Northeast Dairy Magazine | Q2 2018 by NortheastDairyMag

CONSUMERS WANT NUTRITION, FLAVOR ADVENTURE

FEATURE

Real vs. Dairy Alternatives

Second Quarter 2018

INDUSTRY

A2 Milk On The Move

ECONOMIC OUTLOOK

USDA Revises 2018-19 Forecast

LEGISLATION

FDA To Enforce “Milk” Label?

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EDITIO N

turers and Dis to rs Sin

contents

Second Quarter • Summer 2018 • Volume 1, No. 2

FEATURES DAIRY TRENDS REFLECT FLAVOR ADVENTURE, VALUE, NUTRITION 14

AIRY, DAIRY QUITE CONTRARY D Consumers Eager To Try Something New

Supersnackers Attack!

Taste Is King

PRESIDENT’S MESSAGE Tracking Consumer Trends

lder Consumers Confident O In Food Choicess

Protein, Calcium Critical

Butter Is Back

FROM THE ASSOCIATION 04

BY CAROLINE K. REFF

BY MIKE SUEVER

EXECUTIVE VP MESSAGE New Directions, Marketing, Networking

BY BRUCE KRUPKE

23 Essential Nutrients In Milk

24 Consumers Demand Plant-Based Choices

NORTHEAST DAIRY FOODS

Gen Z Backlash?

WHAT YOU NEED TO KNOW

2 Milk Pushes Into A U.S. Markets

MEET YOUR BOARD Member Profiles

09 LEGISLATION Legislative Action Surrounds NYC Deliveries, Children’s Beverages

BY BRUCE KRUPKE

BY CAROLINE K. REFF

CONOMIC OUTLOOK E USDA Ups 2018-19 Forecast

BY GARY LATTA

www.neastda.org

The Dairy Pride Act

WORKPLACE TOOLS OF THE TRADE 36 Benefits Can

STAY CONNECTED

www.nedairyfoods.org

ill The FDA W Enforce Labeling?

42 Environmental

Retain Employees

Regulations

BY JAN COUTURE

BY DEREK HENDERSON, EIT

Overtime Exemptions

BY EMILY MIDDLEBROOK

OSHA Updates

BY STEPHEN VALENTINE, CIH

44 FSMA: Validation vs. Verification BY KIMBERLY BUKOWSKI

NED Magazine | Second Quarter 2018 • 1

contents

Second Quarter • Summer 2018 • Volume 1, No. 2

NORTHEAST DAIRY FOODS ASSOCIATION, INC.

NORTHEAST DAIRY ASSOCIATION, INC.

427 S. Main St. North Syracuse, N.Y. 13212-2863 315-452-MILK (6455) www.nedairyfoods.org

PRESIDENT

EXECUTIVE VICE PRESIDENT

Ozzie Orsillo Evergreen Packaging Co. VICE PRESIDENT

Bruce W. Krupke

Bill Elliott Northeast Great Dane

EXECUTIVE ASSISTANT

TREASURER

Leanne Ziemba DIRECTOR OF MEMBERSHIP AND COMMUNICATIONS

Alex Walsh PRESIDENT

Melissa Fryer Alfa Laval SECRETARY

Ryan Osterhout KCO Resource Management

Mike Suever HP Hood, LLC TREASURER

Michael P. Young Guida’s Dairy

MARK YOUR CALENDAR 47

2018 Northeast Dairy Convention

hings To Do In T Gettysburg

ASSOCIATION UPDATES 50

Chobani Helps Entrepreneurs

Agreement Furthers Commitment To SE Asia

ot Jobs? Campaign G Shows Economic Impact

USDA Purchases Cheddar For Assistance Programs

Member News

Meet The Team

Advertisers Index

SECRETARY

Daniel R. Lausch Lactalis American Groups, Inc.

NORTHEAST DAIRY MAGAZINE TEAM EXECUTIVE EDITOR

COVER DESIGN

Bruce W. Krupke bk@nedairyfoods.org

Greg Minix CONTRIBUTORS

Bill Brod billbrod@nedairymedia.com

Kimberly Bukowski, Derek Henderson, Emily Middlebrook, Stephen Valentine, Renate Wood

EDITOR

PRODUCED BY

Caroline K. Reff CReff@nedairymedia.com

Northeast Dairy Media

PUBLISHER/DIRECTOR OF SALES

CREATIVE DIRECTOR

Robin Barnes robinb@datakey.org

Editorial correspondence should be directed to editorial@nedairymedia.com Advertising correspondence and materials should be sent to billbrod@nedairymedia.com. POSTMASTER: Send address changes to bk@nedairyfoods.org.

An official magazine of the Northeast Dairy Foods Association, Inc., a nonprofit organization. This publication carries authoritative notices and articles in regard to the activities and interests of the associations. In all other respects, neither the association nor the producer of the publication, Northeast Dairy Media, is responsible for the contents thereof or the opinions of the contributors. The entire contents are © 2018 by Northeast Dairy Media. Nothing may be reproduced in whole or in part without written permission of the publisher. The association and Northeast Dairy Media reserve the right to print portions or all of any correspondence mailed to the editors without liability on its part and no such correspondence will be returned. Visit Northeast Dairy Foods Association online at nedairyfoods.org for current information on association programs and services, or call the association at 315-452-MILK (6455). Questions and comments may also be sent to the association at bk@nedairyfoods.org.

2 • Northeast Dairy Foods Association, Inc.

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WYOMING

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OTSEGO

YATES

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GREENE

ULSTER WARREN

MCKEAN

POTTER

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NEW CASTLE ALLEGANY

NEW YORK

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LYCOMING CLINTON CLARION

LAWRENCE

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Inspiring passion and driving demand for dairy products

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FrontDesk

Tracking Rapidly Changing Consumer Trends Is Vital For Dairy’s Future BY MIKE SUEVER, PRESIDENT, BOARD OF DIRECTORS, NORTHEAST DAIRY FOODS ASSOCIATION, INC.

one region of the U.S. to another. We need to know where ’m pleased to see the focus of this issue is on dairy the Millennials and Gen Zers live and what methods these consumption trends and consumer purchasing patterns. younger shoppers are not only using to buy food but also to What consumers decide to purchase in the markets is have it delivered to their doorsteps. We need to see where the evolving very quickly and is at best a challenge to keep Baby Boomers are, as they refocus their eating habits, too, up with. What is driving the changes? Are the influas a result of age-related health concerns and the influence ences any different than in past years? How do we identify of family. This is vital information to our members and our the changes and then decide if we should invest and meet industry if we are to remain competitive and give consumers the new needs or bypass them thinking they are just fads? what they want. Our customers, supermarkets, convenience The dairy industry continues to struggle with a box that stores and food outlets are impacted by these changing we put ourselves in. We want to innovate but at the same time demographics, too, which retain the integrity of Standards of is all the more reason that Identity. Consumers are now label we stay on top of what conreaders and have a much clearer sumers want. understanding of what ingredients We hope to provide our are in the products that they eat members with information and drink. These same consumers that not only keeps them have ready access to mass quanticurrent on what is trending ties of nutritional information at but also help them to be their fingertips on the web. They proactive because, let’s face are informed, and they use their it, the next trends are just dollars to demand what they need around the corner. Today, it and want. seems to be nutrition, valRapidly changing consumer ue-adds and “flavor adventastes and the desire to experiture” — a term we probably ment with new flavors, textures never even thought of just a and inclusions sets up a different few years ago. To this end, marketplace than we had even a few we are watching, listening years ago. The consumer attitude and evaluating all the time, of “I want my food — or anything as we continue to bring the else for that matter — uniquely very best that dairy has to tailored to me” would be a great offer to our members and challenge even if there were not consumers everywhere. Standards of Identity. — MIKE SUEVER I hope you enjoy this The demographics of consumPresident, Board of Directors, second issue of Northeast ers is always changing, and we are Northeast Dairy Foods Association, Inc. Dairy magazine. As always, all too aware of the importance I welcome your feedback. of examining these shifts from

Consumers are now label readers and have a much clearer understanding of what ingredients are in the products that they eat and drink. These same consumers have ready access to mass quantities of nutritional information at their fingertips on the web. They are informed, and they use their dollars to demand what they need and want.

4 • Northeast Dairy Foods Association, Inc.

FrontDesk

New Directions, Marketing, Networking Events In Store for Members BY BRUCE W. KRUPKE, EXECUTIVE VICE PRESIDENT, NORTHEAST DAIRY FOODS ASSOCIATION, INC.

here’s a lot going in our association and with our members. We’ve hired new staff, started to communicate all the good of our industry and worked on a great deal of introduced legislation. In addition, we have some fun and informative events planned for our members this summer! First, I’d like to echo President Mike Suever’s comments about the focus of this issue. As an association, we are concerned about your profitability. We think presenting you with insight on consumer purchasing and consumption trends will help highlight strengths and weaknesses in our industry. I strongly encourage you to read through the enlightening and informative information in this issue. I’d like to report we hired a new staff member in May, Alex Walsh, as our director of membership and communications. He will be based out of our Syracuse, New York, headquarters. (Editor’s note: See the article on his experience in this issue.) With this addition to our team, we are going to take a more proactive approach in supporting our dairy processing, manufacturing and distribution by communicating the positive aspects of our products and industry, including responding to negative press that may need a more realistic viewpoint. We are going to get more involved in social media, spreading our industry’s story about the types of quality, safe and nutritious products we make. And, we are going to address and confront groups like PETA and other animal rights groups that spread misinformation and untruths about what we do and how we do it. Look for my legislative report in this magazine, where you’ll find updates on key issues affecting members in all states we represent. This has been a very busy legislative session, and some of this legislation has simply gone too far. Legislators are looking to go deeper into the rabbit hole to find something to control — way beyond what they should be doing. We are your lobbyist representatives, who know your industry and speak your language with legislators. It is our job to keep them better informed as they consider any kind of legislation that will affect your business.

We are your lobbyist representatives, who know your industry and speak your language with legislators. It is our job to keep them better informed as they consider any kind of legislation that will affect your business. — BRUCE W. KRUPKE

Executive Vice President, Northeast Dairy Foods Association, Inc. Finally, are you ready to network? We have two events coming up for our members. Come to the Dairy Industry Clambake sponsored by our vendor and supplier members at Hinerwadel’s Grove in N. Syracuse on Wednesday, July 11. If you have never been to this event, you are missing out! Tickets can be obtained from any of our suppliers, or call our office for more information. September 24 to 26 is the Northeast Dairy Convention in Gettysburg, Pennsylvania, at the historic Gettysburg Hotel. This event is open to all members. Bring your spouse or guest at no extra charge! We will have industry speakers presenting the latest in news, science, technology and policy. And, we are hosting a golf outing, making a stop at the Gettysburg battlefield and holding a ghost tour of downtown. This convention is your opportunity to network in a relaxing atmosphere. See the back of this issue for more information. To find out more about all our events, visit our websites. If you are a dairy processor, go to www.nedairyfoods.org; if you are a vendor/supplier, go to www.neastda.org. I hope to see you out there at our events and, as always, thank you for your membership support! NED Magazine | Second Quarter 2018 • 5

MEET YOUR

BOARD

In this issue, we are highlighting a few more of the board members of both the Northeast Dairy Foods Association, Inc., and the Northeast Dairy Association, Inc. Other board members will be introduced in upcoming issues of Northeast Dairy. In keeping with this issue’s theme, we’ve asked these board members to comment on what they’ve seen in their careers as the biggest dairy product consumption trend or change, as well as how this has affected the dairy industry.

6 • Northeast Dairy Foods Association, Inc.

Meet Your Board NORTHEAST DAIRY FOODS ASSOCIATION, INC. The Northeast Dairy Foods Association, Inc. was founded in 1928 as New York Dairy Distributors, Inc., and currently serves over 100 dairy processors, manufacturers and distributors in New York, New Jersey and all six New England states.

JOHN BUELOW MANAGER

Worcester Creameries Corp./ Mountainside Farms

Growing up on a dairy farm in Little Valley, New York, Buelow has worked in the dairy industry all of his life. At age 18, he rented a barn and started milking his own cows, which he soon purchased. In 1983, while still operating his own dairy farm, he was offered a job with the National Farmers Organization (NFO), where he was the regional director responsible for organizing farm membership and marketing milk east of the Mississippi. He sold his farm in 1986, and in 1989 he left NFO to work for Elmhurst Dairy in Queens, New York, where he was in charge of milk procurement. Currently, he procures milk for Worcester Creameries Corporation’s two plants in the state, as well as handles marketing milk and cream for other customers.

Trends? “I’ve seen a huge expansion in the number of competing beverages and drinks over the years. This has led to the decline of fluid milk per capita consumption, although dairy consumption for other products like yogurt and cheese has taken up the slack, allowing dairy farms to produce and sell more raw milk. The future of the dairy industry from farmer to processor is positive because consumers continue to accept our products. I expect the decrease in

fluid consumption to level off. People will again realize the big nutritional advantage milk has. We’ll continue to see new dairy products be created. Farm production will continue to increase and rely on exports to other countries that are discovering milk and dairy in their diets.”

KIM BUKOWSKI

DAIRY EXTENSION SPECIALIST AND DIRECTOR OF DAIRY CERTIFICATE PROGRAM Department of Food Science, Cornell University

Bukowski oversees the planning, development and delivery of the Dairy Extension workshops at Cornell University. She also provides consulting to the dairy and food industry on food safety, dairy processing, dairy start-ups and Global Food Safety Initiative (GFSI) auditing. Bukowski is a Safety Quality Food (SQF) auditor and trainer, a Hazard Analysis and Critical Control Points/Preventive Controls Qualified Individual (HACCP/ PCQI) and a Foreign Supplier Verification Programs (FSVP) trainer. Her expertise is in ice cream production and sales.

Trends? “The biggest trend in dairy that I have seen in the past 20 years is that people are drinking less milk. Kids aren’t raised on milk like they were in the past, and the beverage alternatives have exploded in the marketplace. The greatest new product that has affected

the industry, however, is Greek yogurt. The future shows growth in homespun, artisan cheese, milk, ice cream and yogurt products. The challenge is to educate the new entrepreneurs of the future and ensure that they are producing food safely.”

TIM CRONIN GENERAL MANAGER

BelGioioso Cheese, Inc.

In his role at BelGioioso Cheese, Cronin has direct oversight and successful management of the Schenectady, New York, plant in operations, including production and sanitation, procurement, inventory control, sales, human resources, maintenance/project management, plant/ office administration, finance, logistics and development.

Trends? “The largest trend that I have seen in my 14 years in dairy is the upward shift in cheese and yogurt consumption. We have seen more domestic consumers trend towards dairy consumption in the form of ready-to-eat products versus the glass of milk or bowl of cereal that were more of the staples during my youth. Specifically, I’ve noted the growth of protein-ready snacking for the younger generation as a solution to sit down meals. Being ready and able to provide these offerings and introducing new selections within this category will be crucial to the continued success of dairy.” NED Magazine | Second Quarter 2018 • 7

Meet Your Board NORTHEAST DAIRY ASSOCIATION, INC. Northeast Dairy Association, Inc., was founded in 1932 as the New York State Dairy Food Boosters. It is made up of dairy product vendors and suppliers doing business in New York, New Jersey and all six New England states.

JOHN BUCKLIN

BUSINESS UNIT SALES MANAGER WestRock

Bucklin has been in the packaging industry since 1979 in various manufacturing, sales and general management positions throughout New England and New York. He has been in his current role as business unit sales manager at WestRock, a leading provider of differentiated paper and packaging solutions, since 2013. Bucklin oversees the New York sales team, which includes three corrugated manufacturing facilities serving the dairy industry throughout the Northeast.

