Market Watch Diary: Get Out of the Milk Business

February 26, 2013 07:05 PM
Market Watch Diary: Get Out of the Milk Business
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Jerry Dryer is the editor of Dairy & Food Market Analyst, www.dairymarket You can contact him at jdryer@dairymarket

Is it time to get out of the milk business? It may surprise you, but I am positively convinced the answer is YES!

Now, we don’t need to completely abandon the fluid milk business, but we must certainly diversify. That means diversifying into the snack food and refreshment businesses, the after-dinner cordial crowd, the mid-morning pick-me-up trade and the energy drink business. Really, the list goes on and on.

Several years ago as the editor of a dairy processor magazine, I received a shipment of root beer flavored milk. It was a new product being launched by a cooperative in the Northeast. The co-op marketers—and I use the term "marketers" loosely—wanted my opinion on their new product.

It was a remarkable beverage. Rich, full-flavored, refreshing and not too heavy on the calories. In my opinion there was, however, one problem: The name: root beer-flavored milk. So I devised a test.

On the 12th floor, I filled sampling glasses and cruised the hallways offering my colleagues "root beer flavored milk". Most turned up their noses and kept writing.

On the 14th floor, I offered my colleagues a drinkable root beer float—20 of 22 colleagues tried my beverage offering. Even more impressive: 18 of the 20 declared it the best new product I’d shared in two years.

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More on repositioning fluid milk

There is something to be said in how we market products. You’ll note that the fizzy dark brown liquid featured in commercials is not called artificially flavored, artificially colored, artificially carbonated water.

It is called Coca-Cola. In the same vein, it is not root beer-flavored milk. It is not even milk, because we are no longer in the milk business. In fact, it is a root beer float. A Dad’s Old Fashion Root Beer Float. Remember, we are in the refreshment business.

Alas, there seem to be so many opportunities, yet so little time. Starbuck’s created Frappuccinos, packaged the beverage in a glass bottle, stored it at room temperature and used reconstituted milk. It hasn’t done much for the bottom line of milk producers, but Starbuck’s is smiling all the way to the bank.

Why haven’t dairy processors formulated a dozen frap knockoffs using fresh milk that is lactose-reduced so less sugar (or no sugar) needs to be added, add natural flavors and then license it under a Starbuck’s competitor? Such a product would certainly appeal to people looking for a mid-morning pick-me-up.

In my opinion, we have a poster child for my argument in a product called Core Power. The product website introduction says it all: "A delicious post workout recovery drink for your active lifestyle, Core Power is a real milk protein drink made from fresh, lowfat, lactose-free milk and real honey. Its optimum protein to carb ratio and nutrient-rich profile make for the perfect last stage of
every workout. From endurance sports and bodybuilding to pilates and yoga, Core Power helps you
recover faster, build lean muscle and stay at the top of your game. No matter which game you happen to play."

It’s time to get out of the milk business. Here’s to Core Power and more root beer floats.

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