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Industry level dairy promotion is next step, says DairyCo

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DairyCo found itself in the spotlight in recent months when questions were raised about its effectiveness. So what is the view of DairyCo and why does it spend its money in the way it does? Ben Briggs finds out and speaks to farmers, processors and milk marketing chiefs to gauge their view of the levy board.
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Ask a farmer what they think about DairyCo and you will not get the same answer twice.

 

Some believe the information it provides is vital for the future of their business and the dairy industry as a whole, while others loudly claim they ‘do not need teaching how to suck eggs’.

 

DairyCo budgeted expenditure 2013-14

DairyCo budgeted expenditure 2013-14

What does come to the fore when you speak to farmers and industry leaders is how DairyCo’s £7.9 million budget is spent.

 

Some, most notably Farmers For Action’s David Handley at this year’s Livestock Event, claim more of this cash should be spent on promotion of milk in the UK.

 

But Amanda Ball, head of marketing and communications at DairyCo, said the 4 per cent a year the organisation spends on promotion is something which is not set in stone.

Efficiency

But in a view she shares with DairyCo chairman Tim Bennett, she believes providing farmers with the tools to run their businesses in the most efficient manner possible is an integral part of the work it does

 

Without a properly functioning industry, she argued, you would not have a positive image to start with and therefore promotion of the product would be irrelevant.

 

Mrs Ball said: “Our PR work and promotion is like a pin prick in terms of the work we do.”

 

And this, in essence, is what Mr Handley took the board to task for, both in the pages of Farmers Guardian and with red-faced vitriol toward DairyCo director Duncan Pullar at the Livestock Event.

 

Mr Handley claimed farmers were fed up of paying a 0.06ppl levy to an organisation which produced a raft of facts and figures and shone a light on production figures.

 

He said: “Dairy farmers are born and bred to farm. They know what they are doing.”

 

Calling for Mr Pullar and the DairyCo chairman to be removed, Mr Handley once again whipped up a storm and his calls for DairyCo to do more promotion of liquid milk struck a chord with many grassroots farmers.

 

But Mrs Ball is adamant that to divert any more than the 4 per cent of the budget for promotion would detract from the other work it does, namely research, development, genetics and knowledge transfer (see pie chart).

 

Efficiency with pie chart

The levy board has a £6.9m annual income, but a £7.9m-a-year budget.

 

It has to draw down cash from its reserves to fund its work including its current consumer campaign, Discover Dairy, which is headed by Countryfile presenter and Gloucestershire farmer Adam Henson.

Budgets

When you consider the DairyCo promotional budget amounts to about £316,000 annually for consumer facing work, it is easy to see it is dwarfed by Arla’s £20m-a-year spent on Cravendale promotion and First Milk’s £3m-a-year (see graphic).

 

Mrs Ball said: “We survey our farmers every year and the information we get back and the value attached to our work is really high.

 

“The reality is we cannot be relevant to all 12,500 dairy farmers all of the time and maybe it is time we looked at what we do in detail, but it is about encouraging dialogue with farmers.”

 

Mrs Ball believes the information provided by DairyCo allows farmers to stay up-to-date with trends in the market, both domestic and globally, and informs them about where their business sits in the marketplace.

 

And while acknowledging that the information sent out by DairyCo may sometimes be too long and in depth for ‘busy people’ in farming, she said the need for marketing of milk lies not with DairyCo, but with the industry as a whole.

 

Mrs Ball added: “There is no reason why we cannot change [and spend more money on promotion]. But if we wanted to be more outward facing then it is a trade off between that and the things we already do.

 

“What we need is an industry level strategy which looks at the image of liquid milk collectively, not only at home but abroad as well.”

 

Yet despite Mrs Ball’s assertion of there needing to be an industry level strategy to discuss generic promotion, marketing chiefs claim the immediate need for cash to continue the existing promotion is a far bigger concern.

 

Robin Robb, co-ordination director of the Milk Marketing Forum (MMF), the body behind the succesful Make Mine Milk campaign, said without DairyCo’s financial involvement, the future of milk marketing in the UK was in serious jeopardy.

 

The MMF secured funding of £2.5m a year over three years for the Make Mine Milk campaign and its famous ‘milk moustache’ which was proudly worn by a host of celebrities and sports stars.

 

With funding coming from Arla Foods, Dairy Crest, First Milk, Muller Wiseman and some European bureaucrats, it followed on from a Scottish campaign which was funded on a 50:50 basis by the Scottish Dairy Marketing Company, consisting of the milk processing companies in Scotland and milk producers.

 

The big difference for Make Mine Milk was it did not have the support of DairyCo. And with the campaign officially coming to an end in October 2012, Mr Robb said without cross sector buy-in, the future of the initiative was a serious concern.

 

He said: “The money has run out and there will be no promotion before long. It is hard to get commitment from processors if there is no commitment from producers.

 

“We have been able to get buy-in from the celebrities because milk is seen as a worthwhile product as opposed to soft drinks.”

 

But Mrs Ball stuck to her guns about DairyCo’s involvement and claims it is more important for the levy body to promote the image of dairy farming rather than dairy products. And she was reluctant to say whether DairyCo would put forward funds for that.

 

She added: “Strategically, the industry needs to debate how we fund ongoing promotion of the image of dairy to consumers. This promotion activity should stretch from the farmgate, in terms of the important role dairy farmers undertake. For example, in dairy cow welfare and protecting and enhancing the environment, through to milk and dairy products millions of us enjoy every day.”

 

With processors seemingly behind plans for ongoing promotion, however, and a number of farmers clamouring for the same thing, it appears the debate at DairyCo is not one which will disappear soon.

 

Teenagers

Results from the independent tracking survey conducted by Researchcraft show that perceptions of milk have improved way beyond the +3 per cent to +5 per cent targets set for it.

 

For example, against a teenage audience:

  • Milk is cool – up by 23%
  • Milk is becoming more popular – up by 19%
  • Milk is low in fat – up by 20%

Volume increases

Figures from Kantar highlight volume increases for milk across GB, with year-on-year growth of +1.6 per cent for the 52-week period ending December 2010, +1.3 per cent for the same period in 2011 and a further +0.9 per cent in 2012.

 

This equates to milk volume sales in 2012 being +3.9 per cent higher than in 2009 (the period before the campaign started) – equivalent to incremental volume of 726 million litres.

 

Perspective

How much would each of the 12,500 dairy herds have to give to match the £20m Arla spends on Cravendale?

Answer

£1,600 each per year on top of the existing levy

 

What is your view of DairyCo?

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