By Alyssa Sowerwine

MADISON, Wis. — It’s a well-known fact that kids love pizza. As concerns about childhood obesity are mounting and regulations on school meals are tightening, pizza companies and the dairy industry are coming together to offer kids a fresher, healthier version of one of their favorite foods.

The initiative stems from a partnership that began a few years ago between two Colorado school districts; Leprino Foods Co., Denver; Colorado’s Domino’s Pizza franchisees; Western Dairy Association (WDA); and the Colorado Food Distribution Office, says Cindy Haren, CEO, WDA.

“It was a project that started as parents asked the school districts to come up with a healthier pizza for lunches in their schools,” Haren says.

Haren says St. Vrain School District and Douglas County school nutrition directors worked with Leprino Foods, which developed a 100 percent real lowfat Mozzarella cheese that schools could place on pizza or for other uses.

Leprino Foods developed this cheese, called B035 cheese, and worked with the Colorado Food Distribution Office to get it categorized as a USDA commodity cheese and listed on the USDA catalogues to schools, Haren says.

Schools then placed bids out to local pizza franchisees for their services to make a healthier, fresher school pizza with the cheese. Domino’s was awarded the bid for the Douglas County and St. Vrain districts, in part due to an inspection of its stores in which it ranked high in cleanliness, Haren says.

Domino’s stores the cheese at its local stores before using it to make fresh pizzas each morning. The dough is stretched and then topped with sauce, Leprino’s BO35 cheese and other toppings, and baked at 500 degrees.

The pizzas then are boxed and loaded into a Heat Wave bag to maintain a minimum temperature of 140 degrees before orders are dispatched for delivery from Domino’s stores to the schools.

The schools then buy the pizza back from Domino’s, minus the cost of the cheese.

Haren notes that with the program, benefits in cost savings in fresh vs. frozen pizza have been realized, particularly when labor and utilities are factored into the cost. With the cost savings, schools are able to use even more cheese.

“It’s a significant reduction in school labor,” she says. “It also reduces repair and maintenance costs for school ovens, as well as the reduced utility costs from baking.”

In addition, each pizza slice is bundled with milk and a fruit or vegetable to make a reimbursable meal for the schools.

Haren adds the situation really is a win-win for schools and for Domino’s, which is gaining brand recognition with schoolchildren.

“School districts in Colorado saw a 10 percent increase in pizza meals when they started serving Domino’s fresh pizza vs. frozen pizza,” she says. “The same districts saw a 5 percent increase in their summer meal program when they added Domino’s fresh pizza to their menu for just one day per week.”

Now Dairy Management Inc. (DMI), along with WDA, is working at the local and national level to get the word out about fresh pizzas in schools. A DVD brochure was developed, which is used nationally, Haren says.

In addition, DMI has been working in concert with cheese suppliers and others, as well as dairy research centers, to develop a more nutritious pizza using lowfat cheese for schools nationwide, says Jim Montel, vice president of retail and channel development, DMI.

“Pizza is of paramount importance to dairy producers,” Montel says. “It’s the No. 1 item requested by schoolchildren, and we want it to be healthy as well as have good taste.”

Montel notes that with the large focus on cheese on pizzas, there have been some increases in cheese utilization since the first of the year.

DMI also has partnered with Domino’s, which recently introduced Domino’s Smart Slice, targeted specifically for schoolchildren. While the product launch is still in its “piloting” phase — it began last year in schools around Domino’s headquarters in Ann Arbor, Mich., and taste sampling now is being conducted nationwide — it has seen positive results, and Domino’s hopes to officially launch Smart Slice in late 2010 or early 2011 in schools nationwide, says Stephanie Raupp, school lunch marketing, Domino’s.

“We’re really trying to brand it to the kids,” Raupp says. “This isn’t the same pizza they’d be ordering on a Friday night with their parents at home.”

Raupp says Domino’s worked with cheese suppliers of 100 percent real lite Mozzarella cheese to reduce the fat content on the pizzas by about 50 percent, as well as reduce sodium. To address lack of flavor, Domino’s added a bit of Provolone.

The pizzas also are made with dough with 51 percent white whole wheat flour, and the sauce contains 35 percent less sodium, she adds.