Trends? “The biggest trend I have seen with dairy product consumption has been the rapid growth in yogurt consumption — Greek, in particular — and the gradual decline in dairy milk, especially among our youth. Also noteworthy is the proliferation of specialty cheese products now available. Today’s producers are challenged to satisfy the demands of the retail customers. Shoppers expect a wide variety of a given product, which translates into small production runs and more inventory at the processors.”

DEAN ELLINWOOD DIRECTOR OF OPERATIONS

Dairy Farmers of America Cooperative

Ellinwood grew up on a dairy farm, earned a college degree in agricultural engineering and worked his way through the industry in a fluid bottling plant and as a quality assurance field representative before moving into sales and marketing of milk and milk ingredients. He is currently responsible for the day-to-day operations of the Dairy Farmers of America Cooperative, which includes managing 130 independent hauling companies that pick up milk from more than 5,000 farms and deliver 20,000 loads of milk per month to more than 100 fluid and manufacturing dairy plants. Ellinwood is also a member of the board of the New York Cheese Manufacturers’ Association and is chairman of the Pennsylvania Association of Dairy Cooperatives.

Trends? “The most significant product consumption change I’ve seen during my career has been the introduction of Greekstyle yogurt. New York state has become the yogurt capital of the U.S., and billions of dollars have been invested in yogurt production in the Northeast and throughout the nation. Thousands of new jobs have been created to produce, package and deliver finished product to store shelves.”

NEDFA/NDA MEMBER BENEFITS ANNOUNCED Take advantage of all that your membership with the Northeast

Dairy Foods Association, Inc. (for dairy processors, manufacturers and distributors) and the Northeast Dairy Association, Inc. (for vendors and suppliers) has to offer. Both of our websites have been redesigned and are chock-full of information. Sign up and create your own profile to see the members-only information. Are you a dairy processor, manufacturer or distributor? Then check out www.nedairyfoods.org. If you’re a dairy industry vendor or supplier, go to www.neastda.org for more information. Here, you can find our new, exclusive members-only directories with content available only to our membership. Questions? Contact us at 315-452-6455. Also, check out Northeast Dairy Foods Assoc., Inc., on social media and share your company information with us on Facebook, LinkedIn and Twitter.

8 • Northeast Dairy Foods Association, Inc.

Legislative+RegulationsReport

NYC Deliveries and Children’s Meal Beverages Highlight Legislative Action BY BRUCE W. KRUPKE

ne of the primary benefits of your membership is having our association monitor, research and lobby on your behalf. We watch and respond to eight state legislatures and the bills they introduce that could have a significant impact on your business. We know your industry and speak your language with legislators. Unlike any other group, our association can represent your interests, while trying to help elected officials understand the ramifications when they introduce legislation. Usually by the end of June each year, the legislatures in your state capital have adjourned. New York state is one of the latest sessions of the eight states we work in, as it adjourned on June 20. New York also has the most introduced bills of the states we monitor — almost 10,000 every two years. That is a lot of research that our association works to keep track of on all the key issues. This year, there was much more activity than usual. Many legislatures focused on nutrition, labeling, ingredients, raw milk, GMOs, transportation of milk, calorie restrictions, waste handling and other related topics. We are confident that of the bills we have spotted, none were passed this spring that will directly affected your business. Now that the legislative sessions have adjourned,

the politicians are getting ready for the November elections. This year, we worked very hard on a few key topics. The first and most ridiculous was what Mayor Bill de Blasio enacted in New York City. He implemented a “test” of severe restrictions on deliveries in areas of the city to reportedly help reduce traffic congestion. The mayor originally proposed the restrictions in October of 2017. At that time, our association, along with a

recent causes of increased congestion include a 5 percent increase in car traffic due to new ride share services, such as Uber; the creation of bicycle lanes that are taking up more road space; and that consumers are having more goods delivered to their homes through online shopping services. It was important to make the point that our industry hasn’t increased routes or deliveries, and we are not to blame for the traffic tie-ups affecting the Big Apple.

“This year, there was much more activity than usual. Many legislatures focused on nutrition, labeling, ingredients, raw milk, GMOs, transportation of milk, calorie restrictions, waste handling and other related topics. We are confident that of the bills we have spotted, none were passed this spring that will directly affect your business.” – Bruce W. Krupke Executive Vice Presidentt bevy of others affected, met with representatives of the mayor’s office and the New York City Council Transportation Committee Chair Ydanis Rodriguez from the 10th District. Both responded by stating the need to address traffic congestion and stating that those businesses making deliveries in the city have to do their part. We identified that the most

To date, members are reporting the mayor’s test isn’t going well. Where the time and side of street restrictions have been implemented, many members are playing cat and mouse with traffic control officers who write ticket violations. We are communicating with members and identifying the problems, and we will make a report to the mayor’s office later NED Magazine | Second Quarter 2018 • 9

Legislative+RegulationsReport

this summer, as well as encourage de Blasio to discontinue the current “test” earlier than October. And, of course, we intend to ask that restrictions be eliminated, not continued. Another group of bills introduced into Vermont, New Hampshire and Rhode Island mandated calorie restrictions for any food service operation serving children’s meals. These bills specifically restricted calories in any beverage served with a meal to only 130 calories. This restriction essentially eliminated most flavored milks. Our association stands in opposition, and currently Vermont and New Hampshire have amended the bills to

10 • Northeast Dairy Foods Association, Inc.

exclude the beverage calorie restriction. We are still working with Rhode Island and are confident it will make similar changes, as well. Legislators are always looking to try to fix or make something better. It is our association’s position to allow the marketplace and consumers to decide what is best when it comes to health, good diets and nutrition. We’ll continue to monitor for more bill introductions throughout the year. Just because state legislatures are not in session doesn’t mean bills are not being introduced. If you would like to see a list of the bills we are currently lobbying,

visit our association’s website at www.nedairyfoods.org in the members-only section. If you haven’t signed up for a members-only ID, it is easy. Once you do, you’ll have access to all our legislative information and links. We appreciate the opportunity to work on your behalf. If you have any questions concerning our association’s legislative and regulatory policies, please contact our office. Bruce W. Krupke is the executive vice president of the Northeast Dairy Foods Association, Inc.

Economic Outlook

USDA Ups Monthly Forecast for 2018, 2019 BY GARY LATTA

ver the past few months, a few situations have occurred, hinting that the period of low milk prices in the United States has passed. The growth in cow numbers is slowing down, and therefore so is overall milk production. Domestic demand is good, and export demand has been robust for the first quarter. As a result, dairy product prices rose for several weeks throughout April and May. Yes, there have been ups and downs at the Chicago Merchantile Exchange, but the trend appears to be upward. These developments and other observations have led the USDA to revise its monthly forecast upward for 2018 and 2019 to reflect these developments. U.S. dairy product prices have been competitive so far this year in the international marketplace. Exports of U.S. dairy products to other world countries have been quite brisk so far this year, too. The U.S. Dairy Export Council (USDEC) reported in early May that March exports on a total solids basis were equivalent to 17.3 percent of U.S. milk production. Exports in March set a record high on a total volume basis exceeding the previous record high of March 2014.

DAIRY EXPORTS POSITIVE THROUGH YEAR’S END USDEC reported that the export value in March totaled $510 million, an 8 percent increase over March last year and the highest total value since April 2015. Sales of non-fat dry milk/skim milk powder (NDM/SMP) to Mexico were

the second highest ever and were double the previous year in Southeast Asia. Lactose sales to China increased 57 percent and were a record high for that country. Total U.S. lactose exports were up 19 percent in March. Both lactose and whey protein concentrate were especially high in March. Cheese exports in March were up 9 percent, the highest in 10 months. Cheese sales to China and Japan were up 50 percent and 30 percent, respectively, and helped offset lower cheese exports to Mexico, which declined 16 percent. Butterfat exports were up 180 percent from March of last year. While the U.S. was able to export over 17 percent of its milk production, it only imported an equivalent of 3 percent. Exports of this magnitude have absorbed a considerable amount of surplus milk and are a factor in the USDA’s logic in revising its new forecast upward. Most observers feel that such exports will continue to have a positive impact on both the U.S. and global dairy industries for the remainder of 2018.

COW NUMBERS DOWN, PRODUCTION UP The sustained growth in the number of milk cows and milk production is slowing down. The USDA reported a decrease in cow numbers of 2,000 head in March followed by another drop of 2,000 head in April. April’s milk production growth was a mere 0.6 percent compared with the same month last year. Nationally, production per cow is averaging just 9 to10 lbs. more than April of last year. Production per cow is still robust however, especially in the top 23 milk NED Magazine | Second Quarter 2018 • 11

Economic Outlook

U.S. Dairy Export Value Rises 14% in 2017 April 2018 Milk Production for a Few Key States -0.3%

NEW YORK

-2.4%

VERMONT

PENNSYLVANIA

-1.7% OHIO

-2.5%

MINNESOTA

-2.2%

MICHIGAN CALIFORNIA

-1.4%

+0.4%

WISCONSIN

-0.6%

12 • Northeast Dairy Foods Association, Inc.

producing states, which, in April, were yielding 1,982 pounds per cow — the highest production per cow for this month since the 23-state series began in 2003. With feed costs rising, and summer heat approaching, we can expect supplies to tighten up more.

GLOBAL MILK PRODUCTION MIRRORS U.S. Global milk production appears to be following a similar pattern with that of the United States. Global milk output has been growing at much slower levels — around 1 percent. EU commodity prices are firming, especially butter. Skim milk powder is slowly recovering in the EU with intervention stocks starting to finally move. The EU dairy industry is still adjusting to the elimination of quotas and the impact of Brexit. New Zealand’s Fonterra recently revised its dairy price forecasts upward for similar reasons. Fonterra is seeing strong global dairy product demand and slower growth in milk production. New Zealand’s exports to China, especially butterfat, have been brisk. The foodservice industry in China has been especially robust. Milk powder prices have jumped 5 percent in Oceana and 10 percent in Western Europe, primarily due to global demand. Australia, another major world exporter, is seeing its milk production growth at a rather healthy 2 to 3 percent so far this year.

HIGHER PRODUCT PRICES TRANSLATE TO HIGHER CLASS PRICES In its latest May report, the USDA revised its 2018 U.S. price forecast upward due to a multitude of recent developments. Higher U.S. dairy product prices, lower milk production, lower stock levels, higher feed prices and greater than expected exports are among the reasons the USDA adjusted its forecast to reflect higher prices for the remainder of 2018 and into 2019. Higher product price forecasts translate to higher class prices for the remainder of this year and into the next. The USDA adjusted its 2018 Class III forecast to range between $14.80 and $15.30 per cwt., an increase of 60 cents over the previous month’s forecast. Class IV was raised between $13.75 to $14.35, an increase of 50 cents. The all-milk price was raised from $16.20 to $16.70, an increase of 60 cents. For 2019, the USDA is projecting the number of U.S. milk cows to remain flat. Average milk per cow is expected to grow from 23,240 to 23,535 pounds. Annual milk production is expected to increase 1.3 percent over 2018. Domestic use is forecast to grow by 1.1 percent, and strong exports are expected to continue, but at a more modest rate as global

Economic Outlook Yes, there have been ups and downs at the CME, but the trend appears to be upward. These developments and other observations have led the USDA to revise its monthly forecast upward for 2018 and 2019 to reflect these developments. — GARY LATTA

Dairy Product Specialist Consultant, Northeast Dairy Foods Association, Inc. competition intensifies. The USDA is projecting higher cheese and whey prices in 2019 and has forecast the Class III price to range between $14.80 to $15.80, an increase of 25 cents above the 2018 price. The USDA believes 2019 non-fat dry milk prices will be about 2 cents higher, and the butter price down just a bit. Therefore, Class IV prices are forecast to range between $13.65 to $14.75 in 2019, an increase of 15 cents, as the higher dry milk price offsets the lower butter price.

BUT KEEP YOUR EYE ON THE SKY Weather has a large impact on milk production. Even short bouts of abnormal heat and drought can swiftly suppress milk output and lower butterfat production. As of late May, the entire southwest quadrant of the U.S. Drought Monitor showed abnormally dry conditions with severe to excessive drought across a large swath from California to Texas. These conditions appear to be spreading northward as high as Idaho and Washington with a bit of creep toward the Midwest. The U.S. Seasonal Drought Monitor, which attempts to make long term projections, indicates this condition is expected to persist. It’s difficult to forecast just how hot the summer will be, but prolonged periods of widespread abnormal heat can quickly lower milk output and especially butterfat production. So, always keep at least one eye on the weather. Gary Latta is a dairy product specialist consultant for the Northeast Dairy Foods Assoc., Inc. He has more than 30 years of experience in providing economic analysis, statistics and information to the dairy processing industry.

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NED Magazine | Second Quarter 2018 • 13

14 â&#x20AC;¢ Northeast Dairy Foods Association, Inc.

DAIRY, DAIRY, QUITE CONTRARY Consumers Want Flavor Adventure, Value and Nutrition BY CAROLINE K. REFF

he days of pouring milk over your breakfast cereal or chugging back a cold glass of milk with dinner have definitely waned, as is evident in the decrease in overall consumption of cow’s milk. Certainly, there is tight competition from milk alternatives like almond and coconut “milk” or high protein, non-dairy ice cream, but the news is not all bad. In fact, while consumers may not be drinking as much fluid milk, they are trying new and different products that are filling the dairy cases. Coffee-milk beverages, drinkable yogurts, exotic cheese flavors — all made from real milk — are just some of the products that seem to be on the rise, as curiosity gets the better of consumers who are eager to try something new. Donna Berry is the owner of Dairy and Foods Communications, Inc., and her website, www.berryondairy.com, is full of information on trends, new product offerings, dairy innovations and other happenings in the industry. With a degree in food science and past experiences in product development with Kraft Foods, Berry makes it her business to keep her followers informed on what’s going on in the dairy industry, particularly as it relates to what’s new, different and interesting in the diary section. Continued on next page

NED Magazine | Second Quarter 2018 • 15

DAIRY TRENDS “The refrigerated retail dairy case continues to fatten up while the frozen cabinet embraces protein and snacking trends,” says Berry. “Plant-based alternatives are gaining in the marketplace, but dairy foods are holding their ground through innovation efforts aimed at making everything from cheese to yogurt relevant to today’s consumers who crave flavor adventure, value authenticity and natural nutrition.”

Here are some of the trends Berry says are influencing the dairy industry today: PLANT-BASED PRODUCTS Almond and coconut “milk” are the “growth engines of the plant-based products,” and these plant-based dairy alternatives seem to be everywhere as people assume they are healthier and more natural choices. While the facts regarding health benefits continue to be debated, consumers certainly have the impression that they are making better choices with plant-based products. However, despite this mindset, as well as aggressive marketing and visibility, plant-based products have actually never been more than about 6 percent of the dairy category. Still, alternative dairy products continue to be successful, and consumers want more of them. According to Berry, many in the dairy industry may find it prudent to consider including some dairy alternatives in their product portfolios.

