Fast-Food Partners

November 17, 2010 05:43 AM
 
Fast-Food Partners

Domino’s Wisconsin 6 Cheese pizza has six types of cheese and 80% more total cheese than its traditional pie.

 

The numbers are astounding. With $5 million in dairy checkoff seed money over three years, McDonald’s has committed $1 billion to produce and market new dairy-based Frappés and other McCafé specialty coffees.

With Domino’s Pizza, Dairy Management, Inc. (DMI), invested $6 million in both 2009 and 2010. In return, Domino’s created six new specialty pizzas last year, added a seventh this fall and poured some $60 million into advertising.

It’s all part of DMI’s new promotion strategy. “We’ve shifted away from advertising to work through partners to meet unmet demand, multiply checkoff dollars and create categorywide change,” CEO Tom Gallagher says.

McDonald’s new dairy products are using nearly 500 million pounds of milk annually:
 

 

  • McCafé specialty coffees, which are up to 80% milk, use 300 million pounds of milk annually.
  • McDonald’s Frappés, which are 50% milk, use an additional 100 million pounds of milk annually.
  • McDonald’s Real Fruit Smoothies, launched this past July and made with low-fat yogurt, will use an additional 23 million pounds of milk annually.
  • And McDonald’s Angus burgers, each with two slices of cheese, will use 60 million pounds of milk annually.
     

The new menu items required the chain and its franchises to invest up to $125,000 per restaurant for retooling to produce the specialty drinks with consistent quality and at the speed that drive-up customers expect, says Alex Conti, senior director of U.S. menu management for McDonald’s.

The milk utilization numbers are even more astounding for pizza. In the first six months of 2010, quick-serve retail pizza chains moved an addi-tional 100 million pounds of cheese. An additional 1 billion pounds of milk was needed to produce that cheese. If this trend continues for the rest of the year, a total of 2 billion pounds more milk will have been utilized through chain pizza sales.

DMI takes credit for spurring this turnaround. It worked with Domino’s last year to create six new specialty American Legends pizzas, each with 40% more cheese than the company’s traditional pies. Domino’s recently released another new pizza, the Wisconsin 6 Cheese, with 80% more cheese.

Other pizza chains have made innovations of their own. Pizza Hut recently introduced its “Big Italy” pizza, which has 50% more cheese than its standard 16" round pizza. This will result in an increase in incremental milk sales of 180 million pounds.

Domino’s Pizza Australia has entered into an exclusive agreement with Leprino Foods to source all of its mozzarella cheese needs out of California’s San Joaquin Valley.

In the next three years, Domino’s outlets in Australia and New Zealand will serve 12 million pounds of California mozzarella cheese annually to their customers.

Bonus Content


McDonald's McCafe

Domino's Menu

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

And it’s working.

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