“Part of the reason we came up with this is that we started to recognize challenges in school districts to have nutritious foods that kids will actually eat,” Raupp says.

Other regions have the capacity to seize this opportunity as well.

At Wisconsin’s Center for Dairy Research (CDR), researchers have worked to develop a lower fat, lower sodium Mozzarella. While the cheese is still in the process of getting its own patent, one use researchers have in mind for the cheese is on school pizzas, says John Lucey, professor of food science at the University of Wisconsin-Madison.

CDR’s research, which is partially funded by DMI, has led to the development of a technology that can be applied to both process and natural cheese.

According to Lucey, researchers started by creating a natural base cheese with specific acids instead of cultures.

“We found that we could make a cheese that could be used for processing that did not need emulsifying salts,” Lucey says. “The advantage of that is we don’t have to add sodium-based emulsifying salts.”

He adds that the lowfat process cheese could be used as a substitute for American pasteurized process cheese in school lunch programs.

Researchers also used a related type of approach to make what could be considered a natural Mozzarella.

Lucey adds that since pizza is such a popular item with kids and with tightening regulations on nutritional guidelines, CDR sees the school sector as an attractive opportunity for its lowfat Mozzarella production technology.

While he can’t give specifics, Lucey says there is some interest from cheese manufacturers who sell directly to school lunch programs, as well as a number of pizza companies.

“I’m hopeful that people will take advantage of this opportunity,” he says.

CMN

By Johanna Nelson

MADISON, Wis. — From tacos and pastas to sandwiches and salads, many pizza restaurants are expanding their menu options to appeal to a wider consumer base. And while this may help to drive sales, some feel that keeping the focus on the core business of pizza will be best in the long run.

“Anecdotally, it is a fairly common strategy to branch out a menu during challenging economic times to widen your customer base, and with it the potential for more business,” says Annika Stensson, director of media relations, National Restaurant Association. “For example, if a party of three guests decides to visit or order from a restaurant and one person doesn’t want pizza while the others do, they are likely to choose a restaurant that offers both pizza and non-pizza menu options.”

For Domino’s Pizza Inc., the decision to expand its menu offerings was driven by the need to stay competitive. Chris Brandon, spokesperson for Domino’s Pizza Inc., says now more than ever, many quick service restaurants (QSRs) are realizing menu options and variety are important.

“Certainly our category has realized it is something we need to do, and we’ve been fortunate enough to get out in front and either create something new for ourselves or expand on something that someone previously had launched,” Brandon says. “Eighty percent of our current menu are things that have been developed and launched since 2008 — it’s been important to us.”

The company has expanded its menu to include new bread bowl pastas, chocolate lava cakes and oven-baked sandwiches, which have seen considerable success in the lunch sector.

Varieties include Italian sausage and peppers; buffalo chicken with Blue cheese; sweet and spicy chicken habanero; and Mediterranean veggie.

“Typically we’re considered a dinner time option for people, but with the launch of the sandwiches, we’ve put a lot of emphasis on increasing our lunch business, and we’ve done that,” he says. “When we first launched them, we actually beat Subway sandwiches two to one in a national taste test. It’s kind of cool — Domino’s has become more than just a pizza company.”

In addition to focusing on menu expansion, Brandon says the pizza chain also is working to reinvent its core product. Domino’s recently launched a line of six specialty pizzas offering 40 percent more cheese than a regular Domino’s hand-tossed pizza.

The American Legends pizzas are available in six varieties including Honolulu Hawaiian, Cali Chicken Bacon Ranch, Pacific Veggie, Memphis BBQ Chicken, Buffalo Chicken and Philly Steak Cheese.

The new launch is part of a large-scale media campaign with support from dairy farmers in cooperation with Dairy Management Inc. (DMI).

“We’ve never had a premium line of pizzas before, so this is something that has stepped us up a bit in the pizza area,” Brandon says. “We’re still clearly reinventing our core product.”

Pizza Hut also has diversified its menu with the addition of new items such as its Tuscani Pastas. Varieties include Tuscani Creamy Chicken Alfredo, Tuscani Meaty Marina and Tuscani Lasagna.