WHOLE MILK While most reports indicate that sales of fluid milk are down, it seems that whole milk is making a bit of a comeback, and more and more scientific research is indicating that whole fat may not be so bad for us after all. Whole milk, and particularly products made from it, are starting to fill the consumer’s desire for more natural, less processed foods. What’s not popular, however, is milk in the traditional white plastic gallon jug. While it’s more efficient for milk processors to make and use, the product can be too cumbersome for consumers, and today’s smaller households simply don’t need that much milk at once. However, all segments outside of the gallon have seen volume growth lately, including flavored milk (yes, chocolate milk is back!), lactose-free milk, Omega-3 milk, milk from grass fed cows, and even milk in old-fashioned glass bottles. Berry suggests that those in the industry may benefit from embracing the needs of consumers by positioning milk as a valued-added beverage. 16 • Northeast Dairy Foods Association, Inc.

COFFEE While coffee is not a dairy product, what goes into the now popular coffee-milk beverages usually is cow’s milk. “In fluid beverages that is the biggest trend — using milk with other ingredients because it does make the best ready-to-drink beverages,” says Berry. Nearly 83 percent of adults in the U.S. drink some amount of coffee, so the expansion into on-the-go, shelf-stable and/or single-serving coffee-milk beverages has taken off. These include popular products like cold brewed coffee-milk, bottled Frappuccinos and flavored iced coffee. Many contain added protein and less sugar than those purchased from your favorite barista, as well as no artificial colors, sweeteners, lactose, gluten or preservatives. The bottom line is that consumers like them, and they are buying them at a rapid pace. The good news for the dairy industry is that most coffee beverages are made with cow’s milk, not nut-based alternatives, primarily because they simply taste better that way.

CHEESE Americans are eating more cheese than ever, and their taste buds are calling for it to be made with real milk. Non-dairy alternatives are not a threat to cheese because “people don’t want fake cheese,” says Berry, because it simply doesn’t taste as good as the real thing. This, too, is good news for the dairy industry. The challenge lies in consumer expectation of wider selections of cheese apart from your standard slices of American, Cheddar or Swiss, as well as “on-the-go”-sized portions — often combined with nuts, dried fruit or meat — that are often used as a meal substitute. Innovative cheese flavors like chipotle, honey pistachio and fig walnut are a far cry from the plastic-wrapped cheese many of us grew up on, as are cheeses that give consumers an international flair with choices that reflect the flavor palates of various countries and cultures. Cheese manufacturers are also selling their product as an ingredient for other foods, like vegetarian burgers for example, as it adds flavor, texture, moisture and some fat. This, according to Berry, is where the opportunity for growth in cheese currently exists.

YOGURT For years, Greek yogurt ruled the dairy case, but that category seems to be on the decline, as consumers are opting to try something new, says Berry. The yogurt industry is hurrying to differentiate with unique containers, authentic recipes and interesting flavors. Consumers are turning

DAIRY TRENDS back toward whole milk, full-fat yogurt in exchange for less sugar and are eager to try products containing the A2 protein and/or probiotics. Drinkable yogurt and smoothies, as well as yogurt tubes, are also popular in the “grab-and-go” culture.

Attack OF THE

Visit www.berryondairy.com to subscribe to Donna Berry’s e-newsletter “Daily Dose of Dairy.” ICE CREAM Today’s consumers are very concerned with their protein intake, and that even extends to ice cream. There are currently 20 different brands of high protein ice creams, and sales appear strong. Berry, however, thinks the data is skewed by savvy marketing where brands offer coupons for free pints of the high protein ice cream in order to entice consumers to try it. While sales of the product are recorded, the coupon means no actual purchases are required. “People aren’t really buying a lot of high protein ice cream,” she says, “but every company wants to be in it.” Plant-based ice cream is also popular, particular as companies add it to already well-established ice cream brands. “Consumers like when a company, like Ben & Jerry’s for example, offers plant-based alternatives,” said Berry. “They already appreciate the brand itself, so the non-dairy alternative, which is placed right next to the others, sells better.” Ben & Jerry’s currently sells nine non-dairy flavors, like Cinnamon Buns and Cherry Garcia, which are made with almond milk and are 100 percent certified vegan. The company’s tagline for these products is “You’ll get Ben & Jerry’s euphoria in every bite. These flavors deliver everything…but the cow.” The good news for the dairy industry, however, is that ice cream is still ice cream, and, for the most part, people are still willing to indulge in traditional, delicious full-fat ice cream made from milk. It’s hard to keep up with the huge number of new dairy and dairy alternative products coming out every day. Health concerns, convenience and simple curiosity seem to be fueling today’s trends. “It’s not so much that consumers buying plantbased products are averse to dairy. They are just looking at other options,” says Berry. “They want to try something different, so they say, ‘I’m going to give this a shot. Why not?’ Trying a gallon of white milk is not trying something new. But, if you can do things to make dairy products more exciting, then there is a good chance they’ll try it.”

Super Snackers!

illennials are the largest group of snackers in the U.S. today, according to a 2017 report, “The Snack Hack: What You Need to Know About Modern Consumer Snacking Culture,” put out by Barkley and FutureCast. This generation (born between 1981 and 1996) is more likely than any other age group to snack, and one in four Millennials is considered a “Super Snacker,” or someone who snacks four or more times per day. Busy and on the go, Millennials want convenience when it comes to food choices. According to “The Snack Hack,” here are some statistics about Millennials’ snacking habits: • 78 percent say it keeps them full between meals • 64 percent say it is an affordable way to replace meals • 56 percent say it satisfies a craving • 39 percent say it is to get energy • 29 percent say it is because it’s available • 27 percent say it is because they are bored • 20 percent say it is healthier than eating three large meals a day • 17 percent say it is because they are stressed • 14 percent say they are too busy for traditional meals. Because of this, Millennials have helped drive new trends like online food ordering, meal kit services, grocery delivery, and foods that are “grab and go” — easy to eat, high in protein, low in sugar and shelf-stable. In addition, Millennials care about transparency, sustainability, natural ingredients and humane treatment of the animals that produce these foods, adding further factors to their choices. With such a large and impactful group of consumers, the dairy industry is taking notice and offering products that meet the needs of this influential generation with items like drinkable yogurts and pre-packaged snacks filled with high protein cheese, fruit, eggs and nuts, as well as detailed labels about ingredients.

Caroline K. Reff is the editor of Northeast Dairy magazine. NED Magazine | Second Quarter 2018 • 17

DAIRY TRENDS

TASTE IS KING

Consumers Want Dairy Deliciousness

oday’s consumers aren’t just grabbing the first thing they see in the dairy case. While most are concerned with health and nutrition, there’s no denying that they also want their food to taste delicious, too. Consumers are looking for flavor in their choices. Dairy items are no longer expected to taste only sweet, particularly as consumers move away from sugar consumption. People are also looking for dairy products with exotic, gourmet and savory flavors — and they’re willing to pay for them, too. “Consumers today want to perceive value in what they eat, and they don’t just want to eat it but rather experience it,” says Keith Telaak, senior marketing manager, Upstate Niagara Cooperative, Inc., which is owned and operated by over 360 dairy farming families in New York and Pennsylvania. “Take yogurt for instance. Along with convenience, we are seeing more unique, savory flavor combinations, as well as the addition of new types of inclusions and demands for transparency in what people eat. What was common a few years ago is boring on today’s shelves.” According to Telaak, consumers are not as fat-averse as they were a few years ago. “With changing scientific research, consumers now recognize that they can enjoy full-fat products in moderation as part of a healthy diet, including delicious, indulgent dairy options for snacking and dessert occasions,” he says. Sales of ice cream at Stewart’s Shop seem to back up the idea of “delicious indulgent dairy options,” according to Erica Komoroske, PR specialist, Stewart’s Shop Corp. Stewart’s, which has 335 shops in over 31 counties across Upstate New York and southern Vermont, sees steady sales of its ice cream

all year long, but summer typically brings a spike is sales of this tasty treat. “Our pint and milkshake sales are up, and half gallons and ice cream sales are about the same as last year,” says Komoroske. “We are seeing a trend with our customers buying smaller quantities more frequently.” She adds that grab-and-go items like strawberry milk, chocolate and vanilla dairy shakes, and cheese sticks are also very popular. “Taste is still king. Fat is back. Butter is better. Whole fats are better,” says Nils Lundberg, category manager for Price Chopper, a Northeast supermarket that is part of the Golub Corporation. Lundberg attributes much of this to consumers’ new-found confidence that whole fats are healthier because they contain less sugar and more protein, while also “making people feel more satiated.” He also sees consumers looking for alternative forms of products that have become dairy staples. While yogurt has flattened out in the past year, for example, “consumers are looking at how other countries use yogurt in different ways and during different times of the day (Think Iranian mast-o khair, a sauce served with grilled meat, or Turkish ayran, a common salty drink, both of which have yogurt as a main component). That might be the next evolution — using yogurt as a savory item all day long,” he says. Mark DeFazio, director, center store sales and merchandising, for Northeast grocery retailer Tops Markets, LLC, says that while sales of some of the more conventional dairy items like fluid milk are declining, products that contain whole milk, like full-fat yogurt and full-fat cheese, are growing. Plant-based milk alternatives, particularly almond milk, have definitely seen growth, as consumers seem to like the taste and apparent

“What was common a few years ago is boring on today’s shelves.”

18 • Northeast Dairy Foods Association, Inc.

DAIRY TRENDS health benefits. On the other hand, soy milk, once all the rage, has seen a decline, according to DeFazio, possibly due to recent negative press on health concerns related to consumption of soy. DeFazio agrees that butter is definitely back, even as consumption of one of its usual counterparts, bread, is down. Why? “Consumers want more natural foods with reduced trans fats, which is why margarine sales are down and people are using more butter,” he says. In addition, a resurgence of home cooking has become popular among Millennials with butter being a key ingredient. While this is not the main driver of butter sales, it has certain contributed to its renewed popularity. It’s no surprise that people want taste. If they can add some nutrition and health benefits in the mix, too, then that only increases the demand. Consumers want more than standard milk, butter and cheese, and, based on these trends, the dairy industry is making sure they are providing more choices, delicious flavors and clean, nutritious products that keep shoppers coming back for more.

Photo provided by Stewart’s Shop.

Older Consumers More Confident in Shopping Choices, Safety of Food Supply

s people age, their nutritional needs and dietary preferences change. So, it only makes sense that their approach as consumers changes, as well. The International Food Information Council Foundation (IFIC) collaborated with the AARP Foundation to compile the “2017 Food and Health Survey,” which examines the shopping and eating patterns of Americans between the ages of 80 and 50 in an effort to uncover insights into the diets and health of older Americans. Results compared this group with other segments of the population and found that those age 50 to 80 are more confident in their food choices. While 80 percent of all consumers believe there is a great deal of conflicting information about what to eat versus what to avoid, less than half of those age 50 to 80 say this makes them doubt the choices they make (in comparison to 61 percent of those ages 18 to 49). In addition, they are generally more confident in the safety

of the food supply as compared to their younger counterparts and are less likely to be influenced by information from friends and family. Older Americans are more likely to be able to connect specific foods with the health benefits they seek. Of those who named a desired benefit (e.g., lowering cholesterol), 49 percent could associate that benefit with a food or nutrient source versus only 40 percent of younger Americans.

This group is also more likely to adopt and maintain healthy eating behaviors. Among the most significant differences, Americans age 50 to 80 are more likely than those age 18 to 29 to: • Cut back on foods higher in saturated fat and salt • Eat foods with whole grains • Consume smaller portions • Compare sodium in various foods • Cut back on full-fat dairy or replace it with low or non-fat alternatives The desire for foods that provide cardiovascular benefits increases from 23 percent in the 50 to 64 age group in comparison to only 11 percent who are concerned with this at ages 35 through 49. On the flipside, Americans’ interest in achieving weight loss through food and nutrients falls dramatically with age. Only 23 percent of those 50 to 64 and 28 percent from age 65 to 80 reported this to be a primary concern. NED Magazine | Second Quarter 2018 • 19

DAIRY TRENDS

Protein, Calcium Critical for Older Adults’ Health

he Silent Generation (born between 1925-1945) and Baby Boomers (born between1946-1964) tend to enjoy the milk, butter, cheese and other dairy products they grew up on. Aside from the enjoyment of these delicious foods, older individuals have another reason to keep dairy in their diet — good health.

PROTEIN: KEEPS MUSCLES GOING STRONG According to Anna Thalacker-Mercer, Ph.D., assistant professor in the Division of Nutritional Sciences at Cornell University, older adults need protein to maintain muscle mass. Typically, the number one thing a doctor prescribes for people in this age group is increased protein intake. Protein builds and maintains muscles, bones and skin, and it keeps the body manufacturing amino acids, often referred to as “the building blocks of protein.” Unlike fat, the body does not store protein, so it must be constantly replenished. Regardless of age, the current dietary guidelines for protein intake is 0.8 grams of protein per kilogram of body weight. Individuals can multiply their weight in pounds by 0.36 to find out how much protein they need. For example, a 150-pound person would need 54 grams a protein daily. Most American diets easily reach this level of daily protein intake, but older people often eat alone or find high protein meals containing meat uncomfortable to chew. Maintaining muscle function is essential to staying healthy and strong, particularly for those over age 70, and that’s where dairy products consumed in liquid or semi-solid forms can come in handy, according to Thalacker-Mercer. Milk, yogurt, cheese, an occasional ice cream and other dairy products can be an excellent part of a balanced diet as people age. Here is the protein content of some diary staples: • 6-oz. cup of Greek yogurt = 15 grams • ½ cup of cottage cheese = 14 grams • 1 cup of milk = 8 grams • ½ cup of ice cream = 4 grams • One slice of cheddar cheese = 7 grams 20 • Northeast Dairy Foods Association, Inc.

DAIRY TRENDS While no one’s diet should consist only of dairy, the figures above show how easy it is for older Americans — or anyone for that matter — to up their daily protein intake in order to keep the body going strong.

CALCIUM: BANKING ON STRONG BONES Protein is not the only thing that can keep the older generation healthy. As people age, they can experience bone loss, which, in turn, can lead to fractures and other skeletal problems. That’s where calcium-rich dairy products come into play. Bone mass is typically achieved in adolescents, usually by age 17 for women. Females are definitely more vulnerable to problems with bone health, especially after reaching menopause, according to Kimberly O’Brien, Ph.D., professor of human nutrition, Division of Nutritional Sciences at Cornell University. “Our body is not designed to protect our bones. It’s like a bank. You have all the calcium you are going to have by the time you’re a young adult,” O’Brien explains. “When a woman hits menopause, the skeleton responds with a loss of calcium.”

While women are at far greater risk, men can be affected, too. Risk factors for both sexes include a small body frame, being of northern European descent, a family history of osteoporosis and/or smoking. Women over 50 should get 1,200 to 2,000 mg. of calcium a day. Men over 70 need the same daily intake. Dairy foods can help reach those numbers, as part of a well-balanced diet. Here is the calcium content of some dairy favorites: • 6 ozs. of Greek yogurt = 200 mg. • 8 oz. glass of skim milk = 300 mg. • 4 ozs. of cottage cheese = 125 mg. • 1 oz. of American cheese = 195 mg. • 8 oz. glass of a dairy-alternative like fortified almond, rice or soy milk = 300 mg. “A healthy, mixed diet provides you with bone health,” says O’Brien. “That’s why foods like dairy products that contain calcium are so critical and can help reduce some of the risk as your body ages.”

