Dairy Foods November 2011

SELLING TO C-STORES | LEPRINO FOODS CO. | REFORM DAIRY PRICING

November 2011

Innovative Ideas for Dairy Processors

State

of the

Industry

2011

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Your Product. Our Systems Know-How.

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November 2011 Vol. 112, No. 11

S P E C I A L F E AT U R E S

Exporter of the Year

On our cover: Dairy products start with milk. Processors turn this raw material into nutritious foods and delicious treats. Our annual, exclusive State of the Industry report analyzes the trends in each category of dairy foods. Photo courtesy of the California Milk Advisory Board.

Departments 8 10

20 23 84 89 90

Very few U.S. dairy suppliers have been as steadfast in their commitment to export markets as Leprino Foods Co. Its dedication to export market development, integration of an export mindset into its day-in/day-out business and its devotion to forming lasting partnerships through customer service and by going the extra mile earns the company the 2011 Tom Camerlo Exporter of the Year award. p. 24

State of the Industry In this multipart special report, the Dairy Foods editorial team interviews leading processors and analyzes market data to uncover the trends in foods, packaging, formulas and flavors. p. 27

Editorial Newsline

28

Selling in c-stores; international packaging winners; IDFA supports trade agreements; safety-minded dairy operations

34

Milk Processors boost sales with flavored milk.

Supplier News People Classified Ads Index of Advertisers Inside Perspective Government intrusion in dairy pricing must end, writes Connie Tipton, CEO of the IDFA.

42

Ice Cream Uncertain ingredient prices and a weak economy bedevil processors.

52

Cultured Innovative new offerings come equipped with zesty flavors.

62

Butter With unit sales down, butter makers try new flavors.

64

Beverages Protein, vitamins, antioxidants and other better-for-you ingredients are added to teas, coffee, juices and water.

Visit The New DairyFoods.com We’ve redesigned our website this month. The easier-to-navigate site is better organized by topics and full of web-only exclusive content. When you register, you’ll gain full access to all the articles and archives. Go to www.dairyfoods.com.

Cheese Look for a slew of innovations, including raw cheeses and unusual flavors.

74

Ingredients Two categories of ingredients drive product development: cost-saving ones and health-and-wellness ingredients.

80

The Global Report Exporters must manage price volatility.

DAIRY FOODS Volume 112, Issue 11 (ISSN 0888-0050) is published 12 times annually, monthly, by BNP Media II, L.L.C., 2401 W. Big Beaver Rd., Suite 700, Troy, MI 48084-3333. Telephone: (248) 362-3700, Fax: (248) 362-0317. No charge for subscriptions to qualified individuals. Annual rate for subscriptions to nonqualified individuals in the U.S.A.: $178.00 USD. Annual rate for subscriptions to nonqualified individuals in Canada: $216.00 USD (includes GST & postage); all other countries: $228.00 (int’l mail) payable in U.S. funds. Printed in the U.S.A. Copyright 2011, by BNP Media II, L.L.C. All rights reserved. The contents of this publication may not be reproduced in whole or in part without the consent of the publisher. The publisher is not responsible for product claims and representations. Periodicals Postage Paid at Troy, MI and at additional mailing offices. POSTMASTER: Send address changes to: DAIRY FOODS, P.O. Box 2144, Skokie, IL 60076. Change of address: Send old address label along with new address to DAIRY FOODS, P.O. Box 2144, Skokie, IL 60076. Canada Post: Publications Mail Agreement #40612608. GST account: 131263923. Send returns (Canada) to Pitney Bowes, P.O. Box 25542, London, ON, N6C 6B2. For single copies or back issues: contact Ann Kalb at (248) 244-6499 or [email protected].

www.dairyfoods.com

5

November 2011 Vol. 112, No. 11 www.dairyfoods.com A Publication of BNP Media II, L.L.C. Editorial and sales offices 155 N. Pfingsten Road, Suite 205 Deerfield, IL 60015 Phone: 847-405-4000 • Fax: 847-405-4100 Publisher Thomas S. Imbordino 773-755-8990; 248-502-2093 (fax) [email protected] Editorial Chief Editor Jim Carper 847-405-4009; [email protected] Executive Editor Marina Mayer 847-405-4008; [email protected] Product Development Editor Donna Berry Art & Production Art Director Lindsay Leusby Production Manager Lisa Webb [email protected] Sales Amy Vodraska 973-970-9000 [email protected] Barb Szatko 630-527-9927 [email protected] Catherine Wynn 847-405-4010 [email protected] Gabriele Fahlbusch 49-(0)202-271690-15 [email protected] Classifieds Suzanne Sarkesian 248-786-1692 [email protected] Marketing Marketing Manager Elizabeth Wright [email protected] Editorial Reprints Jill DeVries 248-244-1726; [email protected] BNP Custom Media Group Christopher Wilson 248-244-8264; [email protected] List Rental Postal: Senior Account Executive Kevin Collopy 800-223-2194 x.684; [email protected] Email: Senior Account Executive Michael Costantino 800-223-2194 x.748; [email protected] Audience Development Audience Development Manager Christina Roth Multimedia Specialist Katie Jabour Audience Audit Coordinator Carolyn M. Alexander For subscription information or service, please contact Customer Service at: Tel. (847) 763-9534 or Fax (847) 763-9538 or e-mail [email protected]

Corporate Directors Publishing: John R. Schrei Corporate Strategy: Rita M. Foumia Marketing: Ariane Claire Production: Vincent M. Miconi Finance: Lisa L. Paulus Creative: Michael T. Powell Directories: Nikki Smith Human Resources: Marlene J. Witthoft Information Technology: Scott Krywko Clear Seas Research: Beth A. Surowiec BNP Media Helps People Succeed in Business with Superior Information

From the Editor’s Desk

Drinking the Grape Juice Jim Carper

s your company bottling grape juice? If not, it might be a good idea to add this beverage to your filling lines. Here’s why: Sales of the drink, measured in dollars, increased 345%, unit sales increased 178% and the average unit price increased $1.16 to $3.09. Clearly, the purple beverage is a superstar, according to 52-week data provided by Chicago-based market researcher SymphonyIRI Group. To prepare our State of the Industry report (which begins on page 27), executive editor Marina Mayer and I extracted information about the market leaders in all the major categories of dairy foods and nondairy beverages. I then looked at the data in the aggregate to compare categories. I wanted to find other potential sales opportunities for dairy processors among the 900-plus entries in the SymphonyIRI tables. The results were disappointing. Although many categories registered price increases (which helped dollar sales rise), unit sales dropped. Dairy processors need to sell more units (at a profit) to ensure their long-term viability. I kept digging into the numbers, looking to uncover some shiny gems. I found some in the cultured dairy category. Yogurt sales increased (as measured in dollars and units) and prices were up 7 cents. Cream cheese and refrigerated dips also showed gains in dollars, units and prices. Frozen novelties did all right, too.

I

How do you act on this information? Fluid milk processors can look into bottling juices and teas, or promoting their brands of these beverages more heavily. Ice cream processors can ramp up frozen novelties production. Yogurt makers can ride the current wave of popularity and innovate with flavors and inclusions.

Cheers. Non-dairy Beverages Do Well % change, dollar sales

% change, units

Average price per unit change

Sports Drinks

10.47

15.94

$(0.08)

Refrigerated Teas/Coffee

14.44

9.31

$0.09

Tea/Coffee Ready-To-Drink

3.98

7.15

$(0.07)

Bottled Water

2.76

4.23

$(0.03)

Yogurt

8.32

1.14

$0.07

Cream Cheese/Cr Chs Spread

8.40

0.84

$0.13

Natural Cheese

4.88

0.84

$0.12

Refrigerated Dips

4.38

0.78

$0.09

Refrigerated Juices/Drinks

2.45

0.52

$0.05

(0.26)

0.44

$(0.02)

Frozen Novelties

2.56

0.27

$0.07

Sour Cream

5.83

(1.07)

$0.11

Processed Cheese

2.16

(1.52)

$0.11

Milk

6.47

(1.56)

$0.21

Butter

20.50

(2.46)

$0.59

Cottage Cheese

2.20

(3.30)

$0.13

Ice Cream/Sherbet

1.29

(4.06)

$0.18

Category

Bottled Juices (single-serve)

Change is compared to previous 52-week period. Source: SymphonyIRI Group, Chicago. 52 weeks ended Aug. 7, 2011

Reformulate for a better bottom line There’s something else dairy processors can do: make more betterfor-you (BFY) products. They will bring you greater sales, greater operating profits and higher returns to shareholders, according to the new report, “Better-for-You Foods: It’s Just Good Business.” Author Hank Cardello told me that he analyzed 15 major food and beverage companies that have a high percentage of BFY products. Cardello is a director of the Obesity Solutions Initiative at the Hudson Institute, Washington, D.C. He called Dannon a “poster child” among processors of healthy foods. Read the report at www. obesity-solutions.org.  Jim Carper is chief editor of Dairy Foods. Phone: 847-405-4009. Email: [email protected]. 8

Dairy Foods | November 2011

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News & Trends

NEWSLINE... Dairy Processors Shake It Up at C-Store Show wners of convenience stores head to the NACS show every year to find foods, beverages, candies, tobacco products and other goods. This year, dairy processors showed off their wares among the Slim Jims, Monster energy drinks and prepared sandwiches at the 2011 NACS, staged by the Association for Convenience & Fuel Retailing, Alexandria, Va., Oct. 1-4 in Chicago. C-stores attract young adult males, who happen to drink a lot of flavored milks. Chip Marks, a marketing associate in Nestlé’s beverage division, says the company’s Nesquik extended shelf-life milks are popular with the 18- to 35-yearold males across all dayparts. In February 2012, the company will begin to ship a smaller, 8-ounce beverage to its customers. The low-fat strawberry and chocolate milks have 170 calories and are sweetened with sucrose. The company will support the brand with national television and digital advertising, as well as an online game. Upstate Farms also sees young men as a key demographic for its Crave flavored milks, sold in 16-ounce aluminum bottles. The Buffalo, N.Y.-based processor is looking beyond the traditional C-store channel to sporting goods and home improvement stores, says Ken Voelker. It designed a cooler in the shape of a Crave bottle for placement in Home Depot. Other dairy processors exhibited ice cream pints, novelties, non-dairy beverages and yogurt. But it was the milk shake category that was drawing the attention of C-store operators. Cold Cow Ice Cream, West Mifflin, Pa.; f ’real foods, Orinda, Calif.; and Nestlé, Glendale, Calif., exhibited machines and mixes to make milk shakes. Nestlé’s blenderz is a self-serve blending station where shoppers can make a vanilla, chocolate, strawberry or mint shake and

O

 At NACS, Nestlé showed a self-service milkshake machine.

10

Dairy Foods | November 2011

The C-Store Shuffle Among the dairy brands and frozen dessert makers exhibiting at the 2011 NACS show were: Exhibitor Products Bang Ice Cream Caffeinated ice cream pints Borden Dairy Borden milk, LaLa yogurt smoothies Chobani Greek yogurt HP Hood Hershey’s milkshake, Baileys flavored coffee creamers J&J Snack Foods ICEE, Minute Maid frozen desserts Mars Milky Way chocolate ice cream bars Nestlé Nesquik single-serve milk, Aguas Frescas horchata Philadelphia Water Ice WarHeads frozen beverages Turkey Hill Teas Unilever Magnum ice cream bars Upstate Niagara Single-serve milk Wells Enterprises Chef Duff Blue Bunny ice cream pints WhiteWave International Delight iced coffee beverage and dispenser YoCrunch Yogurt parfait

blend in Butterfinger, Nestlé Crunch, Peanut Butter Cup or Oreo pieces. The self-serve f ’real blending bar mixes milkshakes, smoothies and frozen coffees. Ice cream processor and scoop shop operator Cold Cow Ice Cream, Mifflin, Pa., offered four flavors of packaged shakes — vanilla, chocolate, cookies and cream and strawberry — which the shopper then thaws in a low-wattage microwave oven. WhiteWave, Broomfield, Colo., showed off another beverage concept — the International Delight ice café machine. The 5-gallon countertop dispenser uses the company’s readymix refrigerated drink made with skim milk, cream and coffee extract. A company representative claimed the beverage is formulated to create froth as the drink exits the dispenser. WhiteWave showed the unit alongside its Flavor Shots dispensing unit that delivers pre-measured doses of its vanilla, hazelnut, caramel and mocha International Delight coffee flavorings. The units are being tested at the University of Rhode Island and the University of Arizona. — By Jim Carper, chief editor

Continued on page 12

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FREE WEBINAR

USDEC’s Global Dairy Outlook: 2012 Register Today For This FREE One-Hour Webinar! Date: December 7 | Time: 2:00 p.m. EST The U.S. Dairy Export Council is back with its 5th annual “State of the Industry” outlook call! Join us for our yearly look around the corner at the drivers and dynamics of the global dairy business – and what to expect in the year ahead. Can global demand hold? How have dairy producers worldwide responded to strong farmgate milk prices? And where does the United States fit in the picture? Our expert panelists will present a lively dialogue around the major factors shaping the global dairy sector and what’s in store for 2012.

Webinar highlights include: • Factors driving dairy markets in 2011 … and into 2012 • An expert panel discussion on dairy pricing trends • A chance to join the discussion with our panelists • Special Bonus: This webinar will feature the live presentation of the 2011 “Tom Camerlo Exporter of the Year” Award, selected by Dairy Foods magazine

Register now for this 60-minute presentation, including live Q&A with webinar attendees. If you’re busy that day, sign up anyway. You can play back the scheduled broadcast any time you like.

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News & Trends

Pentawards Honor Dairy Products Packaging Packaging of milk, yogurt and frozen desserts were honored in the 2011 Pentawards competition. Prize winners received trophies at a ceremony in New York in September. Other categories in the package design competition included spirits, water, wine, personal care and private label.

The fifth edition of the awards program generated nearly 1,000 entries from 51 countries, says Brigitte Evrard, co-founder of the Pentawards, adding that more entries came from emerging countries such as Korea, Taiwan, China and Brazil. Gérard Caron, editor of the website www. admirabledesign.com, was chairman of the

Pentawards jury, which consisted of judges from 10 countries. For information about winners in all of the categories, as well as information about the 2012 Pentawards competition, go to www.pentawards.org. See a gallery of winning dairy products on the Dairy Foods Facebook page (www.face book.com/DairyFoods).

 Gold award, design by Ohesono design

 Silver award, design by WPF, Russia

 Bronze award, design by Shine Limited,

works, Japan

12

Dairy Foods | November 2011

New Zealand

News & Trends

Dean Foods, Among Others, Recognized as Leader in Worker Safety The International Dairy Foods Association, Washington, D.C., named 144 dairy operations to receive IDFA Dairy Industry Safety Recognition Awards and Achievement Certificates this year. This is the eighth year that IDFA has sponsored the program, which highlights the outstanding worker-safety records of U.S. dairy companies. Among those rewarded for superior worker safety is Dean Foods Co., Dallas, who received 69 total awards. “Quality and safety are our highest priorities, and we strive for continuous improvement — in our plants, on the road, at our customer locations and in our offices,” says Mike Ahart, vice president of transportation for Dean Foods. The award program includes categories for both processing facilities and trucking operations in the dairy industry. In addition to the 32 processing category award winners, IDFA awarded achievement certificates to 24 processing operations for having no injury cases that resulted in lost time away from work. IDFA also recognized 88 trucking operations, more than double the number last year, for having a Zero DART rate, or zero cases with days away from work, restriction or job transfer in 2010. The operations for each nominated company were judged solely on specific data required by the U.S. Occupational Safety

and Health Administration on the facility’s “Summary of WorkRelated Injuries and Illnesses” report. This year’s award decisions were based on data from OSHA reports for the 2010 calendar year. Processing facilities were judged in four product categories — natural and processed cheese; dry, condensed and evaporated Continued on page 14

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FULL potential Are your dairy products reaching their FULL potential? Recent studies demonstrate that foods formulated with Fibersol®-2 digestion resistant maltodextrin can provide an increased feeling of satiety so consumers felt fuller for a longer period of time. Fibersol®-2 can also be used to replace calories from sugar and fat while increasing the fiber content to create ice cream and sorbet products; ice cream and frozen desserts; type products under the appropriate labeling standard and fluid milk. Within each product category, IDFA accepted nominations for small, without adding any taste, aroma or unwanted medium and large facilities that achieved the best overall safety performance rates based on the viscosity of it’s own. Fibersol®-2 digestion resistant OSHA data. “The number of participants jumped dramatically maltodextrin is the fiber you want so your this year, demonstrating that dairy companies and their consumers and your dairy products can employees are proud to receive these awards each year. Their continued positive response just serves to highlight the reach their FULL potential! intense commitment to worker safety within the dairy industry,” says Clay Detlefsen, IDFA vice president of regulatory affairs. “IDFA congratulates all the participants on their hard work, dedication and superior level of achievement.” Here is the list of winners:

Only 1.6 Calories per gram!

Plant Safety Category Agropur Cooperative, Luxemburg, Wis.; BGC Grocery Co., Tyler, Texas; Cabot/McCadam, Agri-Mark, Middlebury, Vt.; DairiConcepts, Dalbo, Minn.; DairiConcepts, Greenwood, Wis. Dairy Farmers of America, Inc., Adrian, Mich.; Dairy Farmers of America, Inc., Fort Morgan, Colo.; Dairy Farmers of America, Inc., Monett, Mo.; Dairy Farmers of America, Inc., Turlock, Calif.; Dairy Farmers of America, Inc., Zumbrota, Minn. Foremost Farms USA, Clayton, Wis.; Foremost Farms USA, Marshfield, Wis.;Foremost Farms USA, Preston, Minn.; Foremost Farms USA, Waumandee, Wis.; The Dannon Co., Inc., Minster, Ohio. Dean Foods Co. of California, ice cream plant, Buena Park, Calif.; Dean Foods Co., WhiteWave Foods, Bridgeton, N.J.; Kemps LLC, Franklin milk plant, Duluth, Minn.; HP Hood LLC, Rosenberger’s Dairy, Hatfield, Pa.; Hunter Farms/Harris Teeter, High Point, N.C. The Kroger Co., Layton Dairy, Layton, Utah; The Kroger Co., Pace Dairy Foods of Indiana, Crawfordsville, Tenn.; The Kroger Co., Southern Ice Cream Specialties, Marietta, Ga.; The Kroger Co., Tamarack Farms Dairy, Newark, Ohio; The Kroger Co., Westover Dairy, Lynchburg, Va. Nestlé Canada Inc., London Manufacturing, Canada; Nestlé USA Inc., Dreyer’s ice cream Salt Lake operations center, Salt Lake City, Utah; Nestlé USA Inc., Dreyer’s ice cream Tulare operations center, Tulare, Calif.; Safeway Inc., Phoenix ice cream plant, Phoenix, Ariz.; Saputo Cheese USA Inc., Monroe, Wis.; Wells Enterprises, Inc., St. George, Utah.

Plant Safety — Zero Lost Workdays DairiConcepts, Bruce, Wis.; DairiConcepts, Chili, Wis.; DairiConcepts, Hummelstown, Pa.; Dairy Farmers of America, Inc., Beaver, Utah; Dairy Farmers of America, Inc., Hughson, Calif.; Dairy Farmers of America, Inc., Houston, Texas; Dairy

14

Dairy Foods | November 2011

News & Trends

Farmers of America, Inc., West Middlesex, Pa.; Dairy Farmers of America, Inc., Winthrop, Minn.; Dean Foods Co. of California, milk plant, Buena Park, Calif.; Deans Foods Co., WhiteWave Foods Co., Mount Crawford, Va. Foremost Farms USA, Ama Center, Wis.; Foremost Farms USA, Appleton, Wis.; Foremost Farms USA, Chilton, Wis.; Foremost Farms USA, Lancaster, Wis.; Foremost Farms USA, Plover, Wis.; Foremost Farms USA, Milan, Wis.; Foremost Farms USA, Richland Center, Wis.; Foremost Farms USA, Sparta, Wis.; Foremost Farms USA, Wilson, Wis. Glanbia Foods, Inc., Twin Falls plant, Twin Falls, Idaho; The Kroger Co., Centennial Farms Dairy, Atlanta, Ga.; The Kroger Co., Winchester Farms Dairy, Winchester, Ky.; Publix Super Markets, Inc., Deerfield Beach, Fla.; Saputo Cheese USA Inc., Paige Plant, Tulare, Calif.

satiety lower calorie

sugar-free digestive health

Trucking Safety — Zero DART Rate Cabot Creamery Distribution Center, Montpelier, Vt.; Dairy Farmers of America, Inc., Concord, N.H.; Dairy Farmers of America, Inc., Fair Oaks, Ind.; Dairy Farmers of America, Inc., Twin Falls, Idaho. Dean Foods Co., Barber Dairies, Dothan, Ala.; Dean Foods Co., Barber Dairies, Jasper, Ala.; Dean Foods Co., Barber Dairies, Hanceville, Ala.; Dean Foods Co., Barber Dairies, Tupelo, Miss.; Dean Foods Co., Berkeley Farms, LLC, Castroville, Calif.; Dean Foods Co., Berkeley Farms, LLC, Modesto, Calif.; Dean Foods Co., Brown’s Dairy, Bogalusa, La.; Dean Foods Co., Foremost Dairies, Longview, Texas; Dean Foods Co., Foremost Dairies, Shreveport, La. Dean Foods Co., Gandy’s Dairies, LLC, Clovis, Texas; Dean Foods Co., Gandy’s Dairies, LLC, Fort Stockton, Texas; Dean Foods Co., Gandy’s Dairies, LLC, Junction, Texas; Dean Foods Co., Gandy’s Dairies, LLC, Lamesa, Texas; Dean Foods Co., Gandy’s Dairies, LLC, San Angelo, Texas; Dean Foods Co., Gandy’s Dairies, LLC, Van Horn, Texas; Dean Foods Co., Fresh Dairy Direct, Highland, Calif.; Dean Foods Co., Land-O-Sun Dairies, LLC, Albany, Ga.; Dean Foods Co., Land-O-Sun Dairies, LLC, Atlanta, Ga.; Dean Foods Co., Land-O-Sun Dairies, LLC, Bluefield, Va; Dean Foods Co., Land-O-Sun Dairies, LLC, Jacksonville, N.C.; Dean Foods Co., Land-O-Sun Dairies, LLC, Lenoir, N.C.; Dean Foods Co., Land-O-Sun Dairies, LLC, Lynchburg, Va. Dean Foods Co., Land-O-Sun Dairies, LLC, South Boston, Va.; Dean Foods Co., Land-OSun Dairies, LLC, Tifton, Ga.; Dean Foods Co., Land-O-Sun Dairies, LLC, Valdosta, Ga.; Dean Foods #2737 Co., Land-O-Sun IFT Booth Dairies, LLC, Warsaw, Va.; Dean Foods Co., Land-O-Sun Dairies, LLC, Waycross, Ga.; Dean Foods Continued on page 16

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News & Trends

Co., Land-O-Sun Dairies, LLC, Wilmington, N.C.; Dean Foods Co., Oak Farms Dairy, Denison, Texas. Dean Foods Co., Oak Farms Dairy, Paris, Texas; Dean Foods Co., Oak Farms Dairy, Sweeny, Texas; Dean Foods Co., Oak Farms Dairy, Weatherford, Texas; Dean Foods Co., Oak Farms Dairy, Wichita Falls, Texas; Dean Foods Co., Oak Farms/Hygeia Dairy, Victoria, Texas; Dean Foods Co., Oak Farms/Hygeia Dairy, Laredo, Texas; Dean Foods Co., Mayfield Dairy Farms, LLC, Anderson, S.C.; Dean Foods Co., Mayfield Dairy Farms, LLC, Athens, Ga. Dean Foods Co., Mayfield Dairy Farms, LLC, Cleveland, Ga.; Dean Foods Co., Mayfield Dairy Farms, LLC, Decatur, Ga.; Dean Foods Co., Mayfield Dairy Farms, LLC, Mobile, Ala.; Dean Foods Co., Mayfield Dairy Farms, LLC, Smiths Station, Ala.; Dean Foods Co., Mayfield Dairy Farms, LLC, Tuscaloosa, Ala. Dean Foods Co., McArthur Dairy, Ft. Pierce, Fla.; Dean Foods Co., McArthur Dairy, Key West, Fla.; Dean Foods Co., McArthur Dairy, West Palm Beach, Fla. Dean Foods Co., Meadow Brook Dairy, Ashtabula, Ohio; Dean Foods Co., Meadow Gold Dairies, Cortez, Colo.; Dean Foods Co., Meadow Gold Dairies, Craig, Colo.; Dean Foods Co., Meadow Gold Dairies, Grand Junction, Colo.; Dean Foods Co., Meadow Gold Dairies, Lewiston, Idaho; Dean Foods Co., Meadow Gold Dairies, Lihue, Hawaii; Dean Foods Co., Meadow Gold Dairies, Idaho Falls, Idaho; Dean Foods Co., Meadow Gold Dairies, Jackson, Wyo.; Dean Foods Co., Meadow Gold Dairies, Pocatello, Idaho; Dean Foods Co., Meadow Gold Dairies, St. George, Utah; Dean Foods Co., Meadow Gold Dairies, Twin Falls, Idaho; Dean Foods Co., Purity Dairies, Clarksville, Tenn.