The company markets them as a time-saving dinner alternative for busy families. In particular, Molly Gold, a consultant for Pizza Hut, researched the time and cost involved in preparing a traditional pasta dinner and compared it to the cost of ordering Tuscani Pastas. The company says her findings showed Tuscani Pastas were a time and cost saver compared to preparing a pasta dinner on one’s own.

In conjunction with the arrival of the new pastas, Pizza Hut also launched a “Pasta Hut” campaign.

Pizza Hut restaurants also feature WingStreet, a delivery-based wing chain that doubled its size in 2008.

“The WingStreet concept is picking up momentum and continuing to expand rapidly across the United States,” says Lisken Lawler, marketing director, WingStreet. “It just goes to show you that customers love our award-winning wings.”

Smaller pizza restaurants also are looking to grow sales through menu expansion. Happy Joe’s Pizza and Ice Cream of Burlington, Iowa, features a diverse menu including breakfast, lunch and dinner options.

In addition to pizza, Happy Joe’s offers customers salads in varieties such as chicken caesar, taco and cobb; a kid’s menu serving baked spaghetti as well as macaroni and cheese; Italian, turkey bistro and chicken Swiss paninis; taco pasta; omelet pizzas and scramblers (a mix of potatoes, scrambled eggs and cheese), among others.

And while such menu expansions are expected to increase sales, Chris Moore, senior vice president of pizza strategic initiatives, DMI, says pizza category sales actually have declined or remained flat for about five out of the last six years, a fact he attributes to a lack of focus on pizza and innovation at some of the major pizza chains.

“Some of the chains have even resorted to the practice of reducing the amount of cheese on pizza, and that has of course contributed to quality erosion and a lot of unhappy customers,” he says, noting this is of particular concern for the cheese and dairy industry as 25 percent of all cheese is used in pizza.

Through the Dairy Checkoff, DMI is working with leading pizza chains or pizza providers to grow cheese sales. Moore notes a partnership with Pizza Hut will work to introduce many cheese-friendly pizza innovations in 2010.

He also believes that collaborations such as the one with Domino’s is helping to return the focus to pizza as opposed to non-traditional menu items.

“Dairy checkoff has certainly met with major pizza chains and have shared with them consumer insights that support the fact that consumers love pizza, and they love cheese,” Moore says.

Moore also notes there has been a recent renewal of interest in pizza, and sales have been on the upswing for the first couple months into the new year. In fact, according to NPD Group data, sales at SQF pizza restaurants were up 19 percent the week following the Super Bowl.

“Obviously pizza sales tend to go up during the Super Bowl, but 19 percent is huge,” Moore says. “When pizza chains are focusing on pizza, you see these kinds of numbers.”

On the other hand, Moore admits diversifying menus also can be beneficial for restaurants as it does help to increase customer count. He notes that although he would prefer pizza restaurants focus solely on pizza, other food items provide additional applications for cheese and cheese products.

“Pizza chains are looking for ways to attract new customers through different menu occasions and some have resorted to promoting other items at the expense of pizza,” Moore says. “There needs to be some balance.”

CMN

By Johanna Nelson

MADISON, Wis. — Facing challenging economic conditions and fierce competition, independently-owned pizza restaurants have their work cut out for them. To meet the obstacles today’s marketplace holds, many restaurant owners are focusing on special promotions, unique marketing tactics and more gourmet menu selections.

“During rough economic times, all restaurants experienced a decline in sales, and independent restaurants were hit even harder,” says Maria Caranfa, foodservice analyst, Mintel Menu Insights.

For Glass Nickel Pizza Co., a Madison, Wis.-based pizza restaurant, the competition has been intense, especially in light of current economic difficulties. Tim Nicholson, Glass Nickel co-owner and president of Madison Dough Boys Inc., says 12 other pizza places have opened up in the company’s delivery area throughout the last decade. On the positive side, he notes Glass Nickel has been able to grow its sales for 11 consecutive years, although this past year it was down 1 percent.

“Competition is extremely high; cutthroat,” says Nicholson, noting competitors range from the big chains to locally-owned restaurants to the frozen pizza sector. “We try not to worry about it though; we just try to put out the best product and the best service possible.”

