3 bi-annual southwest dairy marketing …afcerc.tamu.edu/outreach/files/o. capps 2010 dairy...
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3RD BI-ANNUAL SOUTHWEST DAIRY MARKETING SYMPOSIUMActivities of the Southwest Dairy Marketing Endowed Chair
Oral Capps, Jr.Co-Director, Agribusiness, Food, and Consumer Economics Research CenterMay 6, 2010
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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)
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Broad Goals
• Expanding the demand for dairy products.
• Health and nutritional impacts on dairy products.
• Market development and promotion efforts for dairy products.
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Examine Trends in Fluid Milk Consumption
• Data from the Beverage Marketing Corporation
• Project funding from Southwest Dairy Farmers
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0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Plain Wholewhite fat-reducedwhite fat-free
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33.30%
26.40%
23.80%
16.50%
South
Midwest
West
Northeast
Share of Milk Consumption by Region (2008)
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Population vs. Milk Consumption
15.0
17.0
19.0
21.0
23.0
25.0
27.0
200,000,000
220,000,000
240,000,000
260,000,000
280,000,000
300,000,000
320,000,000
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
(P)
Population
Gallons per Capita
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White92%
Flavored8%
White Milk vs. Flavored Milk(2008)
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Private Label vs. Branded
67.10
32.9027.20
72.80
White Milk Flavored Milk
Private Label Branded
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0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
2003 2004 2005 2006 2007 2008
Total value in Thousand Dollars (for Fluid Milk)
Advertisement Expenditures for Fluid Milk
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U.S. Soymilk Market Retail Sales (millions of dollars)
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
$2,000
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
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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?
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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
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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 demand2. Make forecasts of consumption of dairy products
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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.
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• 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
Completion of Organic Milk vs. Conventional Milk Project
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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?
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Work in Progress #1
• Assess benefits/costs associated with the fortification of processed cheese with omega-3 fatty acids
• Examination of price and income elasticitiesfor various natural and processed cheese products
• Use of 2006 Nielsen panel data for over 35,000 households.
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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 non-alcoholic beverage products
• Use of monthly time-series data from Nielsen over the period 1998 to 2003.
• Attention centered on the importance of advertising expenditures in affecting the demand for non-alcoholic beverage products, particularly milk.
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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
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THANKS ARE IN ORDER TO THESOUTHWEST DAIRY FARMERS
FOR THE FUNDING OF THE
VARIOUS PROJECTS