3 RD BI-ANNUAL SOUTHWEST DAIRY MARKETING SYMPOSIUM
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1 3 RD BI-ANNUAL SOUTHWEST DAIRY MARKETING SYMPOSIUM Activities of the Southwest Dairy Marketing Endowed Chair Oral Capps, Jr. Co-Director, Agribusiness, Food, and Consumer Economics Research Center May 6, 2010
2 Purpose of Southwest Dairy Marketing Chair Develop and enhance research, outreach and education programs related to expanding the demand for dairy products consistent with the Dairy and Tobacco Adjustment Act and the Dairy Promotion and Research Order (CFR, Title 7, Vol. 9, Chapter X)
3 Broad Goals Expanding the demand for dairy products. Health and nutritional impacts on dairy products. Market development and promotion efforts for dairy products.
4 Examine Trends in Fluid Milk Consumption Data from the Beverage Marketing Corporation Project funding from Southwest Dairy Farmers
5 60.00% 50.00% 40.00% 30.00% 20.00% Plain Whole white fat-reduced white fat-free 10.00% 0.00%
6 Share of Milk Consumption by Region (2008) 16.50% 33.30% South 23.80% 26.40% Midwest West Northeast
7 Population vs. Milk Consumption 320,000, ,000, ,000, ,000, ,000, Population Gallons per Capita 220,000, ,000, (P)
8 White Milk vs. Flavored Milk (2008) Flavored 8% White 92%
9 Private Label vs. Branded Private Label Branded White Milk Flavored Milk
10 Advertisement Expenditures for Fluid Milk 160, , , ,000 80,000 60,000 Total value in Thousand Dollars (for Fluid Milk) 40,000 20,
11 U.S. Soymilk Market Retail Sales (millions of dollars) $2,000 $1,800 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $
12 Key Research Questions for Strategic Plan o Where is milk in the beverage picture of US consumers? o What are the driving forces behind the demand for dairy products? o Where do dairy products fit in the food away from home/food service market? o What are the attributes of consumers for new product development within the dairy industry?
13 KEY RESEARCH QUESTION Where is Milk in the Beverage Picture of US Consumers? Carbonated Soft Drinks Fruit Juices and Drinks Powdered Soft Drinks Coffee Iced Tea/Tea Sport Drinks Bottled Water Milk (plain and flavored) Whole Low-Fat Skim
14 KEY RESEARCH QUESTION What are the Driving Forces Behind the Demand for Dairy Products? Develop econometric models to be in position to understand the drivers of demand for dairy products. Potential Drivers: Prices Income Health and nutritional factors Advertising and promotion Region Demographic Groups Outputs: 1. Obtain own-price, cross-price, and income elasticities of demand 2. Make forecasts of consumption of dairy products
15 Completion of Organic Milk vs. Conventional Milk Project Develop profiles of households who consume organic milk Allows for targeting of households who consume organic milk only, conventional milk only, or both organic and conventional milk.
16 Completion of Organic Milk vs. Conventional Milk Project Interest also lies in: Consumer responses to changes in price of organic milk Consumer responses to changes in price of conventional milk Are organic milk and conventional milk substitutes? Cannibalization in the milk category? Analysis based on the use of Nielsen household panel data for over 30,000 households
17 Completion of Yogurt Project Construction of price elasticities for branded yogurt products Look at health and nutrition issues with phytosterol yogurt products versus conventional yogurt products Use of national weekly scanner data to perform this analysis Cannibalization?
18 Work in Progress #1 Assess benefits/costs associated with the fortification of processed cheese with omega- 3 fatty acids Examination of price and income elasticities for various natural and processed cheese products Use of 2006 Nielsen panel data for over 35,000 households.
19 Work in Progress #2 Investigation of own-and cross-price advertising effects (spill-over effects) for fluid milk as well as for an array of other nonalcoholic beverage products Use of monthly time-series data from Nielsen over the period 1998 to Attention centered on the importance of advertising expenditures in affecting the demand for non-alcoholic beverage products, particularly milk.
20 KEY RESEARCH QUESTION What are the attributes of consumers for new product development within the dairy industry? Price-conscious consumers Time-starved consumers Health- and nutrition-conscious consumers Environmentally-conscious consumers
21 THANKS ARE IN ORDER TO THE SOUTHWEST DAIRY FARMERS FOR THE FUNDING OF THE VARIOUS PROJECTS
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