Eclectic Pizza, Tucson, Ariz., also has seen more and more restaurants pop up, and owner Renee Kreager says initially it seems very easy and profitable to those interested in starting up their own restaurant.

“Because so many places have been closing, it is taking less money and the incentives are bigger for moving into a ready-made building,” Kreager says. “I think people are just giving it a go.”

For Mr. Jim’s Pizza, headquartered in Branch, Texas, the combination of stiff competition and the struggling economy has translated into a decrease in sales and increased customer expectations.

“It’s not just pricing, but every aspect of the order. It’s too easy to move on down the road to the next competitor,” says Jim Johnson, founder of Mr. Jim’s Pizza. “If we don’t treat a customer right, he can have burgers or chicken next time, let alone all the myriad of pizza choices.”

And while times have been tough, there may be opportunities for growth in the year ahead. In fact, Caranfa says there are several trends independent restaurant owners can take advantage of in order to differentiate themselves from the competition and grow sales in the long run.

According to Mintel’s 2010 Menu Trends Predictions, restaurants will have the opportunity to “harness the power” of classic combinations and simple, pure ingredients in the year to come.

“It’s about just getting to the root of good food and good drink,” says Caranfa, noting restaurants should examine the menu’s core offerings, what they do best and how to do it better.

The “ buy local” movement also offers the chance to grow sales, and Caranfa says independently-owned restaurants are in a unique position to benefit from this trend as larger chains cannot promote some of the “local” values consumers are seeking out.

“As consumers are looking to eat more homemade food and don’t always want to cook it themselves, independent restaurants can stress the really home grown, homemade touches that are going into all of the menu items, whether it is recipes passed down from generations or using rustic touches like wood-burning stoves,” says Caranfa, adding that the addition of high-quality ingredients such as local artisan cheeses resonates well with consumers. “We’ve seen that claims such as ‘homemade,’ ‘authentic’ and ‘rustic’ were able to increase prices while other pizza chains faced falling prices.”

In the third quarter of 2006, pizzas with “homemade,” “authentic” and “rustic” claims sold for an average of $13.39 while pizzas without such claims sold for an average of $12.80. In the third quarter of 2009, the average for pizzas with homemade claims was still higher than those without, at $14.66 compared to $13.87. According to Caranfa, this indicates that consumers appear to be willing to pay more for pizzas when associated with such claims.

Another indication that sustainable and local claims may justify higher prices in consumers’ minds is the fact that while economic conditions worsened, consumers’ interest in locally-grown, organic food remained strong despite concern over cost, according to Mintel data. When the research firm asked consumers to evaluate what is important when dining out, 46 percent said knowing the restaurant follows sustainable food practices is important. This was second only to knowing the ingredients were safe and fresh, which 69 percent rated as No. 1.

Consumers also responded positively to locally-grown food, with a 3 percent increase in interest between 2008 and 2009.

“Mintel thinks value is not just dollars and cents, and in the coming years, it’s really going to be about what you’re getting for your money,” she says. “Quality is really going to be important, and things like ‘homemade’ will really enforce that level of quality.”

A diverse menu also has helped Glass Nickel stay ahead of the competition, according to Nicholson. From fish and chicken to salads, subs and pizza, the company offers a little bit of everything. In addition, it incorporates gourmet items such as Blue cheese, Swiss and Cheddar as well as mainstays such as Mozzarella and its house blend of Mozzarella, Provolone and Cheddar. The cheeses for the most part are local, coming from Wisconsin and Illinois.

In the future, Nicholson is hoping to pinpoint where the company receives its food items and work toward changing supplier locations to a closer area when possible.

Glass Nickel has embraced the local, sustainable movement in a variety of different ways. The restaurant has implemented a number of eco-friendly practices, including outfitting its restaurants with light emitting diode (LED) lighting. It has replaced its less efficient florescent tubes with low energy LED tubes, which has resulted in annual savings of about 40,000,000 watt/hours of electricity, according to the company.

In addition, Glass Nickel utilizes waste vegetable oil (WVO) delivery cars that operate on vegetable oil, with diesel fuel only being used for the initial start up since at lower temperatures, vegetable oil is too thick to move through the engine.