Wells Enterprises, Inc., Le Mars, Iowa; Dean Foods Co., Purity Dairies, Cullman, Ala.; Dean Foods Co., Purity Dairies, Hohenwald, Tenn.; Dean Foods Co., Purity Dairies, Lebanon, Tenn.; Dean Foods Co., Purity Dairies, Waynesboro, Tenn.; Dean Foods Co., Robinson Dairy, Silverthorne, Colo.; Dean Foods Co., Terrance Dairy, Calverton, N.Y.; Dean Foods Co., TG Lee Dairy, Melbourne, Fla.; Dean Foods Co., TG Lee Dairy, Orange City, Fla. Dean Transportation, Inc., Minot, N.D.; Dean Transportation, Inc., Houston, Texas; Dean Transportation, Inc., Moorehead, Minn.; Dean Transportation, Inc., Thief River Falls, Minn.; Dean Transportation, Inc., Broughton Foods, Old Washington, Ohio; Dean Transportation, Inc., Broughton Foods, White Sulphur Springs, W.V.; Dean Transportation, Inc., Creamland Dairies, Gallup, N.M.; Dean Transportation, Inc., Creamland Dairies, Santa Fe, N.M.; Dean Transportation, Inc., Purity Dairies, Huntsville, Ala. HP Hood LLC, Albany, N.Y.; HP Hood LLC, LaFargeville, N.Y.; HP Hood LLC, Heluva Good Transportation, Sodus, N.Y.; HP Hood LLC, Penn Maid Dairy, Philadelphia, Pa. Kemps LLC, Eau Claire Distribution, Eau Claire, Wis.; Kemps LLC, LaCrosse Distribution, LaCrosse, Wis.; Kemps LLC, Mason City Distribution, Mason City, Iowa Kemps LLC, Merrill Distribution, Merrill, Wis.; Kemps LLC, Minneapolis Ice Cream Distribution, Minneapolis, Minn. IDFA will issue a call for nominations for the next Dairy Industry Safety Awards competition in early 2012.

We put the squeeze on the cost of testing cheese LactoScope: the only milk analyzer that also works with cheese. Forget the expense of buying two dairy analyzers. The innovative LactoScope™ FTIR Advanced finds component levels of numerous dairy goods: raw milk, ice cream, and more. Add its application to liquefy cheese products, and you can even determine composition and quality of soft and hard cheeses! You can also squeeze out the industry’s lowest cost of ownership, because this analyzer is faster, simpler, and less expensive to maintain. Test all your preconceptions about dairy analysis with the amazing double-duty LactoScope.

www.aicompanies.com/cheese 16

Dairy Foods | November 2011

+1 781.320.9000

News & Trends

Register Today for Dairy Foods Webinar Dairy Foods magazine and Koch Membrane Systems, Wilmington, Mass., have joined forces to deliver a free webinar for the dairy industry. The webinar, titled “Innovative Solutions to the Unique Problems of Dairy Processing” and held Nov. 29 at 2:00 p.m. ET, will be hosted by speaker Scott LaRoche, senior process engineer at Koch. Koch Membrane Systems helps the dairy industry meet specific separation and filtration challenges through a wide selection of innovative products, designed to keep dairy operations running smoothly, efficiently and profitably. This webinar will cover the following topics: • Elements that allow cleaning at high temperature and high pH, often eliminating the need for chlorine.

Dairy Research Institute Launches New Product Competition The Dairy Research Institute, Rosemont, Ill., announced a new product competition where students create a dairy beverage that relates to the most recent competitive beverage analysis and meets criteria such as using any form of fresh or dry milk or other dairy ingredients, demonstrating innovation and providing a valuable product for consumers. Entry forms are due Feb. 15, 2012. Finalists will be recognized and have the opportunity to showcase their product at the Annual American Dairy Science Association (ADSA) Conference, July 15-19, 2012 in Phoenix, Ariz. The competition is open to undergraduate and graduate students and will recognize three outstanding individuals or teams, with awards totaling: • First prize, $8,000 • Second prize, $5,000 • Third prize, $3,000 For more information or to download entry forms, go to www.www.usdairy.com/ NewProductCompetition.

• The economics of 10K vs. 5K elements with different WPC products. • Nanofiltration for high-protein solids concentration and high-total solids concentration to reduce energy costs and improve product quality. • Membrane technology for recovering

expensive caustic. • Membranes to meet COD/EC limits. To register for this free event, go to www. dairyfoods.com.

Good for

Your

peace of mind reputation bottom line future development health stability

Our ingredients in your foods and beverages Add the taste, texture, nutrition and functionality that consumers demand in your foods and beverages with highquality ingredients from Tate & Lyle. We work side-by-side with you to create valuable, innovative solutions driven by our passion for food. Everyday, millions of consumers around the world enjoy products made with our ingredients. It’s the Tate & Lyle difference. Experience it today.

MIRA-CLEER® – Cook-up Starches Range SPLENDA® Sucralose KRYSTAR® Crystalline Fructose PROMITOR™ Soluble Corn Fiber STA-LITE® Polydextrose Fiber STAR-DRI® Maltodextrines INSTANT TENDER-JEL® X-PAND’R SC® Natural Starches MIRA-THIK® Cold Water Swelling Starch MIRA-SPERSE® Agglomerated Instant Starch STA-CAP® Lipophillic Starch TATE & LYLE Stabilizer Systems

our ingredients – your success © 2011 Tate & Lyle • www.tateandlyle.com • [email protected] SPLENDA® is a trademark of McNeil Nutritionals, LLC.

Continued on page 18 www.dairyfoods.com

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News & Trends

B R I E F LY … Westby Cooperative Creamery Expands for Distribution Center, Offices Westby Cooperative Creamery broke ground to make room for offices and a new distribution center, located northwest of its Westby, Wis., headquarters. The distribution center will total 10,000 square feet of refrigerated warehouse space for manufactured dairy food products and include 1,000 pallet spaces in five-high racking; the offices will contain 6,000 square feet of space for business operations. This expansion is expected to be completed by January 2012. Alpina Foods Opens First U.S. Plant Alpina Foods, a leading dairy producer in South America, opened its first specialty yogurt manufacturing plant in the United States. The new plant is scheduled to create 50 jobs at the new dairy manufacturing plant, constructed in the Genesee Valley Agri-Business Park in Batavia, N.Y. Alpina runs nine industrial facilities across Colombia, Venezuela and Ecuador and maintains presence in more than 20 countries.

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Dairy Foods | November 2011

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Friendly’s Enters Chapter 11 Friendly Ice Cream Corp., the Wilbraham, Mass., operator of Friendly’s restaurants and a nationwide distributor of ice cream products, and its subsidiaries filed a voluntary petition under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. Friendly’s has secured approximately $70 million in debtor-in-possession financing, which, along with the company’s cash flow, will provide the working capital necessary to meet its ongoing obligations during the restructuring. Nearly 424 Friendly’s restaurants will be open for business as usual during the company’s financial restructuring with no impact to manufacturing and distribution operations. The company also expects to continue paying employee salaries and benefits, meet the needs of its guests and retail customers and honor all gift cards. Wisconsin Dairy Auction Raises $39,000 Dairy Foods magazine s p o n s o re d t h e G r a n d Champion ice cream award in the 2011 dairy products contest of the Wisconsin Dairy Products Association, Madison, Wis. The winning products were auctioned at an awards ceremony held during the World Dairy Expo on Oct. 4 in Madison. The auction raised $39,160, a portion of which funds the Dr. Robert L. Bradley scholarship, awarded annually to a student pursuing a career in the dairy industry. John Gifford (right) of Gifford’s Dairy, Skowhegan, Maine, received the Grand Champion trophy from Jim Carper, Dairy Foods editor.

News & Trends

IDFA’s Dairy Forum 2012 Open for Registration Dairy Forum 2012, which will take place Jan. 15-18, 2012 at La Quinta Resort and Club in La Quinta, Calif., will take a big picture look at the geopolitics of food thanks to influential thought leaders bringing a fresh perspective to the changes to food supply and demand. Keynote speaker, Dan Glickman, former agriculture secretary and co-chair of Agree, a Washington, D.C.-based initiative that brings together a diverse group of interests to transform U.S. food and agriculture policy, will provide an overview of the new geopolitics of food and agriculture. The forum program, which is hosted by the International Dairy Foods Association, Washington, D.C., will also focus on how the industry defines dairy’s role in the international environment. Experts from a cross section of disciplines will lead lively discussions on trade and nutrition policy in a global marketplace, the role of technology in meeting the demand for food and the impact of energy and water on agriculture and food production. Anil Gupta and

Haiyan Wang, global strategists and coauthors of Getting China and India Right, will provide insights on how to do business in these two diverse and dynamic markets. In addition, there will be sessions to discuss dairy policy, the 2012 Farm Bill and the upcoming general election. Stuart

Rothenberg, editor and publisher of The Rothenberg Report and a columnist with Roll Call, will share his analysis of the upcoming elections. To register for the Dairy Forum or to check out the agenda and sessions, go to www.idfa.org.

Good stewardship is good leadership. To us, it’s elementary.

IN MEMORIUM John McGuire, Guernsey Farms Dairy John McGuire, founder of Guernsey Farms Dairy, Northville, Mich., passed away Oct. 14 from natural causes. He was 103. McGuire founded Guernsey Farms Dairy in 1940. It was named for Guernsey cows, which long were favored by Michigan farmers for their rich milk. The family-run business moved to its current location on Novi Road in 1966, and grew to include a dairy, ice cream factory, restaurant, retail store and ice cream parlor. It now boasts more than 50 flavors of ice cream, which are made on site. His wife of 65 years, Elise (Pat) McGuire, died in 2003. Survivors include sons Tom, Jim, Hugh, Joe, Mike, Marty and Paul; daughters, Pat Lawson, Mary Wicke, Peg Lulfs, Fran Hardy, Lucy McGuire, Rita Rice and Karen Kinville; one sister; 50 grandchildren; 84 great-grandchildren and one great-great-granddaughter.

Our daily obligation is to deliver high quality, sweet tasting SPLENDA® Sucralose in a way that protects the environment, is safe for our employees to manufacture, and is ever mindful of the future. We are pleased with the industry respect we have earned, but our true satisfaction comes from working side by side with our partners to create tasty and nutritious products around the world. To see all our elements in action, visit www.splendasucralose.com

© Tate & Lyle 2011

SPLENDA® and the SPLENDA® logo are trademarks of McNeil Nutritionals, LLC.

Continued on page 20 www.dairyfoods.com

19

News & Trends

SUPPLIER NEWS results from differing intensities of at least 15 sensory and rheology attributes, such as mouthcoating, meltaway and oral viscosity.

National Starch

Synergy Flavors acquired Sensus, LLC, providing Synergy with access to unique and innovative technologies for natural essence manufacturing. This expansion also strengthens Synergy’s capabilities in several key markets, including the rapidly growing tea and coffee sectors.

National Starch Food Innovation created the TEXICON food texture language as a way to translate the consumer texture experience into measurable scientific terms. As part of the DIALIN Texture Technology, consumers can translate what they like and dislike about food texture into scientific attributes. For example, “creamy” is actually a multifaceted texture experience that

Kerry Group entered into an agreement to acquire Cargill Flavor Systems for $230 million, subject to closing adjustments. This acquisition will strengthen Kerry’s capability to provide integrated customer solutions across all food and beverage end-use markets and extend the group’s market spread in emerging markets. The transaction, which is subject to regulatory approval, is expected to be completed by year-end.

TI C Gums received the first annual Ingredients/ Flavorings/ Seasonings/ Additives Innovation award for its Dairyblend SC-ASC product at the International Dairy Show. The awards were co-hosted by the International Dairy Foods Association and Dairy Foods magazine. Developed during the last 12 months, Dairyblend SC-ASC was invented to help food formulators manufacture a full-bodied texture for sour cream. Spirax Sarco

Spirax Sarco launched Steam News, a digital magazine published quarterly for plant managers, facility and opera-

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Dairy Foods | November 2011

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News & Trends

SUPPLIER NEWS tion professionals and engineers in the manufacturing industry. Each issue features editorial, steam tips and training opportunities to help improve plant production, sustainability and energy efficiency. It also provides readers with expertise, solutions, articles on industry topics, key product information and promotions and company news. To subscribe, go to www.spiraxsarco.com/us.

Star Kay White

terms of the agreement, Diversey shareholders will receive $2.1 billion in cash and 31.7 million shares of Sealed Air common stock valued at $16.70 per share for a total consideration to shareholders of $2.6 billion. Both company’s leadership teams will remain intact as integration planning continues. D.D. Williamson

Heat and Control purchased Spray Dynamics, Ltd. This acquisition helps Heat and Control expand its selection of coating systems and seasoning applicators and provides food processors with complete single-source support. Star Kay White expanded operational capabilities with the purchase of a 35,000-square-foot facility adjacent to its current manufacturing and R&D campus in Congers, N.Y. The new facility is retrofitted to include refrigerated and

dry storage warehouse space, additional loading docks and new corporate office space. Sealed Air Corp. completed its previously announced acquisition of Diversey Holdings, Inc. Under the

D.D. Williamson launched a new brand image to reflect its expanded expertise in color solutions. The new logo, “DDW,” replaces “D.D. Williamson” while “The Color House” tagline resembles a place where creativity blends with advanced technical capability to bring color ideas to life. Continued on page 22

WAS H I NGTON

WATC H

News & Trends

22

White House Signs Free Trade Agreements President Obama signed free trade agreements with South Korea, Colombia and Panama on Oct. 21. “We’re pleased that the administration recognized the extreme importance of these trade agreements to the U.S. economy,” says Connie Tipton, president and CEO of the International Dairy Foods Association, Washington, D.C. “The pact with South Korea is particularly important because it would reduce tariffs and expand market opportunities in a high-value market and add 10,000 or more additional U.S. jobs throughout the dairy supply chain.” South Korea is now the U.S. dairy industry’s sixth largest export market, representing $145 million in exports year to date. That figure is nearly double the value of exports during the same time period last year. According to U.S. International Trade Commission estimates, full implementation of the agreement with South

Dairy Foods | November 2011

Korea would increase U.S. dairy exports by as much as $336 million a year. The Panama and Colombia agreements are also strong, with each expected to produce gains of an additional $25 million in exports per year. Supply control programs could derail anticipated trade gains IDFA warns legislators to steer clear of proposed U.S. dairy policies that could negate the growth opportunities awaiting the dairy industry. A report from Bain & Co., Boston, titled “Dairy Globalization Refresh: 2011 Update,” reaffirmed that the global demand for dairy products will exceed supply in the near term. The report, which was commissioned by Dairy Management Inc., Rosemont, Ill., and the U.S. Dairy Export Council, Arlington, Va., and issued in August, also said the United States remains uniquely positioned to become a consistent exporter.

“Supply control programs, such as the price stabilization program included in the Dairy Security Act of 2011 recently introduced by Rep. Collin Peterson have the potential to undermine the market access gains of these trade agreements,” Tipton adds. “Such programs would increase domestic prices for dairy products well above international levels, weakening our competitive position in the global marketplace and limiting our industry’s ability to grow and create more jobs.” Editor’s note: Due to an editing error in the October article “Dairy Producers at Odds Over Proposed Policy Reform,” Dairy Foods created the impression that all dairy processors support the reform program, Foundation for the Future. Many do not, and IDFA opposes the proposal. A corrected version of the article is on www.dairyfoods.com.

News & Trends

PEOPLE Concord Foods, Inc., Brockton, Mass. David Weisser joined the Oringer division as national sales manager, responsible for servicing the existing customer base and developing new business opportunities within the foodservice, dairy and bakery sectors.

responsible for sales of VersiLac, the company’s innovative and versatile new dairy ingredient. Shibuya Hoppmann Corp., Elkwood, Va. Hidetoshi “Hide” Shibuya, manag-

ing director of Shibuya Kogyo Co., Ltd. in Kanazawa, Japan, was named chief executive officer, bringing progressive leadership experience and a commitment to blending Hoppmann’s quality to Shibuya’s world leading technologies.

D.D. Williamson, Louisville, Ky. Margaret Lawson, chief science officer, was honored Oct. 14 at her alma mater, UC Davis, Davis, Calif., with an “Award of Distinction” from the university’s College of Agricultural and Environmental Sciences. The award is presented annually to those whose contributions and achievements enhance the college’s ability to provide cutting-edge research, top-notch education and innovative outreach. Blommer Chocolate Co., Chicago Barry Heinbaugh joined as director, West Coast s a l e s , re s p o n s i b l e f o r Heinbaugh driving the sales plan and growth on the West Coast. This move allows Steve Kline to be promoted to vice president, West Coast business development. ONESource Facility Solutions, Atlanta Ed Wright was named president and CEO, bringing more than 35 years of experience in the food and beverage industry. Deacom Inc., Wayne, Pa. Ryan Orman joins as a junior software developer, responsible for updating the company’s unit test library and developing new integration test scripts for the quality control department. Stephanie Eaves was named marketing communications specialist, responsible for generating sales support materials, coordinating company events and maintaining the company’s website. Proliant Dairy Ingredients, Ankeny, Iowa Linda Myhr was named sales manager,

Just as fresh as your product: fillling technology from krones. www.krones.com

Up Close and Personal with the World A focus on face-to-face service and long-term customer relationships makes Leprino Foods Co., Denver, a global leader in cheese and ingredients.  Paul Rogers Contributing Writer n 1978, you could count on one hand the number of U.S. dairy companies serving overseas clients commercially. Leprino Foods Co. was one of them. You could probably count on one finger the U.S. dairy suppliers who were able to maintain those same customers for the next 33 years: Leprino Foods. That statement might be a bit hyperbolic, but the fact remains that very few U.S. dairy suppliers have been as steadfast in their commitment to export markets as Leprino Foods. For more than three decades, the Denver-based company has been one of the stalwarts of U.S. dairy exports. Its dedication to export market development, integration of an export mindset into its day-in, day-out business and its devotion to forming lasting partnerships through customer service and by going the extra mile earned the company the 2011 Tom Camerlo Exporter of the Year award. The fact that the company is still servicing its first export customer 33 years after the initial sale speaks volumes about commitment and service. “Leprino Foods epitomizes what we need to have in our industry: committed, customer-service-oriented export suppliers,” says Marc Beck, senior vice president, market development, U.S. Dairy Export Council (USDEC), a co-sponsor of the award with Dairy Foods magazine. “They have been doing it well and doing it for years, and it shows in their export results.” “The company has been an export champion since day one,” says Tom Suber, president of USDEC, Arlington, Va. “Leprino Foods was a founding member of USDEC in 1995 and has been extremely active in dairy trade policy, both within the organization, leading the Dairy Trade Policy Committee, and outside, participating in industry delegations to World Trade Organization meetings and groups such as

I

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Dairy Foods | November 2011

USDA’s Dairy Industry Advisory Committee, where it provided a global perspective.” In the 1970s, the company recognized the potential of the international market for whey and other dairy ingredients “almost immediately,” says Leprino Foods president Larry Jensen. “Once our first customer relationship was formed, we realized the growth potential, particularly in light of the demand and our access to such a large, healthy dairy industry.” The company’s exports began what Jensen calls “a nice steady trend of positive gains” for a couple decades and “really took off ” in recent years. International sales more than doubled from 2008 to 2010. This year, cheese export volume grew 50% through the first three quarters, compared to the same period in 2010. A single product to a single country in 1978 — whey to Japan — grew to an array of dairy ingredients and cheese to more than 40 countries worldwide. In 2000, Leprino Foods became one of only a handful of U.S. dairy suppliers to expand its manufacturing footprint to another continent when it formed a joint venture with Glanbia Plc to serve Europe. The joint venture owns and operates two facilities in the United Kingdom — one in Llangefni, Wales, and one in Magheralin, Northern Ireland — and markets products under the Glanbia Cheese name.

Past Exporters of the Year 2010 United Dairymen of Arizona 2009 Hilmar Cheese Co. 2008 Schreiber Foods 2007 Darigold 2006 Davisco Foods

“We each bring unique capabilities to the partnership,” says Jensen. “Glanbia brings knowledge of the European market and the European milk supply, and Leprino Foods brings state-of-theart mozzarella production expertise.” International sales now account for nearly 7% of Leprino Foods’ total cheese sales and almost 60% of its whey sales. With the “dramatic” expansion of its international presence, “we restructured our entire business development organization in order to meet the growth and complexity of international markets,” says Kevin Burke, senior vice president of global business development. “We want to ensure we take a more comprehensive view of how international sales impact our entire operation and better integrate our international efforts into everything we do.” Greeley to Singapore While Leprino Foods has a long history in world markets, two recent developments put the exclamation point on its export success. In August, the company opened its first Asian Business Center in Singapore. And in November, it opens a $200 million cheese and dairy ingredient plant in Greeley, Colo. Besides giving the company a larger physical presence in Asia, the 6,000-squarefoot business center contains the company’s third Innovation Studio — a facility that assists customers in identifying and developing products tailored to the tastes and food trends of the region. (Leprino Foods also operates an Innovation Studio in Denver and in the UK as part of its joint venture with Glanbia). The center is staffed by sales and customer support personnel and business development experts, including culinary professionals. It builds on Leprino Foods’ already significant presence in the region that seeks to capitalize on rising dairy demand in the AsiaPacific market. “Leprino Foods has made strategic and focused efforts to build business in China and the Southeast Asian theater for mozzarella,” says Beck. “The company has taken a very creative and innovative positioning as ‘supplier of choice’ to a major pizza chain in Australia, working with them on creating a marketing platform that would meet Australian consumers’ desire for pizza that satisfied cravings for indulgence without negative connotations of weight gain.” Leprino Foods used its mozzarella expertise to develop a lowfat cheese that met all of the chain’s desired taste, composition and melt characteristics. The product was so well received that last year, the pizza company converted its entire market territory to the low-fat cheese. And it’s not just in Singapore in which the company has boots on the ground. It has in-country staff in China and a robust distributor network in China, South Korea, Japan, Thailand, Australia and other countries. Cheese exports are shipped primarily from plants in California. Whey and other dairy ingredients are shipped from any of 10 U.S. facilities in seven states. The new Greeley facility will boost volume and provide more supply options. The Greeley plant will go live in stages, with Phase 1 set to open Nov. 1 and Phase 2 scheduled for completion in late 2012. Phase 3’s completion date has yet to be determined. Phase 1 will make non-fat dry milk. Phases 2 and 3 will produce cheese, whey and dairy ingredient products. “As demand increases internationally, the addition of the Greeley production facility will enable us to meet our domestic demand for cheese while we increase shipments overseas from our California facilities,” says Jensen.