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NED Magazine | Second Quarter 2018 • 21

DAIRY TRENDS

Spread It Around

n 2017, butter exports had a record year in prices and shipments, according to the United States Department of Agriculture (USDA), and it looks like this trend will continue into 2018. According to a February 2018 report by the USDA, the demand for butter, cream and other dairy foods rich in butterfat has risen as consumers continue to be swayed by various studies that indicate that butter is not the health risk it was once thought to be. The return of buttery goodness is often attributed to an editorial that ran in The New York Times in March of 2014, when columnist Mark Bitterman praised the return of natural, real fats. His piece began: “Julia Child, goddess of fat, is beaming somewhere. Butter is back, and when you’re looking for a few chunks of pork for a stew, you can resume searching for the best pieces — the ones with the most fat. Eventually, your friends will stop glaring at you as if you’re trying to kill them.” While the debate continues, a number of studies have convinced consumers that dairy fat and trans fats are not as great a health risk as once thought. (In fact, sugar is now said to be the real danger.) According to the USDA, Americans now consume an average of just under 6 lbs. of butter per year. According to Euromonitor International, 2018 is expected to bring a 2.9 percent increase in global butter sales — over $19 billion. U.S. consumption of butter is nearing a 50-year high, and consumers are willing to pay for it, even as prices rise.

22 • Northeast Dairy Foods Association, Inc.

THE BUTTER DEBATE: A HISTORICAL PERSPECTIVE Over the past 150 years, the debate about butter has raged on. According to, “Is Butter Good for You? Or Bad? What Does Science Say?” an article in Bon Appetit magazine by Rochelle Bilow, oil was preferred to butter in the mid 1800s. In the early 1900s, there was a lot of bacteria in butter, so people were told to use salted varieties, which were perceived as less dangerous. In the 1930s, margarine was the spread of choice over butter, as it was thought to reduce the U.S. mortality rate. During WWII, rationing of fat opened the door further for margarine. By the late 1970s, butter was considered superior to margarine as it was chemical-free, but then the 1980s came along and so did the concern about high cholesterol. Butter again was bad. In 1990, butter was considered the most dangerous fat of all. By the year 2000, butter was again on top, as health professionals claimed its vitamin content cured everything from heart disease to cancer. In 2006, both butter and margarine were considered unhealthy saturated fats, and the trend tipped toward olive oil. Studies in 2014 said butter and other full-fat foods may actually help people lose weight and that there was no link between butter and heart disease — until another study said that might not be true at all. Today, it seems that butter is back — at least in moderation — as consumers look for more natural foods free of sugar, chemicals and preservatives. For now, one thing is certain: butter has stood the test of time — and there’s no denying it’s delicious! Stay tuned.

Essential Nutrients OF MILK

CALCIUM Helps build and maintain strong bones and teeth

PROTEIN Helps build and repair muscle tissue

VITAMIN B3 (NIACIN) Used in energy metabolism in the body

VITAMIN A Helps keep skin and eyes healthy; helps promote growth

PHOSPHORUS Helps build and maintain strong bones and teeth; supports tissue growth

VITAMIN B12 (COBALAMIN) Helps with normal blood functions; helps keep the nervous system healthy

VITAMIN D Helps build and maintain strong bones and teeth

VITAMIN B2

VITAMIN B5

(RIBOFLAVIN) Helps your body use carbohydrates, fats, and protein for fuel

(PANTOTHENIC ACID) Helps your body use carbohydrates, fats and protein for fuel

NED Magazine | Second Quarter 2018 • 23

DAIRY TRENDS

Consumer Demands Spurs Growth in Plant-Based Dairy Alternatives

ext time you make your weekly grocery run, look around. You’re sure to still see plenty of milk, cheese, butter and other traditional dairy products on the shelves, but you’ll also notice plenty of alternatives, as items like plant-based “dairy” products make their mark on consumer buying practices. According to a March 2018 report by Grand View Research, dairy alternatives — like those made with soy milk and almond milk — are expected to grow both within the U.S. and globally at a significant rate by 2024. The research attributes this to lactose intolerance and consumers’ growing concern with healthy eating. Almond milk is coming on particularly strong and is expected to continue to increase in popularity with consumers due to its high energy content, fiber and protein content, as well as a palatable taste and texture. A global consumer research study issued by food giant Cargill asked consumers whether and how they chose dairy products (defined as made with milk from animals) in comparison to dairy alternatives (defined as made from plants like nuts, rice or soy) in the categories of yogurt, flavored milk, ice cream and dairy alternatives. Results showed: • 35 percent chose plant-based alternatives due to lactose intolerance • 26 percent chose plant-based alternatives due to dairy sensitivity or allergies • 24 percent wanted to avoid added growth hormones • 7 percent didn’t like the taste of dairy • 4 percent wanted to reduce intake of saturated fat The survey also ranked the dairy-alternative ingredients consumers liked best. The most popular were: • Almond = 80 percent • Coconut = 59 percent • Soy = 50 percent • Cashew = 47 percent • Rice = 43 percent

24 • Northeast Dairy Foods Association, Inc.

While perceived health benefits seem to be the primary reason for the increase in plant-based alternatives, consumers are also concerned with taste, sustainability and — particularly so among Millennials and Gen Zers — animal welfare. However, not everyone was ready to switch to plant-based alternatives. Results showed: • 67 percent regularly consumed real dairy products • 50 percent consumed both dairy and dairy alternatives • 63 percent preferred the taste of real dairy products • 47 percent found dairy alternatives too pricey • 21 percent never tried a dairy alternative While this is some good news, the increase in plant-based alternatives has clearly had an effect on traditional milk products, with the biggest decline in milk consumption seen in reducedfat non-flavored milk, 2 percent milk, 1 percent milk and skim milk, according to the USDA Agriculture Marketing Service. The taste for more plant-based alternatives has also negatively impacted organic cow’s milk, as consumers believe options like almond milk and coconut milk are healthier. U.S. sales of plant-based alternatives increased 60 percent from 2012 to 2017, according to the research firm Mintel. The U.S. is certainly not the only place where dairy alternatives are gaining in popularity, however. According to the Grandview report, Asia Pacific dominates the dairy alternatives industry, primarily due to greater product awareness, changing dietary habits and more disposable income. Europe is also seeking dairy alternatives, as consumers are asking for more plantbased products, as well as lactose-free yogurt and ice cream. According to Innova Market Insights, plant-based alternative products are expected to reach more than $16 billion globally in 2018. While it is doubtful that traditional dairy items will ever disappear from the refrigerator, plant-based alternatives have clearly caught the eye of the consumer. This is one trend that is likely to continue for some time. The dairy industry can’t help but monitor it carefully and adapt to it quickly.

DAIRY TRENDS

Will There Be a Gen Z Backlash?

any of the trends in dairy are being pushed forward by Millennials and Gen Zers (born between 1995 and 2014) who tend to be very interested in sustainability and the environment. But Donna Berry, dairy blogger and owner of Dairy and Foods Communications, Inc., thinks these consumer groups may eventually discover a downside to some of their food choices. For example, individually-portioned, pre-packaged products are great for their busy lifestyles, but where do all those tiny plastic containers end up? In the recycling bin? Hopefully. But also in landfills. The same consumers want their foods to be natural and free of artificial colors, so manufacturers use things like beet juice and carrots to produce red and orange coloring. Yes, it’s natural, but it also creates a tremendous amount of waste. In fact, according to Berry, it takes one pint of strawberries to give just one cup of

yogurt its pink color. While some of the by-products of such a process can be used for other purposes, the energy consumption alone may be cause for concern. Berry adds, “Once these younger consumers, particularly the Gen Zers who grew up during the Recession, realize this, they might just say, ‘Hey, why are we creating all this waste?’” The possibility of a Gen Z backlash may be the beginning of new trends to come.

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NED Magazine | Second Quarter 2018 • 25

DAIRY TRENDS

New Ad Campaign Pushes A2 Milk Further Into U.S. Markets BY CAROLINE K. REFF

“For years, I thought I was lactose intolerant. Turns out I was just sensitive to a protein commonly found in milk. Now with A2 milk I can finally enjoy cereal again.”

“I forgot what real milk tasted like. It was amazing … my first latté in 12 years.”

“It’s delicious like real milk … because it is real milk.”

26 • Northeast Dairy Foods Association, Inc.

he quotes to the left are just some of the statements heard in the commercial for A2 milk as part of a national “Love Milk Again” advertising campaign that began in March. The a2 Milk Company is headquartered in Australia but has been strategically entering the U.S. market since 2015. In January 2018, it expanded its reach to the Northeast. The company plans to invest approximately $25 million by 2019 to build further brand awareness in the U.S., according to Dairyreporter.com. Back in 2007, author Keith Woodford published “Devil in the Milk,” a book that brought attention to the link between the milk in New Zealand and a variety of health problems, including heart disease and even schizophrenia. His book claimed these diseases were linked to a protein fragment released when people digest A1 beta-casein, which is found in the majority of milk Americans drink today. According to Woodford, all milk was originally A2 until a mutation occurred thousands of years ago in some European cattle. Today, cows in Africa, Asia and parts of southern Europe remain primarily A2. The product is controversial, however, as the a2 Milk Company claims the product is a healthier choice than the “regular” milk we all grew up drinking in the U.S. — now known as A1 milk. The

DAIRY TRENDS a2 Milk Company’s primary marketing angle is that it allows people with lactose intolerance to drink milk again. “The numbers that we see in the U.S. are approaching 75 million people who will self-diagnose as lactose intolerance,” said a2 Milk Company’s U.S. CEO Blake Waltrip during an interview on CNBC. “But the key is that a much smaller percentage of those people are actually lactose intolerant, and the research that we see shows that many more of them are actually intolerant to the A1 protein versus the A2 protein.”

SO WHAT IS A2 MILK? Casein makes up about 80 percent of the protein in milk with the two most common types termed A1 and A2. “Regular” milk that most of us drink contains both A1 and A2, but A2 milk contains only A2 beta-casein. A1 milk originated in northern Europe and is found in breeds like Holsteins, Friesians, Ayrshires and British Shorthorns, while A2 originated in the Channel Islands and Southern France. A2 is found in breeds like Guernsey, Jersey, Charolais and Limousin, as well as sheep, donkeys, goats, camels, yaks and buffalo. The majority of cows in the U.S. are genetically A1, which is actually considered a genetic mutation that results in the production of a compound called Beta-casomorphin-7. Some research says BCM-7 is what makes A1 milk unhealthy due to the possibility of the release of an opioid peptide during digestion, according to studies highlighted by the National Institutes of Health. The debate between A1 and A2 milk ramped up when the a2 Milk Company patented the genetic test that allows the company to determine what type of protein a cow produces in its milk. This, in turn, allows the company to license dairy farmers that prove their cows give only A2 protein in their milk.

Scientists on both sides can provide studies proving or disproving the A1 versus A2 debate. (Other health claims are much more serious and yet unproven, stating that A1 milk is associated with an increase in heart disease, type 1 diabetes, autism and Sudden Infant Death Syndrome.) However, it appears that significantly more research needs to be done in order to support these claims. However, if and when there is solid evidence of health benefits for A2 milk, which Waltrip claims has the same taste and nutritional value of A1 milk without the unhealthy side effects, it will still take decades to develop the number of A2 cows needed to produce enough milk to meet the U.S. demand. Depending on how the research pans out, A2 milk has the potential to greatly

“Regular” milk that most of us drink contains both A1 and A2, but A2 milk contains only A2 beta-casein. change the U.S. dairy industry in the next 10 years. Bull breeders are, of course, paying attention to this debate, as they will have a stake in the process, as are dairy farmers who may face the possibility of having to make the necessary changes to give the customers what they want. A2 milk — in varieties that include chocolate, 1 percent, 2 percent and whole — is already available in the United States in major grocery retailers

t Agri-Mark, we are continually investing in the Northeast Dairy Industry because this is our home. We are now investing more than $20 million in our butter/powder/condensing plant in West Springfield, Massachusetts, shown above, for the 950 dairy farm families that own the co-operative. This project will be completed in mid-2018 and allow us to better serve our customers. Please contact us at 978552-5500 for more information on how we can serve you! NED Magazine | Second Quarter 2018 • 27

DAIRY TRENDS like Whole Foods, Safeway, Target, Trader Joe’s and Publix at about one third more the cost in comparison to its A1 counterpart. In addition, the a2 Milk Company has already made great in roads with partnerships throughout Asia-Pacific, including South Korea and China. The Northeast Dairy Foods Association has, of course, been keeping close tabs on the issue and possible consequences — both positive and negative. “I’ve watched the introduction and development of the product as it originated in Australia and has made its way around the world to the U.S., and particularly now into the Northeast,” says Bruce Krupke, executive vice president, Northeast Dairy Foods Association. “The science behind the product is persuasive, but eventually sales will determine success.”

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DAIRY TRENDS “Should the industry be concerned as we continue to find better ways to improve milk in the hopes of increasing sales? Are we cannibalizing traditional milk and, perhaps, others, such as organic, with different marketing approaches? Are we increasing milk consumption or just spreading it out? Most concerning — Are we putting the idea into consumers’ heads that there is something wrong with what they have been consuming for years? These are some of the questions we struggle with, and we are keeping a careful eye on this product,” Krupke adds. The recent marketing push by the a2 Milk Company has raised awareness of this new product and its potential health benefits. Is it science or scare tactics? For now, it seems U.S. consumers will have to decide.

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NED Magazine | Second Quarter 2018 • 29

DAIRY TRENDS

WILL THE FDA FINALLY ENFORCE MILK LABELING STANDARDS? BY CAROLINE K. REFF

hat is milk? Members of the Northeast Dairy Foods Association are probably pretty clear on that, but that doesn’t mean the rest of the country is — and that’s where the controversy comes in as new, mostly plant-based products are being labeled as “milk” — to the confusion of many consumers. In 2017, Sen. Tammy Baldwin (D-WI) introduced The Dairy Pride Act, challenging the use of the term “milk” as a description for anything other than the “lacteal secretion” of animals. For approximately 20 years, the Food and Drug Administration has essentially skirted the issue of whether certain terms like “almond milk” violate federal standards or mislead consumers, even though current FDA regulations clearly state the milk must come from an animal. At a March 2018 Senate Appropriations Committee hearing, Baldwin pressed FDA Commissioner Dr. Scott Gottlieb for answers on this issue, stating that she is “really concerned about the proliferation of mislabeled products in the market-

30 • Northeast Dairy Foods Association, Inc.

There’s a perfect storm of challenges to the dairy industry right now in that the FDA is not following its own rules. — SEN. TAMMY BALDWIN place that are using dairy’s good name but have absolutely no dairy ingredients. These products are violating the FDA’s existing regulation, and they are getting away with it because of inaction by the agency.” She went on to say, “It is a matter of fairness to the farmer and dairy producer and processors. …Imitation products should not be able to use dairy’s good name. …It’s time for the FDA to act.” Gottlieb acknowledged that the senator was correct in that FDA standards currently define milk as being “something that comes from a lactating animal” and also that the term has been used on items that are created otherwise.

