The cleaver “branding” of product by it’s processors does not make it a ”better” product. Branding is becoming common practice within the marketplace. Placing a label/brand on a product to play into the wants or more often than not, the fears, of consumers. This has become a common trend that creates further challenges for dairy.
This is a very informative article that I came across in the August 09 issue of Western Dairy Business magazine. It was written by Dave Natzke.
” Publicity surrounding Dean Foods’ launch of a new, mid-priced product category – “natural” dairy – as an alternative to “organic” has created a stir. Based on news accounts, the selected products will be “naturally produced without added growth hormones, artificial colors, flavors or preservatives and no high fructose corn syrup.” According to published summaries of a study by the Shelton Group, consumers are confused about what’s “green,” and don’t know who to trust. More people (31%) trusted labels stating the product was “100% natural” over labels stating the product was “100% organic,” at 14%. The organic industry is up in arms, because the “natural” (organic lite) category will undoubtedly eat into organic markets as confused consumers – told that “conventional” dairy is bad for them by the organic industry – “try to do the right thing” while managing food budgets in a down economy. And, companies going the “organic lite” route gain an economic advantage by purchasing milk produced from cows not supplemented with recombinant bovine somatotropin (rbST) or under the strictest organic standards – at a price close to, if not the same as conventional milk, while gaining the “organic lite/rbST-free” market premium.
How much is that premium?According to the American Farm Bureau Federation’s quarterly Marketbasket Survey, shoppers in 33 states reported paying the following average prices for milk in half-gallon containers in the second quarter of 2009:
• regular: $1.92, down 24¢ from the prior quarter and down 20% compared to the same quarter a year earlier.
•“rbST-free”: $3.18, down 1¢ from the prior quarter and about 5% less than the second quarter of 2008 (65% more than regular milk).
• organic: $3.63, down 8¢ compared to the first quarter, but 1% more than the second quarter of 2008 (90% more than regular).
According to my analysis on the back of a recycled envelope, one half-gallon of milk = about 4.3 lbs. = 23.25 half-gallons per cwt. At second-quarter 2009 retail prices (one-half gallon), regular milk generated $44.64/cwt. The gross income on “rbST-free” milk ($3.18/half-gallon X 23.25) = $73.94/cwt.
DairyBusiness Communications was at the forefront when the whole “rbST-free” labeling debate escalated a couple of years ago, accurately warning dairy producers could lose an approved technology, while gaining none of the economic benefits of “organic lite” premiums. For everybody who jumped on the bandwagon supporting “rbST-free” labels as being about the “consumer’s right to know” and “free speech,” get out your calculator. The retail markup on “rbST-free” milk = $1.26/half-gallon X 23.25 half-gallons/cwt. = $29.30/cwt., of which dairy producers get little, if any. “Free” speech indeed.”
So buyer beware! Milk is Milk! No matter what the label says on the outside of the product, be assured that the inside composition is the same.
None of us should be “feared” into purchasing something at a higher price. You should be informed and make your decision based on truth, not creative profiteers!
Organic and conventional farming are different in rules and certification. We both have standards of safety for consumers and animal welfare. The milk we produce is tested and retested to provide a safe and healthy product.
Whatever you choose to purchase you can be assured that it was produced by a hardworking dairy family that gladly follows the health and safety guidelines set before them. ENJOY!
The nutritional qualities of milk with different labels has been scientifically evaluated. There is no significant difference in milk, whether it comes from farms that were certified organic, from farms that were certified as rBST-free or from farms with conventional management. The URL to the scientific article is http://blogs.das.psu.edu/tetherton/wp-content/uploads/jada-rbst-paper-july-2008.pdf.
This is an important scientific study, that is not widely recognized.
Hope that helps
DairyScienceMark
It’s amazing how the media has so much control and power! Definitely an example of don’t believe everything you read and hear! Love the blog Barbara–let me know if you ever need any pics taken to go with your posts!
While I agree with the premiss that ‘milk is milk’ I also have to agree that branded milk is better than unbranded milk.
Example: No-Name Generic brand or Generic Brand of products (those products with white packaging and green band) of the late 1970′s offered products whose major feature was lowest price.
