- Dean Foods is giving up its membership in the International Dairy Foods Association because it said the trade group doesn't share one of the company's key priorities: opposing the labeling of plant-based products with dairy terms.
- "Unfortunately, IDFA has been unable to reach consensus and take a stance on this important issue," the dairy company wrote in an opinion piece for the Wisconsin State Farmer. Instead, Dean said it will use its advocacy resources to pursue "accurate product labeling" to benefit the industry — including farmers, processors and consumers.
- IDFA said in a statement to Feedstuffs that departures are very rare. More than 30 companies became members this year because of the group's "more inclusive association that represents and engages all segments of the growing dairy industry."
The use of dairy terms on plant-based beverages and other dairy-free products has been a thorn in the side for the dairy industry. Dean Foods, the largest milk producer in the U.S., opposes the practice and, like the National Milk Producers Federation, wants action from the U.S. Food and Drug Administration to stop it.
Dairy producers claim plant-based product labeling baffles customers, since the products aren't nutritionally equivalent to dairy-based milk. But those who support labeling plant-based beverages as "milk" have cited free speech rights of food producers.
In recent years, the IDFA may have softened its stance on this contentious issue. IDFA President and CEO Michael Dykes told a 2017 House Agriculture Committee hearing the group was no longer asking the government to intervene in keeping dairy terms off plant-based product labels. The issue should be settled in the marketplace, he said. It has been a difficult issue for members because some sell non-dairy beverages, and almond and soybean growers are being pitted against dairy producers.
The trade group isn't likely to suffer from Dean's exit. It has a long list of other dairy and dairy-related companies on its roster, including major global players Danone North America, Arla Foods, Fonterra and Land O'Lakes. But if other major companies join Dean in taking a stance against the group and leaving the organization, then it could hurt IDFA.
Dean's strong stance could be seen as a publicity stunt to draw attention back to dairy and the labeling issue. To some, its position may look hypocritical since the company owns a majority stake in Good Karma Foods, which sells non-dairy milk and yogurt and labels its products with traditional dairy terms such as "plant-based milk alternative," "dairy free flaxmilk," "plant-based sour cream" and "dairy free yogurt."
The company has been going through a rough time as the dairy industry struggles with changing consumer trends and the emergence of plant-based alternatives. Dean's stock has plummeted and it has canceled milk contracts, closed processing facilities, changed CEOs, cut costs and even considered a sale in the recent past.
This isn't the first time the dairy giant has left a trade group. In 2017, the company dropped its membership in the Grocery Manufacturers Association. While Dean didn't give specific reasons for doing so, other than a desire to "prioritize and allocate our limited time and resources elsewhere," it was one of several large CPG firms — including Nestlé, Campbell Soup, Mars and Cargill — that left around that time.
Of course, given the company's lackluster earnings as of late, leaving these trade groups could just be a means to cut corners and save the cost of membership fees.
Although the former FDA commissioner said last year the agency may soon restrict plant-based beverages from using the term "milk" on labels, it is unclear what type of regulation will come and when. The FDA asked for public comment on the issue, and more than three-quarters (76%) of them favor allowing plant-based products to continue using dairy terms, according to an analysis.
Regardless of the outcome on the labeling issue, the dairy industry still needs to continue adjusting to changing consumer trends. Dairy milk continues to outsell plant-based beverages despite the latter's growing popularity. The best the dairy industry might be able to do for the time being is sit tight, emphasize the nutritional profile of its products and enhance its sustainability credentials as much as possible to retain a strong customer base.