DAIRY TRENDS “The FDA has not stepped into this in the past, and now there is a lot of commercial activity going on,” Gottlieb stated. “If consumers are being confused or misled about the nutrition or status or quality of milk because of how products are being labeled, that is something that we would certainly want to take a look at.” Baldwin retorted that the FDA could, in fact, enforce milk labeling now, as it is part of the existing FDA regulations, adding, “There’s a perfect storm of challenges to the dairy industry right now in that the FDA is not following its own rules.” “We hear your concerns, senator,” responded Gottlieb, who said the FDA’s long inaction on this topic now requires new data in its decision-making process. “We are taking a very close and fresh look at this.” This debate has been going on for some time. In 2017, the Good Food Institute filed a petition with the FDA to allow the use of terms like “milk” and “yogurt” on vegan products. The National Milk Producers Federation reacted by urging the FDA to reject the petition saying it is the antithesis of existing laws and FDA regulations surrounding the definition of milk. The NMPF’s CEO Jim Mulhern wrote the following in the comment section of the petition: “Nothing has happened in the last 20 years that makes it okay to combine plant or nut powders with water, sugar, emulsifiers, stabilizers and other chemicals, and call it ‘milk.’…This request is wrong on its merits and is designed to further mislead consumers.” Federal Judge Stephen V. Wilson did not agree, however, when the NMFP took the case to court, saying, “No reasonable consumer could be misled by almond milk labels. Even the least sophisticated consumer would know instantly the type of product they are purchasing.”

Other court cases claiming false advertising over plant-based “milk” have argued that while the federal standard for identifying milk is limited to lacteal secretions from animals, that does not categorically preclude a company from giving food products names that include the word “milk.” In 2015 in California, a judge dismissed a class action suit (Amy Gitson et. al. v. Trader Joe’s Company) that claimed the retailer’s use of the term “soy milk” violated labeling laws and mislead consumers. Judge Vince Chhabria said, “The reasonable consumer does not think soy milk comes from a cow.”

A ROADMAP TO PROGRESS? The FDA issued its 2018 Strategic Policy Roadmap, “Healthy Innovation,

Safer Families,” in January, which stated the following under its Nutrition Action Initiative: “(The FDA will consider) modernizing certain health standards of identity to address current barriers to the development of healthier products while making sure consumers have accurate information about the foods they eat. Among other steps, FDA intends to issue a request for information to identify and help prioritize which potential standards of identity should be modernized based on their public health value.” This statement is vital because the last FDA “Food Standards and Labeling Policy Book” was published in 2005. Since then, hundreds, if not thousands, of new foods have premiered on store shelves and created labeling confusion,

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NED Magazine | Second Quarter 2018 • 31

DAIRY TRENDS

The Dairy Pride Act

he Dairy Pride Act was introduced by Sen. Tammy Baldwin to “defend against imitation and replacements of yogurt, milk and cheese to promote regular intake of dairy every day.” The bill amends the Federal Food, Drug and Cosmetics Act “to prohibit the sale of any food that uses the market name of a dairy product, is not the milk of a hooved animal, is not derived from such milk and does not contain such milk as a primary ingredient.”

SOME KEY CONGRESSIONAL FINDINGS INCLUDE:

• Dairy products are an important part of a healthy diet for both children and adults, according to the “2015-2020 Dietary Guidelines for Americans,” which states that consumption of dairy foods provides numerous health benefits, including lowering the risk of diabetes, metabolic syndrome, cardiovascular disease and obesity. • The “Dietary Guidelines” state that Vitamin D and potassium amounts vary across plant-based milk alternatives, as does the amount of calcium per calorie. To obtain the amount of calcium contained in one cup of non-fat fluid milk from a plant-based milk alternative, the portion size and calorie intake must be greater. • Imitation dairy products, such as plant-based products derived from rice, nuts, soybeans, hemp, coconut, algae and other foods that imitate milk, yogurt and cheese, often do not provide the same nutrition as real milk, yogurt and cheese derived from dairy cows. • Plant-based products labeled as milk are misleading to consumers. • Given the proliferation of plant-based products in the marketplace that are mislabeled as milk despite the standard of identity defined for this substance, enforcement by the FDA against these practices should be improved to avoid misleading consumers. Passage of the Dairy Pride Act puts the United States in line with Canada, the U.K. and many nations of the European Union, which all enforce labeling laws that refer to plant-based products as rice “beverage” or “drink” instead of “milk.” (To read the bill in its entirety, go to www.congress.gov/bill/115th-congress/senate-bill/130/text ) 32 • Northeast Dairy Foods Association, Inc.

including the popular plant-based “milk” products. NMPF’s Mulhern released the following statement: “The congressional directive to FDA will stem the flagrant misuse of the word ‘milk’ on products that are, by FDA’s own definition, not milk nor are made from milk. Real milk is well known for its strong nutritional contributions, which is why the fake food marketers want so badly to continue using dairy terms on dozens of different plant powder formulations. But these products are pale replicas, not an acceptable substitute for real milk from a nutritional standpoint. This measure will help end the confusion that just co-opting a word somehow makes a food nutritionally equivalent.” In March, the Trump Administration’s 2,200-page Omnibus Spending Bill was signed into law. Part of this includes a directive to the FDA to develop labeling standards for dairy products. The bill gives the FDA 180 days to issue clear guidelines for how dairy standards will be implemented and enforced. The questions now are: Will the FDA do so, and, if so, how will those guidelines impact the dairy industry? The issue is a tricky one for the Northeast Dairy Foods Association, as some of its members are benefitting from the sales of plant-based products, while others are vehemently opposed. “I think we are at the point of do or die and will soon see the true colors of what the FDA is really thinking,” says Mike Suever, president of the Northeast Dairy Foods Association. “Regardless of the FDA’s decision, the industry is still going to call these products something — whether it’s ‘milk’ or another term. With milk consumption declining, anything milk companies can do to increase their sales, they will do — and that may include plant-based beverages.”

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PTI/WALDNER Provides Solutions, Personalized Service to Turn Small Business’s Investment in DOSOMAT Machine Into Future Growth

&L Foods Specialties is a small family-owned co-packer and manufacturer of flavored cream cheese and cream cheese spreads based in Glassboro, New Jersey. The company began as a retail store inside a farmers market in 1994, selling a variety of dairy products. John Esh, who purchased the retail market from relatives, added his own line of cream cheese spreads to the existing line of cheese products and was content with the size and scope of his business, but the quality of his products soon had customers asking for more. The company’s venture into the private labeling and co-packing industry began when a former employee was offered a position on a sales team for a meat and cheese purveyor. Being familiar with the company’s cream cheese products, he requested that the company consider a private label of the product under its company’s label. After others also expressed interest, Esh and his team decided to set up a small manufacturing facility at his retail location to make cream cheese spreads and dips for distribution. After several years, J&L outgrew the facility and moved the business to the current location in Glassboro in 2013. In the past ten years, J&L Foods has grown and so has the demand for its products. Five years ago, one of the company’s larger customers requested a new line of retail packaged cream cheese, something J&L Foods was not set up for, so, in order to make that happen, the company purchased an affordable, two-lane, in-line machine. It was soon apparent that this machine, while cost-effective, could not keep up with the necessary speed or efficiency needed. The lower cost machine could not fulfill the demand in terms of capability and flexibility, making it a temporary solution. In the long run, J&L experienced lower output and higher downtime. In 2014, Esh attended the Pack Expo in Chicago, “dreaming about some of the machines there,” but figuring most were probably out of his financial reach. One evening at the show, he met Julian Stauffer, who at the time was manager of 34 • Northeast Dairy Foods Association, Inc.

PTI/Waldner North America. (Today, Stauffer is the COO.) They began to talk about J&L’s needs, and, after discussing the challenges they faced on their filling line, Esh was considering a high-performance Waldner DOSOMAT Cup System. The advanced technology, capacity and flexibility of the DOSOMAT would enable J&L to increase its efficiency dramatically and maintain the high quality standards for which its products had become known. Esh knew it would be a significant investment for his small company, but he was willing to research the options with Waldner. Representatives from PTI/Waldner North America visited his New Jersey plant to assess his needs, and Esh was particularly impressed that Karl Angele, Waldner’s managing director, came all the way from the company’s headquarters in Germany to visit J&L Food Specialties. In 2016, Esh spent several days in Germany travelling with Angele on a tour of Waldner’s facility, as well as a cheese plant that uses the DOSOMAT Cup System. “It was impressive to see this machine do its job,” says Esh, noting the speed and accuracy of its filling. The personal service combined with the amazing DOSOMAT Cup System’s capabilities convinced Esh to make the investment. In 2018, the DOSOMAT machine arrived at J&L, along with two service technicians — one from PTI and one from the Waldner factory —who completed the installation and training in just a few days to get production up and running quickly. Esh and his team at J&L saw a difference immediately. “Once you know the machine, it’s incredible,” says Esh, who was particularly impressed with the precision of the DOSOMAT’s automatic dosing valve, the fast changeover from one product to another, and how everything is fully adjustable and customizable on an HMI touch screen. “The machine we had purchased from another company did the job but required too much human intervention. Somebody constantly had to be there, and there was too much downtime and manual labor required to run the machine,” he says. “The DOSOMAT practically runs itself.”

While the DOSOMAT Cup System has only been in place at J&L since the beginning of this year, Esh already has plans to grow the business, including solidifying relationships with distributors to larger supermarket chains — something he had been reluctant to do until he was certain J&L could deliver on its promises. Today, the DOSOMAT is filling cups with some of J&L’s 42 specialty flavors of cream cheese and dips — including its popular Cajun Crab dip. “What sets us apart? says Esh. “We try to keep our products simple and the number of ingredients to a minimum.” “We have a small company, so to have the head of Waldner come over here from Germany to assist in this process was pretty impressive. Having PTI/Waldner North America in Tuckahoe, New York, as our primary contact for parts, service and support is a huge advantage, too. While this machine did cost more than what we expected to pay initially, its speed and precision has changed our business completely,” Esh says. “It was well worth it. Now, we are able to complete our orders, meet our deadlines and look for new business. We are confident that when we start up this machine, we’re going to have a successful run.” J&L Food Specialties is just one example of how Waldner has succeeded in installing over 3,400 machines worldwide. Says Sam Troiano, product manager for PTI/Waldner North America, “We worked closely with J&L Foods to find a solution that was affordable yet met its needs for future growth. Waldner has decades of experience with filling and sealing applications for dairy and welcomes challenging assignments. When customers have confidence in the equipment, it allows them to sell their products with confidence, as volume demand and product variety increases. PTI will support J&L as its needs change, be it preventative maintenance, spare parts or format parts. Waldner Germany also has the capability to perform remote diagnostics to support smaller customers who do not have technical staff on site.”  For more information on how PTI/Waldner can help you find the right solutions for your company, contact info@ptipacktech.com or call 914-337-2005. Waldner DOSOMAT Cup System Installation at J&L.

NED Magazine | Second Quarter 2018 • 35

HumanResources

Competitive Benefits Can Attract, Retain Employees to Small Businesses BY JAN COUTURE

ith unemployment rates at record lows, small businesses may have to do more than their larger counterparts to attract and retain talented employees, simply because they can’t always afford to pay higher wages. One way they can do this is to offer better employee benefits. In fact, employees today are taking a closer look at benefits and using them to make employment decisions. According to a Fractl 2017 employee benefits study, “Which Job Perks Do Employees Value Most?”, 88 percent of employees would consider a lower paying job with better benefits over a higher paying job if they could get better health, dental and vision coverage. As a small business, you may feel like you don’t have access to the benefits available to larger companies or that you can’t afford to offer them. By following theese suggestions, you can put together and offer your employees a competitive benefits package to help your company appeal to and keep the employees you need.

36 • Northeast Dairy Foods Association, Inc.

TEAM UP WITH AN EXPERT IN THE FIELD Not all insurance companies are created equal. When you’re looking for competitively-priced employees benefits and the service you need, look to a company that caters to small businesses and understands their needs.

LOOK FOR THE LATEST TECHNOLOGY According to “What Your Employees Think About Your Benefits Communication” by Jellyvision Lab, Inc., an employee communication software company, 48 percent of U.S. workers say that making choices about health insurance is very stressful, and 41 percent say enrolling in their employer’s health insurance plan is very confusing. That’s all the more reason to enlist the latest technology to make your employee benefits experience — enrollment, communications, etc. — simple, engaging and helpful. The more your employees understand their benefit offerings, the more likely they are to enroll and use them.

HumanResources CONSIDER A VARIETY OF VOLUNTARY PLANS

INSIST ON EASY SETUP AND ADMINISTRATION

While health, dental and vision plans are seemingly the most popular, employees also want to make sure their families will be taken care of if something happens to them. Therefore, you may want to consider including life, disability and supplemental health plans, such as critical illness insurance (which covers medical and other expenses arising from a serious illness such as cancer or stroke), deductible insurance (which can be used to cover high out-of-pocket health costs such as deductibles and coinsurance) and hospital-plus (which provides a payment to the insured if they are admitted to the hospital and allows them to use it however they see fit).

Just because your business is small, doesn’t mean you don’t deserve the same personalized treatment that large companies get. Look for insurance companies who specialize in providing hands-on service to small businesses like yours, with a real person to help you through the plan design and setup, through enrollment and beyond. Easy administration is also crucial, since many small businesses don’t have a designated benefits person to handle ongoing administration. Look for a simple, powerful online benefits administration experience that can reduce the amount of paperwork you need to do and streamline your responsibilities.

This article was provided courtesy of R. Andrew Hagen, CFP®. Andrew Hagen offers securities through AXA Advisors, LLC (NY, NY 212-314-4600), member FINRA, SIPC. Investment advisory products and services offered through AXA Advisors, LLC, an investment advisor registered with the SEC. Annuity and insurance products offered through AXA Network, LLC, which conducts business in California as AXA Network Insurance Agency of California, LLC. This article is provided for educational purposes only and not a solicitation of any product or service.

Do you sell products or services to companies that process, manufacture and distribute dairy products? Let us help you make a splash. Contact us today to learn about the opportunities.

William Brod, Publisher, CEO billbrod@nedairymedia.com 315.445.2347 x138

NED Magazine | Second Quarter 2018 • 37

Labor Law

Determining Overtime Exemptions State Laws May Differ From Federal Standards BY EMILY MIDDLEBROOK

ecently, the United States Supreme Court considered a question involving overtime exemptions under the Fair Labor Standard Act (FLSA). In Encino Motorcars, LLC v. Navarro, the nation’s highest court was forced to decide whether automobile service providers are exempt from overtime pay requirements. Under the FLSA, “any salesman, parts man or mechanic primarily engaged in selling or serving automobiles, trucks or farm implements if he is employed by a non-manufacturing establishment primarily engaged in the business of selling such vehicles or implements” is exempt from overtime pay. The court concluded that automobile service providers are salesmen who are “primarily engaged in servicing” cars. Because automobile service providers are more like salesmen, the court held such employees are exempt from overtime pay requirements. While the Supreme Court’s decision in Encino does not directly apply to the dairy industry, it could affect employers in this sector. First, the Supreme Court in Encino rejected a long-standing approach of narrowly interpreting the FLSA. What this means is that, going forward, courts will take a broader look at which employees could be considered overtime exempt under the FLSA. While Encino could mean that employers are more likely to have a favorable ruling on overtime pay requirements in federal court, employers must still comply with state wage and hour overtime laws, which could be more restrictive than the court’s approach in Encino. As such, employers in the dairy industry must be aware that state courts could take a less expansive approach in considering when employees qualify for overtime pay exemptions and must still comply with state law on this issue. Both federal and state laws have certain tests regarding an employee’s salary and job duties in determining whether an employee is exempt from overtime pay. To qualify for overtime exempt status, the United States Department of Labor (USDOL) requires three tests to be met. The first is a salary level test where the employee’s salary must meet a specified amount. On the federal level, the minimum annual salary to 38 • Northeast Dairy Foods Association, Inc.

qualify for exempt status is currently $23,660. New Jersey, New Hampshire, Massachusetts, Vermont and Rhode Island all follow the same salary level threshold established by the USDOL. However, some states in the Northeast have different tests for determining overtime pay exemptions. New York has a higher salary threshold than USDOL regulations in determining whether an employee is exempt from overtime pay.