The introduction of the generic brands immediately opened up new markets for the distributors and stores. They were able to create their own store brands to compete with premium brands. Customers immediately bought into this choice. Based on packaging (and associated marketing/branding), people purchased goods. Looking for great peanut butter? Buy Jiffy. Looking to save some money? Buy the store brand. Coca-Cola or Sam’s Cola? Choice expanded.
Fast forward to today: grocery stores have 10s of thousands of products of all kinds and varieties. We expect this. If there is a new product we make a decision to buy based on the packaging, branding, and positioning within the store. Even stores are branded, setting the expectation that Whole Foods has “better” food than Jewel even though many products in both stores have similar manufactures, taste, and quality.
So even though milk may be just milk, milk with pretty pictures and fancy words will sway some number of consumers to purchase it. Marketing is not just about stating the facts. It is also about making you feel better, faster, stronger. How many of you wanted those Michael Jordan basket ball shoes because (by association) those shoes would make you a better player?
“There’s a sucker born every minute.” (erroneously credited to P. T. Barnum)
In July 2009, the American Journal of Clinical Nutrition published “Nutritional quality of organic foods: a systematic review”, stating:
“Despite growing consumer demand for organically produced foods, information based on a systematic review of their nutritional quality is lacking.”
Many hoped to use this information to help dispel some of the organic rhetoric.
However, it is being discovered that this nutritional fact may not be top of mind for consumers when they purchase. The SupermarketGuru provided a response to nutritional research with a quick poll:
“What does organic mean to you?” found that the number one issue that comes to mind is “no antibiotics” (71%). However, the number two answer was “higher cost” (64%). In a tie for third place, 62% our readers associate “better for the environment”, “hormone free”, “no artificial flavors/colors”, and “no pesticides”. “Better nutrition” only received 29% of the votes, while “always the healthiest option” received 22% of votes. Twenty-six percent chose “better flavor”.
So what is to be learned here? Producers have already brand their products to differentiate themselves from others. You can take a position that says “milk is milk” but there will always be marketers out there to create that uncertainty and people will continue to buy.
Hi John,
I am a huge fan of creative marketing and packaging. Appealing to our consumers is an important and necessary. I have been a huge supporter of changing our gallon milk jugs to be creative and fun. I especially love the new “Go-gurht” tube packaging that freezes then defrost perfectly by lunch.
I am not a fan of “branding” complete untruths to confuse and bring doubt to the consumer. For example, “no antibotics”, dairy farmers are tested and retested for antibiotcs before the milk even leaves the dairy. Dairy farmers do not get paid for their milk if it has antibiotics in it. Milk can not be processed if antibiotics are detected. Placing “no antibiotics” on the label can make consumers believe that other products DO have antibiotics. That is deceptive. Another expample is “no hormones” ALL cows have hormones as do humans! This statement is also using a play of words to build unwarranted fears of our consumers.
Playing on consumers fear and conscience using deceptive, untruths on a product for profit is wrong and should be illegal. Consumers work very hard for their money and should not be subjected to untruths for profit.
Thank you, Barbara
Very interesting discussion. Barbara, you have the perfect response to the absense labeling that challenges us across the nation. We must stop selling fear in food! I have personally found that two of my relatives purchase organic milk for one reason only–they know it’s not safer or more nutritious, and it’s much more expensive. So why do they buy it? They like the longer expiration date that ultra-pasteurization gives them. Obviously these milk drinkers use it on cereal and that’s about it, but that’s why organic works for them. I’ve wondered if that’s a marketing area that conventional milk might pursue. It sure wouldn’t work for us. We drink so much of it and truly enjoy the taste. I don’t like the “cooked” taste of ultra-pasteurized. But expiration date continues to be among the top three reasons folks choose one jug over another.
Thank you for your comment LuAnn. There has been discussion of the availability of “ultra-pasteurized” and offering more of it. It is used through out Europe and other countries through out the world. The US dairy industry has faced that with a bit of resistance. One reason taste. The other, longer shelf might equal less consumption? Though you make a very valid point. The taste of ultra-pasturized is no match to fresh. Those that need an extended shelf life are “cereal” milk drinkers and they should have more availability of affordable products. A very good point that you bring up that I will surely share! Thank you!
Sincerely
Barbara Martin