Dairies' Fix for Souring Milk Sales: Genetics and Bananas
2017年8月9日 - 06:59PM
Dow Jones News
By Mike Cherney and Heather Haddon
Dairy makers are hoping puréed fruit and genetically screened
cows can help win back consumers who have soured on milk.
U.S. milk sales are down 11% by volume since 2000, according to
U.S. Department of Agriculture data. Plant-based milk substitutes
have taken some of the remaining market share. And a turn away from
packaged foods has sapped sales of breakfast cereal, a key milk
accompaniment.
Milk companies are fighting back with products they are billing
as an improvement on the original.
"Innovation is the only way out," said Blake Waltrip, chief
executive for the U.S. at A2 Milk Co., a New Zealand-based company
that sells milk that lacks a protein that may cause indigestion for
some.
Big food makers are testing new products, too. Danone SA's Sir
Bananas product combines milk with puréed fruit, which it hopes
will stand out from other flavored-milk drinks and is now available
nationwide. Fairlife LLC, a partnership between Coca-Cola Co. and
Select Milk Producers Inc., is selling "ultra-filtered" milk it
says contains more calcium and protein than regular milk. It is
also offering milkshakes containing antioxidants and prebiotic
fiber, which is intended to aid digestive health.
A2 uses genetic tests on its cows to make sure they will produce
milk that contains only a protein known as A2, not the additional
A1 protein that some research suggests could cause indigestion. The
company has captured more than 8% of the market in Australia, up
from about 3% in 2012, according to Euromonitor International, in
one of the few developed markets where milk sales continue to
grow.
In Australia, where agriculture plays a bigger role in the
economy than the U.S., "milk is still seen as a staple," said Alice
Yu, research analyst at Euromonitor in Sydney. "Everyone has a
bottle of milk in their fridge," she said.
A2 Milk hopes to convince U.S. consumers that its milk can help
them avoid the indigestion many people associate with lactose
intolerance. "Literally within an hour, the consumer knows whether
this solves their issue," Mr. Waltrip said. The company, which
started selling milk in California in 2015, has struck distribution
deals with Whole Foods Market Inc. and Publix Super Markets
Inc.
Competitors and some scientists question A2's claim that milk
without the A1 protein is easier to digest.
In Australia, A2 Milk sued competitor Lion Dairy & Drinks
alleging that the rival's advertising misled customers into
thinking Lion's milk didn't contain the A1 protein. Lion filed a
countersuit challenging claims that milk without the A1 protein is
easier to digest. A2 Milk says scientific studies suggest a
benefit.
A2 Milk will also face competition in the U.S. from
fast-growing, plant-based milk alternatives. The National Milk
Producers Federation and other industry groups are pushing Congress
to bar the makers of those products from marketing them as
milk.
The dairy companies are fighting over a shrinking pool of milk
demand. Milk sales dropped 14% in dollar terms the year through
June from that period in 2013, according to Nielsen figures. That
is one reason farmers are pouring excess milk into their fields and
manure pits. Farmers in parts of the Northeast and Midwest dumped
more than 250 million pounds of milk last year, a recent record,
USDA data shows. They are on pace to dump even more milk this
year.
Dean Foods Co. lowered profit guidance and saw its shares tumble
Tuesday as executives with the U.S.'s largest milk producer
acknowledged their struggles with declining fluid milk sales, and
no end in sight.
"At some point you will see a bottoming in this category, and
I'm not sure when you will predict that," Dean Chief Executive
Ralph Scozzafava told investors. The company earlier this year
launched versions of its TruMoo flavored-milk drinks that it says
are free from genetically modified material.
Nate Donnay, director of Dairy Market Insight at INTL FCStone,
questioned whether A2 and other companies charging a premium for
their enhanced milks can reverse the broader turn away from the
beverage.
"The target market is fairly narrow," he said.
--Jacob Bunge contributed to this article.
Write to Mike Cherney at mike.cherney@wsj.com and Heather Haddon
at heather.haddon@wsj.com
(END) Dow Jones Newswires
August 09, 2017 05:44 ET (09:44 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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