“We have six green cars throughout the seven restaurants that run on vegetable oil,” Nicholson says. “When we are done with the fryer oil, we filter it and use it as fuel.”

The company also employs two hybrid cars in its delivery fleet including a Honda Civic hybrid and a Toyota Prius, which it says is great for stop-and-go city driving.

Its Oshkosh, Wis., location also has been conducting research on the new Smart brand cars in its delivery fleet. These cars are capable of achieving up to 41 miles per gallon with the use of a three-cylinder engine and regular unleaded gasoline.

Additional “green” efforts include a switch to biodegradable pizza containers made from cornstarch. In the future the restaurant also hopes to switch to a solar hot water heater designed to reroute cold water through black piping on the roof, where it gathers solar heat.

In addition, Glass Nickel works to stand out by forming local ties within the community through the various causes it supports, ranging from March of Dimes to the Cerebral Palsey Center to the Red Cross Blood Drive and the Aldo Leopold Nature Center, among others.

Glass Nickel also strives to ensure there is an owner available at every location, and Nicholson believes this is a strong point when it comes to consumers.

“Customers really like to call and talk to an owner, and in my experience — I’ve worked at about every pizza place basically since I was 16 on — many places are run by young kids,” Nicholson says. “Our pizza places are run by young adults or adults, and to them it’s not just a job, it’s their life.”

Glass Nickel shares its current activities and future plans through its website, flyers and an e-mail marketing campaign. It is working to build an e-mail database that will allow it to spread its message without the costs associated with postage and paper.

Johnson of Mr. Jim’s Pizza also utilizes various internet opportunities, television ads, shared mail flyers and solo mail flyers to highlight Mr. Jim’s. He says the fact that his company is locally-owned and “familiar” to consumers is a strong point as is the fact that the restaurant makes its dough fresh on a daily basis.

Additional attributes Johnson works to highlight include the restaurant’s line of signature pizzas and its Nacho Stix — a thin crust without sauce cut into strips and served with salsa for dipping.

He also works to highlight best sellers such as Mr. Jim Sticky Fingers and Chicken Nacho Stix.

Johnson says future endeavors to increase the company’s presence within the industry will include exploring new products and expanding internet marketing.

Eclectic Pizza focuses its marketing and promotions on what it calls the “educated consumer.” The restaurant specializes in fresh, local, organic and green products, and it seeks out those who feel encouraged by the effort to bring them a great product and are aware of the cost that is created by doing so, Kreager says.

“We have a desire to provide a pure product for people who care so deeply and have the understanding this is not just marketing — eating is a nourishing experience and a great time to realize you really do get what you pay for,” she says. “Our goal is to say, ‘enjoy this delicious meal and feel good that you have supported us further in providing the best we can from farm to table.’”

Eclectic Pizza reaches out to consumers via advertising online, in print, in the local weekly paper, and occasionally television and radio. Word-of-mouth also has been helpful, as are special promotions such as a coupon book with selected zip codes.

The restaurant highlights its dedication to local and green practices, including the fact that all of its pizzas begin with organic homemade dough and sauce. It also uses organic products whenever possible throughout the menu and utilizes biodegradable take out containers, napkins and straws.

The restaurant works to differentiate itself through its unique menu offerings, such as pizza with homemade hummus, black beans and spinach.

In addition, Eclectic Pizza works with a local coffee roaster, bread maker, tomato distributor, paper supplier, produce company, brewery, ranch and farmers’ market.

Kreager says customer response has been very supportive and appreciative of the restaurant’s commitment. She notes the company needs more of that to reach profitable margins, although the restaurant did make it through the last two years going slightly up while many of the local businesses went down — some even closing.

Looking to the future, Kreager hopes to increase profits in order to continue cooking and operating conscientiously without the cost becoming too high for customers.

Kreager notes being locally-owned will help as the restaurant works to reach its goals noting that consumers believe that people care more than corporations, working to ensure care is taken with the service provided.

“This is not always true by any stretch of the imagination, but when it is true, the consumer wins,” Kreager says. “When we who own the business operate the business, our passion is tasted in every bite and felt in every handshake.”