 Leprino Foods has a team of customer-focused individuals, including (back row, from left): Mike Sweeney, Monica Lasswell, Mark Benson, Ken Pharis, Gillian Kaye and Aaron Whittaker. Middle row: Brad Cunningham, Allison Specht, Shawn Judge, Jeremy Egle, John Jones and Jaime Sanchez. Front row: Larry Jensen, Kevin Burke, Cheri Bellendir, Derek Friedman, Tony Eafanti and Pat Drye. Ingredients and foodservice Although Leprino Foods is synonymous with cheese — the company says it is the largest mozzarella maker in the world — dairy ingredients like sweet whey, whey protein concentrates and lactose are a major segment of the business. International markets actually led its whey business. “Demand for whey products matured for us faster overseas than it did in the United States,” says Jensen. Now, the international markets are primed to propel Leprino Foods’ cheese business as well as the overseas foodservice sector booms. “There appears to be tremendous opportunity for foodservice expansion in many international markets,” says Jensen. “When you consider the Asia-Pacific market, it’s reminiscent of the U.S. food industry in the early ’70s, particularly in the pizza category. We all know the growth the industry experienced in the United States over the last 40 years. I think it’s fair to expect significantly increasing international sales as many developing markets see a desire for Western-style foods.” “With the numerous tariff and regulatory requirements abroad, USDEC has been a tremendous partner in helping us gain access and navigate the many varying international markets,” says Burke. “They also provide those in the industry with a wealth of information on various global markets in regard to trends and market outlets — all of which is critical as we work to provide superior service to our customers.” In the end, it comes back to service. Says Burke, “We want our customers to succeed and we work hard to make sure they do.”  Paul Rogers writes about the dairy and food and beverage industries from his base in Madison, Wis. www.dairyfoods.com

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PROVIDING CREATIVE SOLUTIONS

State

of the

Industry In this exclusive category-by-category review, processors talk about their brands and share their outlook for dairy foods in 2012. MILK Processors boost sales with flavored milk, sell in new retail channels and try new processes. Page 28

CHEESE Look for a slew of innovations, including raw cheeses, unusual flavors and portion-control sizes. Page 34

ICE CREAM Uncertain ingredient prices and a weak economy bedevil processors. Page 42

CULTURED Innovative new offerings come equipped with zesty flavors and intricate packaging concepts. Page 52

BUTTER With unit sales down, butter makers try new flavors to lure shoppers to the dairy case. Page 62

BEVERAGES Protein, vitamins and other better-for-you ingredients are added to teas, coffee, juices and water. Page 64

INGREDIENTS Two kinds of ingredients drive product development: cost-saving ones and health/wellness. Page 74

GLOBAL REPORT For the United States to become a consistent supplier, it must manage price volatility. Page 80 To order reprints of this special report, contact Jill DeVries, 248-244-1726 or [email protected].

Sponsors

Photo courtesy of the California Milk Advisory Board

www.dairyfoods.com

27

State of the Industry Sponsored by:

Milk Drinkers Savor the Flavor Faced with stagnant growth and competition from non-dairy beverages, processors try to boost sales with flavored milk, new retail channels and new processes.  Jim Carper Chief Editor

he milk category is getting frothy as processors try hard to differentiate their products. They are not just competing against each other; makers of soft drinks, energy drinks, teas, juices and bottled waters want their share of consumers’ dollars. Milk processors use flavors, processing techniques and packaging to make their beverages stand out in the dairy case. But the battle for market share and share of stomach is not fought solely in the grocery store. Savvy marketers are placing their products in alternative channels such as health clubs, home improvement stores and outdoor equipment retailers. Upstate Farms, Buffalo, N.Y., is selling its Crave flavored milks in Dick’s Sporting Goods stores and Home Depot. Upstate identified active young males and construction workers as key consumers of chocolate milk, says Ken Voelker, director of marketing. It developed a self-service cooler for extended shelf life, so that retailers can position the milk in the checkout aisle. Crave is packaged in resealable aluminum pint bottles. Nestlé also identified the hard hat wearer, and the 18- to 35-year-old male in general, as an important demographic for its Nesquik chocolate milk, says Chip Marks, a marketing associate in the company’s Glendale, Calif., headquarters. The beverage is consumed across all dayparts, he says, including breakfast, as a snack and in the evening. At the NACS tradeshow for convenience store retailers in October, Nestlé promoted its new 8-ounce bottles of strawberry and chocolate low-fat milks, which will be available in February 2012.

T

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Dairy Foods | November 2011

 Garelick Farms in the Northeast is a Dean Foods processor selling the new TruMoo low-fat chocolate milk. For Halloween promotions, Garelick colors the vanilla milk orange.

A Nesquik sales sheet encourages retailers to “think outside the cooler” by placing aseptic packages of the beverage near pastries, cold sandwiches and fruit. The company cited information from Dairy Management Inc., Rosemont, Ill., showing that when Nesquik was placed in a secondary location, it generated additional sales of 40%. Chocolate milk is also a favorite of children who buy it in schools. The added sugars have proven to be a lightening rod, attracting

Milk Processors Are Talking About • • • •

The movement to ban flavored milk in schools Positioning chocolate milk as a post-workout recovery beverage The 12+% growth in organic milk sales Finding new channels of distribution for single-serve milks

Continued on page 30

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State of the Industry MILK Milk’s Bold Message: An Irreplaceable Package of Nutrients By Peggy Biltz, CEO, Dairy Council of California A surge in research supporting a stronger health profile for milk and milk products is emerging. The research paints a picture of the benefits of milk beyond bone health and supports what we at Dairy Council of California, Sacramento, Calif., believe — milk and milk products provide an irreplaceable package of nutrients for men, women and children. It may seem like a bold statement, but consider this: Where else can you find the unique package of nutrients found in milk and milk products? Add to that the fact that dairy is convenient, cost-effective and tasty. Recent research reveals how milk and milk products can protect health at every stage of life – from preventing childhood bone fractures and helping athletes build muscle and replenish fluids to protecting the immune system and reducing the risk of select chronic degenerative diseases. The results of multiple new studies at major universities shows milk also helps: • Control blood pressure • Reduce the risk of some cancers

• Reduce the risk of heart disease • Support healthy weight • Enhance satiety • Reduce the risk of type 2 diabetes • Improve intestinal health An area of note is research surrounding the unique healthy benefits of dairy proteins. Casein and whey are high-quality proteins found in dairy that have unique metabolic traits, yet act synergistically to increase protein synthesis and suppress protein breakdown more effectively than other proteins. Satiety, weight management and blood glucose control have all been suggested in early research findings as health benefits of these dairy proteins. The 2010 Dietary Guidelines for Americans cites the dairy group (milk, cheese and yogurt) as a substantial contributor of many nutrients important for good health, such as calcium, potassium, phosphorous, magnesium, zinc, protein, riboflavin, and vitamins A, D and B12. The recently revised guidelines even increased the daily recommendation by one-half cup to 2 ½ servings for 4 to 8 year olds. The guidelines also focus largely on dairy’s bone health attributes, while acknowledging

Got Competitors? Milk Sure Does Sports beverages - 3.5% White milk 16.2%

Fruit beverages - 9.9% Flavored milk - 1.6% Other* - 6.1% *Other consists of ready-todrink teas and coffees, valueadded water, energy drinks and soy beverages. Source: Beverage Marketing Corp.

Carbonated soft drinks 38.5%

Bottled water 24.4%

 Milk ranks third in its competitive set, behind soft drinks and bottled water. Bottled water is growing in share. It was 21.1% in 2005. That year, white milk’s share was 16.3% and flavored milk was 1.4%.

activist parents who seek to ban flavored milk from school cafeterias. Chef and nutrition gadfly Jamie Oliver used his ABC television show, “Jamie Oliver’s Food Revolution,” to force the Los Angeles Unified School District to toss flavored milk off the menu. Dean Foods Co., Dallas, one of the leading school milk providers in the nation, developed chocolate- and strawberryflavored non-fat milks for school foodservice under the name TruMoo. (Dean Foods has a low-fat version for retail sale.) 30

Dairy Foods | November 2011

a moderate level of evidence supporting milk and milk products’ role in decreasing the risk of cardiovascular disease and type 2 diabetes and lowering blood pressure in adults. The Dairy Council sees this as an area of opportunity. Strong clinical research in these other areas is needed to strengthen the evidence base in time for the next round — the 2015 Dietary Guidelines for Americans. The MyPlate icon, which replaced the Food Guide MyPyramid, recommends increased consumption of food groups, including non-fat and low-fat milk, fruits, vegetables and whole grains. New research, coupled with support from the USDA and the dietary guidelines, speaks to an expanded benefit package of milk products above and beyond bone health that is the foundation for a broader and stronger health position for milk and milk products. It also provides important educational opportunities at a time when milk products aren’t always top of mind among health professionals and consumers. This is a time when all corners of the dairy industry need to come together to tout milk’s expanding profile and make the case for milk’s irreplaceable nutrient package. 

“We’re proud to offer a fat-free flavored milk that meets the proposed USDA school meal guidelines a full year in advance of their anticipated implementation,” says Rick Zuroweste, Dean’s chief marketing officer. “Our school customers see the future, and we’re offering them a solution today. As a result, many of our school customers converted to the fat-free TruMoo at the start of this 2011-12 school year.” “In regards to flavored milk, the consumer patterns continually shift between concern over calories, concern about grams of total sugar and concern about high-fructose corn syrup. Our research and development group did an excellent job of navigating the shifting sands in developing TruMoo, a product that addressed several consumer preferences while keeping taste priority No. 1,” Zuroweste says. Some milk processors have dropped high-fructose corn syrup (HFCS) from their formulas, and tout that on their packaging. The stance of corn syrup providers is that “a sugar is a sugar,” and that compositionally, table sugar and corn sugar are nearly identical, and that nutritionally, the two ingredients are the same. Last summer, Prairie Farms Dairy removed HFCS in its flavored milks for schools. The dairy cooperative, headquartered in Carlinville, Ill., offers chocolate, strawberry, vanilla and cookies and cream flavors. An 8-ounce serving of the reformulated fat-free milk has 130 calories and 11 grams of added sugar. The previous 1% formula had 170 calories and 16 grams of added sugar. Continued on page 32

From the breakfast line to the finish line, she made the most of MilkPEP. Cindy Layne Marketing Coordinator Producers Dairy Foods Inc., Fresno

How did Cindy Layne win our Grand Prize for 2011? She took her MilkPEP materials and ran with them. Cindy maximized the power of the “got milk?®” Breakfast Challenge to wake up Fresno students, increasing morning milk consumption in the winning school by 13%. And she hit the ground running with Refuel With Chocolate Milk, handing out 24,000 lowfat chocolate milk pouches at one race event alone. You could be next. Visit MilkPEP.org and tell us your story. You could win the Grand Prize, exciting monthly prizes or even an iPad 2!

2011 milkpep award grand prize winner

©2011 America’s Milk Processors got milk?® is a registered trademark of the California Milk Processor Board iPad 2 is a registered trademark of Apple Inc.

State of the Industry MILK Private Label, Hood, Horizon Claim Top 3 Spots for Skim/Low-Fat Milk % change vs. yago

Unit Sales (millions)

% change vs. yago

Rank

Brand

Dollar Sales (millions)

1.

Private Label

$4,642.3 +7.5

1,741.4

-2.1

2.

Hood Lactaid

$258.2

-0.6

62.5

-2.4

3.

Horizon Organic

$235.0

+11.2

56.5

+10.2

4.

Dean’s

$101.7

+14.5

40.7

+5.8

5.

Prairie Farms

$96.6

+19.6

37.1

+7.4

6.

Organic Valley

$82.9

-2.2

20.2

-1.7

7.

Garelick Farms

$68.3

+8.7

26.1

+2.3

8.

Hood

$60.0

-0.1

21.7

-4.3

9.

Tuscan Dairy Farms

$54.4

+11.1

20.9

+1.9

10.

Kemp’s Select

$51.5

-3.1

18.2

-5.1

Total category*:

$7,374.6 +6.6

2,648.6

-1.8

*Includes brands not shown. Total U.S. – Supermarkets, drug stores and mass merchandisers (excluding Wal-Mart). 52 weeks ended Aug. 7, 2011. Source: SymphonyIRI Group, a Chicago-based market research firm, www.symphonyiri.com

Rice Dream Takes Sales, Hershey’s Takes Units in Refrigerated Milkshakes/Non-Dairy Drinks % change vs. yago

Unit Sales (millions)

% change vs. yago

Rank

Brand

Dollar Sales (millions)

1.

Rice Dream

$15.2

-2.1

4.4

+2.2

2.

Hershey’s

$10.4

+203.3

8.4

+194.0

3.

Chug

$3.9

-9.4

3.0

-9.7

4.

Kerns Aguas Frescas

$3.8

+0.6

1.4

-3.8

5.

Yoo Hoo

$3.4

-10.0

1.2

-14.0

6.

Private Label

$3.0

-31.1

1.5

-45.0

7.

Dean’s Choco Riffic

$1.6

-0.2

0.7

-5.9

8.

Don Jose

$1.3

+2.1

0.4

-2.8

9.

Lala Lalacult

$0.7

+24.9

0.4

+27.6

10.

Borden

$0.7

+2.7

0.3

-0.8

Total category*

$48.2

-9.3

23.7

-10.8

*Includes brands not shown. Total U.S. – Supermarkets, drug stores and mass merchandisers (excluding Wal-Mart). 52 weeks ended Aug. 7, 2011. Source: SymphonyIRI Group, a Chicago-based market research firm, www.symphonyiri.com

Dean’s Zuroweste says the company’s focus in 2011 “has been innovating across our businesses in 2011, including our plant-based Silk product line, Horizon Organic and conventional milk categories.” He calls the national launch of TruMoo flavored milk “a potential game changer for the dairy industry. Consumers have been calling for a better-for-you flavored milk, and TruMoo delivers on a scale unseen in the dairy case.” 32

Dairy Foods | November 2011

Adding flavor is one way to differentiate milk; processing is another. Dean’s WhiteWave Foods division is testing a finefiltered milk called Simply Pure that is sold in half gallons in fat-free, reduced-fat and whole options. “We believe, and our research suggests, that about a third of conventional milk purchasers are looking for something new and different in their milk choices. Simply Pure meets this demand with the extra step of fine filtering to remove more of the impurities left behind in conventional milk,” says Sara Loveday, senior communications manager for the Broomfield, Colo.-based company. Before pasteurization, WhiteWave passes milk through a very fine filter to physically remove some of the impurities. “Because we’ve taken care to create just the right degree of filtration, certain impurities are removed, but the protein, calcium and vitamins you count on from milk remain. Our fine filter traps and removes coarse natural impurities such as non-nutritional matter and cellular material, including many of the somatic cells found in unprocessed milk,” Loveday says. Loveday says the company does not claim that Simply Pure tastes better or is fresher than conventional milk. Another way to differentiate one milk from another is to add probiotics. In June, Foster Farms Dairy, Modesto, Calif., launched Dairy Balance, sold in whole and 2% varieties. “Probiotics are ‘good bacteria’ that have been shown to improve digestive health and support immunity,” says company president Jeff Foster. “Sales of yogurt enhanced with probiotics have dramatically grown, and studies have proven Dairy Balance delivers more active cultures than yogurt.” Processors of organic milk have been able to distinguish their beverages from conventional milk while receiving a premium. The price of a gallon of organic milk can be double that of conventional milk. “In the organic dairy category, we’ve seen growing consumer interest in fortified organic  Byrne Dairy, Lafayette, N.Y., promotes its single-serve, extended-shelf life chocolate milk as a post-workout beverage. The milk industry is positioning chocolate milk as an alternative to sports drinks and other recovery beverages. The dairy promotes ESL processing as sustainable because it uses waterless sterilization and less water and heat during production.

MILK State of the Industry

Drink Up, Baby Boomers By Madlyn Daley With competition from soft drinks, bottled water, coffee and tea, dairy needs a new way of thinking to recapture consumers’ beverage preferences. New consumer research analysis from the Innovation Center for U.S. Dairy, Rosemont, Ill., suggests the industry can bring consumers back to milk by better tailoring products based on specific consumer needs. To do this, milk needs to compete in two ways — first, become the competition, and second, protect its share. Dairy needs to focus on the 50-year-oldplus population segment because of the size and buying power of the Baby Boom generation. This group will account for more than one-third of the total population by 2015; it already controls 80% of personal financial assets and owns 50% of discretionary spending power. Plus, general wellness and the importance of healthy eating increase with age. The Kantar Worldpanel Beverage Report, the foundation for the Innovation Center’s analysis, tracks the beverage choices and decision drivers of more than 40,000 children, teens and adults to provide a better understanding of the current climate for milk. With this knowledge, the dairy industry is better able to address milk’s challenges and opportunities by leveraging consumer insights. The Kantar research identifies seven macro consumer needs that influence most beverage decisions: thirst, fun/treat, food accompaniment, nutrition, energy, low-calorie and relaxation. Milk excels in a couple

of so-called need-states: nutrition and parent-recommended, but these needs become less important once people reach their teens and as their beverage decision drivers change. New consumer research based on the Kantar report shows that milk’s offerings are out of sync with what the powerful group of 50-plus purchasers is looking for in a beverage: satisfying thirst, accompanying food and providing fun or a treat. (Currently, tap water and carbonated soft drinks dominate the food accompaniment state, and competition is fierce with carbonated soft drinks, coffee and tea for the fun/treat state.) Functional beverages also present a promising opportunity among this consumer segment. Significant, smart product innovations that are not marketed as milk and meet the energy, fun/treat and functional needs of the 50-plus population are a way to make dairy drinks more relevant for this group. To be more competitive and to better meet these driving beverage need-states, milk must innovate as an ingredient. Consider: • Taste. The fun/treat need-state accounts for 38% of beverage occasions, plus enjoyment is a key factor when consumers choose any beverage. • Thirst. Milk as an ingredient has an opportunity to penetrate this need-state through lighter, refreshing beverage innovations. • Functionality. Milk can grow in this needstate by leveraging functional claims that focus on heart health, digestive health, immunity and cancer prevention.

dairy products,” says Loveday. Horizon is WhiteWave’s brand of organic milk brand. “Our largest growth in this area has been with our omega-3 DHA organic milk products.” Earlier this year, Horizon launched a fat-free, plant-based omega-3 DHA organic milk. Organic Valley, La Farge, Wis., also markets a line of milks fortified with the omega-3 fatty acids DHA and EPA. The switch to organic milk from conventional milk is often triggered by a change in lifestyle, says Tripp Hughes, the company’s director of category management. Triggers include having children, a desire to eat better foods because of a health problem and a general interest in health and wellness. While sales of organic milk increased 12.2% from 2009 to 2010, the product makes up just 3.3% of total milk sales, according to the Milk Processor Education Program (MilkPEP), which helps processors develop marketing messages. The milk industry is not going to grow on organic sales alone.

Youngsters drink milk, too In addition to focusing on need-states that drive boomer beverage consumption, the dairy industry should also remain vigilant in reinforcing milk’s nutritional superiority. Competitors are challenging milk’s nutritional position, with functional claims nearly quadrupling since 2006. Flavored waters, teas, juices and meal-replacement beverages are all active in this space. Heart health, immunity, energy and digestive health represent today’s most important functional areas. Nor should the importance of children as milk drinkers be forgotten. There is an opportunity to grow the frequency of milk consumption with this group by focusing on breakfast and dinner. These meal occasions often occur among a large group of individuals, so growing frequency by a small amount will reap large incremental growth. Through bringing Baby Boomers back to milk and meeting consumer need-states, milk will remain a competitive beverage choice. As consumers continue to look for fun/treat state beverages and as health concerns remain a consistent thought, milk has the opportunity to capture consumers’ needs. By using milk as an ingredient in beverages that fit these consumer needs, dairy can grow consumption by leveraging beverage drivers that it normally does not meet on a stand-alone basis.  Madlyn Daley is the senior vice president, strategic insights, dairy, at the Innovation Center for U.S. Dairy, Rosemont, Ill.

In 2012, the Washington, D.C.-based organization is making “fewer but bigger bets” in its messages, says MilkPEP CEO Vivien P. Godfrey. First, milk processors must “defend breakfast” as the important milk-drinking occasion of the day. Second, processors will promote chocolate milk as a recovery beverage to replace sports drinks. The so-called Breakfast Project has the message “Every good day starts with milk.” The audience for the Refuel with Chocolate Milk message is the active 18- to 34-year-old adult who works out hard and participates in triathlons, marathons or other extreme sports. If MilkPEP is successful, this young cohort will develop a favorable attitude toward chocolate milk. This will carry over as they begin to start families, so that when their children enter school, flavored milk won’t be the bugbear it is now. Then processors will truly savor the flavor of increased milk sales.  www.dairyfoods.com

33

State of the Industry Sponsored by:

Raw is the Draw Whether it’s raw cheeses, unusually flavored options or a portion-control size, today’s cheese processors introduce a slew of crafty innovations.

 Marina Mayer Executive Editor

resh, natural, locally grown and small batch are food terms that resonate with shoppers. But, when some consumers hear the word “raw” in association with dairy foods, they assume the worst — Salmonella or listeria. Even after periods of dairy recalls, who can blame them? Today, the cheese industry has taken the term raw to a whole new level, one where shoppers can indulge on raw cheeses without experiencing any poisoning symptoms. In fact, raw milk cheeses are becoming increasingly popular in the natural foods sector, says RachelOriana Schraeder, sales director for Sierra Nevada Cheese Co. “Consumer awareness and demand for alternatives to cows’ milk is increasing,” she says. “Hot-button terms include ‘truly raw,’ ‘local’ and ‘putting a face on our farmers.’” That’s why the Willows, Calif., company launched two lines of raw cheeses — Raw Organic Cows’ Milk (white cheddar, creamy Jack and jalapeño Jack) and Caprae Raw Goats’ Milk (aged goat cheddar and Monterrey Jacques). Using fresh raw milk purchased from family run dairies in Northern California, the milk is heated to 104°F to preserve its full, original nutritional value and then aged for more than 60 days. Both lines are available in 8-ounce retail packages and 5-pound bulk loaves for foodservice or in-store cut-andwrap uses. For its part, Grafton Village Cheese, Grafton, Vt., introduced a new line of raw milk Vermont cheddars under its Grafton Tavern Select brand. Comprised of 2-, 3- and 4-yearold naturally aged cheddars and a Maple Smoked cheddar that is cold-smoked for up to four hours over maple wood chips, Tavern Select cheeses are handmade in small batches from local Jersey cow’s milk. “As emerging trends in the natural cheese category, the high-end, specialty segment is experiencing strong, sustained

F

34

Dairy Foods | November 2011

 Tillamook’s Creamery Collection of pre-sliced cheeses are sold in 2-inch squares wrapped in 7-ounce shingle packs. growth in the quality and variety of products with many new brand entrants,” says David Rachlin, president and CEO. Grafton Village Cheese also developed a Cave Aged brand, which consists of raw milk, artisan specialty cheeses, including sheep milk, cows’ milk and a sheep-and-cow milk combination. They are made by hand in small batches and aged in open air within the company’s new cave-aging facility in Grafton, Rachlin says. While raw cheeses may not be in Vermont Farmstead Cheese Co.’s portfolio, the South Woodstock, Vt., processor is latching on to the locally grown trend, as more and more consumers want to know the origin of the foods they eat. “We believe that consumers today like to know where their food comes from — that the food produced is derived from a natural, clean and healthy environment,” says Kent Underwood, Continued on page 36

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State of the Industry CHEESE Laughing Cow Smiles at Gains in Sales, Units

Private Label Continues to Reign in Natural Shredded Segment % change vs. yago

Unit Sales (millions)

% change vs. yago

Rank

Brand

Dollar Sales (millions)

Unit Sales (millions)

% change vs. yago

Rank

Brand

1.

Private Label

$938.8

+1.8

294.0

-2.8

1.

Private Label

$1,476.0 +7.2

570.0

+1.1

2.

Tillamook

$156.8

+1.4

32.1

+1.6

2.

Kraft

$484.3

+7.4

179.6

+1.2

3.

Kraft

$156.4

-7.1

60.0

-12.5

3.

Sargento

$216.3

+1.9

77.6

-1.7

4.

Kraft Cracker Barrel

$92.2

-3.5

25.2

-8.5

4.

Crystal Farms

$107.3

+9.1

41.4

+6.2

5.

Cabot Vermont

$85.0

+12.1

29.8

+16.0

5.

