Us Feed Our Nation’s Kids!” movement, which so far has generated $3 million in corporate and individual donations. More than 5,000 applications have been submitted by school districts across the country requesting up to $3,000 grants for equipment, packaging and other supplies as school foodservice professionals work tirelessly to feed at-risk children. GENYOUth seeks to raise an additional $12 million to satisfy these requests.

Helping food banks meet growing need:
DMI is working with cooperatives and companies, quick-serve and foodservice partners and Feeding America to broaden access to dairy foods for the growing number of people facing food insecurity. The checkoff is convening cooperative leaders seeking to find a destination for excess supply with local processors and food banks. This effort already is diverting more than 100,000 gallons of milk per week in Texas, New Mexico, Indiana, Michigan, Ohio, New York and New England into the hunger system.

Convening partners across supply chain: Working with domestic and international partners to realign the supply of dairy products to those in need while working through U.S. Dairy Export Council to assure dairy products continue or resume flowing into the critical export market. After more than 10 years of partnership with dairy farmers, Domino’s is working with GENYOUth and local organizations to pilot a grab-and-go meal program at 31 public school sites in Miami. So far, approximately 23,000 meals have been made available and similar opportunities through other franchisees in Michigan and other locations are being explored.

Photo source: GENYOUth

“The dairy checkoff has earned the knowledge, credibility and relationships to work across the chain to accomplish--on farmers’ behalf--what no other company or sector can do alone,” Ms. O’Brien wrote. “We are urgently executing these strategies across the U.S. to help dairy farmers in this time of crisis, which is more important now than ever in our history.”

Dairy is not the only food sector experiencing dramatic change. The industry analysts at Culinary Tides, San Francisco, issued the “Shifting Sands: Trends Shaping the Food Industry in 2020/21” report this week identifying three trends that are reversing course due to COVID-19.

“Food and beverage trends are pulling back to a more conservative position as consumers exhibit a ‘stall’ pattern of behavior, which characterized by caution, is now being amplified and accelerated by COVID-19,” writes Suzy Badaracco, president. “Three key patterns are expected to reverse course due to COVID-19’s effect: the low /no alcohol trend, the faux meat trend and sustainability purchasing behaviors.”

The “sober curious” movement has been put on indefinite hold. COVID-19 is literally driving consumers to drink. My hometown, Chicago, issued a public health order this week banning sales of alcohol past 9:00pm.

Then there’s the reality that plant-based meats are simply not selling at the supermarket. During uncertain times, meat eaters want real meat.

“It is clear from research that faux plant-based meats are consumed by meat eaters, not vegetarians, with curiosity being their driver,” writes Ms. Badaracco. “As sales numbers on these products continue to slide, COVID-19 will push meat eaters back to animal protein at an accelerated pace, while vegetarians will celebrate plants being plants.

“Plant protein will learn to stand on her own while maintaining her individual personality,” writes Ms. Badaracco. “Dairy is another category that has been maligned lately, but now has a set of conditions which may allow her to shine. Dairy has the winning combination of health attributes and comfort, but she needs to stand up for herself. 

“A newer, more promising direction, which supports the current mood, is to hybridize the categories--an alliance between animal and vegetable protein, with vegetables maintaining their natural integrity and voice.”

Think cheesy broccoli casserole! Or how about this grilled fruit pizza? Photo source: Dutch Farms

For the third reversal, expect sustainability sales to de-escalate due to cost, not desire. There is blurring between sustainability and health, making them more interlinked than they were in past years.

“The usual suspects will show up and include food waste and conscious indulgence. Reduced consumerism, composting and embracing the ugly (produce) will remain despite COVID-19 because they don’t present a cost barrier,” writes Ms. Badaracco. “When consumers experience financial difficulties or uncertainty, sustainability is one of the first things they will step away from, even if temporarily. They will be looking for no cost sustainability solutions to satisfy their drive. Trust issues underly decreased spending behaviors, while fear of uncertainty is underlying their stricter savings behavior. Sustainability spending will bounce back, however its return will be linked directly to economic health and consumer confidence.”

To read more about these trend reversals, link HERE.

Stay well. Stay safe. Stay sane. Happy Spring!

1 comment:

  1. Glad to hear that kefir sales are booming. I am consuming daily to boost my immune system during this pandemic.I love Lifeway kefir.