Producers dairy Foods

May 31, 2015
Our Dairy Farmers

Editor's note: Daryl J. Orris is the president and CEO of The Ice Cream Bar Inc. He wrote this opinion in response to the editorial "Can technology save fluid milk?" by Dairy Foods editor-in-chief Jim Carper.

The recent editorial by Jim Carper, Dairy Foods chief editor asked the question: Can technology save fluid milk?

My response to the question is most emphatic: The worst thing that could ever happen to fluid milk is to use aseptic packaging.

Why? Because the dairy industry would lose those great big electronic display cases that now adorn over 10, 000 Class A grocery stores in the United States. And when you add in independents and convenience stores, too, the damage to the industry would be incalculable.

Imagine shelf-stable commodity milk that requires no refrigeration, no lights and no cool-to-the-touch when the consumer picks up her intended purchase. All of that history and consumer conditioning is lost, as would be aseptically packaged milk, lost in the aisles among 10, 000 to 50, 000 other SKUs.

I have lived in Hong Kong and toured throughout China. No fancy electronic refrigerated displays for dairy products there, and not much consumption of fluid milk either. All fluid milk products were shelf-stable, lost within the aisles of the store; some merchandised with the cereal aisle, some in the baking aisle and some on a kiosk. In many cases, they were placed anywhere, including on a back wall. Other dairy products were drowning in spot coolers. Imagine that scenario in the United States.

It reminds me of when the Pillsbury Co. had can stops and merchandising materials that called out its different SKUs for its refrigerated dough products. They expanded it into complex display sets in every American Class A grocery store. Then when private-label and competitive products began to invade the section, Pillsbury complained about foreign products that pirated their shelf space. Eventually retailers figured it out: they had been providing a free display to them for years. The loss was catastrophic for Pillsbury, one that they could not recoup from.

A catastrophe looms large if producers’ turn to aseptic packaging and retailers ultimately end indirectly supporting dairy with their costly dedicated refrigerated case. The loss in fluid milk sales would lower the cost of milk for companies like mine who buy milk. But the loss to the dairy industry as a whole would end small producer fresh milk and favor large factory dairies that would ultimately end, or to a great degree control them, and affect commodity prices as well. The small farm dairy producers and local dairies would be the victims of this debacle.

It will be a sad day when aseptic packaging becomes the norm for fluid milk. It will forever change the small producer dairy industry and the industry as a whole – not for the better, but for the worse.

I would be remiss if I didn’t state that there is a light at the end of the tunnel: exports. Aseptic packaging makes the exporting of fluid milk a snap. We know that there are huge markets that would want high quality U.S. fluid milk and cream, but the cost is the inevitable loss of U.S. fluid milk sales because of the loss of the refrigerated case. It’s a bird in the hand and the one in the bush scenario. The one in the bush is growing demand for quality U.S. dairy products. The one in the hand is the impact on fluid milk sales with aseptic packaging with retailers rescinding the expense of refrigerated merchandising in favor of the shelf.


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