CMN

WASHINGTON — Milk production in the 23 major milk-producing states during January totaled 14.82 billion pounds, down 0.6 percent from January 2009, according to preliminary monthly data recently released by USDA’s National Agricultural Statistics Service (NASS). (All figures are rounded. Please see CMN’s Milk Production chart.)

Revised December production in the 23 major states was 14.63 billion pounds, down 0.7 percent from December 2008. The December revision represented an increase of 18 million pounds or 0.1 percent from last month’s preliminary production estimate.

This month’s NASS production report, with revisions, puts total U.S. milk production during 2009 at 189.32 billion pounds, 0.3 percent below 2008 (although with leap year incorporated, 2009 production on a daily average basis was less than 0.1 percent lower than 2008 production). Revisions to 2008 production decreased the annual total 10 million pounds, NASS reports. Revised 2009 production was up 61 million pounds from last month’s milk production report, NASS adds.

Production per cow in the United States averaged 20,576 pounds for 2009, 181 pounds above 2008. The average annual rate of milk production per cow has increased 13.1 percent from 2000, according to NASS.

The average number of milk cows on farms in the United States during 2009 was 9.20 million head, down 1.2 percent form 2008. There was no revision to the average number of milk cows for 2008.

In January 2010, total U.S. milk production is estimated at 16.04 billion pounds, down 0.6 percent compared to January 2009. The drop was due to the significant decline in cow numbers in the January-to-January comparison. There were 9.09 million cows on U.S. farms in January 2010, NASS estimates, down 227,000 head from 9.31 million head in January 2009. However, January 2010 cow numbers were up 3,000 head from December 2009. Production per cow in January 2010 averaged 1,766 pounds, up 33 pounds from January 2009.

In the 23 major milk-producing states, there were 8.32 million cows on farms, down 191,000 head from a year earlier but up 4,000 head from December 2009. Production per cow in the 23 states averaged 1,782 pounds, 30 pounds more than a year earlier.

California, which leads the nation in milk production volume, produced 3.37 billion pounds in January 2010, down 2.4 percent from January 2009, according to NASS. There were 1.76 million cows on California dairies in January, down 72,000 head from a year earlier and down 2,000 head from a month earlier. Production per cow averaged 1,915 pounds in California in January, up 30 pounds from January 2009.

Wisconsin followed with 2.16 billion pounds of milk produced in January 2010, up 4.7 percent from its production a year earlier. There were 1.26 million cows on Wisconsin farms in January, 5,000 head more than in January 2009 and 1,000 head more than in December 2009. Production per cow in Wisconsin in January 2010 averaged 1,715 pounds, up 70 pounds from a year earlier.

CMN

WASHINGTON — USDA last Friday announced details of the final rule amending the National Organic Program (NOP) regulations to clarify the use of pasture for organic livestock operation.

USDA says the final rule provides more certainty that organic livestock production is a pasture-based system and greater assurance that all producers are being held to the same standards.

“Clear and enforceable standards are essential to the health and success for the market for organic agriculture,” says USDA Secretary Tom Vilsack, adding that the final rule “will give consumers confidence that organic milk or cheese comes from cows raised on pasture, and organic family farmers the assurance that there is one consistent pasture standard that applies to dairy products.”

This final rule is the result of a process that started in 2005, when the National Organic Standards Board recommended that ruminants obtain a minimum 30 percent dry matter intake (DMI) for at least 120 days.

In 2006, NOP called for input on whether regulations adequately addressed the role of pasture in organic livestock management and if not, what should be done to address the problem. NOP received more than 80,500 comments in response, nearly all of them supporting strict standards and greater detail on the role of pasture. Among these were comments from consumers expressing clear expectations that organic ruminants graze in pastures and comments from producers concerned that regardless of changes made, some producers would find a way to circumvent regulations because the problem was not the regulations themselves, but the enforcement of regulations.

The proposed rule, published Oct. 28, 2008, received more than 26,000 comments from producers, retailers, handlers, certifying agents, consumers, trade associations, organic associations, animal welfare organizations, consumer groups, state and local government entities and various industry groups.