Sargento ChefStyle

$45.4

-2.0

14.9

-6.0

6.

Laughing Cow Mini Babybel

$70.8

+19.9

18.6

+17.1

6.

Borden

$44.3

+8.5

19.5

+6.5

7.

-5.0

14.2

-11.1

BelGioioso

$67.0

+13.6

14.5

+11.1

Sargento Artisan Blends

$39.1

7. 8.

Crystal Farms

$48.7

+6.9

20.4

+1.4

8.

DiGiorno

$28.8

-13.7

6.8

-13.2

9.

President

$42.3

+3.3

7.5

+3.4

9.

Kraft Philadelphia

$28.4

n/a

11.4

n/a

10.

Cacique Ranchero

$38.7

+3.0

11.5

+3.9

10.

Tillamook

$25.4

+19.3

9.4

+31.8

Total category*

$2,501.2 +2.2

713.8

-1.5

Total category*

$2,664.7 +7.1

997.7

+1.9

*Includes brands not shown. Total U.S. – Supermarkets, drug stores and mass merchandisers (excluding Wal-Mart). 52 weeks ended Aug. 7, 2011. Source: SymphonyIRI Group, a Chicago-based market research firm, www.symphonyiri.com

Cheesemakers Are Talking About: • Sodium reduction • Making artisan cheeses • Adding flavor • Portion control • Locally grown • Raw • Portability and convenience

chief operating officer. “In addition to wanting delicious cheese, consumers are growing more and more health-conscious, so hot-button words include ‘natural,’ ‘sustainable,’ [and] ‘healthy.’ We also believe that consumers are looking to find something new and enjoy something different.” With that something new and different come a line of unusually flavored cheeses produced by the 11-month-old company. For example, BrickHaus Tilsit, AleHouse Cheddar and Lillé Coulommiers “incorporate local products in a whole new way, yet pay homage to some very old, traditional cheese recipes. We are making Old World cheese classics with Vermont flair,” Underwood says. Also tapping into the locally grown trend is Rogue Creamery with its Flora Nelle blue cheese, named after the two owners’ grandmothers. “This blue [cheese] is made in the traditional European style with animal rennet (calf), and it is our only blue cheese that is pasteurized,” says Francis Plowman, director of marketing and merchandising for the Central Point, Ore.-based processor. “It was developed to ship to the Australian market; our first shipment to Australia was received in December 2010.” 36

% change vs. yago

Dollar Sales (millions)

Dairy Foods | November 2011

*Includes brands not shown. Total U.S. – Supermarkets, drug stores and mass merchandisers (excluding Wal-Mart). 52 weeks ended Aug. 7, 2011. Source: SymphonyIRI Group, a Chicago-based market research firm, www.symphonyiri.com

Rogue Creamery also created line extensions to its TouVelle cheese line, with new flavors such as lavender, rosemary and a smoky version. In the goat cheese segment, new and innovative products continue to increase in popularity, according to Lindsay Gregory, marketing manager for Woolwich Dairy, Canada. “The Crème Chèvre products are actually something that we made years ago and decided to bring back to our line once we saw an increased presence of fresh, new and funky spreadable cheeses,” she adds. The higher moisture cheeses, Gregory says, are great alternatives to heavy cream cheeses, butters or dips, making them a good alternative to other cheese offerings. Available in Plain ‘N’ Simple, Inevitable Vegetable and Big Kick Herb & Garlic offerings, the Crème Chèvre line starts with a base of soft unripened goat cheese, is then blended using all-natural ingredients  Sierra Nevada Cheese Co. added stickers and sleeves to convey the artisan nature of its products.

Continued on page 38

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State of the Industry CHEESE

Cheese Processors Get all Wrapped Up In the midst of creating new product offerings, cheese producers are also getting wrapped up with new packaging innovations. Here is a peek at some of the most recently introduced packaging options: • Sierra Nevada Cheese Co., Willows, Calif., added stickers and sleeves to convey the artisan nature of its products. • Crowley Cheese Inc., Mount Holly, Vt., downsized its 8-ounce waxed bars to 4-ounce options called Crowley Minis. • Rogue Creamery, Central Point, Ore., introduced a 3.5-ounce blue cheese package that is wrapped in parchment, overwrapped with colorful graphics and offers a 5-month shelf life. • Sargento Foods Inc., Plymouth, Wis., showcases flavors and textures through its large window on the front of the pack. Plus, all sub brands, such as the reduced-sodium line, feature the signature burgundy color to better aid consumers in their shopping decisions. • Tillamook County Creamery Association, Tillamook, Ore., redesigned its product packaging to be more environment and consumer friendly by reducing the amount of packaging used for its single slices. 

 Sargento Foods created a reduced-sodium line of natural cheeses that contain 25% less sodium than its regular counterpart.

to a light, creamy consistency and packaged in 5.3-ounce recyclable tubs. They’re recommended as a component to pasta, omelettes, casseroles, quiches or toppings to pizza. Revamping formulas for healthier cheeses Unlike some cheese producers who strive to produce innovative cheese kinds, others focus on revamping formulas to provide better-for-you options for the everyday consumer. “Cheese continues to be one of America’s favorite dairy forms,” says Barbara Gannon, vice president of corporate communications and government affairs for Sargento Foods Inc., Plymouth, Wis. “The natural cheese snacks category, in particular, has been growing. It provides the flavor variety and high protein consumers want with the calcium they need for a satisfying snack between meals.” That’s why it created a reduced-sodium line of natural cheeses. Available in eight varieties — mild cheddar shredded, mozzarella shredded, Pepper Jack slices, Colby-Jack slices, provolone slices, mild cheddar snacks, Colby-Jack snacks and string cheese stick snacks — each offering contains 25% less sodium than its regular counterpart. To better speak to those consumers in search of gourmet flavors and convenience, Tillamook County Creamery Association, Tillamook, Ore., introduced the Creamery Collection, a line of pre-sliced cheeses in Hot Habanero Jack, Garlic Chili Pepper Cheddar, Garlic White Cheddar, Smoked Black Pepper White Cheddar, Smoked Swiss and Medium Cheddar flavors. They’re sold in 2-inch squares wrapped in 7-ounce shingle packs. 38

Dairy Foods | November 2011

 Grafton Village Cheese’s new line of raw milk Vermont cheddars is comprised of 2-, 3- and 4-year-old naturally aged cheddars and a Maple Smoked cheddar that is cold-smoked for up to four hours over maple wood chips. Tillamook expanded its deli cheese selection to also include a 4-pound Baby Swiss loaf, designed for slicing for sandwiches, cubing for party trays and melting for fondue. This loaf is aged for 30 days for a slightly sweeter flavor with nut and butter overtones and a creamy texture. Meanwhile, Tillamook reformulated its Monterey Jack recipe to achieve a creamier and milder cheese that works well in southwest and Hispanic recipes, says Mary Cecchini, brand communications manager. “Consumer demand for quality foods that are simple, natural and healthy drive Tillamook’s effort to introduce new products,” she adds. “We’re meeting this trend head-on with Continued on page 40

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State of the Industry CHEESE  Rogue Creamery created line extensions to its TouVelle cheese line, with new flavors such as lavender, rosemary and a smoky version.

Kraft Rules the Processed/Imitation Sliced Cheese Sector % change vs. yago

Unit Sales (millions)

% change vs. yago

Rank

Brand

Dollar Sales (millions)

1.

Kraft Singles

$509.7

-6.0

173.5

-11.0

2.

Private Label

$413.5

+2.8

176.3

-2.7

3.

Kraft Deli Deluxe

$112.8

-8.1

24.2

-10.6

4.

Borden

$63.7

+1.7

26.2

-5.2

5.

Kraft Velveeta

$47.5

-1.6

11.8

-3.5

6.

Kraft

$28.9

+2,008.0 11.2

+9,807.0

7.

Crystal Farms

$26.2

+4.3

10.0

+1.0

8.

Galaxy Nutritional Foods Veggie

$14.2

-10.3

4.3

-9.5

9.

Land O’Lakes

$14.0

-25.3

3.2

-32.6

10.

Borden Sandwich Mate

$8.8

+6.6

8.6

+9.4

Total category*

$1,316.6 -0.8

480.7

-4.1

*Includes brands not shown. Total U.S. – Supermarkets, drug stores and mass merchandisers (excluding Wal-Mart). 52 weeks ended Aug. 7, 2011. Source: SymphonyIRI Group, a Chicago-based market research firm, www.symphonyiri.com

Kraft Reels in Roller-Coaster Sales Results a commitment across all our product categories to use the highest quality milk from cows not treated with artificial growth hormones and the use of natural ingredients whenever possible.” The Laughing Cow brand, owned by Bel Brands USA Inc., an Elk Grove Village, Ill.-based subsidiary of Fromageries Bel in France, offers two new flavors to its Mini Babybel line — White Cheddar and Sharp Original. Both of these portioncontrolled cheese snack options are said to be a good source of calcium and protein, offer 80 calories or less (35 calories per wedge) and are individually packaged in a wax wrapper. Seymour Dairy, Seymour, Wis., debuted a new cheddar blue cheese that’s handcrafted in micro batches using rBGH-free milk supplied by Red Barn Family Farms, a group of small, sustainable Wisconsin dairy farms certified by the American Humane Association, Washington, D.C. This blue cheese features a sweet and nutty yet creamy and mellow flavor, boasts golden hue and green veins and is recommended to pair with a Pinot Noir or Stout, place as a table cheese or use for melting on steaks, burgers or veggies. Despite these new flavors and portion sizes, the cheese industry is seeing less innovation, says Tom Gallagher, chief executive officer of Dairy Management Inc., Rosemont, Ill. That’s because with the rise of private-label cheeses, price has become a key factor in a consumer’s purchasing decision. “That’s a concern” for branded cheesemakers, he says. Retail cheese sales will be slower, but cheesemakers are finding eager buyers among foodservice accounts, manufacturers of prepared foods and export clients. 40

Dairy Foods | November 2011

% change vs. yago

Unit Sales (millions)

% change vs. yago

Rank

Brand

Dollar Sales (millions)

1.

Private Label

$417.4

+15.6

155.3

+11.2

2.

Sargento

$134.5

+0.4

41.0

-3.6

3.

Sargento Deli Style

$86.9

-12.5

26.6

-15.2

4.

Kraft Deli Fresh

$47.8

+50.8

14.9

+55.3

5.

Tillamook

$47.3

-5.7

11.5

+5.1

6.

Kraft Big Slice

$21.3

n/a

7.1

n/a

7.

Alpine Lace

$20.8

-10.0

4.6

-13.3

8.

Kraft

$19.3

-68.4

6.4

-67.0

9.

Land O’Lakes

$18.8

+2.0

5.0

-0.9

10.

BelGioioso

$16.0

+27.0

2.7

+21.8

Total category*

$1,004.7 +5.9

320.0

+3.8

*Includes brands not shown. Total U.S. – Supermarkets, drug stores and mass merchandisers (excluding Wal-Mart). 52 weeks ended Aug. 7, 2011. Source: SymphonyIRI Group, a Chicago-based market research firm, www.symphonyiri.com

Still, the U.S. consumer wants cheese, he adds, saying that cheesemakers need to position the food as a “nutrient-dense product” with high-protein content. Shoppers no longer need to be concerned with what’s inside their cheese; they just need to prepare their meal or snack with it and enjoy.  For more information about these and other cheeses, check out the Annual Cheese Outlook in Dairy Foods’ October 2011 issue.

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State of the Industry Sponsored by:

Ice Cream Makers Keep Their Cool Despite high energy costs, uncertain ingredient prices and a weak economy, processors continue to develop new ice cream and novelty products and flavors.  Jim Carper Chief Editor

ising ingredient prices and slow sales are not a great recipe for profitability. But that’s exactly what ice cream processors are dealing with. Cocoa prices have been rising steadily and so have those for guar gum. Perry’s Ice Cream Co. doesn’t sugarcoat the situation. “Commodity pricing pressure has forced higher retail and higher promotional price points, which has led to lower unit sales,” says a spokeswoman for the Buffalo, N.Y.-based processor. Then there are the general economic and competitive conditions in the United States that knocked out one processor this summer (Yarnell’s, Searcy, Ark., shut down) and staggered another in October (Friendly’s, Wilbraham, Mass., filed for Chapter 11 protection). Nevertheless, processors have continued to innovate with flavors, product extensions and marketing programs. In April, international food giant Unilever rolled out its super-premium Magnum stick novelty to the United States. The treat, made with vanilla bean or chocolate ice cream and enrobed in a thick coating of Belgian chocolate, competes against Mars’ Dove bars. The Magnum bar retails for a suggested price of $2.59 and a three-count multipack for $3.99 at Walmart, Target, Safeway, Kroger and other retailers. The ice cream bars are available in six flavors: classic (vanilla bean ice cream), almond, double caramel, double chocolate, white (vanilla ice cream with a white chocolate coating) and dark (vanilla bean ice cream dipped in 60% cacao Belgian dark chocolate). Unilever’s ice cream and novelty portfolio includes Ben & Jerry’s, Breyers, Good Humor, Klondike and Popsicle.

R

42

Dairy Foods | November 2011

 A small-bite ice cream cake from Baskin-Robbins comes in four flavors and sells for about $3.

“In 2011, Unilever’s ice cream brand’s innovations are driving growth,” says Mike Hurley, senior brand manager for Magnum Ice Cream, Klondike and Good Humor. Citing Magnum’s launch and new products from its other brands, Hurley says, “Unilever is contributing great innovations to the industry, and consumers should expect the same in 2012.” Eight new flavors in Breyers’ Blasts! line use candy and cookie brands, including Oreo and Chips Ahoy (licensed from Kraft Foods) and Mrs. Fields.

Ice Cream Processors Are Talking About: • Rising ingredient prices • High retail slotting fees • Culinary influences on flavors, like fleur de sel • Competition from other frozen desserts

Continued on page 44

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State of the Industry ICE CREAM Ice Cream Dollars Rise While Units Drop % change vs. yago

Unit Sales (millions)

% change vs. yago

Rank

Brand

Dollar Sales (millions)

1.

Private Label

$1,013.9 +2.4

328.5

-5.1

2.

Breyers

$412.1

-6.4

119.2

-14.7

3.

Blue Bell

$326.8

+10.2

84.6

+3.2

4.

Dreyer’s Edy’s Slow Churned

$281.5

-5.5

77.6

-8.8

5.

Häagen-Dazs

$258.4

+5.0

66.5

+0.6

6.

Ben & Jerry’s

$227.2

+6.2

64.0

-0.5

7.

Dreyer’s Edy’s

$143.2

-5.9

40.8

-9.4

8.

Dreyer’s Edy’s Fun Flavors

$142.9

+9.4

40.0

+4.8

9.

Wells’ Blue Bunny

$140.7

+8.3

36.6

-0.5

10.

Turkey Hill

$131.7

+9.0

47.3

+10.7

Total category*

$4,010.3 +1.1

1,173.1

-4.5

*Includes brands not shown. Total U.S. – Supermarkets, drug stores and mass merchandisers (excluding Wal-Mart). 52 weeks ended Aug. 7, 2011. Source: SymphonyIRI Group, a Chicago-based market research firm, www.symphonyiri.com

The Popsicle brand was built on Unilever’s partnership with the Hershey’s Jolly Rancher brand, entered the market in Blue Raspberry/Cherry and Grape/Green Apple flavors and is sold in 20-count packages. Pops are made with 10% fruit juice and provide 10% of the daily value for vitamin C per serving. One fat-free treat contains 45 calories. Popsicle also partnered with AirHeads (a taffy-like chewy candy from Perfetti Van Melle Benelux) on a line of fat-free ice pops. The 50-calorie ice pops are sold in 18-pack cartons in strawberry, blue raspberry, watermelon and White Mystery flavors. Klondike, Unilever’s brand of stickless bars, added a new flavor: mint chocolate chip, featuring light ice cream with chocolaty flakes and a dark chocolate-flavored coating. Klondike’s new What the Fudge? brownie ice cream sandwich is made with an artificially flavored vanilla light ice cream with a chocolate fudge core, sandwiched between a chocolate brownie. Klondike packaged its popular Choco Taco into a four-pack for grocery store sales nationwide. This taco is made with an artificially flavored reduced-fat vanilla ice cream with a chocolate-flavored swirl in a sugar taco with milk chocolateflavored coating and peanuts. Another ice cream processor taking flavor cues from the candy industry is Mars. Ellen Thompson, marketing director for Mars Ice Cream, said in 2011 the company focused on its new Dove Peanut Butter Swirl novelty, along with flavor extensions of its branded pints. 44

Dairy Foods | November 2011

“Our key message for Dove was communicating the indulgent combination of real ice cream and silky smooth Dove Chocolate. Our Snickers marketing was focused behind letting consumers know they can have the delicious taste of Snickers bar in ice cream,” Thompson says. Looking for a competitive edge Regional and local ice cream processors compete against national brands by taking advantage of a loyal fan base, trying new flavors, exploiting their local roots and identifying niche markets and preferences. For example: • Bang Caffeinated Ice Cream, Madison, Wis., makes a super-premium ice cream with caffeine (which it calls “everyone’s friend”). A scoop contains 125 milligrams of caffeine, which the company calls equivalent to the amount in a large energy drink. The company’s Iced Latte Da earned second place in the Open Class Ice Cream category in the Wisconsin Dairy Products Association’s 2011contest. Bang’s caffeinated ice cream is available in three other flavors: Peanut Butta, Cooky Mint and Heaps of Gold! The company sells pints to local grocers, other local ice cream shops and online. • Non-dairy frozen dessert processor Bliss Unlimited, Eugene, Ore., launched four new flavors of its premium coconut milk ice cream made with coconut sugar and superfoods. The flavors are Ginger Cookie Caramel, Chocolate Walnut Brownie, Mocha Maca Crunch and Lunaberry Swirl. The privately owned producer uses organically grown coconut milk, agave syrup and coconut sugar. All the new flavors are free of soy, dairy, gluten and cane sugar. Plus, the ingredients are certified organic, non-GMO and fair trade-sourced when possible, the company claims. • Salt & Straw Ice Cream, Portland, Ore., carved out a niche as a small-batch processor tapping into consumer interest in local foods and sustainable practices. Owner and culinary director Kim Malek says the company’s marketing focus is “farm to cone ice cream. We personally get to know the folks who provide our ingredients and develop a partnership in developing our flavors. In Portland, people enjoy unique flavors from sources they know and are willing to pay more to support companies who deliver. These trends drive sales because one is able to fetch a premium price for a hand-crafted product.” In 2012, the company plans to extend its flavors  Beginning in March 2012, Mars Ice Cream will ship Milky Way chocolate ice cream miniatures. The 80-calorie bars ship 12 to a package. Continued on page 46

We look at things a little differently. Because we’re not just a flavor company, we’re your product development partner. And when that happens, anything is possible.

State of the Industry ICE CREAM Talenti Gelato Makes Top 10 for Sherbet/Sorbet/Ices % change vs. yago

Unit Sales (millions)

% change vs. yago

Rank

Brand

Dollar Sales (millions)

1.

Private Label

$75.9

+1.8

32.6

-2.6

2.

Häagen-Dazs

$30.7

-3.6

8.5

-7.4

3.

Dreyer’s Edy’s

$8.9

-14.6

2.4

-17.3

4.

Blue Bell

$7.4

+16.3

2.9

+8.5

5.

Ciao Bella

$6.5

+57.4

1.7

+72.3

6.

Whole Fruit

$6.5

-1.0

2.3

+0.1

7.

Kemp’s

$6.2

+8.5

2.3

+4.7

8.

Prairie Farms

$4.9

+10.3

1.7

+3.1

9.

Dean’s

$3.4

+3.7

1.4

-4.9

10.

Talenti

$3.2

+30.8

0.7

+35.2

Total category*

$183.5

+1.4

66.8

-2.2

*Includes brands not shown. Total U.S. – Supermarkets, drug stores and mass merchandisers (excluding Wal-Mart). 52 weeks ended Aug. 7, 2011. Source: SymphonyIRI Group, a Chicago-based market research firm, www.symphonyiri.com

into new forms and expand into other channels and retail locations. Like most ice cream processors, Salt & Straw offers limited-edition flavors because they generate interest and excitement. Salt & Straw sells its flavors in its shop and online ($65 for five hand-packed pints). Its Thanksgiving flavors (available until Nov. 24) are: • Bourbon Pecan Pie (fresh pecans, molasses, brown sugar and whiskey from Stone Barn on Portland’s Distillery Row) • Brown-Bread Stuffing (sweet brown bread, savory herbs, fresh roasted Oregon chestnuts and tart apricots) • Mince Meat (cinnamon clove ice cream swirled with currants, ginger-candied oranges and shortbread cookies) • Blood Orange Cranberry (cranberries and ribbons of blood orange marmalade) • Pumpkin Cheese Cake (pumpkins, sweet brown sugar, spices and creamy chunks of cheesecake) The Holiday collection (sold from Nov. 25-Jan. 1, 2012) consists of Peppermint Cocoa, Gingerbread with Hard Sauce, Eggnog with Butter Rum Caramel, Sweet Potato Marshmallow and Bourbon Pecan Pie.

cream category in Denver were down throughout the years, which indicated there was room for growth. We entered the market in March with a full-fledged marketing campaign and a new market half-gallon flavor exclusively available to Coloradoans—Rocky Mountain Road. Sales and consumer acceptance have been outstanding.” Blue Bell uses a prominent red ribbon on the principle display panel to remind shoppers that they are buying a true half gallon. “Consumers are taking note that our carton is larger than most other brands,” Breed says. This year, Blue Bell introduced six new ice cream flavors and three to four frozen snacks or novelties. It plans a similar number of introductions in 2012. A successful product extension has been frozen fruit bars. “Since our Strawberry Fruit Bar was so successful last year, we knew there was room for expansion within our all-natural fruit bar line. This led to the introduction of our new Lime and Peach fruit bars,” Breed says. The bars are high in vitamin C and made with real fruit and all-natural ingredients. The lime bar has 80 calories and contains 50% of the Daily Value of vitamin C. A peach fruit bar has 70 calories and 100% of the Daily Value of vitamin C. Gifford’s Dairy, Skowhegan, Maine, is pushing beyond its New England trading area and into Pennsylvania, Long Island, N.Y., and New Jersey, says Lindsay Gifford-Skilling, vice president of sales. A two-time Grand Champion winner of the Wisconsin Dairy Product Association’s dairy product contest, Gifford’s makes a slow-churned, high butterfat and low-overrun ice cream in 1940-era freezers. The processor came out with a new logo and new packaging in order to give the ice cream a more premium look, Gifford-Skilling says. Rather than using scoop shots, the packages have images of ingredients, like blueberries, for example. (Like Blue Bell, Gifford’s packages in true half-gallon containers.) G.S. Gelato, Fort Walton Beach, Fla., moved into production of frozen yogurt. Its new division, called Yogurtiamo, sells one-gallon plastic jugs to frozen yogurt shops, coffee shops, restaurants and theme parks. Among the 17 flavors are blueberry pomegranate, blood orange and cookies and cream.

Making a move Strong regional brands look to expand beyond their home base. “One of our greatest opportunities and strengths for 2011 was our entry into the Denver market,” says Carl Breed of Brenham, Texas-based Blue Bell Creameries. “Before entering the market, we realized the sales for the ice  Blue Bell Creameries of Texas developed Rocky Mountain Road when it decided to enter the Denver market. Black Cherries & Chocolate Chunks is one of six new flavors developed by Pierre’s Ice Cream for its Yovation probiotic frozen yogurt. 46

Dairy Foods | November 2011

Continued on page 48

State of the Industry ICE CREAM  Muse gelato, from processor Molto Gourmet Foods, Orlando, is packaged in containers resembling Chinese take-out cartons (bottom row).

