DMI/Domino’s partnership could sell 100 million lb. more cheese

February 15, 2009 06:00 PM
 
Dairy Management, Inc. (DMI) and Domino's Pizza are partnering to promote six new pizzas being introduced nationally this week.

The new pizzas, being advertised as "America Legends,” will feature 40% more cheese than Domino's standard pizza and will feature all American type cheeses, ranging from mozzarella to cheddar. The new pizzas, already tested in Domino's test markets around the country, are projected to sell 100 million lb. more cheese over the next year, the equivalent of an additional one billion lb. of milk.

Domino's is the Number 1 Pizza chain with some 9,000 stores in 61 countries. The new American Legends pizzas will be marketed exclusively here in the United States, says Dave Brandon, Domino's Pizza CEO. But if they prove as successful as test markets indicate, variations might be launched globally to fit specific markets.

The new marketing campaign will be a spin-off spoof of the transition in the U.S. Cabinet, with a new "Secretary of Taste” being named. Interns for this new Cabinet Secretary will shred cheese, not documents.

The partnership with Domino's is extremely important for dairy producers, says Tom Gallagher, DMI CEO. (DMI is the umbrella organization which administers the national portion of the 15¢/cwt dairy promotion checkoff, and coordinates expenditures with many state and regional dairy promotion groups.)

"Demand for cheese has been slowing down in the last five years, and the amount of cheese used on pizza, for a number of reasons, has been declining,” he notes. A reversal of this trend is critical, because 25% of all cheese consumed in the United States is on pizza.

"If we could increase the use of cheese on pizza by just one ounce on each pizza, we could sell an additional 250 million lb. of cheese, or an extra 2.5 billion lb. of milk,” adds Paul Rovey, an Arizona dairy producer and DMI Chairman.

Along with helping develop the new pizzas, DMI will be spending $12 million of checkoff money over the next two years promoting the pizza. (Checkoff funds are typically used for generic promotion. Any branded promotion expenditures must be deemed a special case, approved by the National Dairy Board as well as the Secretary of Agriculture.) Domino's will spend an additional $48 to $60 million advertising the new pizzas.

DMI is also convening a "pizza emergency task force” meeting in the next few weeks, inviting in some 15 cheese suppliers to discuss both barriers and opportunities for continued pizza growth.

On February 28, the U.S. Dairy Export Council will also convene a special meeting to restructure its budget to jump start export sales. DMI is going through a similar exercise, restructuring more than 20% of its annual budget to stimulate dairy sales here in the United States. 

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