ROSEMONT, Ill. — As restaurants and schools closed and states issued shelter-in-place orders to slow the spread of the coronavirus, leaders of the dairy checkoff program shifted focus to help get food in the hands of hungry people.
“We prioritized to navigate the changing environment and address supply challenges,” said Barb O’Brien, president of Dairy Management Inc. “We are working with organizations and processors to coordinate a redistribution of product.”
DMI is working with Feeding America to help quantify the demands for milk, O’Brien said during a webinar.
“We worked with Kroger and their 16 milk processing plants and with co-ops with excess milk,” she said. “That resulted in hundreds of thousands of gallons of milk being processed.”
The food service partners of DMI have helped keep dairy moving to consumers.
“We have promotional programs with two major pizza players — Pizza Hut and Papa John’s that are scheduled to run now until the end of August,” O’Brien said.
“Domino’s (Pizza) has moved up their launch of a program Carside Delivery,” she said. “Since they don’t have a traditional drive-through, their program is the first fully automated pickup which allows people to order online and pick up their pizza without leaving their car.”
Communication is critical, O’Brien said, to connect consumers and farmers more directly.
“We are re-purposing virtual farm tours to support parents and educators who are teaching from home and looking for curriculum,” she said. “We worked with Fox to produce a 30-second video of footage from multiple farms across the country, and it will run 20 times on Fox networks.”
Panic Buying
Tom Gallagher, CEO of DMI, discussed some of the impact of the pandemic on retail and food service sales.
“At the lowest point, the number of transactions at quick service restaurants was down 42% and now they are down 20%,” he said. “For full service restaurants transactions were down 80% at the height of the pandemic and now down 60% and most of the change is due to curbside sales.”
Milk sales for a two-week period increased 34% at retail, Gallagher said, and during the last month up 10%.
“Cereal sales historically have gone down 1 to 3% each year, but they were up 78% during the pandemic buying and now sales are up 17%,” he said. “That’s critical because cereal historically is 3% of all fluid milk sales.”
Historically, the sales of frozen pizza in grocery stores are mostly flat, Gallagher said.
“During the panic buying pizza sales went up 120% and since then 39%,” he said.
Looking ahead, Gallagher said, it is important for DMI to evaluate why consumers do what they do.
“What will happen with sales will not be determined by some great ad, it’s going to be determined by the behavior of the consumer,” Gallagher said.
“If more people continue to eat at home and continue to bake at home, that bodes well for milk and butter,” he said.
Or, consumers may return to eating a significant number of meals outside of the home like they were before coronavirus hit the United States.
“The reality is it will probably be somewhere between those two extremes,” Gallagher said. “And we’re going to do things for the dairy farmer based on data.”
Around The World
Exports of U.S. dairy products during the first three months of 2020 totaled 44,000 metric tons more than in 2019, said Tom Vilsack, president and CEO of the U.S. Dairy Export Council.
“That added $237 million of value,” he said.
The dairy export council is continuing to work as the pandemic is causing problems throughout the world.
“We have partnerships with a number of culinary institutes to encourage the next generation of chefs to understand the importance of U.S dairy ingredients,” Vilsack said. “In the Middle East and Africa, we are promoting recipes using U.S. cheeses by putting the recipes in grocery bags.”
The export council has developed a series of virtual training webinars and short videos that utilize dairy ingredients to make quick and easy meals and these have been distributed to a number of markets around the world.
“As South Korea started re-opening, we saw 10 million customers go to McDonald’s in March,” Vilsack said.
“We are looking forward to a significant rebound in dairy exports for the later part of the year,” he said. “We are continuing to use social media in all our markets to get the word out about U.S. cheese and so people understand U.S. dairy is in business and products are available for export.”