Where do flavors come from? Ice cream processors stay tuned into culinary trends and consumer preferences. “Our products are in line with consumer-preferred desserts that are often driven from restaurant and des-

48

Dairy Foods | November 2011

sert shops, e.g. Red Velvet Cake,” says Marissa Wilson, communication manager for Perry’s Ice Cream. “In 2011, our focus has been on consumer demanded flavors such as Red Velvet in our bulk tub line and Banana

Cream Pie in our 48-ounce packages. In 2012, we will continue our focus of consumer-preferred flavors with cleaner ingredient decks,” she adds. High Road Craft Ice Cream & Sorbet, Atlanta, looks to the culinary world for flavors. At the July Fancy Food Show in Washington, D.C., High Road introduced pints of what it calls “chef-inspired flavors,” including Bourbon Burnt Sugar, Vanilla Fleur de Sel and Red Berries & Prosecco sorbet. The company had been selling primarily to foodservice accounts, but owner Keith Schroeder says he “quickly discovered how sophisticated the home cook has become,” so the company developed retail packages. Carvel Ice Cream looked in the grocery store cookie aisle for inspiration, partnering with Nabisco brands Oreo, Nilla Wafers and Nutter Butter. This summer, the Atlanta-based ice cream retailer served three Cookie Trio Sundae Dashers made with its premium handdipped ice cream and cookie toppings. The Oreo sundae incorporated vanilla ice cream and fudge. Nutter Butter peanut butter ice cream was infused with chunks of the cookies and a peanut butter topping. Nilla Wafers used banana ice cream blended with marshmallow. Pierre’s Ice Cream, Cleveland, found a new flavor within its own plant. The processor’s lead flavor man, Ray Kralik, proposed Ray’s Root Beer Float. This year, the company, which also makes fruit sorbets, sherbets and frozen yogurts, unveiled nine new flavors across all of its product lines. The company developed six new flavors of its Yovation probiotic frozen yogurt, including Black Cherries & Chocolate Chunks, Butter Pecan, Cappuccino and Moose Tracks. The ¡Hola Fruta! pure fruit sherbet product came out with a Black Cherry Lemon flavor, which the company says became “a quick favorite.” For 2012, Pierre’s has a Mango Sorbet on tap, a new flavor for ¡Hola Fruta! and two lactose-free flavors in its line of premium ice cream. Continued on page 50

State of the Industry ICE CREAM Blue Bunny, Turkey Hill Gain in Frozen Yogurt/Tofu Segment % change vs. yago

Unit Sales (millions)

% change vs. yago

Rank

Brand

Dollar Sales (millions)

1.

Private Label

$45.0

+22.5

13.5

+13.6

2.

Dreyer’s Edy’s Slow Churned

$33.3

-11.6

8.8

-15.1

3.

Ben & Jerry’s Lighten Up

$18.3

-1.7

5.2

-7.7

4.

Häagen-Dazs

$16.8

-5.1

4.5

-9.0

5.

Turkey Hill

$9.9

+98.1

3.3

+100.6

6.

Kemp’s

$9.8

+24.1

2.7

+19.9

7.

Purely Decadent

$8.7

+13.9

1.8

+11.0

8.

Wells’ Blue Bunny

$8.5

+101.0

2.5

+114.0

9.

Organic So Delicious

$8.1

-7.2

1.6

-9.0

10.

Kemp’s Live Healthy

$6.2

+14.8

1.7

+12.5

Total category*

$208.2

+6.0

57.0

+2.7

*Includes brands not shown. Total U.S. – Supermarkets, drug stores and mass merchandisers (excluding Wal-Mart). 52 weeks ended Aug. 7, 2011. Source: SymphonyIRI Group, a Chicago-based market research firm, www.symphonyiri.com

 Carvel’s sundaes incorporate the popular cookie brands Oreo, Nilla and Nutter Butter.

To develop new products, Salt & Straw’s Malek says “we sit across the table from our suppliers, look them in the eye and collaborate on how to make the best possible ice cream with their products. This has the result of one plus one equaling three. We really get to know the people behind the ingredients and work together to create the best possible ice cream recipes.” Processors often use their scoop shops to test flavors and flavor combinations. “Our customers inspired us to create fresh flavors and we interacted with them face to face,” says Brandon Moss, president of Muse Gelato, the retail brand of processor Molto Gourmet Foods, Orlando. Its flavors include Bourbon Pumpkin Spice, Stilton Blue Cheese and Port Wine, Maple Bacon Brulee and Gingerbread Cheesecake. “Additionally we feel the Muse Gelato brand is more than artisan gelato or gourmet frozen desserts — it’s a culinary inspired product. The experience of Muse Gelato is in its intense and natural flavors, not the candy mixed in. It’s a frozen dessert with a culinary foundation and inspiration from the soul. In such a competitive marketplace, we need to differentiate our brand as a product with heart and soul, and our marketing will reflect this.” Other processors turn the search for new flavors into a contest. Andre Dager of Velvet Ice Cream, Utica, Ohio, says the company’s Create-A-Flavor contest “helps bring our buy-local efforts to consumers that value that philosophy.” This year’s winner, Honey Caramel Ice Cream, incorporates made-in-Ohio honey. 50

Dairy Foods | November 2011

National brand Baskin-Robbins sorted through 40,000 entries and held a nationwide vote in its first ever “Create Baskin’s Next Favorite Flavor” contest. The winner, Toffee Pecan Crunch, combines chocolate ice cream, a caramel ribbon and crunchy bites of Heath bar and pecans. The company is also expanding the frozen dessert category with its Cake Bites, launched in October. The bite-size ice cream and cake desserts come in four flavors: Double Chocolate, Praline Caramel, Chocolate Mint and Vanilla Blondie. One sells for $2.99 and a mix-n-match four-pack is $9.99. Baskin-Robbins is following the trend of packaged ice cream processors by selling small, single-serve sizes that encourage trial and accommodates different taste preferences of family members. “The Cake Bites provide franchisees an opportunity to grow their ice cream cake sales. If a consumer has not yet tried a Baskin-Robbins full-size customized cake, the Cake Bites are the perfect opportunity to attract consumers to grow cake sales,” says Andrew Mastrangelo, manager of public relations. “Consumers always have something to celebrate whether it’s a birthday, anniversary, promotion, holiday.” That’s a sentiment many ice cream processors hold. Ice cream is not a “must-have” food, but the public loves it and buys it for special occasions. “We manufacture a comfort food, and in difficult times, people turn to trusted brands,” says Luconda Dager, president of Velvet Ice Cream. 

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State of the Industry Sponsored by:

The Cultured Craze Several cultured product makers are stepping outside of their comfort zone to provide a crowd of innovative new offerings that come equipped with zesty flavors and intricate packaging concepts.  Marina Mayer

Executive Editor

t used to be that yogurt was yogurt, cottage cheese was just cottage cheese, sour cream was plain old sour cream and dips were simply dips. Everything was plain, original, ordinary and regimented. But, that was then, this is now. Now, the various cultured product segments are heating up the fridge aisle with items that go above and beyond the sameold, same-old. Plain and original yogurt becomes fruit on top and drinkable. Cottage cheese boasts high protein and probiotics. Even sour cream and dips entered the action with allorganic, party-pleasing flavors. Find out what products are creating a craze for cultured.

I

Yearning for yogurt Whether it’s filled with fruit, created as a snack or available in drinkable form, many of today’s yogurt products deliver valueadded characteristics. “‘Me too’ products will have a difficult time making it to the shelf unless there is a consistency in quality and a substantial difference in price benefit,” says Ken Strunk, general manager and CEO for Redwood Hill Farm & Creamery, Inc. “Also, a style that originates from a particular region of the world has shown market stride.” To stand out from the crowd, the Sebastopol, Calif., processor added premium-priced organic fruits to its goat milk yogurts. “We just celebrated the one-year anniversary of the launch of Green Valley Organics line of lactose-free yogurt, kefir and sour cream,” Strunk says. “This new line truly did create a new market segment that hadn’t been filled previously.” It also unveiled a bold new look to its product packaging with “Camellia,” the owner’s Saanen goat, contrasted against 52

Dairy Foods | November 2011

 Agro Farma’s Chobani Champions Greek-style yogurt consist of 100% natural ingredients, low-fat yogurt and real fruit.

a vibrant background of colors and hand-drawn illustrations. The new logo, Flourish, resembles the company’s custom blend of 10 live active probiotic cultures. “It’s a bright new look that focuses on our commitment to use only the highest quality ingredients, starting with 100% fresh goat milk, for which we pay the highest price in the industry,” Strunk says, “and now the addition of organic fruits giving consumers something truly special.” Also tapping into the fruit trend is Ehrmann USA, LLC, Mishawaka, Ind. Its all-natural Bavarian low-fat yogurt, which is made fresh out of its Brattleboro, Vt., plant, comes in a 5.3ounce cup with a dual-chamber that separates the yogurt from the fruit (blackberry-pomegranate, blueberry, cherry, peach and strawberry). Each flavor contains 150 calories or less, 7 grams of protein per serving and 1.5 grams total fat.

Producers of Cultured Products Are Talking About: • Sustainability • Grass-fed • Greek-style • Organic • Low- or no-fat • Naturally sweetened • Omega-3s • Protein • Probiotics

Continued on page 54

Danisco USA Inc. Four New Century Parkway New Century, KS 66031 www.danisco.com

State of the Industry CULTURED Dollars Up, Units Drop in Sour Cream Category

Chobani Jumps from No. 6 to First Place in Yogurt Sales Unit Sales (millions)

% change vs. yago

Rank

Brand

Dollar Sales (millions)

% change vs. yago

Unit Sales (millions)

% change vs. yago

Rank

Brand

1.

Chobani

$430.9

+163.0

308.2

+149.0

1.

Daisy

$264.7

+13.2

130.4

+8.1

2.

Private Label

$398.9

-3.5

652.7

-5.8

2.

Private Label

$248.0

+11.3

176.1

+2.3

3.

Yoplait Light

$398.6

+2.7

614.4

+0.3

3.

Breakstone’s

$79.7

-10.6

44.5

-19.5

4.

Yoplait Original

$375.2

-2.9

506.2

-9.6

4.

Knudsen Hampshire

$40.0

-4.9

16.4

-6.5

5.

Dannon Light & Fit

$299.9

+4.0

307.8

-13.4

5.

Friendship

$10.2

-11.7

6.1

-23.9

6.

Dannon Activia

$262.4

+8.8

97.9

+16.0

6.

Tillamook

$9.4

+8.6

4.6

+10.3

7.

Fage Total

$174.4

+55.1

83.4

+69.2

7.

Knudsen

$8.4

-12.3

3.7

-15.0

8.

Yoplait Go-Gurt

$133.1

+13.4

47.4

+13.5

8.

Hood

$8.2

+40.6

4.9

+28.9

9.

Stonyfield Farm

$130.3

-7.1

77.3

-10.2

9.

Darigold

$7.5

-3.6

3.9

-2.7

10.

Dannon Activia Light

$128.2

-3.0

48.8

+1.1

10.

Kemps

$7.4

+10.1

4.6

+9.3

Total category*

$4,428.2 +8.3

4,079.2

+1.1

Total category*

$802.6

+5.8

457.0

-1.1

*Includes brands not shown. Total U.S. – Supermarkets, drug stores and mass merchandisers (excluding Wal-Mart). 52 weeks ended Aug. 7, 2011. Source: SymphonyIRI Group, a Chicago-based market research firm, www.symphonyiri.com

*Includes brands not shown. Total U.S. – Supermarkets, drug stores and mass merchandisers (excluding Wal-Mart). 52 weeks ended Aug. 7, 2011. Source: SymphonyIRI Group, a Chicago-based market research firm, www.symphonyiri.com

“We have found that U.S. consumers are highly interested in innovative yogurt concepts of old-world European origin,” says Carolin Widmann, product manager. “In addition, there are an increasing number of consumers being conscious about their health and body. Thus it is important to the U.S. consumer that they purchase low-fat and all-natural products.” Hammond Dairy, LLC, Amenia, N.Y., specializes in yogurt that can be consumed either for breakfast or dessert. Made with un-homogenized whole milk, the selection contains five kinds of active cultures and is said to either enhance a bowl of granola or be scooped into a bowl of ice cream as a sundae-like topping. It comes in strawberry, raspberry and peach offerings. Aside from value-added attributes, drinkable yogurts are also hitting high notes with consumers. Dallas-based Lucky Layla Farms’ portfolio includes a team of drinkable yogurts that contain no powdered milk or whey, extenders or thickeners. “We pride ourselves on our environmentally sound farming practices. Our Guernsey and Jersey cows are pasture-based and fed and we use non-commercial fertilizers,” says Todd Moore, owner/farmer. “Technically, our

product is a ‘luxury item’ and isn’t always on grocery lists as a kitchen staple.” Meanwhile, other yogurt producers are developing products that specifically target the health-conscious consumer. For instance, Dannon Co., White Plains, N.Y., expanded its Activia family with Activia Selects, which includes Activia Selects French, Activia Selects French Fruit on the Bottom, Activia Selects Greek, Activia Selects Parfait and Activia Parfait Crunch, which blends Activia low-fat yogurt, fruit pieces and low-fat crunchy granola into a 6-ounce container. Activia Parfait Crunch comes in Strawberry & Granola, Mixed Berry & Granola, Vanilla & Granola and Peach & Granola. “Specialty products seems to be a trend that is here to stay,” says Michael Neuwirth, senior director of public relations. “And, as the U.S. market’s first French-style yogurt, Activia Selects French is an excellent example of Dannon’s innovation to bring consumers new taste and texture options in the category.” Dannon also re-branded its Greek-style yogurt offerings, Dannon Oikos and Activia Selects Greek, to combine the functional benefits of Activia with the texture of Greek-style yogurt, Neuwirth says. “Consumers continue to gravitate toward Greek yogurt because of its inherent health qualities (high protein, low fat) and exceptionally thick and creamy taste,” he adds.”

 Springfield Creamery expanded its Nancy’s brand to include low-fat cottage cheese with fruit on the top, while Dannon’s ActiviaSelects line consists of low-fat yogurt available in select fruit flavors. 54

% change vs. yago

Dollar Sales (millions)

Dairy Foods | November 2011

Continued on page 56

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Wholly Guacamole Snags 2 Spots for its Refrigerated Dips % change vs. yago

Unit Sales (millions)

% change vs. yago

Rank

Brand

Dollar Sales (millions)

1.

Private Label

$108.7

+0.2

43.6

-3.1

2.

T. Marzetti

$72.5

-2.1

21.5

-2.2

3.

Dean’s

$49.1

+1.6

27.7

+1.5

4.

Heluva Good

$42.4

+10.9

21.9

+8.5

5.

Wholly Guacamole

$30.9

+24.2

8.1

+21.0

6.

Kraft

$12.7

-15.0

5.9

-17.8

7.

Calavo

$8.3

+1.6

2.0

+2.6

8.

Wholly Guacamole Classic

$8.0

+23.9

3.0

+12.9

9.

Yucatan

$6.6

+8.3

1.7

+6.3

10.

Gordo’s

$5.5

+15.7

1.2

+15.5

Total category*

$486.1

+4.4

190.1

+0.8

*Includes brands not shown. Total U.S. – Supermarkets, drug stores and mass merchandisers (excluding Wal-Mart). 52 weeks ended Aug. 7, 2011. Source: SymphonyIRI Group, a Chicago-based market research firm, www.symphonyiri.com

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For its part, Stonyfield Farm grew its Pure Pleasures brand to include caramel and chocolate offerings, expanded its Organic Oikos 0% Fat line to include new flavors such as superfruits and peach mango and extended its Organic Oikos platform with drinkable yogurt and frozen yogurt options. Stonyfield also developed a 100-calorie recipe for its Smooth & Creamy 0% Fat yogurts, which are naturally sweetened with organic sugar and organic stevia. “Despite the fact that Greek yogurt is the big news in the yogurt category, and despite the pressure it has put on other category segments, Greek isn’t the only news and it still isn’t for every yogurt eater,” says Kristen Deshaies, senior director of marketing for the Londonderry, N.H., processor. To better speak to children, in March, Stonyfield redesigned the packaging for YoBaby yogurt with its “Love on a spoon” campaign, “designed to connect the product’s health features and benefits (a yogurt made with pure whole organic milk produced without antibiotics, synthetic hormones or toxic pesticides) with mom and dad’s joyful love of feeding their baby,” she adds. Agro Farma, the Norwich, N.Y.-based maker of the Chobani brand, also crusaded for children with its Chobani Champions lineup of Greek-style yogurt. Each 3.5-ounce cup is packed with 100% natural ingredients, low-fat yogurt and real fruit. It comes in Honey-Nana and VeryBerry. Further tapping in to the Greek-style trend, Chobani released Chobani Kitchen, which is designed to help stimulate creativity in the kitchen with some easy-to-follow recipes incorporating Chobani yogurt. It also unveiled Chobani Fit, a program designed to help educate physically active consumers about the benefits of consuming Chobani as a post-workout recovery snack. Continued on page 58

State of the Industry CULTURED “We receive several consumer-generated recipes and suggestions that use Chobani as a replacement for higher calorie ingredients,” says John Heath, vice president of new ventures and innovation. “We feel it’s really up to us and the category to help educate the rest of consumers on [the] versatility of Greek

yogurt and to come up with new and innovative ways to help consumers to enjoy it.” Tillamook County Creamery Association touted the better-for-you health trend by introducing “a light line of yogurts designed to meet consumer demand for simple, healthy and

Yogurt With a Crunch Anybody who’s anyone knows that yogurt isn’t supposed to crunch. But, the folks at Revolution Foods, Emeryville, Calif., are leading the charge with an organic, shelf-stable, yogurt-based snack that provides a crunch or two. Yo’ Drops is a crunchable yogurt snack that’s shaped into little balls so children can pop them in their mouths and crunch, says Eleanor Domingquez, brand manager. “Yo’ Drops are simply made with certified-organic yogurt and hormonefree yogurt that’s mixed with real fruit and freeze dried into tiny drops,” Domingquez says. They come in a long, skinny, tubular BPA-free package with a tear notch for easy pour. Plus, they are SB12 compliant, which means they can be sold in K-12 schools. “Yogurt continues to be a big opportunity,” Domingquez adds. “There’s a consumer need for yogurt products that are unique, portable and easy-toeat, especially in the kids segment.” 

natural products,” says Mary Cecchini, brand communications manager for the Tillamook, Ore., organization. “The new light yogurt line [which will be available next year] will have fewer calories than our low-fat yogurts and will be free of artificial colors, flavors, sweeteners, high-fructose corn syrup and will be made with milk from cows not treated with artificial growth hormones.” Tillamook also redesigned its 6-ounce yogurt cups to reflect the company’s new recipe (no artificial colors, no artificial flavorings, no artificial sweeteners, no high-fructose corn syrup and no artificial growth hormones), and is scheduled to introduce a 32-ounce, family-size yogurt container for families and home cooks, Cecchini says. 58

Dairy Foods | November 2011

Continued on page 60

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State of the Industry CULTURED Private Label Outranks Brands in Cottage Cheese Category

Dipping Into Success

% change vs. yago

Unit Sales (millions)

% change vs. yago

Rank

Brand

Dollar Sales (millions)

1.

Private Label

$346.6

+6.1

152.8

-2.3

2.

Breakstone’s

$81.3

-1.6

26.8

-2.8

3.

Knudsen

$51.8

-5.4

14.3

-8.5

4.

Friendship

$29.8

-0.2

11.2

-8.9

5.

Daisy

$29.3

+20.7

9.9

+20.3

6.

Dean’s

$22.8

+1.2

8.0

-8.3

7.

Hood

$22.1

+3.3

8.5

+2.0

8.

Breakstone’s Cottage Doubles

$20.3

-12.4

18.8

-8.9

9.

Prairie Farms

$15.4

-6.4

6.0

-13.7

10.

Kemp’s

$14.1

+1.2

5.1

-3.4

Total category*

$856.8

+2.2

343.4

-3.3

*Includes brands not shown. Total U.S. – Supermarkets, drug stores and mass merchandisers (excluding Wal-Mart). 52 weeks ended Aug. 7, 2011. Source: SymphonyIRI Group, a Chicago-based market research firm, www.symphonyiri.com

Straus Family Creamery Expands Organic Dairy Lineup with Sour Cream Straus Family Creamery, Petaluma, Calif., enriched its organic dairy lineup to include artisanal, locally made sour cream, available in full fat and light options. Both varieties are slow cultured using a traditional 16-hour process and made in small batches to produce a naturally thick texture. “It all starts with the milk,” says Albert Straus, president. “Although making sour cream without gums or stabilizers takes time, it’s worth the effort.” This sour cream is touted as a perfect base for dips and dressings, adding zip to tacos, enchiladas, baked potatoes, muffins, scones, cakes and other baked goods. 

Cottage cheese makers get creative Dairy processors vamped up the dairy market with a bevy of items that go beyond the traditional tub of cottage cheese. Springfield Creamery, for example, expanded its Nancy’s brand with low-fat cottage cheese fruit-on-the-top. Available in an 8-ounce, two-part cup (the bottom portion is organic, low-fat cottage cheese, the top contains 100% real organic fruit lightly sweetened with organic agave), they come in pear, strawberry and peach flavors. “We hope to have answered the consumer’s call for a highprotein, probiotic choice,” notes Sheryl Kesey Thompson, co-owner, marketing director for the Eugene, Ore., company. “With 21 grams of protein per [227-gram] serving, folks are finding the product a healthy, meal-on-the-go. This new product offers a gluten-free option as well, which is critical to many people.” 60

Dairy Foods | November 2011

Lately, makers of dips and spreads have been making a name for themselves among the dairy category. For starters, Future Food Brands, Carrollton, Texas, introduced a flurry of flavor profiles, including Smoked Sockeye Salmon spread (with omega-3s), Buffalo Blue Cheese dip and Smokey Bacon Crab dip, with several more in the works for the end of the year, such as a Lobster and Seafood spread. “People will always entertain for some type of occasion, which makes our products viable year-round through economic highs and lows,” says Emily Alfano, director of marketing and new product development. Future Food Brands also moved its products into a sustainable, 100% recyclable, BPA-free, oval-shaped retail package that is dishwasher and microwave safe. “The shape itself sets us apart from any competition, and the in-mold high-resolution label images help the product pop off the shelf,” Alfano says. “Our new logo and brand image along with our new packaging now match the high quality our products have been long known for.” Meanwhile, Dallasbased Santa Barbara Bay tackled snack time with a new Buffalo Blue Cheese dip that consists of a blend of sour cream, blue cheese, hot sauce and cayenne pepper in a pre-packaged, ready-to-serve container. 

Friendship Dairies, a division of Dean Foods Co., livened up the supermarket dairy cases with Fit to Go, a line of 5-ounce, single-serve cottage cheese offerings, available in 4% California style, 1% low-fat and 1% low-fat with pineapple. This line hit retailer shelves in the New York tri-state area starting in September. The Friendship, N.Y., processor also unveiled a new look by making the Friendship dove logo more apparent on its packaging and assigning each flavor its own color, so consumers can easily spot their favorites. Also undergoing a makeover is Traders Point Creamery’s cottage cheese selection. The Zionsville, Ind., company transitioned its cottage cheese items into 100% recyclable glass containers. “By using glass containers, we are able to be more environmentally friendly and sustainable,” says Ken Warren, chief operating officer. “The cottage cheese is preserved in a nonporous and impermeable container, which extends shelf life and prevents leaching that can occur with plastic containers.” Plus, the transparent glass containers allow the cottage cheese to take center stage on the shelf. What used to be plain and ordinary is now fresh, revitalized and organic. And from the looks of these new products and packaging concepts, this cultured craze isn’t dying down anytime soon. 