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LaborLaw In Maine, an employee must be paid at least $576.93 per week ($30,000 annually) to be exempt from overtime pay. Additionally, in Connecticut, there are several different tests that the Connecticut Department of Labor has issued in deciding whether an employee is considered exempt from overtime pay requirements. Yet, it should be noted that the USDOL and legislatures in some Northeast states are considering raising the minimum salary threshold to determine whether an employee is exempt from overtime pay. Next, an employee must also meet the salary basis and the job duties tests to qualify for the overtime pay exemption. To satisfy the salary basis test, an employee must be paid a fixed and pre-determined salary that is not subject to decrease as a result of variations in either the quantity or quality of the employee’s work. The final test is the job duties test, which means the employee’s job duties must mainly involve professional, administrative or executive duties unless the position is otherwise exempted from the overtime requirements. One such exemption is available for agricultural employers who use less than 500 “man days” of agricultural labor in any given calendar quarter in the last

calendar year. If each of the salary level, salary basis and job duties tests are met, then the employee may be exempt from overtime pay under the FLSA. Overall, it is important for employers to ensure that its employees are classified correctly to avoid penalties. If an employer misclassifies an employee as overtime exempt, the employer could owe up to two years of the employee’s backpay for unpaid overtime work; liquidated damages to the employee — which could mean up to double the amount of back pay; attorneys’ fees if the employee brings a formal claim against the employer; and/or back taxes along with interest and fines on the unpaid back taxes. Employers in need of more information about proper employee classifications should seek the advice of a labor and employment attorney. Emily Middlebrook is an associate with Hancock Estabrook, LLP. She can be contacted at emiddlebrook@hancocklaw.com. This article is for informational purposes only and is not intended as legal advice.

NED Magazine | Second Quarter 2018 • 39

OSHA UPDATES High Priority OSHA Standards For The Dairy Processing Industry BY STEPHEN VALENTINE, CIH

ny business in the dairy processing industry is applicable to many of the Occupational Safety and Health Administration (OSHA) regulations and standards. This starts with the basics of injury and illness (OSHA 300 forms) tracking and recordkeeping to written safety programs, safety training to other industry-specific standards such as process safety management for ammonia. The Control of Hazardous Energy (Lockout/Tagout) and machine guarding regulations are two high priority hazards and top 10 most frequently cited OSHA standards year after year.

LOCKOUT/TAGOUT (29 CFR 1910.147 – THE CONTROL OF HAZARDOUS ENERGY) We have all likely heard real time stories of employees injured as a result of improper Lockout/Tagout procedures. Lockout/ Tagout should be a standard and practice readily familiar to all dairy production operations. However, compliance with Lockout/Tagout is still the fifth most frequently cited OSHA standard (2017) in general industry. As a reminder, the Lockout/ Tagout standard is in place to prevent the unexpected start up or activation of machinery and equipment, which could injure an employee during service and maintenance activities. An effective Lockout/Tagout Program is critical to the safety of machine operators, technicians, maintenance, contractors, etc.

40 • Northeast Dairy Foods Association, Inc.

Listed below are the main components of any effective and OSHA-compliant Lockout/Tagout Program: • Written Lockout/Tagout Program consisting of the policies, procedures and responsibilities in place for the implementation of the appropriate precautions. • Available Lockout/Tagout equipment, which includes locks, tags, multi-lock devices, valve covers, circuit breaker covers, etc., to meet the needs of the facility. • Written, equipment-specific Lockout/Tagout procedures for all machinery and equipment in the plant (with some exemptions). These procedures contain specific details (e.g., type and magnitude of energy, actual lockout points) for Lockout/Tagout. • Annual review and update of the written equipmentspecific Lockout/Tagout procedures. • Lockout/Tagout safety training for both authorized employees conducting the Lockout/Tagout (full training) and affected employees in the area of the Lockout/Tagout (awareness training). • Annual review of authorized employee competency in conducting Lockout/Tagout activities using a hands-on demonstration. Every employer should make sure to have these Lockout/ Tagout components in place.

OSHAUpdates MACHINE GUARDING (29 CFR 1910 SUBPART O – MACHINERY AND MACHINE GUARDING) Dairy plants contain a magnitude of production machinery (fillers, homogenizers, packing equipment, facilities equipment) and support equipment (conveyors, cranes, robots) with many moving parts. According to OSHA, it is the employer’s responsibility to safely guard employees from exposure to hazards created by machinery and equipment. This includes preventing employees from accessing points of operation, in-running nip points, rotating parts, flying chips, moving equipment and sparks. Machine guarding was the seventh most frequently cited OSHA standard (2017) in general industry. The most effective approach to managing machine guarding in the plant is to start with an assessment of the hazards within the operations. Practically speaking, this should include all machinery and equipment in production and support areas, as well as maintenance shops. Many of these hazards may be subjective based on visual assessment of points where an employee could become injured from the moving part, while others may be based on specific OSHA requirements for guarding of certain equipment (power presses, abrasive wheel grinders, drill presses). Once these hazards are identified, it is the employer’s responsibility to first try to eliminate (engineer or substitute) the hazard. However, if elimination is not feasible, the employer must utilize machine guarding controls, including, but certainly not limited to: • Physical guards (most common) that create a barrier between the employee and the hazard. These guards can be fixed, interlocked, adjustable or self-adjusting. Many

guards at critical access points are interlocked to prevent employee access when the machine is in operation. • Presence-sensing devices that stop the machine or prevent activation if the employee is in the “hazard zone.” A common presence-sensing device is a light curtain. • Two-handed controls that require the operator to use both hands to operate the machine, thus keeping hands away from the “hazard zone.” Machine guarding controls should also be supported by appropriate warning signs and caution tape, as well as

employee training on machine hazards, guards and their appropriate use. In summary, both of these standards go hand-in-hand in preventing machine or equipment related injuries to employees. Evaluate these requirements in your plant and implement safety initiatives as needed to control those hazards. Stephen Valentine, CIH, is the director of environmental, health and safety with Partners Environmental Consulting (formerly Greystone) in Syracuse, New York. He is a consultant to Northeast Dairy Foods Association, Inc., members, and can be reached at svalentine@ partnersenv.com or 315-263-3183.

18,000 Items. 900 Pages. Nelson-Jameson is your source for hard-to-find and specialty items—as well as products you use every day! Safety Sanitation & Janitorial Production & Material Handling Building & Facilities Maintenance Processing & Flow Control Laboratory & QA/QC Packaging & Ingredients

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NED Magazine | Second Quarter 2018 • 41

EnvironmentalReport

Keeping Close Watch on Environmental Regulations in the Dairy Industry BY DEREK HENDERSON, EIT

nvironmental regulations sometimes fall through the cracks when employers are not aware of what they are potentially applicable to in the midst of their day-to-day facility activities. As such, it is vitally important to know what may be environmentally applicable to your industry and to keep a pulse on what’s being promulgated by state and federal agencies. Here are some common environmental regulatory concerns for the dairy industry:

STORMWATER PERMITTING AND STORMWATER POLLUTION PREVENTION PLAN (SWPPP) REGULATIONS The U.S. Environmental Protection Agency promulgated stormwater regulations [40 CFR Part 122.26(b)(14)(i) through (ix) and (xi)], which regulate the handling and conveyance of stormwater discharges associated with certain industrial activities. The dairy industry is included as one of the applicable industrial activities regulated by 40 CFR 122.26. As such, applicable dairy processing facilities typically have two options to meet compliance requirements of these stormwater regulations, which are delegated to most Northeastern state environmental agencies to enforce. Option 1: The applicable facility must obtain coverage under the MultiSector General Permit (MSGP) for storm42 • Northeast Dairy Foods Association, Inc.

water discharges associated with industrial activities and develop/implement a written Stormwater Pollution Prevention Plan (SWPPP) specific to the facility. The SWPPP includes identification of potential stormwater contamination sources, spill prevention, and monitoring/ recordkeeping/reporting requirements. Option 2: If the facility meets defined standards, the facility may apply for a No Exposure Certification and does not need to file for coverage or develop/ implement a SWPPP.

PETROLEUM BULK STORAGE AND SPILL PREVENTION CONTROL AND COUNTERMEASURE (SPCC) REGULATIONS The EPA regulates facilities with aggregate aboveground petroleum bulk storage of 1,320 gallons or greater and facilities with aggregate underground petroleum bulk storage of 42,000 gallons or greater. Only petroleum storage vessels 55 gallons or greater are counted toward the applicability thresholds. Should a facility determine that it exceeds these thresholds, it must develop and implement a written SPCC plan, which outlines petroleum storage locations, potential spill directions/impacts, spill prevention practices, spill response procedures/actions, inspection requirements and employee training. Most Northeastern state environmental agencies also require petroleum tank registration depending on tank size

and whether these tanks are located aboveground or underground.

CHEMICAL BULK STORAGE AND SPILL PREVENTION REPORT (SPR) Similar to federal SPCC plan regulations, the New York State Department of Environmental Conservation (NYSDEC) specifically also regulates hazardous substances, as listed in 6 NYCRR Part 597. This includes aboveground storage tanks larger than 185 gallons, any size underground storage tank (with some exceptions) or any non-stationary tanks used to store 1,000 kg or more for a period of at least 90 consecutive days. All regulated tanks at facilities must be registered with the NYSDEC and managed in compliance with applicable regulations for the storage and handling of hazardous substances, which includes developing/implementing a written SPR, which is very similar in structure and content to a SPCC plan. Other Northeastern states currently do not require permitting or registration of chemical bulk storage tanks.

RISK MANAGEMENT PLAN (RMP) The EPA currently has a special emphasis program in place for Risk Management Planning (RMP) that mirrors OSHA’s Process Safety Management (PSM) requirements. Specific to the dairy industry, this includes operations with over 10,000 lbs. of ammonia being used for refrigeration. Those employers

EnvironmentalReport Other Environmental Standards That May Apply to Dairy Production Operations AIR PERMITS Typically state-specific equipment subject to permitting in your area may include boilers, emergency generators, parts washers or certain process sources. WASTE WATER Discharges of a type and volume other than typical domestic waste is usually regulated by permits issued by the local treatment works. Pre-treatment may be required even if the source is not subject to federal standards. Direct discharges to surface waters or groundwater always require a permit. HAZARDOUS WASTE Most dairy facilities are small or very small quantity hazardous waste generators. Recent changes to the federal rules for waste generators will have an impact on areas such as waste profiling and container marking, and electronic manifesting will begin rolling out in mid-2018, starting with destination facilities.

exceeding this threshold have multiple requirements to meet the EPA RMP, as well as OSHA PSM standard requirements. This would include a written RMP Program, Off-Site Consequence Analysis and formal, on-line RMP*Submit to the EPA. Both agencies have been known to issue significant citations relating to non-compliance with these requirements. In conclusion, it is important for NEDFA members to take a moment to assess their applicability and compliance with these environmental regulatory programs that are common in the dairy industry.

Derek Henderson, EIT, is a senior environmental compliance project manager with Partners Environmental Consulting (formerly Greystone) in Syracuse, New York. He is a consultant to Northeast Dairy Foods Assoc., Inc. members and can be contacted at dhenderson@ partnersenv.com or 315-657-3056.

UNIVERSAL WASTE Even if you do not generate hazardous waste, universal wastes (lamps, batteries, etc.) must be properly containerized, managed and recycled. CHEMICAL MANAGEMENT EPCRA requirements include annual chemical inventorying (Tier II), as well as release reporting (TRI, or Form R reporting). Chemicals stored, manufactured, processed or otherwise used in excess of thresholds are subject to reporting. Even if your facility is ultimately not required to report, it is prudent practice to keep records documenting that chemicals are below the applicable reporting thresholds. NED Magazine | Second Quarter 2018 â&#x20AC;˘ 43

EnvironmentalReport

The Food Safety Modernization Act: Validation Versus Verification BY KIMBERLY BUKOWSKI

he Centers for Disease Control and Prevention reports that annually 48 million people get sick from foodborne illnesses. That, of course, is something no dairy supplier or producer ever wants to hear. However, the U.S. Food and Drug Administration (FDA) has been working to change the country’s food safety emphasis to prevention. Much is preventable and this issue raises a serious threat to the food industry’s economic success. The Food Safety Modernization Act (FSMA) was signed into law in 2011. According to the FDA, this act ensures “the safety of the food supply is a shared responsibility among many different points in the global supply chain for both human and animal food. The FSMA rules are designed to make clear specific actions that must be taken at each of these points to prevent contamination.” Larger animal goods facilities were required to comply with preventive controls requirements by Sept. 18, 2017. The next deadline comes this September 18, as small business will be required to meet preventive controls requirements. This means that animal food facilities must have a food safety plan in place that includes “an analysis of hazards to determine which ones need control and risk-based preventive controls to minimize or prevent those hazards,” according to the FSMA.

44 • Northeast Dairy Foods Association, Inc.

The seven rules of the FSMA are presently in effect, and by September 2018 all dairy processors must be in compliance. These rules are related to human food, animal food, produce safety, Foreign Supplier Verification Program (FSVP), third party auditor accreditation, sanitary transportation and food defense.

…the U.S. Food and Drug Administration has been working to change the country’s food safety emphasize to prevention, as much is preventable and is a serious threat to the food industry’s economic success. You may be right on target with your food safety plans and have determined preventive controls to monitor. Those of you who already had a HACCP plan and pre-requisite programs in place are probably thinking, “Why do I have to change or adjust what I have been doing?” The differences from the standard HACCP and the FSMA come down to identifying specific prevention controls

and how you will validate and verify them. The key word seems to be “preventive.” All food safety plans must include process preventive controls, allergen preventive controls, sanitation preventive controls and supply chain preventive controls. In addition, all controls must include monitoring, corrective action procedures, verification procedures and recordkeeping. The FSMA defines validation as “obtaining and evaluating scientific and technical evidence that a control measure, combination of control measures, or the food safety plan as a whole, when properly implemented, is capable of effectively controlling the identified hazards.” (21 CFR 117.3) Validation may include using scientific principles and data, use of expert opinion, conducting in-plant observations, testing or challenging the process at the limits of its operating controls. The goal for validation is to be able to demonstrate that the food safety plan will effectively control the identified hazard. All process controls must be validated. For example, when pasteurizing milk, the scientific data that determines the time and temperature of pasteurization is based on a five-log reduction of the most heat resistant pathogen. The verification would be the recording charts that monitor the pasteurization to prove that the times and temperatures were met at all times.

EnvironmentalReport

The FSMA defines verification as “the application of methods, procedures, tests and other evaluations in addition to monitoring, to determine whether a control measure or combination of control measures is or has been operating as intended and to establish the validity of the food safety plan.” (21 CFE 117.3) Verification for a process control could include validation of effectiveness, checking equipment calibrations, record reviews, and targeted sampling and testing. Some of the other controls that require verification are allergens, sanitation and supply chain. Allergen verification could include label review, cross contamination and sanitation after an allergenic product is processed. Sanitation verification could include visual inspection of equipment

and environmental monitoring. Supply chain verification could include second and third-party audits, targeted sampling and testing of your suppliers. All validations should be reviewed at a minimum annually or when any change is made in the system. Verification of records for monitoring a process control must be reviewed within seven working days. All other verification records must be reviewed within a reasonable period of time. Your facility should have a verification schedule that determines what records and programs need to be verified, how often, by whom and how. If you can’t verify that something was processed properly, then it may not have been done correctly and ultimately could lead to a recall or withdrawal — and no one wants that!

