Move More Milk McDonald''s, Domino''s and HP Hood jimp-start dairy demand

September 17, 2009 07:00 PM

McCafé milk-based coffee drinks are now offered in more than 12,000 McDonald's restaurants here in the U.S. and in another 2,400 stores internationally.
McDonald's, Domino's Pizza and HP Hood are allies in an effort to revitalize domestic dairy demand.

And they're succeeding, utilizing help from dairy checkoff dollars to develop and market new menu items and products that meet, exceed and wow customers.

Dairy Today will feature speakers from all three companies at its annual Elite Producer Business Conference, Nov. 9 to 11, at the Bellagio hotel and casino in Las Vegas.

McDonald's has spent untold millions retooling 12,000 of its U.S. stores and another 2,400 internationally to offer its McCafé espresso coffees.

The McCafé coffees are designed to tap into the world's almost insatiable demand for milk-based coffees and to go head-to-head with other national and international coffee vendors.

"Today, most of our McCafé coffees and chocolate drinks do include milk as a key ingredient,” explains Alex Conti, the senior director of menu management for McDonald's Corporation.

"Our hot cappucino, latte and mocha all contain steamed milk [whole or nonfat]. Our iced latte and mocha use fresh cold milk as a main ingredient, and last but not least, we offer a great-tasting hot chocolate that is made with whole milk.”

Conti says an ongoing relationship with Dairy Management, Inc. (DMI), which manages the national dairy checkoff, allows McDonald's to leverage a wealth of consumer and dairy industry knowledge in new product development.

"We have many new McCafé beverages in our product pipeline that have been developed with steamed or cold milk,” he says. "You'll be hearing more about these in the near future.”

Domino's began offering several varieties of its new American Legends pizza, each with 40% more cheese, during the 2009 Super Bowl.
Domino's Pizza
rolled out six new "American Legends” pizzas last winter, each featuring 40% more cheese than their traditional pies. It has since added a seventh variety.

Again, DMI was instrumental in the development. With the runup in cheese prices in 2007 and 2008, pizza purveyors scaled back the amount of cheese they were placing on each pie. DMI calculated that adding just one more ounce of cheese per pizza would move 250 million more pounds of cheese annually and use 2.5 billion more pounds of milk. It set to work with Domino's to develop American Legends and to show that consumers prefer more-cheese-is-better pizzas.

DMI will pony up $12 million over the next two years to promote American Legends, while Domino's spends four to five times that amount in advertising and promotion.

"We completed our second four-week advertising ‘window' featuring American Legends [in July],” says Brandon Solano, vice president of brand innovation for Domino's.

"Advertising an idea like Legends twice a year is not typical in the industry and would not be possible without DMI's partnership.

"Additionally, we brought in new cheeses to help make the pizzas special, such as feta for our Pacific Veggie, parm-asiago for the crust of the Honolulu Hawaiian, and so on,” Solano says.

"With these cheeses in stores, we're getting orders, especially online, for different combinations. Consumers are experimenting with these new cheeses and their favorite toppings,” Solano says.

HP Hood, based near Boston, Mass., is tackling one of dairy's most misunderstood impediments: lactose intolerance. "Over the past two years, HP Hood/McNeil Nutritionals, the category leader in lactose-free milk, has worked with DMI to complete a multiphase research initiative to better understand what lies behind consumers reporting symptoms associated with lactose intolerance and/or lactose maldigestion,” says Chris Ross, vice president of marketing for HP Hood.

"While approximately a quarter of consumers believe they are lactose intolerant or report symptoms, clinical analyses indicate the actual incidence is in the 10% to 12% range.”

These consumers, whether or not they are actually lactose intolerant, limit and sometimes eliminate dairy consumption. But if they would consume three daily servings of dairy, estimated consumption would grow by 2.5 billion pounds of milk, Ross says.

"Similar to DMI's work in the conventional milk arena, the key to growth is giving consumers the product they want, when and where they want it,” he says. "Satisfying ‘unmet demand' holds true in the lactose-free milk segment as well.”

HP Hood's Lactaid brand, distributed nationally, includes white and chocolate milk, cottage cheese, eggnog, evaporated milk and ice cream.

Conti, Solano and Ross will provide more detail on their companies' dairy marketing efforts on the first full day of the Elite Producer Business Conference, Nov 10.

Other speakers will home in on the prospects for economic recovery, immigration reform, Pacific Rim export potential, U.S. dairy industry restructuring and on-farm energy production. A roundtable of Dairy Today "Dollars and Sense” producers will round out the conference.

For more details and to register, follow the dot for this story at DT

Bonus content:

McDonald''s nutrition information

More information on Domino''s pizza

More on Lactaid by HP Hood

2009 Elite Producer Business Conference

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