KNOWLEDGE HAS ITS REWARDS

The increasing consumer demand and unmet need for gluten-free products was the inspiration for this year’s winning concepts. Make it gluten-free, and it’s a winner. Which is just what the food science team from Clemson University capitalized on to win the 2011 Danisco Knowledge Award contest. The product – “Farmer Chad’s Very Veggie Dip with Gluten-Free Chips,” – features a healthful, portable snack offering a full serving of roasted vegetables accompanied by gluten-free pita chips. Taking second and third place honors in this annual contest were teams from Virginia Tech and the University of Arkansas respectively, both with gluten-free entries. Dairy Foods and Prepared Foods are pleased to work alongside Danisco in bringing you this year’s Danisco Knowledge Award New Product Contest. Over the next six months, qualified food science students from all over the country will compete for a chance to win the hearts and stomachs of consumers, not to mention $10,000 in cash. As our industry continues to explore new and innovative ingredient applications and flavor profiles, Dairy Foods congratulates Danisco on its innovative spirit, as well as, the progressive efforts of our future food scientists. For more information about the Danisco Knowledge Award New Product Contest, please contact Danisco at 800.255.6837 ext. 3436 or visit the website below.

www.danisco.com/knowledgeaward

State of the Industry Sponsored by:

Butter Buoyed By Higher Prices Sales rose although units dropped in the last year. Butter makers try new flavors to lure shoppers to the dairy case.  Jim Carper Chief Editor

utter makers don’t buy a lot of ingredients. When a typical package label reads “cream and salt,” there isn’t much wiggle room for making substitutions or cutting back on ingredients. The weekly price of a pound of butter has remained high throughout most of 2011, according to the United States Department of Agriculture’s National Agricultural Statistics tistics Service. It peaked at nearly $2.15 this summer and stayed above $2 for most of the first 40 weeks of the year (see graph).. Sales of butter rose nearly 21%, while units fell 2.5% in the 52-week -week period ended Aug. 7, according to Chicago-based market research firm SymphonyIRI Group. “Strong markets, coupled with a soft economy, have negatively impacted demand in the retail and foodservice sectors,” says Jim Walsh, vice president of marketing for Associated Milk Producers Inc., New Ulm, Minn. High prices are one reason butter makers are looking at how they can produce a lower-cost product for foodservice users. The average restaurateur, seeking to lower operating costs, is asking for butter blends, says Trevor Wuethrich of Wuethrich Creamery Co., Greenwood, Wis. Restaurant owners tell Wuethrich that diners won’t notice the difference between a blend and 100% butter. Consequently, a 2012 goal for the creamery is to develop a better butter blend, Wuethrich says. The company sells its own branded butters (including Grassland, Wüthrich, Country Cream and Fall Creek) and co-packs others’ brands. Private-label butters outsell the top brand 2:1. Land O’Lakes, St. Paul, Minn., makes the best-selling branded butter. Sales of its Land O Lakes brand increased 20% to $375.5 million and unit sales grew by 2.2%, towering over all other brands. Sales of the No. 2 brand, Challenge Butter (Challenge Dairy Products, Dublin, Calif.), were a mere $57.2 million. Land O’Lakes perhaps made the biggest noise in the category this year with its Cinnamon Sugar butter spread sold in a 6.5ounce container. The product embodies two trends in butter — spreadability and added flavor. “We have seen growing popularity in the spreadable butter category, with an 11.3% increase in 2010,” says Angela Pengelly, the company’s marketing manager. She says that spreadable butters are helping to increase sales in the butter category at the retail level.

B

62

Dairy Foods | November 2011

 Challenge Dairy adds Italian herbs to its spreadable Tuscan butter made with olive oil. The company markets the food as a breakfast spread and as an ingredient in dinners, side dishes, sweets and desserts, recommending its use, for example, on cooked carrots and grilled cheese sandwiches and in couscous recipes. In March, Challenge Dairy, introduced Tuscan-style butter under the Challenge brand in the spreadable butter category. The butter is infused with slow-roasted garlic, olive oil and Italian herbs, including rosemary, basil, oregano and thyme. It is packaged in 7-ounce containers. Non-traditional use of butter is as an hors d’ouevre. Tripp Hughes, category manager for Organic Valley, La Farge, Wis., says he spreads the company’s pasture butter on crackers and serves them to his dinner party guests. Pasture butter is made in the spring and summer while cows are feeding on grass outdoors. As a result of this diet, the milk is higher in conjugated ed

Butter Makers Are Talking About: • The popularity of spreadable butters • Adding sweet and savory flavors • High retail prices • Drop in consumption

Private Label, Land O Lakes Own the Refrigerated Butter Category

Butter Up That Bacon

% change vs. yago

Unit Sales (millions)

% change vs. yago

Rank

Brand

Dollar Sales (millions)

1.

Private Label

$786.0

+25.4

275.5

-2.3

2.

Land O Lakes

$375.5

+20.0

105.3

+2.2

3.

Challenge Butter

$57.2

+14.9

16.6

+3.2

4.

Breakstone’s

$33.5

+18.8

13.1

+4.8

5.

Crystal Farms

$22.3

-4.7

7.1

-29.9

6.

Tillamook

$22.2

+3.2

6.3

-19.3

7.

Keller’s

$19.3

+10.5

6.5

-4.5

8.

Cabot

$18.0

-4.7

5.2

-27.5

9.

Hotel Bar

$15.7

+18.8

5.9

+2.8

10.

Darigold

$12.8

+14.6

4.1

-7.1

Total category*

$1,474.3 +20.5

477.5

-2.5

*Includes brands not shown. Total U.S. – Supermarkets, drug stores and mass merchandisers (excluding Wal-Mart). 52 weeks ended Aug. 7, 2011. Source: SymphonyIRI Group, a Chicago-based market research firm, www.symphonyiri.com

Butter Breaks The $2 Barrier $2.5

Price per pound

2

Homer Simpson once instructed his son Bart to “butter up that bacon.” While the idea of smearing fat on fat might have sent shivers up the spines of nutritionists, science is finding that breakfasts rich in cream and butter can lower the levels of risk indicators for heart disease and diabetes, according to a press release from the trade group Dairy Australia. Scientists from the Baker IDI Heart and Diabetes Institute in Melbourne, Australia, examined the effect of breakfasts rich in either cream, butter, cheese, yogurt or low-fat milk markers, which are indicators of heart disease and diabetes risk. The researchers served overweight or obese adults different dairy-rich breakfasts on different days over a two- to three-week period. The dairy foods did not increase any of the markers. The breakfast choices consisted of: • “Creamy” (containing nearly half a cup of cream) • “Buttery” (containing more than six individual packs of butter) • “Milky” (containing a glass-and-a-half of low-fat milk) It turned out that all three choices actually lowered marker levels. The researchers said the surprising fall in the concentrations of a number of biomarkers, especially after butter and cream were consumed, remained unexplained. Dairy Australia dietitian Glenys Zucco says it was previously thought high-fat meals increased the levels of markers related to heart disease and diabetes, yet these results suggest dairy fat has different effects compared to other types of fat. The study was supported by the Dairy Health and Nutrition Consortium, which was formed in 2007 by Gardiner Foundation and industry partners, including Bega Cheese/Tatura Milk Industries, Fonterra Australia, Parmalat Australia, Dairy Australia and Dairy Innovation Australia. 

1

0

2011 Weekly Prices Source: United States Department of Agriculture, National Agricultural Statistics Service

linoleic acids, which is said to improve the taste of the resulting butter. To guarantee a year-round supply, processors store excess butter to sell in the winter months. (Pasture butter can only be made while the cows are mad grazing outdoors because gr a typical wintertime dairy diet does not produce high CLA levels.)  Sp Spreadable butters are growing. Land O’Lakes grow introduced a flavored product intro this summer.

Regarding health and wellness, Wuetrich sees a role for butter as a delivery system for functional ingredients, including Omega3s. And by blending canola or other heart-healthy oils into butter products, the foods gain a healthy halo and perception of being better-for-you. The cachet of a limited-edition butter elevates the product above the level of a commodity. Hughes says Organic Valley exhibits the butter at beer tastings, in the belief that those who appreciate fine beer also have a taste for fine dairy products. Cabot Creamery Cooperative, Cabot, Vt., also sees consumers moving toward better food, including butter. “In the specialty sector, there is growing interest in butter, largely in the deli case with some spillover into dairy. With the natural and local movements gaining ground, butter has a role to play there that has only just begun to be realized,” says Amy Levine, director of marketing. She sees an opportunity to capitalize on the appeal of buying natural and locally made foods, two trends that favor butter over spreads. “Specialty butter offers opportunity in both dairy and deli.” Though the drop in unit sales is worrisome, if prices remain high, butter makers should continue to churn more dollar sales.  www.dairyfoods.com

63

State of the Industry Sponsored by:

Beverages Soldier On The beverage aisle bulks up as processors add protein, vitamins, antioxidants and other better-for-you ingredients to their team of teas, coffee, juices and water.  Marina Mayer Executive Editor

hether it’s a glass of juice, a bottle of water, a can of iced tea, a cup o’ joe or a swig of an energy drink, many of today’s beverages offer a little something extra for that health-conscious consumer. In fact, the beverage aisle bulked up to include an insurgence of nutrient-rich and vitamin-laden options housed in recycled, sustainable containers. Here’s a rundown of how beverage processors are expanding their market segments.

W

Juiced up and ready to go It used to be that juice was made from concentrate and delivered nothing more than just a sweet taste. Nowadays, juices are becoming the real deal thanks to an added dose of fruits, vegetables and other all-natural ingredients. “Consumers continue to look for easy and more delicious ways to get their daily servings of fruit and vegetables,” says Victoria Nuevo-Celeste, marketing director for Naked Juice. That’s why in August, the Monrovia, Calif., processor launched Mango Veggie, which consists of mashed-up mango with yellow carrots, sweet potato, sweet corn, apple, chick peas and hints of lemon and butternut squash. Together, these ingredients provide two full servings of vegetables and one serving of fruit in each 15.2-ounce bottle, Nuevo-Celeste says. Simultaneously, Naked Juice revamped its reduced-calorie smoothie line to include Lychee and Citrus Lemongrass flavors. “We are always looking for new, delicious fruits from around the world to bring to our consumers,” Nuevo-Celeste says. “Naked Juice offers the freshest fruits and vegetables and derives naturally delicious and artful blends that offer healthy, feel-good refreshment.” Taking aim at its rival, V8, produced by Campbell Soup Co., Camden, N.J., Dr Pepper Snapple Group Inc., Plano, Texas, added Mott’s Garden Blend, a lighter-tasting blend of tomato and other vegetable juices that delivers two servings of vegetables per 8- ounce bottle. 64

Dairy Foods | November 2011

 Beginning in September, Honest Tea refreshed the labels of its Honest Tea and Honest Ade lines to feature a white background that highlights clean, vibrant images of the ingredients. Old Orchard Brands, Sparta, Mich., turned on the power with its Very Cherre pure tart cherry juice. This 100% juice drink is made up of blueberry, cranberry and cherry/pomegranate blends housed in a 64-ounce bottle. Meanwhile, Minute Maid, Houston, Texas, a division of Coca-Cola Co., launched Minute Maid Pure Squeezed, available in 59-ounce carafe containers in no pulp, no pulp with calcium and vitamin D and some pulp options.

Non-dairy Beverage Processors Are Talking About: • Protein • Vitamins • Full servings of fruits and vegetables • Pure and unsweetened • Recyclable and sustainable PET bottles • Clear on Calories initiative • Good source of calcium

Continued on page 66

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State of the Industry BEVERAGES Orange Juice Dominates Non-dairy Beverage Segment

66

% change vs. yago

Lipton Remains Leader of RTD Tea Sector

Unit Sales (millions)

% change vs. yago

Rank

Brand

Dollar Sales (millions)

% change vs. yago

Unit Sales (millions)

% change vs. yago

Rank

Segment

Dollar Sales (millions)

1.

Orange Juice

$2,545.8 +0.5

810.3

-2.3

1.

AriZona

$330.4

+0.9

212.3

+2.4

2.

Fruit Drink

$686.0

+7.3

346.7

+6.2

2.

Lipton

$192.6

-10.9

55.0

-13.5

3.

Lemonade

$351.4

+7.2

175.9

+2.1

3.

Snapple

$116.9

-1.5

44.7

-7.3

4.

Blended Fruit

$285.6

-9.1

95.1

-7.5

4.

Diet Snapple

$110.9

+10.7

33.1

+10.7

5.

Juice & Drink Smoothies

$253.4

+18.3

75.9

+13.7

5.

Lipton Brisk Tea

$89.7

+2.2

45.1

+15.7

6.

Lipton Diet

$58.0

-3.7

14.7

+7.5

6.

Grapefruit

$78.5

+1.6

24.5

+1.1

7.

+82.2

45.4

+69.5

Cider

$63.6

+1.5

19.0

+0.5

AriZona Arnold Palmer

$51.3

7. 8.

All Other

$50.5

+9.0

9.4

+13.6

8.

Nestea

$50.4

-8.3

19.4

-10.6

9.

Apple

$43.0

-4.6

15.5

-7.3

9.

Lipton Pureleaf

$47.2

-5.9

20.6

-4.7

10.

Vegetable Juice/ Cocktail

$39.8

+9.8

9.3

+8.9

10.

Arnold Palmer Lite Half & Half

$36.9

+80.2

12.6

+79.7

Total Category*

$4,441.0 +2.5

1,596.2

+0.5

Total category*

$1,286.5 +3.2

625.7

+7.0

*Includes brands not shown. Total U.S. – Supermarkets, drug stores and mass merchandisers (excluding Wal-Mart). 52 weeks ended Aug. 7, 2011. Source: SymphonyIRI Group, a Chicago-based market research firm, www.symphonyiri.com

*Includes brands not shown. Total U.S. – Supermarkets, drug stores and mass merchandisers (excluding Wal-Mart). 52 weeks ended Aug. 7, 2011. Source: SymphonyIRI Group, a Chicago-based market research firm, www.symphonyiri.com

For its part, Odwalla Inc., Half Moon Bay, Calif., pumped up its Odwalla brand with Super Protein Mango, made up of apple juice, orange juice and mango and banana puree. This proteinrich smoothie is fortified with 20 grams of soy protein and provides 50% of the daily value of calcium and 150% of the daily value of vitamins B6 and B12 in each 12-ounce bottle. Natalie’s Orchid Island Juice Co., Fort Pierce, Fla., debuted its new line of seasonal hand-crafted blends in blackberry limeade, orange mango peach and tangerine honey flavors. These all-natural juices are freshly squeezed, made from locally sourced fruits and carry the Product of the USA certified seal. Nestlé USA, Glendale, Calif., tapped into its Hispanic roots and introduced three authentic-flavored aguas frescas (fruit juice) drinks. Aguas Frescas is 100% natural while the Aguas Frescas Jamaica kind is made from hibiscus flowers and a tamarind puree and provides an excellent source of vitamin C. Aguas Frescas Horchata consists of rice and cinnamon and produces an excellent source of calcium. To further promote these new fruit drinks, over the summer, Nestlé deployed a custom-built food and beverage truck called the Nestlé Aguas Frescas Aguas! Movil, which canvassed Los Angeles neighborhoods, parks, beaches, festivals and retail outlets, providing samples of its new Aguas Frescas drinks paired with Mexican-street tacos. And, while some processors focused on creating that betterfor-you product, others turned their attention to developing a better-for-the earth package. For instance, in April, Odwalla rolled out its PlantBottle packaging, which is made from 100% plant-based materials and sourced from sugarcane. In May, Chicago-based Tropicana Products, Inc. launched a 12-ounce, single-serve container for its Trop50 brand exten-

sion. This new bottling concept exhibits the same transparent PET container as the original 59-ounce bottle. “Our research shows that Trop50 fans strongly prefer clear packaging so they can see the vivid colors of Trop50 varieties, so we made the transition from carton to PET last summer,” says Kate Keller, director of marketing. “Also, the curved shape of the slim, clear bottle fits really well with the Trop50 proposition — the goodness of fruit juice with 50% less sugar and calories. The bottle is also recyclable.” Furthermore, Dole Food Co., Inc., Hawaii, showcased a blow-molded canister for its new Dole Fruit Smoothie Shakers, which are made with frozen fruit and yogurt and will hit store shelves first quarter of 2012. This user-friendly, functional package allows consumers to unscrew the cap, add juice to the fill line, re-apply the cap and shake for 30-45 seconds. The result is a perfectly blended smoothie, the company says.

Dairy Foods | November 2011

Taking one for the TEAm The ready-to-drink (RTD) tea category is one of the fastest growing beverage segments in c-stores, according to Jamal Henderson, brand manager for the Brisk brand. “Brisk iced tea has leveraged the momentum of the ready-todrink iced tea category to come back in a big way and engage the coveted Millennial male audience,” Henderson says. “Catering to the ever-evolving needs of its audience, Brisk’s latest flavor innovation combines green tea with tropical mango and exotic dragonfruit flavors for a combination that is truly ‘Brisk.’” The Brisk brand, owned by PepsiCo, Purchase, N.Y., launched a new green tea option to correspond with Warner Bros. Picture’s “Green Lantern” movie, which hit theaters this summer. The cans were designed by DC Comic artist Kenneth Rocafort, who “reinforced the unique connection between green tea and the ‘green energy’ that fuels the ‘Green Lantern’ corps” through the artwork, Henderson notes. Continued on page 68

Coffee ExtractQ‚Tea ExtractQ‚Botanicals

State of the Industry BEVERAGES Gatorade Owns Shelf-stable, Non-aseptic Sport Drinks Category % change vs. yago

Unit Sales (millions)

% change vs. yago

Rank

Brand

Dollar Sales (millions)

1.

Gatorade Perform

$941.9

+112.7

534.6

+108.6

2.

Powerade ION4

$306.3

+23.7

319.9

+28.8

3.

Gatorade G2 Perform

$279.2

+132.8

156.0

+121.9

4.

Powerade Zero

$106.6

+30.6

112.5

+34.9

5.

Gatorade

$79.3

-77.7

33.0

-80.6

6.

G2

$14.2

-89.5

6.1

-91.1

7.

Gatorade Frost

$12.9

-80.9

2.7

-91.8

8.

Gatorade Recover

$11.4

+122.4

7.1

+149.6

9.

Powerade

$10.6

-22.4

2.9

-52.1

10.

Private Label

$9.5

-3.0

7.4

-0.6

Total category*

$1,795.2 +10.6

1,198.3

+15.8

*Includes brands not shown. Total U.S. – Supermarkets, drug stores and mass merchandisers (excluding Wal-Mart). 52 weeks ended Aug. 7, 2011. Source: SymphonyIRI Group, a Chicago-based market research firm, www.symphonyiri.com

In addition, New York-based Graphic Design USA magazine honored Brisk last year with the 2010 American Package Design Award for its new 1-liter and 24-ounce can art design series. “Brisk is all about being bold and innovative,” Henderson says. “With this mentality, we set out to partner with artists and up-and-coming social and digital companies who resonate with the brand and Millennial audience.” Honest Tea, Bethesda, Md., refreshed the labels of its Honest Tea and Honest Ade lines. Beginning in September, the new designs feature a white background that highlights clean, vibrant images of the ingredients, accompanied by tea leaves and large cut-open fruit on the front. The labels also include a callout of “Brewed Organic [Green, Black or White] Tea Leaves” to reinforce the authenticity of the ingredients. “The redesign of our labels was not necessarily driven out of any trends,” says Samme Menke, public relations manager. “Transparency has always been a part of our mission, but we didn’t feel like our old labels necessarily spoke to that. In our redesign, we incorporated more white space and more whole fruit to communicate the simplicity and transparency of ingredients.” Honest Tea also adopted the Clear on Calories label, providing the caloric content of the bottle on the front of the label, Menke adds. Also in support of the Clear on Calories initiative is Rooibee Red Tea, Louisville, Ky. That’s why, in April, Rooibee Red Tea debuted its line of naturally caffeine-free RTD teas in sustainable glass bottles housed in a 4-pack carrier. “The new packaging design displays the total calories per container as recommended by the American Beverage Association Clear on Calories initiative in support of First Lady Michelle Obama’s efforts to help families make informed choices as part of an active, healthy lifestyle,” says Heather Howell, the company’s “CTeaO.” 68

Dairy Foods | November 2011

Plus, its products are USDA-certified organic by the Kentucky Department of Agriculture, Frankfort, Ky. That’s why it received first place for its Watermelon Mint flavor at the 2011 North American Tea Championship, which took place Feb. 22-23 in Las Vegas. “Fortunately, Rooibee Red Tea competes in the natural food segment, where, despite the tough economy, consumers are continuing to make ever more healthful choices in their shopping selections,” Howell says. “Rooibee Red Tea uses pure organic cane sugar and all-organic flavors for our teas. It is a healthful product that is naturally caffeine free, high in antioxidants, gluten-free and provides a full serving of vitamin C.” For its part, AriZona Beverages USA, LLC, Woodbury, N.Y., extended its packaging mix to include 12-packs of 11.5ounce cans. Coffee heats up the competition One day coffee is bad for you, another day, coffee helps ward off certain forms of cancer. Whatever the day, the coffee category underwent a makeover that involves exotic tastes and a bounty of better-for-you ingredients, allowing consumers to keep coffee as a part of their eating regimen. After its falling out with Starbucks Corp., Seattle, in August, Kraft Foods Inc., Northfield, Ill., debuted its own version of RTD coffee with Gevalia, available in traditional roast, traditional roast whole bean, house blend, house blend decaf, French roast, French roast whole bean, Colombia, espresso roast, vanilla and chocolate mocha flavors. Meanwhile, HP Hood, LLC expanded distribution of its Baileys coffee creamers to be available on the West Coast, including Arizona, California, Idaho, Nevada, Oregon, Utah, Washington, Alaska, Hawaii and New Mexico. The Lynnfield, Mass., processor also redesigned the labels to better “capture all the richness and creaminess waiting inside,” the company said in a press release. Stonyfield Farm introduced Organic Half & Half, a mixture of organic milk and cream that contains 11% milk fat and delivers 1 gram of protein and 40 calories per 2-tablespoon serving. The Londonderry, N.H., company suggests using it as an addition to clam chowder and soups, as a component to sauces, gravies and desserts or as an add-on to pies and cakes.  Tropicana’s new bottling concept exhibits the same transparent PET container as the original 59-ounce bottle. Continued on page 70

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State of the Industry BEVERAGES Refrigerated Orange Juice: Minute Maid Rebounds, Odwalla Makes Top 10 Dollar Sales (millions)

% change vs. yago

Unit Sales (millions)

% change vs. yago

Brand

Dollar Sales (millions)

% change vs. yago

Unit Sales (millions)

% change vs. yago

Rank

1.

Silk

$205.2

-9.6

60.4

-10.6

2.

Blue Diamond Almond Breeze

$84.3

+135.5

26.7

+134.3

Rank

Brand

1.

Tropicana Pure Premium

$806.6

-3.2

233.1

-3.3

2.

Simply Orange

$466.1

+14.0

137.8

+14.1

3.

Private Label

$446.4

-4.1

167.1

-11.8

3.

Silk Pure Almond

$72.6

+220.9

23.3

+217.4

4.

Florida’s Natural

$298.6

+7.0

96.0

+6.1

4.

Silk Light

$70.3

-6.0

21.8

-7.7

5.

Minute Maid Premium $251.9

-8.6

81.9

-6.2

5.

Private Label

$58.8

+0.8

21.6

-0.1

6.

Minute Maid

$28.7

+444.0

6.5

+454.3

6.

Lifeway

$32.0

+28.5

9.4

+30.1

7.

Minute Maid Premium Kids Plus

$25.7

+12.0

9.2

+9.3

7.

8th Continent

$21.0

-3.0

7.0

-4.1

8.

Silk Plus

$14.3

-15.7

4.2

-15.0

8.

Citrus World Donald Duck

$16.7

-6.6

7.2

-10.6

9.

Odwalla Protein Monster

$13.4

+19.2

4.8

+26.0

9.

Tree Ripe

$15.3

-0.6

7.5

-4.6

10.

Myenberg

$10.2

-2.8

2.6

-3.7

10.