Remember, validation is an activity to obtain evidence that a requirement is controlled effectively. Verification is a confirmation through the review of effective evidence that requirements have been fulfilled. In other words, did you do what you said you would do, and are you doing the right thing? For a detailed explanation of FSMA rules and guidance, visit www.FDA.gov. (Source: FSPCA training and FSMA). Kimberly Bukowski is a dairy extension specialist, Department of Food Science, at Cornell University. She can be contacted at krb14@cornell.edu .

NED Magazine | Second Quarter 2018 • 45

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Don’t forget to find us on social media! /NEDairyFoods

/NEDairyAssociation

The 2018 Annual

NORTHEAST DAIRY CONVENTION Gettysburg, Pennsylvania 9.24

9.26

You are invited to attend the Northeast Dairy Convention with other dairy executives and professionals at the historic Gettysburg Hotel. Combine dairy business and a little down time with a guest or your family. Join industry representatives for professional networking and learn more about our industry from our guest speaker line up. Here is what we have planned for you in historic Gettysburg, Pennsylvania.

Business Session Speaker Program TUESDAY, SEPT. 25, 2018 8:30 a.m.

Keynote Speaker: Russ Reading, Pennsylvania Secretary of Agriculture; Welcome and Comments on Dairy in the Region

9:15 a.m.

Chris Nicholas, President, Eagle Consulting Group; Political Update

10 a.m.

Coffee & Milk Break

10:30 a.m. Rod Wheeler, Associate, ACET Global Consulting, LLC, The Global Food Defense Institute , Food Defense for Companies 11:15 a.m.

Steve Valentine, Associate Director, Industrial Hygiene and Safety, Greystone/Partners Environmental Consulting; OSHA Regulations Update

WEDNESDAY, SEPT. 26, 2018 8:30 a.m.

Kim Bukowski, Cornell University, CALS, Extension professional; Food Fraud

9:15 a.m.

Panel Discussion Perspectives on the Dairy Industry with Retailer Andrea Karns, Anthony Gigliotti of Boyer’s Food Markets and Dairy Producer Abe Harster

10 a.m.

Coffee & Milk Break

Thank you

to our sponsors!

KEYNOTE SPEAKER

COCKTAIL PARTY

COFFEE & MILK BREAKS

The 2018 Annual

NORTHEAST DAIRY CONVENTION is hosted by

Meet the Speakers RUSS READING

Perspectives on the Dairy Industry Reading is the Pennsylvania secretary of agriculture with more than 20 years of experience in state and national governmental roles related to agriculture. Reading also is chair of the USDA Advisory Committee on Biotechnology and 21st Century Agriculture.

CHRIS NICHOLAS

Tours Events MONDAY, SEPT. 24 6 p.m.

Open Bar Welcome Party with a Civil War Blue Grey-themed Dinner Buffet. Gettysburg Presentation and Ghost Tour to Follow!

TUESDAY, SEPT. 25 10 a.m. 1 p.m.

Name Bingo, Open To All Guests. Everyone Goes Home A Winner! Golf Tournament, Shotgun/Best Ball Open to All Attendees at Quail Valley Golf Club, 900 Teeter Rd., Littlestown, Pennsylvania A Bus Tour of the Battlefields is Available for Non Golfers

7 p.m.

Annual Convention Cocktail Party and Banquet with Awards Ceremony

WEDNESDAY, SEPT. 26, 2018 11 a.m.

Northeast Dairy Foods Association, Inc., Annual Meeting. All Members Are Welcome to Attend. Lunch Will Be Provided. PA Association of Milk Dealers Annual Meeting. Lunch Will Be Provided.

Political Perspective in the Region and U.S. Nicholas is the president of Eagle Consulting Group and an award-winning Republican political and public affairs consultant. He has managed numerous competitive congressional and state senate campaigns nationwide.

ROD WHEELER

Regulations vs. Reality: Bridging the FSMA Gap Wheeler is the founder/CEO of the Global Food Defense Institute, focusing on food defense, intentional adulteration, education, tampering investigations and intelligence. He is a regular consultant on national and international media outlets on topics such as international security, terrorism and crime.

STEVE VALENTINE

OSHA Update: Changes You Need to Know Valentine is the associate director, industrial hygiene and safety, at Partners Environmental Consulting, Inc. With more than 25 years of experience, Valentine has a solid understanding of safety and health program implementation — from the corporate level to local facility operations.

KIM BUKOWSKI

Food Fraud Bukowski is an extension support specialist at Cornell University’s College of Agriculture and Life Sciences, Department of Food Services. She is an expert in dairy plant auditing, food safety systems, GFSI-Safe Quality Foods, good manufacturing practices, dairy manufacturing, ice cream and FSMA preventive controls.

Registration packets will be mailed to all main member contacts the first week of July. Convention registration begins Sunday, July 1. Links can be found on our websites: www.nedairyfoods.org or www.neastda.org

48 • Northeast Dairy Foods Association, Inc.

Golf Tournament held at QUAIL VALLEY GOLF CLUB

The 2018 Annual

NORTHEAST DAIRY CONVENTION

s you make your plans to attend the Northeast Dairy Convention this September in Gettysburg, Pennsylvania, take a look at some of the fun and interesting things to see and do in this beautiful and historic area of the country.

GETTYSBURG NATIONAL MILITARY PARK MUSEUM AND VISITORS CENTER The Battle of Gettysburg essentially ended General Robert E. Lee’s invasion of the North. This three-day battle is considered one of the bloodiest of the Civil War and was the inspiration for Abraham Lincoln’s famous “Gettysburg Address.” At the museum and visitors center, you can learn about those who lived and fought in this historic town through 12 galleries full of artifacts from this important time in history. www.gettysburgfoundation.org

GETTYSBURG HERITAGE CENTER AND MUSEUM Stop by this family-friendly museum to learn about the Battle of Gettysburg, as well as observe historical documents, artifacts and displays. http://bit.ly/GettysCtr

LINCOLN STATUE AT WILLS HOUSE See a life-like status of our 16th president, Abraham Lincoln, called “Return Visit.” Don’t miss this excellent photo opportunity! http://bit.ly/LincolnAbe NATIONAL CEMETERY

There’s So Much to Do and See in Gettysburg! LITTLE ROUND TOP This mountain was a pivotal spot in the Battle of Gettysburg in 1863. Take advantage of the amazing view at the spot remembered for a downhill bayonet charge that is one of the most remembered actions of the Civil War. Little Round Top is home to many monuments in remembrance of those who fought there. http://bit.ly/LittleRT

GETTYSBURG NATIONAL CEMETERY Visit the final resting place of more than 3,500 Union soldiers killed at the Battle of Gettysburg and see the Soldiers’ National Monument. http://bit.ly/GburgCemetery

DEVILS DEN Climb the boulders used by the infantry near Houck’s Ridge on the Gettysburg Battlefield, where intense fighting took place. Nearly 2,600 were lost on the second day of the battle, as 8,000 Union and Confederate soldiers fought between the giant boulders. www.gettysburgfoundation.org

GETTYSBURG LINCOLN RAILROAD STATION See the train station once used as a field hospital and a departure point for thousands of soldiers during the Civil War. It is also the place where President Lincoln was greeted before giving his “Gettysburg Address.” www.destinationgettysburg.com

LITTLE ROUND TOP

GETTYSBURG GHOST TOURS Take a candlelight tour given by guides dressed in period costumes on great adventures through the streets of Gettysburg, which some say is one of the most haunted towns in the U.S. www.destinationgettysburg.com GHOST TOURS

ADAMS COUNTY POUR TOUR After you’ve had your fill of milk for the day, treat yourself to the ciders, wines and craft beers at locations throughout downtown Gettysburg and the surrounding countryside in Adams County. www.destinationgettysburg.com NED Magazine | Second Quarter 2018 • 49

Photo Submitted by Chobani

What’sNews

Chobani Incubator Program Helps Entrepreneurs Break Into the Industry

hobani, LLC, maker of Greek yogurt and the second largest overall yogurt manufacturer in the U.S., recently announced the members of its spring 2018 class for the Chobani Incubator. The third and largest Chobani Incubator class to date, is composed of companies that are disrupting and improving high-potential food categories in the U.S. — from new and innovative snack products like simple seed-based bars or peanut butter protein puffs to healthier energy drink and smoothie options to nutritional foods. “The past few years have proven the need, value and strong desire for a food incubator that is solely focused on supporting entrepreneurs who want to challenge the food industry, improve broken systems and bring better food to all people,” says Chobani Incubator Director Jackie Miller. “Through this program, we’ve seen companies double their distribution, expand their teams and launch new products — and we’re just getting started. Hamdi, our founder, hand-picked this class — our 50 • Northeast Dairy Foods Association, Inc.

largest yet — for their unique ability to transform traditional product categories in the United States and we couldn’t be more excited to get started with them.” The Chobani Incubator program helps entrepreneurs with big hearts and ideas break into food and beverage industries through equity-free investment and a strong focus on mentorship. There is proof the model works, as the Incubator’s first class has seen a more than 250 percent increase in distribution and 2.6X growth in annual revenue. The program also had more than 650 applications for the nine spots in this year’s class — a 30 percent increase from last year. For this class, Chobani selected purpose-driven entrepreneurs whose products are reinventing high-potential food and beverage categories — making them more delicious, nutritious, natural and accessible. As such, this class’s roster includes several brands striving to improve childhood nutrition. Additionally, given the rise of Millennials’ snacking habits, many are making it easier to eat nutri-

tious food on-the-go. The entrepreneurs represent a broad swath of the country, with companies based across six states: • 88 Acres®, Allston, Massachusetts • Fresh Bellies®,White Plains, New York • Masienda®, Los Angeles, California • NOKA®, Pacific Palisades, California • Nona Lim®, Oakland, California • Puffworks®, Portland, Oregon • Remedy Organics®, Englewood Cliffs, New Jersey • teaRIOT®, Venice, California • Wildway®, San Antonio, Texas This third Chobani Incubator class will run late spring to mid-summer, based out of a dedicated space designed for the Incubator at Chobani’s sales and marketing offices in New York City. For more information and updates from each of the participants, visit chobaniincubator.com.

What’sNews

U.S. Dairy Industry Agreement Furthers Commitment to Food Innovation in Southeast Asia

he U.S. Dairy Export Council (USDEC) and the Food Innovation and Resource Centre (FIRC) at Singapore Polytechnic signed a partnership agreement in May that furthers U.S. dairy’s commitment to food innovation to meet the needs of Southeast Asian customers and consumers. The Memorandum of Understanding (MOU) lays out a framework under which USDEC and U.S. dairy suppliers will work together with FIRC to deepen dairy knowledge, develop innovative food products for the Southeast Asian market and provide consumers in the region with more options suited to their specific tastes. “Singapore is a hotbed of food innovation and the gateway to Southeast Asia,” says USDEC President and CEO Tom Vilsack. “FIRC’s team of food technologists, packaging specialists and

engineers is at the forefront of establishing Singapore as a strategic food hub. We are very excited to be working with this innovative group and look forward to sharing U.S. dairy technology and expertise.” FIRC, a joint venture between Singapore Polytechnic and Enterprise Singapore, is a statutory board under the Ministry of Trade and Industry and was formed in 2007 to provide food companies with technical expertise in new product and process development. It is part of the government’s vision to position Singapore as a leading food and nutrition hub in Asia. “One of FIRC’s objectives is to leverage science and technology to develop food innovations and capture new markets,” says Loong Mann Na, centre director of the FIRC. “We expect the dairy knowledge and spirit of innovation

brought by USDEC and its members will advance progress toward that goal.” U.S. dairy is not new to the region. USDEC has staffed an office in Southeast Asia since 1998, and currently around two-dozen USDEC member companies have personnel based in Singapore or Southeast Asia. USDEC’s 2018 activities fall into two primary areas — health and wellness, and culinary — and focus on demonstrating how the U.S. lineup of sustainably-produced dairy protein, milk powder, specialty ingredients and cheese fit the taste preferences and nutritional requirements of the region. “This partnership allows U.S. dairy suppliers to be at the forefront of the product development process, become more customer-centric and enhance their level of service,” says Martin Teo, technical director, food applications, with USDEC’s Singapore office. NED Magazine | Second Quarter 2018 • 51

What’sNews

“Got Jobs?” Campaign Shares Narrative of Dairy’s Economic Impact

ost Americans know milk and other dairy products are an essential part of a healthy diet. But less well-known is dairy’s contribution to the health of the U.S. economy and the economies of every state across the country. A new storytelling campaign launched in May by the U.S. dairy industry aims to shine a brighter, data-driven spotlight on the positive effects of dairy’s economic engine. The U.S. Dairy Export Council (USDEC), the International Dairy Foods Association (IDFA) and the National Milk Producers Federation (NMPF) are collaborating to create the new “Got Jobs? Dairy Creates Jobs, Exports Create More” campaign. Over the next year, they will share in-depth data and compelling narratives featuring hardworking dairy farmers, innovative dairy company employees, resourceful retailers and many others throughout the food supply chain at GotDairyJobs.org.

“With the Trump administration’s current focus on global trade, it’s important for consumers and policymakers to understand how dairy drives the American economy,” says Michael Dykes, D.V.M., president and CEO of IDFA. “The United States needs sound trade policy that will place the U.S. dairy industry on a level playing field with global competitors. Backed by fair and proactive trade policies, the U.S. dairy industry will continue to keep and create jobs in states across the country.”

DATA SHOWS DAIRY ACCOUNTS FOR BILLIONS IN TAX REVENUES

Source: Dairy DeliversSM

The U.S. dairy products industry supports nearly 3 million workers, generates more than $39 billion in direct wages and has an overall economic impact of more than $628 billion, according to IDFA’s economic impact tool, Dairy DeliversSM at www.idfa.org. The tool also examines dairy’s economic ripple effect on other sectors of the national economy, showing dairy is responsible for $24.9 billion in state and local business tax revenues and another $39.5 billion in federal business tax revenues.

52 • Northeast Dairy Foods Association, Inc.

#GOTDAIRYJOBS TO AMPLIFY CAMPAIGN The new campaign provides a clearinghouse of information at GotDairyJobs. org. The site will offer monthly features, videos and plenty of hard facts that demonstrate dairy’s continued impact on jobs, tax revenue and communities around the country. Using #GotDairyJobs, the dairy industry will amplify the campaign and create the dairy jobs conversation on Twitter, Facebook and Instagram.

“Dairy has a positive story to tell, affecting a wide swath of America, creating jobs and tax revenue in rural, suburban and urban communities,” says Tom Vilsack, president and CEO of USDEC, who saw dairy’s impact first-hand as U.S. Agriculture Secretary. “I’m delighted we now have a go-to place where people can find state-bystate data and compelling human stories that reinforce the same message: ‘Dairy creates jobs and exports create more.’”

“As milk continues its journey from farm to table, it becomes a job-creation machine, employing farm workers, truck drivers, construction workers, factory workers, retailers and even cargo ship captains navigating the ocean to ports in fast-growing countries demanding more dairy than their own countries can produce,” says Jim Mulhern, president and CEO of NMPF. “The United States is uniquely positioned to meet this growing global need, which allows U.S. dairy to provide opportunities for job creation and growth in the United States.”

