Will the promise of moolah bring consumers back to milk?
- The California Milk Board — the organization behind the iconic “Got milk?” campaign — is back for round two with a new social media financial rewards program called “Moo Money,” intended to get more people drinking dairy milk, according to a press release.
- Their strategy appears to take a cue from coffee shop rewards programs. Dollars spent on dairy milk translate into points in an account. Customers can then convert accumulate points into virtual rewards cards, available to use for a limited time anywhere Mastercard is accepted.
- The campaign is launching at an extremely tenuous time in the dairy industry. Prices have been falling for the past several years running. Alternative milks have drawn customers away from dairy. Farmers, processors, and producers alike are struggling to adapt to the demands of an ever-tougher market.
The past few years have been tough on the dairy industry nationwide. Between tariffs and price pressure from industry consolidation and surplus production, stability in the milk business looks a long way off. According to Nielsen data commissioned by the Plant Based Foods Association, sales of plant-based milks were up 9% in a year last summer, comprising about half the money spent on milk. From 2012 to 2017, Mintel estimated non-dairy milk sales in the U.S. increased 61%.
The paid is spreading to producers in a real way. Last year, Dean Foods closed two processing plants and canceled contracts with more than a hundred producers. The company reported a 12% drop in gross profits and drop in net income of $26.6 million in Q3 2018.
To add fuel to the fire, milk consumption is down as more customers turn to plant-based alternatives, including almond, oat, and soy. The U.S. dairy industry saw growth of just 1% last year –– among the slowest years on record, according to a Rabobank report.
Loyalty and rewards programs among companies and brands are nothing new. Looking at restaurants, Taco Bell has used mobile technology to drive sales and reward customers with free food, which in turn brought new customers into its stores. In retail, 7-Eleven used a Facebook chatbot to sign customers up for its 7Rewards program.
But this rewards-based program for a specific commodity is different. It doesn’t deal with a particular brand, but rather a product category as a whole. More than anything, it’s a sign of the desperate state of the dairy industry. For the program to work, the reward incentive has to outweigh the concerns and considerations pushing people away from dairy milk and toward other products perceived as preferable.
Other efforts to better market milk to consumers have yet to make a major dent. Last summer, the Dairy Farmers of America sought to appeal to customers with Mülü: milk fresh packaged in a sleek bottle evocative of its non-dairy competitors. The significance of a single product is hard to measure, but it looks like it will take a lot more to reverse the downward trends in American milk markets.
British dairy company Arla tried its hand at carbonated, fruit-flavored milk as part of a strategy to increased sales of milk-based drinks. News of the drink made a splash worldwide, but it's not clear if the product was successful.
Slick marketing campaigns and buzzy new products are two common ways to revive a less trendy food product, but financial rewards are quite another. The cost of this program is unclear, as is the potential return on investment. Will consumers keep buying milk when the financial incentive is gone? Only time will tell, but given the California Milk Board's previous marketing success, perhaps this program will do what it takes to begin herding consumers back into the dairy category.