Odwalla

$14.4

+10.2

2.6

+13.6

Total category*

$626.9

+17.1

195.0

+16.9

Total category*

$2,545.8 +0.5

810.3

-2.3

*Includes brands not shown. Total U.S. – Supermarkets, drug stores and mass merchandisers (excluding Wal-Mart). 52 weeks ended Aug. 7, 2011. Source: SymphonyIRI Group, a Chicago-based market research firm, www.symphonyiri.com

Water wages war against obesity Water used to not be such a touchy subject. Doctors urged their patients to drink eight glasses of water a day, case closed. But, thanks to an insurgence of sweetened and sugar-filled beverages, many consumers are barely even drinking half of the recommended amount of water. In fact, leading researchers and health experts discussed the importance of healthful hydration and its role in curtailing hot-button epidemics, such as obesity, at the Healthy Hydration Symposium at the Sustaining the Blue Planet: Global Water Education Conference, held by the Project Wet Foundation, LLC, Bozeman, Mt. During the conference, speakers suggested that consumers actually replace sugar-sweetened beverages with more healthful choices, such as water, unsweetened tea and coffee. “We’ve had great success with a marketing campaign aimed at promoting water as the primary drink of choice and providing education around the amount of sugar in popular beverages,” says Heidi Kessler, school nutrition manager for Let’s Go!, a multi-sector childhood obesity prevention program. Thankfully, processors are responding by introducing a slew of options that allow consumers to make the switch from sugar to pure water with ease. For example, Nature’s Omega, a joint venture between Mycell Technologies, Paramus, N.J., and Nature’s Way Purewater Systems, Inc., Pittston, Pa., released Omega Water, a flavored bottled water that’s fortified with 100 milligrams of omegas 3 and 6. It comes in lemon squeeze, orange splash, fruit fusion and berry breeze flavors. 70

Silk, Blue Diamond Beat Private Label Kefir, Milk Substitutes, Soy Milk

Dairy Foods | November 2011

*Includes brands not shown. Total U.S. – Supermarkets, drug stores and mass merchandisers (excluding Wal-Mart). 52 weeks ended Aug. 7, 2011. Source: SymphonyIRI Group, a Chicago-based market research firm, www.symphonyiri.com

TalkingRain Beverage Co. debuted Twist Essence Water, a zero-calorie, naturally sweetened, non-carbonated flavored water that is said to combine “the quintessential essence of fruit flavor and healthy hydration,” the Preston, Wash., company says. Meanwhile, Los Angeles-based Activate released a line of vitamin-enhanced beverages, designed for the active, on-thego consumer in search of a vitamin and hydration fix. The Lulo Pear option is a multivitamin drink packed with 200% of the daily serving of vitamin C and other essential vitamins, whereas the blueberry pomegranate flavor is made with acai and aloe vera extract to deliver an antioxidant-rich drink. The raspberry citrus flavor is loaded with vitamin C, amino acids and electrolytes and is touted as a post-workout beverage to keep active consumers hydrated. Processors are also enhancing the way consumers drink their water. For instance, Activate’s new PET bottle is composed of 100% post-consumer recycled plastic and is equipped with a proprietary cap that stores ingredients separate from the water and increases shelf life. Denver- and Phoenix-area residents can dive into a can of water, not a bottle, with Just Pure Water, a non-carbonated, all-natural water that’s infused with lemon-lime, orange and berry flavors. Produced by New Age Beverage, Denver, Just Pure Water comes in 24-ounce 100% recyclable cans.  Naked Coconut Water is filled with essential electrolytes such as potassium (510-650 milligrams), calcium (28-65 milligrams) and magnesium (23-30 milligrams) in each serving. Continued on page 72

Pour On the Sales ADD BREWED TEA TO YOUR LABEL. Consumers are more health conscious than ever and the demand for functional, healthy and natural beverages is on the rise. There is no doubt about it, fresh brewed tea and tea blended with other botanicals have become today’s beverages of choice. There is now an alternative to manufacturing the same old tea. Amelia Bay’s brewed-leaf extraction provides superior extracts to dairies that will assist reaching higher sales goals.

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State of the Industry BEVERAGES Coca-Cola’s Glacéau Lines Dominate Convenience/PET Still Water Category % change vs. yago

Unit Sales (millions)

% change vs. yago

Rank

Brand

Dollar Sales (millions)

1.

Private Label

$866.2

+5.0

341.6

+3.2

2.

Aquafina

$352.4

-0.3

126.6

+0.4

3.

Dasani

$301.0

+1.0

114.5

-0.3

4.

Glacéau Vitaminwater $280.0

-3.1

235.7

-4.9

5.

Poland Spring

$257.5

-2.5

76.6

-1.5

6.

Nestlé Pure Life

$205.9

+33.5

58.4

+35.4

7.

Glacéau Vitaminwater $133.4 Zero

+167.9

117.7

+173.1

8.

Glacéau Smartwater

$128.7

+23.3

78.3

+17.1

9.

Deer Park

$126.8

-1.7

37.2

-1.5

10.

Propel

$114.6

-7.0

67.9

-0.3

Total category*

$3,901.7 +2.5

1,774.5

+4.7

*Includes brands not shown. Total U.S. – Supermarkets, drug stores and mass merchandisers (excluding Wal-Mart). 52 weeks ended Aug. 7, 2011. Source: SymphonyIRI Group, a Chicago-based market research firm, www.symphonyiri.com

Weis Markets, Inc., Sunbury, Pa., took its 20-ounce private-label brand of bottled water and placed it in 100% recycled PET plastic. The bottles, produced by Ice River Springs Water Co., Inc., Canada, are manufactured with recycled resin derived from baled post-consumer plastic purchased from municipal recycling plants and use 25% less plastic. Pumping up, chilling out Energy drinks have been the craze for some time, however they’ve also received an enormous amount of backlash. Drinks such as Redbull, Monster, 5-hour Energy, Full Throttle and Four Loko have stirred up some controversy, as they contain ingredients that are said to produce too much energy, resulting in death. But not all energy drinks have to be banned from the shelves. That’s why some processors continue putting together pumped-up formulas that still pump up the energy but in a better-for-you manner. For example, Hydrive Energy LLC developed Hydrive Extra Strength, which contains 20% more caffeine than leading energy drinks, but only delivers 30 calories per bottle. It comes in a black cherry flavor. “Hydrive energy drinks are a refreshing alternative to traditional energy drinks developed for those who are looking for a great tasting, healthier boost of energy without all the added sugar and harsh ingredients,” says Charly-Ann Oddo, director of marketing for the Rye, N.Y., company. Hydrive Enhanced Water energy drinks offer a jitter-free energy and optimum hydration option. “There is a great deal of buzz around the term functional beverages, those that offer added vitamins and nutrients shown to improve overall health, and each Hydrive SKU has been given a unique functional benefit,” Oddo adds. Xyience, the Las Vegas-based maker of the Xenergy line of energy drinks, presented Frostberry Blast, a balanced blend 72

Dairy Foods | November 2011

Silky and Smooth “Plant-based nutrition and nutritional value are major trends in the non-dairy beverage category,” according to Sara Loveday, senior communications manager for Silk, part of WhiteWave Foods Inc. That’s why the Broomfield, Colo., company expanded its portfolio to include Silk Pure Coconut coconutmilk, which is said to feature 50% more calcium than dairy milk and is an excellent course of vitamins D and B12. This dairy-, lactose- and cholesterol-free drink comes in original and vanilla, with 80 and 90 calories per serving, respectively. Silk also increased the calcium level of its Pure Almond products by 50% to be more consistent with its other lineup of products, and has plans to release a new plant-based, nutrient-rich, non-dairy beverage option in January 2012. “Nutrition-conscious beverage consumers are looking for new options, and expanding the plant-based nutrition category with new products, flavors and nutritional value is a tremendous opportunity,” Loveday says. Tree of Life, a business unit of KeHE Distributors, Romeoville, Ill., tagged on to the non-dairy beverage trend with its Almond line, available in original, unsweetened original, vanilla, unsweetened vanilla and chocolate. Released in March, these almond beverages pack iron, calcium, protein and vitamins A, D and E into a 32-ounce carton. Meanwhile, Bolthouse Farms, Bakersfield, Calif., stretched its Protein Plus beverage line to include the Parfait smoothie, a yogurt parfait-based smoothie made with strawberries, yogurt, granola and the company’s proprietary whey and soy protein blend, which delivers 25 grams of protein per 15.2-ounce bottle. Lastly, White Cow Dairy, East Otto, N.Y., introduced Dairy Tonics, which consists of whey on top of yogurt. These drinks are said to be rich in probiotic enzymes, and come in sunflower-yellow, lime, lemonade and berry flavors. 

of blueberries and raspberries. This sugar- and calorie-free drink comes in a 16-ounce can featuring Wanderlei “The Axe Murderer” Silva, a middleweight fighter for the Ultimate Fighting Championship. On the other hand, some processors are scaling back on the energy-filled drinks and incorporating some more chilled out versions for the health-conscious consumer who still wants a kick. Hydrive launched a more chilled-out version of an energy drink with Hydrive Decaf, a caffeine-free energy drink that’s loaded with B vitamins, D-ribose and choline. Each 15.5-ounce bottle delivers 30 calories and comes in a wild peach flavor. “Over the last few years, we’ve seen a shift in the types of beverages consumers are looking for — moving from drinking heavily sweetened, carbonated, non-nutritious drinks to lighter, more refreshing, healthier ones,” says Oddo. The Chill Group LLC, Los Angeles, is cooling down its consumer base with Just Chill, an all-natural stress relief beverage designed to keep shoppers relaxed without causing drowsiness. It’s formulated with 100% natural ingredients, including ginseng, ginko biloba, lemongrass, L-theanine and other essential vitamins. It doesn’t matter how it’s bottled or canned; today’s non-dairy beverage is pumped and ready for the every consumer and every taste. 

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State of the Industry S

Sponsored by:

Innovative Ingredients for a Complex Market Cost-saving ingredients help processors stay afloat during struggling economic times, while value-added ingredients, which increase production costs, create a point of differentiation in a competitive marketplace.  Donna Berry Product Development Editor nnovative ingredients — those ingredients that do more than the basic functions of acidifying, coloring, flavoring, stabilizing and sweetening — are the lifeblood of today’s dairy foods business. And during this second decade of the 21st century, two categories of innovative ingredients appear to be driving product development — and they are about as different as oil and water. First there are the cost-saving ingredients that are helping dairy processors stay afloat during struggling economic times. Then there’s the category of health and wellness, with many of these value-added ingredients actually increasing production costs. But because they help marketers create a point of differentiation in a highly competitive marketplace, when proper promotion and education is part of the product, costs can be readily recouped through a premium shelf tag.

I

Powerhouse additions According to the 2011 Functional Foods/Foods for Health Consumer Trending Survey conducted by Washington, D.C.-based International Food Information Council (IFIC), the majority of Americans (95%) believe they have some control over their health and that food and nutrition play the most important role in maintaining and improving their overall health. Further, 87% of the 1,000 consumers who participated in a web-based survey this past spring agree with the concept of functional foods, which are defined as those that may provide benefits beyond basic nutrition. Respondents identified cardiovascular disease, which includes heart disease, heart attack, high blood pressure, high cholesterol and stroke, as their No. 1 health concern. The good news for dairy processors is that there are a multitude of functional ingredients — including omega-3 fatty acids, fiber and phytosterols — available to them for enhancing dairy products and positioning them as heart healthy. 74

Dairy Foods | November 2011

 According to consumer research, the Photo courtesy of Danisco majority of Americans recognize that both probiotic cultures and select fiber ingredients are associated with digestive health benefits. Both types of ingredients can be invisibly added to many dairy foods at levels recognized as providing a benefit to the body.

Ingredient Suppliers Are Talking About: • Reducing costs • Adding functional ingredients • Formulating for specific demographics

Continued on page 76

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State of the Industry INGREDIENTS Milk Can Deliver Healthful Ingredients Low-fat milk functions as an ideal carrier for many beneficial ingredients, enabling beverage processors to design nutritional drinks that meet the needs of specific demographic segments. This trend is becoming increasingly popular with products intended for children and older adults, two population segments that have very specific nutritional needs that are not always readily met through the typical daily diet. Awareness of the benefits associated with many food components and ingredients continues to grow, despite regulatory limitations on claims that can be made on product packaging and supporting materials. As a result, a growing number of marketers are using fancy names to help convey the benefits of the beverage, particularly when an approved health claim is not possible. Prototypes sampled at this year’s International Dairy Show include Moo-Mania, a fortified low-fat chocolate milk targeted to children. It contains 20% of the Daily Value of 13 essential nutrients and is a good protein source. For adults who need to shed a few pounds or simply work at maintaining a healthy weight, an appetite-suppressing milk drink was created in two adult-friendly flavors. Skinnyberry (strawberry) and Slimmaccino (cappuccino) are slightly sweetened, lowfat dairy beverages made

with a patented lipid emulsion that has been clinically proven to help control appetite and reduce feelings of hunger throughout the day. Several short- and long-term published clinical studies show that the ingredient helps reduce caloric intake by up to 30% and prevents weight gain after dieting. The “skinny” and “slim” names indirectly inform consumers about the products’ possibilities. Indulge low-fat chocolate milk shows that luxurious chocolate can also be heart healthy and promote cognitive function. This is accomplished through the addition of omega-3 fatty acids. For women trying to defy the aging process, ChaiTime Relaxing Beauty drink is a refreshing low-fat drink that helps promote skin health. It does this through the addition of powerhouse antioxidants, including vitamins, carotenoids, coenzyme Q10, resveratrol and green tea extract. And for older consumers looking for concentrated sources of drinkable nutrition, Vitamite Vanilla nutritional beverage provides all the nutrition of a glass of milk and more. The beverage is also lactose-free, appealing to consumers with challenging digestive systems, and it includes immunity-boosting vitamins that the aging segment requires. Though merchandising these products in the fresh milk case is an option, using aseptic packaging technology allows these value-added drinks to more effectively compete with va other beverages when they are merchandised in the o ambient soft drink, juice or nutritional aisles. This packaging even allows for club-store “case” packs. p Such thinking outside of the dairy case drives milk S ssales and builds milk’s image in the highly competittive beverage business.  Photo courtesy of DSM Nutritional Products, Sensory Effects Flavor Systems and TetraPak

Cardiovascular disease is followed byy weight, then cancer. Healthy aging was a leading health concern of 19% of consumers. The good news, again, is that scientists are aggressively exploring food components and ingredients that address these concerns, with a growing number of suppliers offering dairy processors ingredient solutions for innovative product development. The accompanying chart (page 78) lists functional food components or ingredients that apply to dairy foods. The data come from the IFIC study and indicate the number of consumers surveyed who are aware that a specific food component or ingredient has an associated health benefit. Aware consumers further indicated if they are already consuming this component or ingredient for this benefit or if they plan to within the upcoming year. With this knowledge, ingredient suppliers and dairy processors can work together to offer consumers more of what they are looking for. 76

Dairy Foods | November 2011

Looking at the data, it should not be surprising tthat consumers are most aware of the calcium and vvitamin D connections to bone health and reduced rrisk of osteoporosis. After all, these benefits have been consistently communicated to consumers through numerous channels for many years. The IFIC study shows that 92% of Americans know the calcium connection, while 90% also know the vitamin D connection. When those aware of these benefits were asked if they already consume foods with calcium, 58% said yes, and 37% plan to do so in the next year. For vitamin D, these figures are 55% and 41%, respectively. It’s no wonder that many processors are adding vitamin D to dairy products beyond the required fluid milk, as well as boosting calcium contents. The next best-known functional food relationships involve protein. Specifically, 87% of consumers surveyed understand that protein, in general, supports overall health and well-being, while 86% are aware of the weight management connection. More than half of those aware of these connections say they are already eating the protein they need to reap these benefits, while almost all of the remaining consumers plan to increase their intake within the year. Continued on page 78

Learn more about the what, where and how of PUREFRUIT™ and its appeal with consumers! Download the insight report, “The PUREFRUIT™ Revolution” and visit www.purefruit.com. Tate & Lyle is a leading provider of high-quality sweeteners, texturants, wellness ingredients and innovative solutions for the food and beverage industry. Our passion for food shines through in everything we do, and we are dedicated to helping our customers create cost-effective, better-tasting, healthier and highly successful foods and drinks.

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State of the Industry INGREDIENTS Awareness of Nutrient/Ingredient and Health Benefit (Data is based on a web survey of 1,000 adults conducted during Spring 2011.) Percent Aware of Relationship

Percent of Aware Adults Already Consuming

Percent of Aware Adults Planning to Consume Within the Year

Calcium, for the promotion of bone health and reduced risk of osteoporosis

92

58

37

Vitamin D, for the promotion of bone health and reduced risk of osteoporosis

90

55

41

Protein, to support overall health and well-being

87

57

37

Protein, for weight management and to provide a feeling of fullness

86

56

38

B vitamins, to support overall health and well-being

86

49

44

Omega-3 fatty acids, for reduced risk of heart disease

85

48

44

Antioxidants, for protection against free radical damage

84

57

39

Fiber, for weight management and to provide a feeling of fullness

84

60

36

Probiotics, for a healthy digestive system

81

43

45

Fiber, for a healthy digestive system

79

60

37

Potassium, for reduced risk of high blood pressure and stroke

78

45

47

Omega-3 fatty acids, for cognitive development, especially in children

73

45

39

Prebiotic fiber, for a healthy digestive system

72

37

54

Folate/Folic acid, for reduced risk of heart disease

68

37

52

Soy protein, for reduced risk of heart disease

64

28

47

Lutein and zeaxanthin, for maintaining eye health

57

34

52

Flavanols, for helping to support blood flow/circulation

51

44

50

Plant sterols, for reduced risk of heart disease

50

40

51

Fiber, for reduced risk of heart disease

43

62

34

Fiber, for reduced risk of cancer

39

61

36

36

62

34

Nutrient/Ingredient and Benefit

Fiber, for promoting healthy blood sugar levels

Source: 2011 Functional Foods/Foods for Health Consumer Trending Survey, International Food Information Council (IFIC)

What’s surprising with this data is how omega-3 fatty acids, specifically docosahexaenoic acid (DHA), trump fiber and its many functional benefits. It’s no wonder that omega-3s were the buzzword at the International Dairy Show in September. One supplier suggested that as the scientific community learns more about the benefits of DHA and reduced risk of heart disease, as well as DHA’s positive impact on cognitive function and other emerging health benefits, it would make sense to require all fluid milk to be fortified with DHA, along with vitamins A and D. And Emily Alfano, director of marketing and new product development at Future Food Brands, Carrollton, Texas, says, “Consumer interest in omega-3 fatty acids continues to grow and is definitely a driver for product development at our company.” Indeed, most dairy foods are a natural fit for the addition of omega3 fatty acids, as their relatively short, refrigerated shelf life complements the stability of many of the omega-3 ingredients in the market. Dairy processors are well poised to give consumers what they want. According to the IFIC survey, 85% of adults indicated that they are aware of the omega-3 and reduced risk of heart disease connection. And 73% know omega-3s have a positive influence on cognitive development, especially in children. When asked if they are consuming omega-3s for these various benefits, less than half currently are, and almost an equal amount plan to in the next 12 months.

Of all nutrients, fiber has the most associated health benefits. The No. 1 connection is fiber’s role in feeling full, with 85% of adults surveyed recognizing this benefit. Seventy-nine percent understand fiber’s role in digestive health. Less known, but not any less important, or less of an opportunity for marketers, is the connection between fiber and heart health, cancer and blood sugar levels. The really impressive fact is that of those consumers aware of the benefits of consuming fiber, 60% or more are already getting fiber in their diet, and almost everyone else plans to get more fiber in their diet during the next year. Again, here is one of those great need-want opportunities for dairy processors. You can help consumers get more of the nutrients they want by adding functional ingredients such as fiber to product formulations. Moving onto probiotics, it is notable that so many consumers claim to be aware of the connection between probiotics and digestive health — 81% of those surveyed. However, there must be some disconnect because not even half of the consumers who say they are aware of the connection between probiotics and a healthy digestive system say they are already consuming Photo courtesy of Danisco

78

Dairy Foods | November 2011

INGREDIENTS State of the Industry Photo courtesy of TIC Gums

Ingredients Driving Flavored Milk Formulations It seems that everybody has an opinion on the ingredients that go into flavored milk, in particular the chocolate milk served at elementary schools. And as a result, chocolate milk processors are exploring all types of innovative ingredient solutions to either improve the nutritional profile of this beloved school beverage or to reduce production costs, or both. A new video sheds light on the continuing controversy over chocolate milk in schools. Entitled “Chocolate Milk in Schools: Ban-worthy or Necessary Nutrition,” cardiologist James Rippe, founder and director of the Rippe Lifestyle Institute and Professor of Biomedical Sciences at the University of Central Florida, Orlando, shares his point of view about the potentially detrimental impact of removing chocolate or other flavored milk from school cafeterias. He explains that while there are no studies linking chocolate milk to childhood obesity, some studies show that removing chocolate milk from schools has resulted in a 35% decrease in milk consumption, correlating to a 35% decrease in calcium and vitamin D. He also addresses controversies surrounding high-fructose corn syrup (HFCS), explaining that it is a widely misunderstood ingredient. Approximately half fructose and half glucose, HFCS

such products. The good news is there is interest in doing so, presenting yet another opportunity for dairy processors. What’s important is that the product includes legitimate probiotic cultures in order to not challenge consumer confidence. This can be accomplished by using live microorganisms in quantities that have been clinically proven to have a specific health benefit. The studies should be performed in humans and published in peer-reviewed, reputable journals. Cost optimization Moving onto cutting costs, the dairy industry has long been known as one for low profit margins. Thus, ingredients that can help maintain product quality while saving money have become increasingly popular during the past few years and will continue to influence product development in the near future. One of the product categories that ingredient suppliers have been working with is cottage cheese, as many believe that consumer interest in high-protein dairy foods will bring new users to this category and turn it around after years of decline. A new cottage cheese stabilizer challenges the typical 45-55% dressing-to-curd ratio and allows manufacturers to reverse this ratio to 55% dressing and 45% curd without sacrificing product integrity or changing the production process. The net result of this new ingredient technology can help processors save millions of dollars every year, depending on their annual production output.

is a sugar made from corn and is nutritionally and metabolically equivalent to table sugar. They have the same number of calories and the human body handles them the same way. He says that replacing HFCS with sugar makes no nutritional difference. The video can be viewed at: http:// tinyurl.com/3npafel. In addition to pursuing sweetener reductions and alternatives, some chocolate milk processors are trying to create low-fat, yet premium products that appeal to adult consumers. This is proving to be possible through careful manipulation of texturants. Chocolate milk requires a stabilizer to suspend the cocoa particles, with carrageenan having historically been the texturant of choice. The drawback is that the chocolate flavor clears from the palate very quickly. By slightly changing the stabilization system to include a blend of texturants, 2% chocolate milk becomes more indulgent without extra fat calories. The rich mouthfeel with enhanced mouth-coating properties appeals to adults who prefer a more decadent chocolate milk beverage. And of course, such a product can be an effective carrier for all types of health and wellness ingredients, further adding value and attracting more consumers. 

It is also now possible to have a faster vat turnover when making cottage cheese when a new phage-resistant culture is used that also provides for a faster, more consistent set time. This combination of attributes can increase curd yield, which translates to improved profits. With gelatin costs continuing to climb (they have nearly doubled in the past year), many yogurt makers are looking for a cost-effective alternative that produces a product with the same smooth, creamy, melt-in-your mouth experience that gelatin provides. This is proving to be possible through a texturant based on a unique combination of pectin and starch. Texturants can also be used to mimic milkfat in some applications. The net result not only reduces costs by replacing milkfat with less expensive ingredients, but there’s also an improvement in nutrition profile, as fat and calorie contents get lowered. Finally, for those processors not in the Greek yogurt business, texturant suppliers offer solutions that yield a thicker, denser yogurt without having to invest in traditional straining equipment. This is possible by benchmarking the targeted texture, characterizing the sensory attributes and blending texturants until a prototype is produced with a similar mapping of attributes such as oral viscosity, mouthcoating, melt and degree of gel. In conclusion, dairy foods formulators can expect to see more ingredient solutions that impact the value of dairy products, in terms of profitability and nutrition profile. It’s imperative that processors work closely with their suppliers and be specific about the objectives.  See page 88 for more information about some of the ingredients referred to in this article. www.dairyfoods.com

79

State of the Industry GLOBAL REPORT

Sponsored by:

Calm Within A Storm Processors find that smoother sailing on the export seas depends on managing global price volatility.  Alan Levitt Contributing Writer

alk of an emerging global price for milk, debate over whether dairy market liquidity is good or bad, consideration of Federal Milk Marketing Order reform in the next Farm Bill and concerns over another global recession — could there be any more factors at play for U.S. dairy processors when attempting to get a handle on the global market? How about the increasingly volatile weather, the on-again/ off-again global economy and the long-term effects of growing demand in emerging markets, for everything from infant formula to cheese-laden pizzas? As dairy processors and manufacturers manage in this complex, global environment, all signs point to increased volatility of dairy markets. In fact, managing price volatility has the potential to be such a game-changer that it was identified as one of the seven priority programs in the “Globalization Report” prepared by Bain & Co. and commissioned by the Innovation Center for U.S. Dairy.