Dairy Delivers

The Economic Impact of Dairy Products in the United States

The total economic impact of dairy products produced and sold specifically in the United States

Direct Jobs:

977,727 Wages:

The amount dairy companies contribute to the U.S. GDP in 2017

$39.46 billion

$628.27 billion

1.09%

Economic Impact:

$206.89 billion

A further 1,986,183 jobs

Total Tax:

were indirectly supported by the dairy industry through suppliers and the indirect impact of the industryâ&#x20AC;&#x2122;s expenditures.

$64.39 billion DAIRY MATTERS

Dairy foods deliver a unique combination of nine essential nutrients including protein, vitamin D and potassium.

The Dietary Guidelines for Americans recommend three servings of low-fat and fat-free dairy foods per day.

Consuming dairy products provides health benefits, especially improved bone health.

Dairy foods provide about 67 percent of the calcium available in the U.S. food supply.

International Dairy Foods Association | (202) 737-4332 | info@idfa.org | www.idfa.org Source: Dairy DeliversSM, IDFAâ&#x20AC;&#x2122;s economic impact tool.

What’sNews

USDA Announces Cheddar Purchase Plan for Nutrition Assistance Programs

n May, the U.S. Department of Agriculture (USDA) announced plans to purchase cheddar cheese for distribution to various food nutrition assistance programs. Purchases will be made under the authority of Section 32 of the Act of August 24, 1935, with the purpose of encouraging the continued domestic consumption of these products by diverting them from the normal channels of trade and commerce. Solicitations will be issued in the near future and will be available electronically through the Web-Based Supply Chain Management (WBSCM) system at www. usda.gov. A hard copy of the solicitation will not be available. Public WBSCM information is available without an account at https://portal.wbscm.usda.gov/ publicprocurement. All future information regarding this acquisition, including solicitation amendments and award notices, will be published through WBSCM and on the Agricultural Marketing Service’s website at www.ams.usda.gov/selling-food. Interested parties shall be responsible for ensuring that they have the most up-to-date information about 54 • Northeast Dairy Foods Association, Inc.

this acquisition. The contract type is anticipated to be firm-fixed price. Deliveries are expected to various locations in the United States on an FOB destination basis. Pursuant to Agricultural Acquisition Regulation 470.103(b), commodities and the products of agricultural commodities acquired under this contract must be a product of the United States and shall be considered to be such a product if it is grown, processed, and otherwise prepared for sale or distribution exclusively in the United States. Packaging and container components under this acquisition will be the only portion subject to the World Trade Organization Government Procurement Agreement and Free Trade Agreements, as addressed by FAR clause 52.225-5. Offerors are urged to review all documents as they pertain to this program, including: • A M S M a s t e r S o l i c i t a t i o n f o r Commodity Procurements (MSCP), April 12, 2017 • Applicable commodity specification(s) identified in the subsequent solicitation(s)

• Qualification Requirements for Prospective Contractors Selling Commodities to USDA, March 1, 2017. These documents are available at https://www.ams.usda.gov/selling-food. To be eligible to submit offers, potential contractors must meet the AMS vendor qualification requirements. The AMS point of contact for new vendors is Andrea Lang, who can be reached by phone at (202) 720-4237 or by email to Andrea.Lang@ams.usda.gov. Details of these requirements are available online at https://www.ams.usda.gov/ selling-food/becoming-approved. Once qualification requirements have been met, access to WBSCM will be provided. Bids, modifications, withdrawals of bids and price adjustments shall be submitted using this system. To receive e-mail notification of the issuance of AMS solicitations, contract awards and other information, subscribe online by visiting public.govdelivery. com. Inquiries may be directed to the contracting officer, Jeffrey Jackson, via email at jeffreyF.jackson@ams. usda.gov.

BeneďŹ ts of Association Membership EXECUTIVE DIRECTOR AND INDUSTRY CONSULTANT SUPPORT Legislative Representation Through Executive Lobbying and Networking Safety and Environmental Information Economic Analysis and Forecasting Continuing Education and Certification Opportunities Industry Spokesperson Emergency Preparedness

PROFESSIONAL COST-SAVING PROGRAMS AND SERVICES Dedicated Industry-Specialized Insurance Programs Employee Benefits - 401(k) Retirement Program Energy Supply and Consulting Services

NETWORKING AND MEETING EVENTS Annual Northeast Dairy Convention Annual Dairy Industry Clambake Industry Plant Tours Annual Charity Golf Outing Fundraiser

COMMUNICATIONS AND PUBLIC RELATIONS Editorial News Support - Northeast Dairy Magazine Social Media Support Direct Customer Advertising Opportunities Industry Scholarship Program Member Distribution of Dairy News of Key Industry Information

ADVOCACY An association represents your interests before your government leaders, industry and business community. If your business/ industry faces major threats or needs support, our association is right there on the front line fighting for you.

NETWORKING Association events, meetings and member directories make networking a reality for you and your peers. This is the one advantage many view as the most important reason to join!

Member News

Member News and Announcements

Welcome to the newest members of the Northeast Dairy Association, Inc.: DeLaval; Shelton Associates Inc.; Power Management Co., LLC; Ryder Transportation; Schenck Process; and Schneider Packaging Equipment. Empire State Development (ESD), New York’s chief economic development agency, announced in April that BelGioioso Cheese, one of the nation’s largest specialty cheese producers, plans to build a new 100,000-squarefoot manufacturing facility in Glenville, Schenectady County (New York), and create 46 new jobs, while retaining 31 local employees. Belgioioso Cheese will be using milk from New York dairy farms, which will provide a boost to the state’s agricultural industry. To help secure this new investment for New York state, ESD has agreed to provide up to $850,000 in performance-based Excelsior Jobs Program tax credits. BelGioioso Cheese has signed a contract with Schenectady County Metroplex Development Authority to purchase 40 acres at the Glenville Business and Technology Park, where it will build a state-of-the-art manufacturing plant. Founded in 1979, BelGioioso is a specialty producer of all-natural, award-winning Italian cheeses manufactured, aged, finished, packaged and shipped from the company’s facility. This allows BelGioioso Cheese to provide quality control from start to finish,

56 • Northeast Dairy Foods Association, Inc.

Byrne Hollow Farm Lactose Free milk is locally sourced.

and for 40 years the company has set a standard of excellence, winning several national and international awards for taste and quality. The Byrne family has worked closely with local farm families to bring customers the highest quality dairy for four generations. These relationships have been bonded by trust with a simple handshake. Now, Byrne Dairy’s newest brand, Byrne Hollow Farm, has a new addition in its lactose free milk — a rich, classic taste of whole, 2 percent, fat free (skim) and chocolate milk without the lactose. Byrne Hollow Farm Lactose Free Milk is a product everyone can enjoy. It’s real milk sourced exclusively from the Hourigan Family Farm in Navarino, New York, so you’ll always know where your milk comes from.

And, like all Byrne products, there are no artificial growth hormones (rBSTfree) or artificial ingredients, and it’s non-GMO. For more information, visit www.byrnehollowfarm.com. Chobani is considering a significant expansion of its yogurt plant in South Edmeston, New York. This expansion would enable the company to increase products manufactured in the facility and create a significant number of jobs in addition to the 1,000 who are already employed there. It would result in greater milk consumption and a boon to the state’s economy, as all milk Chobani uses at that location is purchased from New York state dairy farmers. Chobani has yet to make a formal announcement but has been committed to continued growth in Central New York since 2007.

Member News PTI (Packaging Technologies & Inspection) of Tuckahoe, New York, and Germany-based Waldner announced Sam Troiano has been named lead product manager of the North American team. “With our dedicated sales, project management, service and engineering staff for dairy, pet food and baby food, we carry Sam Troiano out Waldner’s core values and ensure that the customer’s needs are met in a timely manner every step of the way,” says Troiano. “Whether it’s providing consultations on new or existing projects or providing technical support and service, PTI/Waldner North America works endlessly to not only satisfy client needs but to nurture an ongoing relationship.” Perry’s Ice Cream, a fourth generation, family-owned ice cream company headquartered in Akron, New York, has expanded into all eight Wegmans Maryland store locations. This expansion comes on the heels of a successful 2017 launch into the Virginia Wegmans stores, where currently all 11 locations in the state carry the Perry’s brand. “The growth into Maryland is a direct result of Perry’s strong performance in Virginia and an integrated, long-term partnership with Wegmans. Our brand has far exceeded planned year one share goals; consumers have clearly responded to Perry’s ‘good stuff,’ and we are well-positioned for success in this new market,” says Robert Denning, president and CEO of Perry’s Ice Cream.

Flavorchem Corporation, a global supplier of flavor and color solutions, recently unveiled its line of clean label extracts. The “Go Clean” movement is here to stay with consumer demand for more label-friendly ingredients, clean processing facilities and corporate transparency and authenticity. Flavorchem now offers a variety of clean label extracts derived from wholesome sources, using only the cleanest methods of processing for a true-to-nature flavor. There are no federal regulations defining “clean label” ingredients, but Flavorchem follows standards set by industry leaders in food service and retail, including no artificial ingredients, Propylene Glycol Free, Prop 65 Free, Non-GMO Project Verified, no synthetic chemicals, caramel color free, natural/natural WONF and organic compliant/certified.

INDUSTRY NEWS Garelick Farms, owned by Dallasbased Dean Foods, will close several U.S. plants, including one in Lynn, Massachusetts. Several other locations have closed in the last few years, including a milk processing facility in Bangor, Maine. James Cowdell, executive director of the Economic Development Industrial Corp. in Lynn, was quoted as saying he spoke with the plant manager, who confirmed that the closure was announced to employees at the Massachusetts location. Morrisville State College (New York) students tested their skills showing livestock during the annual Spring Showmanship. This year’s winners were: • Natalie Strub, North Collins, New York; Master Showman, Grand Experienced Showman for Beef, and Reserve Showman for Dairy • Madison Woodis, Dewittville, New York; Reserve Master Showman and Grand Experienced Showman for Dairy • Austin Graham, Montrose, Pennsylvania; Grand Showman for Lamb • G a r r e t t J e n k i n s , B a i n b r i d g e , Pennsylvania; Reserve Showman for Lamb and Novice Showman for Dairy • Jacob Wafler, Wolcott, New York; Reserve Novice Showman for Dairy

• Brittney Noto, Delevan, New York; Reserve Showman for Beef The college’s curricula are enriched with applied learning and pave the way for opportunity at both the Morrisville and Norwich, New York, campuses. An action-oriented, interactive learning lab, the college is a national leader in technology and has been lauded for its exemplary, innovative and effective community service programs. For more information, visit www.morrisville.edu. NED Magazine | Second Quarter 2018 • 57

Meet The Team

he Northeast Dairy Foods Association welcomes two new faces: Alex Walsh and Caroline Reff. Both Walsh and Reff will focus on different aspects of communicating with our membership through the association’s various resources. We are happy to utilize their skills and expertise as part of our team.

ALEX WALSH Director of Membership and Communications

In May, Alex Walsh joined The Northeast Dairy Foods Association as the director of membership and communications. He is responsible for expanding the association’s membership and its services to members, communications and media relations. A graduate of SUNY Oswego, Walsh previously worked as a public relations account manager for Pinckney Hugo Group, a public information specialist for the Onondaga County (New York) Department of Transportation, and as a legislative aide to New York State Senator John DeFrancisco. “I am excited to take on the new position of director of membership and communications. It is my goal to grow the membership and highlight and promote the great work our members are doing every day in the dairy foods industry,” says Walsh. Walsh can be contacted at aw@nediaryfoods.org or 315-452-6455 (MILK).

CAROLINE K. REFF Editor, Northeast Dairy magazine

Reff is the editor of the Northeast Dairy Foods Association’s publication, Northeast Dairy, published by Northeast Dairy Media. She has more than 25 years of experience as a writer, editor, project coordinator and public relations professional. A graduate of Boston College, Reff worked as a reporter/special sections editor at Manlius Publishing Co., as the assistant director of community relations at St. Joseph’s Hospital Health Center in Syracuse, New York, and is the principal/owner of Inkwell Creative Services, a small business focusing on copywriting and editing. For the past 11 years, she has also been a member of the faculty at the S.I. Newhouse School of Public Communications at Syracuse University, teaching news and public relations writing. “I am excited to lead the continuing development of Northeast Dairy magazine, as our team works to communicate information and issues vital to our members and the dairy industry as a whole,” says Reff. “It’s an exciting and valuable tool, and I strongly encourage our membership to contact me with news and ideas — big or small — so that we can continue to network, share best practices and explore the issues that matter most to you through the pages of our magazine.” Members are encouraged to contact Reff at creff@nedairymedia.com. 58 • Northeast Dairy Foods Association, Inc.

As we celebrate

90 years of serving our members throughout the Northeast, let’s take a look back at some of the key accomplishments along the way!

1997 A contingent of seven New York City-area milk processors and distributors agreed to join the association. The addition of these companies solidiﬁed the association’s position as the only trade group in the state to represent the dairy processing and manufacturing industry. The membership grew from 72 to 120 between 1992 and 2006.

1993 In November, the ofﬁce moved from Albany to North Syracuse, where it remains today.

1992

2008 In September, the board approved an expansion of the association to include the New England states and New Jersey. The organization became the Northeast Dairy Foods Association, Inc.

2006 The association’s supplier and vendor support group, the New York State Dairy Food Boosters, merged with two similar organizations to form the Northeast Dairy Association. The merger drove the number of members past 225.

2018 The association celebrates 90 years as a strong vibrant group for the beneﬁt of our membership in the dairy industry.

Bruce W. Krupke was named executive vice president. He came to the association after eight years at the American Dairy Association and Dairy Council.

1978 The board of directors approved a name change to New York State Dairy Foods, Inc., to more adequately represent the entire dairy processing, manufacturing and distribution industry in the state.

1972 Edmund Towle became the executive vice president, and the ofﬁce was relocated to Albany, New York.

1928 The New York State Milk Distributors, Inc., was founded in Syracuse, New York, with districts from regions around the state. Each district sent one delegate to form the board of directors. J. Russell Fox was the executive vice president, a position he held until 1972.

Celebrating

On a daily basis, our goals and efforts are directed towards: Representing our membership as a united processing/manufacturing/distribution body before legislative government and regulatory agencies, promoting and safeguarding their common business interests. Providing services and information to our members that will continually serve to improve their operations ensuring the efﬁcient distribution of the freshest and safest dairy products possible.

YEARS

Our Mission Statement

ADVERTISERS INDEX Agri-Mark Cooperative- Cabot Cheese............ 27 American Dairy Association- North....................3 Brown & Brown Empire State........................... 28 Dairy Farmers of America, Inc.......................... 29 Evergreen Packaging........................................ 13 Farm Credit East............................................... 31 Herbein + Company......................................... 21 Indian River Transport...................................... BC Jefferson County Local Development.............. 10 Nelson-Jameson, Inc........................................ 41 Plumley Engineering, P.C.................................. 33 ProSpect Analytical Technology, Inc. ............... 29 PTI/Waldner North America........................34-35 Schenck Process LLC........................................ 39 Spinnaker Custom Products............................. 60 S&D Welding.................................................... 25 Tri Tank Corp.................................................... 25 Tremcar USA Inc............................................... 37 Weidenhammer New Packaging, LLC............ IBC W N VanAlstine & Sons, Inc. ............................ 28

GIVE US SOMETHING TO CHEW ON. Are you introducing an interesting product? Have you instituted cutting-edge processes? Are you welcoming a new hire? Is your business expanding, moving or changing? Do you have other news to share? Northeast Dairy magazine is always looking for Member and Industry News. Email your information, news releases and/or captioned photographs to us at editorial@nedairymedia.com.

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