T

Customers confounded by the U.S. market It’s not always easy being an international player based in the United States. The weekly and monthly contracting at the CME and the cumbersome classified pricing system are head-scratchers to global buyers who are used to 3-, 6- and 9-month contracts. “Export customers are often confounded and frustrated by the complexity of the U.S. system,” says Kevin Vogt, vice president, Hilmar Ingredients, Hilmar, Calif. “Our export customers face the same challenges that our domestic customers face with developing new products that use dairy ingredients. They are concerned that the long development timeline, the volatility of ingredient prices and the uncertainty of future supply could hamper the commercial launch of value-added products.” And while offering a NASS-plus price helps to ensure export customers get a competitive deal and processors still can make their margins, it’s nearly impossible to explain. “When trading internationally, it’s harder to feel good about our ability to set a price point,” says Ken Meyers, president and CEO, MCT Dairies, Millburn, N.J. “I can’t go out and say ‘this is my price’ vs. New Zealand’s price. The U.S. pricing mechanism is archaic and it is an impediment to trade. It forces us to assume a lot of risk.”

“In my opinion, the biggest constraint to the increased use of risk management tools is the regulated pricing systems in the United States,” says Mike McCully, director of dairy procurement, Kraft Foods Inc., Northfield, Ill. Volatility is a headache and an opportunity The entire commodity complex has devoted significant brain power dissecting the causes of increasing market volatility. But most agree that understanding why volatility exists is secondary to having a plan in place that addresses the fact that it does exist. That’s true whether you sell your product domestically, globally or both. And volatility doesn’t appear to be going away, even as emerging trading indices like GlobalDairyTrade (GDT) and futures markets in New Zealand and Europe gain steam. “The interesting part is there seems to be more transparency than ever due to globalization influenced by the Internet, GDT and mandatory reporting,” Meyers notes. “We’re starting to receive more information, but piecing it all together to create a credible demand situation is not so easy. The better the information, the better we can all manage risk.” And from the dairy producer standpoint, the lessons of 2009 made demystifying risk management tools jump to the top of their to-do list. “The risk is squarely on the dairy farmer,” says Marc Beck, senior vice president, market development, U.S. Dairy Export Council, Arlington, Va. “We saw that in 2009. They paid that bill; they paid it here as well as globally. I don’t think we want to ask

Exporters Are Talking About: • Managing price volatility • The complex, regulated pricing system of the Untied States • Keeping dairy producers in business • High prices for dairy products Continued on page 82

80

Dairy Foods | November 2011

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State of the Industry GLOBAL REPORT

Source: USDA’s Dairy Market News. (Cheddar, butter, SMP and WMP prices are from Oceania; whey is from the European Union.)

them to pay it again. We need to concern ourselves first and foremost that dairy producers can stay in business. We should really think strategically about how we’re going to maintain this production domestically. One way to do that is to make sure that our markets help us maintain our business.” “I think we’re at the tip of the iceberg when we’re going to have an explosion of risk management tools by dairy farmers,” says Ed Gallagher, president of Dairy Risk Management Services, a division of Dairy Farmers of America (DFA), Kansas City, Mo., and vice president of economics and risk management, Dairylea Cooperative Inc., Syracuse, N.Y. “Some are doing it on their own, while others are coming kicking and screaming because their lenders are making them, but there’s record use of futures among DFA and Dairylea farmers this year.” The numbers bear this out: use of dairy futures and options at the CME Group has expanded dramatically in 2011. At the end of the third quarter, open interest on all dairy futures and options was 146,107 contracts, up 91% from a year earlier. Open interest on Class III milk options more than doubled, Class IV futures contracts spiked this year and take-up of cheese futures is so great, it became the second-most-active dairy futures contract just 15 months after it launched. Gallagher notes he’s not sure risk management tools are being adopted at the same rate by processors. “We have members that want to go out multiple years,” he says, but cooperatives often have trouble finding willing partners on the end-user side. “I think there are a lot of end-users out there who are still living in the mid-2000s. I’m hoping they’ll step up and embrace these things like they’re doing on the farm side.” A higher price floor? Going forward, strong global markets in 2011 point to a higher price band for dairy products. In the first three quarters of the year, world commodity reference prices were roughly 20% higher 82

Dairy Foods | November 2011

than the five-year average for milk powder and cheese, 33% higher for whey and 60% higher for butter. “We seem to be at a point where the ‘floor’ value of dairy products is just not, on a long-term basis, as low as it has been historically,” says Sara Dorland, managing partner, Ceres Dairy Risk Management LLC, Seattle. “The shock value of the commodity prices has worn off and consumers are not necessarily changing their purchasing patterns due to $1.30 to $1.40 non-fat dry milk values found in their end products — as may have been the case in 2007 or 2008.” As for whether the recent high prices for dairy products are sustainable, Meyers reminds his clients that what was once difficult to imagine can become routine in a flash. “We have now gone through that $2 cheese price point on several occasions. Every time you break through a price point, you go through a pattern: First time you cry, second time you wonder and the third time you expect it. Markets have a way of testing price points and elasticity points,” he notes. “Absent another cataclysmic event (like the complete economic breakdown of 2008-09), we have to realize that we moved that platform up,” Meyers concludes. “We are going to see a higher average price. It’s not going to be over $2 for cheese on a daily basis, but it could be $1.55 or $1.65.” Either way, the need for viable risk management tools will only intensify. The good news is that U.S. suppliers have about a 10-year head-start in using risk management tools. The bad news is that suppliers from elsewhere are cutting the learning curve quickly. In an expanding, interconnected global dairy market, the stakes are high. For those who understand and contract for the price ups and downs, it can be a genuine competitive advantage.  Alan Levitt is president of Levitt Communications, a Crystal Lake, Ill.-based firm specializing in market analysis and marketing communications for the dairy industry.

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Chief Executive Officer American Dairy Products Institute (ADPI) is seeking a highly motivated and proven industry leader to serve as Chief Executive Officer. The Chief Executive Officer is responsible for guiding staff and furthering ADPI’s mission. This position has a critical role in the success of association programs and the successful candidate must be able to foster effective relationships with the association’s leadership, committees, employees, membership, government agencies and other industry organizations. This position is responsible for the overall administration and operation of corporate headquarters and field activities. Functional area responsibilities include budgetary development and reporting, program development and execution, IMS, technical and membership services, internal and external communications, national and international industry representation; with accountability for results. In addition, the CEO is responsible for directing and supervising internal professionals and support staff. The position reports to the Board of Directors. Success in this role requires dairy industry executive management experience and education commensurate with job responsibilities, working knowledge of the dairy industry, and a strong track record for managing Versed Microsoftbudgets, demanding projects and people. knowledge of federal government and state regulatory agencies is a must. Marketing background is considered beneficial. ADPI offers a competitive compensation and benefits package. Qualified candidates are invited to confidentially submit their resume, salary history and references to: [email protected] American Dairy Products Institute (ADPI) is the leading association for manufactured dairy products and strives to effectively promote and communicate the many positive attributes and benefits of member products, both nationally and internationally. We serve our membership by offering the most current dairy industry information and by collaborating with dairy associations to represent members’ interests before state and federal regulatory agencies. We are a visible voice of the industry, contributing to the growth of processed dairy products and the continued success of our members.

116 N. York Street, Suite 200 Elmhurst, IL 60126 www.adpi.org

www.dairyfoods.com

85

EQUIPMENT FOR SALE

PRODUCT SAVER The Unpackager.... Reclaiming Machines.... “Serving the Dairy, Beverage & Food Industries for over 78 years.” STORAGE TANKS (1) 25,000 GALLON WALKER SILO (1) 50,000 GALLON MUELLER SILO (1) 40,000 GALLON CREPACO SILO (1) 40,000 GALLON DCI SILO (2) 3,000 GALLON DCI ROUND HORIZONTAL TANKS (2) 6,000 GALLON WALKER ROUND HORIZONTAL LARGE STOCK OF 1000 - 10,000 GALLON HORIZONTAL STORAGE TANKS STAINLESS INTERIOR

HOMOGENIZER SERVICE FIELD SERVICE FOR APV GAULIN MACHINES 24/7

Product Saver technology differentiates our system from all the rest. Our high throughput design will process products quickly and efficiently. Compacted containers are product-free. Reclaims products from off-spec packaging. Will process free-flowing liquids and viscous products. Powder reclaim systems available as well. Free product testing and demos.

HOMOGENIZER GAULIN G132 1.5TPN, 10,000 GPH @ 1500 PSI W/MICRO GAP 1999 TETRA ALEX 20 770 GPH @ 5800 PSI TETRA ALEX 30 5970 GPH @2350 PSI GAULIN MC18-5TBS - 1190 GPH @ 5000 PSI GAULIN MS18-8TBS - 590GPH @ 8000 PSI GAULIN K24-3BS 2000 GPH @ 3000 PSI CIP SYSTEMS HOT WATER SETS UNILOY MODEL 350 BLOWMOLD SYSTEM GARDNER DENVER 125 HP AIR COMPRESSOR MODEL 36 CHERRY BURRELL DEAERATOR

Processing Tanks (6) 8,000 GALLON VERTICAL PROCESSORS

262-835-2390 E-mail: [email protected]

sprinkman.com

ANDERSON ICE CREAM FILLER PARTS OVERHAUL TECH SUPPORT FOR ANDERSON & WCB FILLERS 56OZ 456N 456-1 555-4 588 64OZ CLUTCH REBUILDING SERVICE OVER 25 YEARS EXPERIENCE

STOMBERG PACKAGING 6396 Myrtle Lane Rockford, IL 61108 CALL 815-226-0843 FAX 815-229-8430

SERVICES

X-RAY INSPECTION SAVE YOUR PRODUCT AND YOUR GOOD NAME HACCP Compatible solution for detecting foreign particles in your product.

• Metal • Stone • Glass • Plastic • Bone • Rubber

FAST RESPONSE FREE TESTING

Call CXR COMPANY • Warsaw, IN 800-817-5763 • fax 574-269-7140 www.cxrcompany.com

86

Dairy Foods | November 2011

Product Saver 40A Stonehill Road, Oswego, IL 60543 • T: 800-547-9370 • F: 630-554-7805 E-Mail: [email protected] • www.productsaver.com

EQUIPMENT FOR SALE

ICE CREAM DOLLY “The Original Ice Cream Dolly” els New Mod in Available e! id Tall and W

NEW & USED CARTS 80 G A L B O S S Y S 120 G A L B O S S Y S WHEEL CARTS • 4 WHEEL CARTS FOLD-UP CARTS Z I N C P L AT E D • S TA I N L E S S S T E E L FOLDING • RIGID

• Many Models Available • All Models Foldable • Lightweight / Heavy Duty

A&E Aluminum Products, LLC (800) 444-8969 • (410) 620-3915 Fax: (410) 620-3917 www.Aluminumcarts.com Contact: Pat Brown All major credit Cards Accepted

SQUEEZE YOUR WASTE INTO PROFITS!

THE PYTHON SEPARATOR It opens, empties, and compacts containers of dairy products and juices.

www.pythonseparator.com CALL today for a competitive quote!

McClaren Machine and Tool, LLC 202-17th St., Brodhead, WI 53520 P: 608.897.4017 • F: 608.897.2958

MILK BOSSYS

FOLD-UP CARTS

3 WHEEL CARTS

Great Lakes Separators Now Available: Reconditioned ALFA-LAVAL and WESTFALIA Separators Consultants: Dick Lambert, Rick Veneer and Bill Gooderham

Many Different Used and New Items Available Call or Write for Free Catalog!!

LOWEST PRICES EVER Cart - Mart

A Division of Matco P.O. Box 686 • Itasca, IL 60143

Call Dave Lambert (920)863-3306

A DVERTI S E H ER E dfx0311class-CartMart.indd 1

2 4 8 -78 6 -16 9 2

3/7/11 10:17 AM

www.dairyfoods.com

87

EQUIPMENT FOR SALE

Ser v ing Wit h

EMPLOYMENT

Pride Since 1

94 6

More Information about Dairy Ingredients “Innovative Ingredients for a Complex Market” (beginning on page 74) refers to a number of ingredients used in dairy foods. Contact the following suppliers for details: • DSM Nutritional Products, for the prototype milk beverages described in “Milk Can Deliver Healthful Ingredients,” on page 76. www.dsm.com • TIC Gums, for the stabilizer that is an alternative to carrageen for use in chocolate milk, described in “Ingredients Driving Flavored Milk Formulations,” on page 79. www.ticgums.com. • Danisco USA, for the cottage cheese stabilizer described on page 79. www.danisco.com • Cargill Inc., for the phage-resistant cottage cheese culture and the texturant that substitutes for gelatin described on page 79. www.cargill.com • National Starch Food Innovation, for the texturant to make Greek yogurt without straining equipment described on page 79. www.foodinnovation.com/texicon

Statement of Ownership, Management, and Circulation (Requester Publications Only) Publication Detail 1 Publication Name 1 Publication Number 2 ISSN 3 Filing Date 4 Issue Frequency 5 Number of Issues Published Annually 6 Annual Subscription Price 7 Complete Mailing Address of Known Office of Publication 7 7 Contact Person 7 Telephone 8 Complete Mailing Address of Headquarter or General Business Office of Publisher 8 9 Publisher (Name and complete mailing address) 9 9 9 Editor (Name and complete mailing address) 9 9 9 Managing Editor (Name and complete mailing address) 9 9 Owner 10 10 10 10 10

Full Name BNP MEDIA II, LLC TAGGART E HENDERSON HARPER T HENDERSON MITCHELL L HENDERSON

Complete Mailing Address 2401 W BIG BEAVER RD STE 700, TROY, MI 48084-3333 2401 W BIG BEAVER RD STE 700, TROY, MI 48084-3333 2401 W BIG BEAVER RD STE 700, TROY, MI 48084-3333 2401 W BIG BEAVER RD STE 700, TROY, MI 48084-3333

Known Bondholders, Mortgagees, Other Security Holders 11 Line

Full Name

Complete Mailing Address

13 14

DAIRY FOODS 09/01/2011

15 15a

Line 1 2 3 4

Publication Title Issue Date for Circulation Data Below

15b3 15b4 15c

Requested Copies Distributed by Other Mail Classes Through the USPS (e.g. First-Class Mail) Total Paid and/or Requested Circulation

15d1

Outside County Nonrequested Copies stated on PS Form 3541 (include Sample copies, Requests Over 3 years old, Requests induced by a Premium, Bulk Sales and Requests including Association Requests, Names obtained from Business Directories, Lists, and other sources)

15b2

14064

13513

0

0

111

134

15 14190

18 13665

5184

5866

0

0

15d4 15e 15f 15g 15h 15i 16

Publication of Statement of Ownership

Publication of this statement will be printed in the NOVEMBER, 2011 issue of this publication

17 17 17

Signature and Title of Editor, Publisher, Business Manager, or Owner Title Date

RONA2C (Catherine Ronan)

Version

PS Form 3526, September 2007

15d3

Dairy Foods | November 2011

09/28/2011 01:07:08 PM

EXCEEDING EXPECTATIONS AS YOUR SEARCH PARTNER Our mission is to earn the privilege of becoming our client’s exclusive recruitment resource for key search activity. We do this by LISTENING to our clients needs to develop an understanding of the ideal candidate. We FOLLOW-UP throughout the entire recruitment process with conscientiousness and a respectful sense of urgency. We reliably DELIVER freshly recruited, qualified and interested candidates to fill our client’s positions. Our pursuit of excellence and our dedication to the Food Processing Industry, has earned our firm a reputation we are proud to have, and one that you can trust. To learn how your business can benefit from our extensive industry knowledge and experience, contact us today.

Phone / Fax: 866-898-9911

In-County Nonrequested Copies stated on PS Form 3541 (include Sample copies, Requests Over 3 years old, Requests induced by a Premium, Bulk Sales and Requests including Association Requests, Names obtained from Business Directories, Lists, and other sources) Nonrequested Copies Distributed Through the USPS by Other Classes of Mail (e.g. First-Class Mail, Nonrequestor Copies mailed in excess of 10% Limit mailed at Standard Mail or Package Services Rates) Nonrequested Copies Distributed Outside the Mail (include Pickup Stands, Trade Shows, Showrooms and Other Sources) Total Nonrequested Distribution Total Distribution Copies not Distributed Total Percent Paid and/or Requested Circulation

15d2

SPECIALIZED EXECUTIVE SEARCH

HENSON PARTNERS, INC.

No. Copies of Single Issue Average No. Copies Each Issue Published Nearest to Filing Date During Preceding 12 Months 19887 20019

Extend and Nature of Circulation Total Number of Copies (net press run) Outside County Paid/Requested Mail Subscriptions stated on PS Form 3541. (Include direct written request from recipient, telemarketing and Internet requests from recipient, paid subscriptions including nominal rate subscriptions, employer requests, advertiser's proof copies, and exchange copies.) In-County Paid/Requested Mail Subscriptions stated on PS Form 3541. (Include direct written request from recipient, telemarketing and Internet requests from recipient, paid subscriptions including nominal rate subscriptions, employer requests, advertiser's proof copies, and exchange copies.) Sales through Dealers and Carriers, Street Vendors, Counter Sales, and Other Paid or Requested Distribution Outside USPS

15b1

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DAIRY FOODS 446-850 0888-0050 09/28/2011 MONTHLY 12 178.00 2401 W BIG BEAVER RD STE 700 TROY, OAKLAND, MI 48084-3333 CATHERINE RONAN (248) 244-8259 2401 W BIG BEAVER RD STE 700 TROY, MI 48084-3333 THOMAS S IMBORDINO 155 N PFINGSTEN RD STE 205 DEERFIELD, IL 60015-5293 JIM CARPER 155 N PFINGSTEN RD STE 205 DEERFIELD, IL 60015-5293 MARINA MAYER 155 N PFINGSTEN RD STE 205 DEERFIELD, IL 60015-5293

HENSON PARTNERS, INC.

1

1

171 5356 19546 341 19887 72.6

281 6148 19813 206 20019 68.97

Web: http://www.hensonpartners.com

Ad Index

Company Name

Page No.

Company Name

Page No.

Company Name

Page No.

ADI Systems Inc. ..............................................21

GEA Niro Soavi NA..........................................59

Robertet Flavors, Inc. .....................................65

Advanced Instruments .........................16, 58

GEA Process Engineering, Inc. ..............IFC

Rocket Products, Inc. .....................................69

Amelia Bay, Inc. ................................................. 71

GEA Tuchenhagen North America .......81

S&D Coffee .......................................................... 67

Anderson Instrument Company Inc.........8

Gertrude Hawk Ingredients ..........................7

Shibuya Hoppmann .......................................18

BASF ...................................................................... 73

Hydrite Chemical Company ......................26

Bentley Instruments.......................................20

International Dairy Foods Association....... 57

Blommer Chocolate Company ................49

iTi Tropicals .................................................. 12, 22

Blue Print Automation...................................48

KRONES ...............................................................23

California Custom Fruits & Flavors........ 47

Matsutani ADM ..........................................14, 15

Chr. Hansen, Inc. ............................................... 75

MilkPEP .................................................................31

Danisco USA Inc....................................... 53, 61

Mintel International .........................................89

David Michael & Co. ........................................45

Nelson-Jameson, Inc......................................20

Delkor Systems, Inc. .....................................BC

Neogen......................................................................3

DSM Nutritional Products, Inc. .................29

Richmond Baking ............................................43

Fristam Pumps, Inc. ...........................................4

Robert Reiser & Co. ........................................35

SPX Flow Technology Segment........... IBC Star Kay White Inc............................................51 Sudmo North America, Inc. ...........................9 T.D. Sawvel Co. Inc. ............................................6 Tate & Lyle.............................................. 17, 19, 77 *Tetra Pak Hoyer .....................................10 a-b* TIC Gums..............................................................55 Tindall Packaging, Inc....................................83 Urschel Laboratories, Inc. ........................... 37 U.S. Highbush Blueberry Council ..........56 Weber Scientific ................................................13 *Indicates Regional Advertising

ACCELERATE YOUR

INNOVATION Mintel provides the most relevant, reliable & current market intelligence available. Flavor, ingredient & preparation trends Nationwide restaurant menu tracking Global new product monitoring & analysis

www.dairyfoods.com

89

Inside Perspective

Opportunity – A New Way of Looking at Our Industry t’s hard to be optimistic with so many fundamentals in disarray — millions are out of work, the stock market gyrates daily and our President and Congress seem incapable of reaching agreement on ways to change our course or to even send a message that stability and hope lie ahead. In the dairy industry, we see great market opportunity but grapple with how to get out of the policies of the past that hold us back. Whether it’s the economy, jobs or dairy policy, we need leaders who will follow strong principles to get us back on track rather than those who want to simply gain an advantage from the moment. Yes, I realize there are differing points of view in all of these issues, but the fundamentals for dairy are pretty clear. The role for government should be smaller — at best providing a safety net for farmers in dire circumstances and setting the stage for better risk management by farms and businesses. The intrusion of government in dairy pricing and markets must end for us to be successful in capturing and keeping new markets. These fundamentals should be pretty clear to anyone in the dairy industry. We have multiple policies that were intended to guarantee success, but, sadly, we realize that that is a promise government cannot fulfill. Clinging to complicated government systems, such as Federal Milk Marketing Orders, to manipulate winners in the marketplace is a losing proposition. Eliminating federal pricing is not about helping or hurting dairy farmers. It’s about creating a successful market situation for milk and other dairy products, so that all segments of the industry have the opportunity for success. Yes, the opportunity. Neither the federal government nor the industry should design policies or systems that guarantee the success of some, but we need to remove the policies that are impediments to the opportunity for success for all. This is how I see our best opportunity for a bright dairy future. Indeed, it’s a new way of looking at our industry and its relationship with government. Some predict doom and gloom without government interference and involvement in our markets, but for most, it’s more about the comfort of retaining the way we’ve always done things and the fear of what change might bring. And I grant you, analyses of the future based on the facts from a government-dominated past make it hard to know with confidence what that future will look like. But, I believe our industry can thrive and do well unaided by the government.

I

Optimistic about dairy’s future Political jockeying for advantage through government programs is a long-learned and hard-to-break habit, but the entire dairy industry could be so much more effective, innovative and 90

Dairy Foods | November 2011

Connie Tipton

successful by replacing the shackles of government mandates and market interference with creativity, entrepreneurship and competition. And, that’s precisely why I remain optimistic about the future of dairy, even with the uncertainty that pervades the economy and the nation. Our industry has continued to slog through the tough times with unbelievable fortitude and perseverance. Just think what we could accomplish with the right policies in place. The findings of the globalization studies commissioned by the Innovation Center for U.S. Dairy and conducted by Bain & Co. provided a roadmap for success in the U.S. dairy industry. The 2009 report, “The Impact of Globalization on the U.S. Dairy Industry: Threats, Opportunities and Implications” and this year’s companion, “Dairy Globalization Refresh: 2011 Update” show clear promise of welcome relief from the rugged terrain we’ve been navigating lately.

The role for government should be smaller — providing a safety net for farmers and setting the stage for better risk management by farms and businesses. The intrusion of government in dairy pricing and markets must end. The initial research showed and the update reaffirmed that the global demand for dairy products will exceed supply in the near term, and that the United States remains uniquely positioned to become a consistent exporter. Both reports make it clear that the U.S. dairy industry may only grasp that opportunity if dairy policies are streamlined to better fit with global markets and provide incentives for growth and innovation. I am optimistic that the dairy industry can continue to be a strong economic engine for our country. All we need — and look forward to — is the opportunity for success.  Connie Tipton is president and CEO of the International Dairy Foods Association, Washington, D.C. Dairy Foods seeks essays from dairy processors. Send your ideas to [email protected].

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