Five listening sessions were held after the proposed rule was published, and while the majority of those who commented at these sessions supported the proposed rule, many expressed concern over specific provisions and definitions. For example, there was universal support to change “growing season” as it appeared in the proposed rule to “grazing season” and concern over the definition of “inclement weather” and conditions under which animals could be confined indoors. There also was concern about overly-prescriptive regulations that could place producers in violation of state and local regulations for nutrient and runoff management. Additionally, most commenters objected to the formula proposed for computing DMI.

The final rule adds 15 new terms to NOP regulations, revises certain definitions and eliminates the terms “growing season,” “killing frost” and “sacrificial pasture.” It clarifies the meaning of “access to pasture” and aims to eliminate the current inconsistent application of livestock and pasture regulation that resulted in violations and the filing of complaints.

According to the final rule, producers are required to: provide year-round access for all animals to the outdoors; recognize pasture as a crop; establish a functioning management plan for pasture; incorporate the pasture management plan into their organic system plan; provide ruminants with pasture throughout the grazing season for their geographical location; and ensure ruminants derive not less than an average of 30 percent of their DMI requirement from pasture grazed over the course of the grazing season.

The final rule has drawn praise from members of the organic dairy industry, even some who initially were concerned about the effects of the rule.

Albert Straus, founder and president of Straus Family Creamery, a California organic dairy and processor, in January joined representatives from Aurora Organic Dairy to bring concerns to USDA and the Office of Management and Budget over the proposed rule (see “Organic industry has opposing views on proposed standards” in the Feb. 5, 2010, issue of Cheese Market News). However, he says he is very pleased with the final version of the revised pasture rule, and the dairy’s concerns about specific language that might have impacted the health of animals and land have been resolved.

“The final rule allows for a grazing season that considers regional variation in climate, soil conditions and regional water quality regulations,” Straus says. “We’re very grateful to all of the consumers who urged USDA to account for such regional variations in the final rule. It’s exciting to see the National Organic Program continue to get stronger.”

The Organic Trade Association (OTA) also says it welcomes the release of USDA’s final access to pasture rule for organic agriculture.

“It clearly defines access to pasture for organic ruminant livestock and sets a mechanism into place for strict regulation and enforcement,” says Christine Bushway, executive director, OTA, adding that the rule substantially refines requirements for pasturing animals and has been crafted to recognize the diversity of crop and grazing zones across the United States.

The Cornucopia Institute, which in the past several years has filed numerous formal legal complaints with NOP, calling for investigations into alleged violations of organic livestock management practices, says it is delighted by the new rules.

“The organic community has been calling for strong regulations and its enforcement of much of the past decade,” says Mark Kastel, senior farm policy analyst, Cornucopia Institute. “These minimum benchmarks will assure consumers that industrial-scale dairies don’t just create the ‘illusion’ of grazing and continue producing illegitimate organic milk.”

The final rule becomes effective June 17, 120 days after publication. Operations which already are certified organic will have one year to implement the provisions. Operations which obtain organic certification after the effective date will be expected to demonstrate full compliance.

Copies of the final rule and additional information are posted at www.ams.usda.gov/NOP.

CMN

By Alyssa Sowerwine

MADISON, Wis. — As more U.S. dairy companies are making European-style and other artisan butters, chefs and consumers are finding them ideal for cooking, entertaining — and tasting.

While these artisan butters typically have a higher fat content — U.S. salted and unsalted butters are required by FDA standards of identity to contain 80 percent butterfat, while European butters are required to have 82 percent — the benefits achieved in taste, texture and use make up for any extra calories, says Andrea Neu with Wisconsin’s Dairy Business Innovation Center (DBIC), a not-for-profit organization dedicated to growing specialty, farmstead and artisan dairy processing businesses.

“If people are buying and using butter for flavor quality, they’re not worrying about fat” content, Neu says. “There are many consumers who say, ‘I want the real thing,’ and will just use less of it.”

Higher-fat, low-moisture butters with fewer milk solids are especially ideal for cooking, as they are easier to sauté with and put in sauces. The smaller amounts of milk solids in these butters allows for cooking at higher temperatures without burning, Neu says.

Neu says demand for these butters is high in the chef sector, but also has been increasing in the consumer sector in light of the local food movement.

“Consumers looking for local, farmers’ market foods who want to know who makes their food and are interested in new taste experiences are increasingly interested in artisan butters,” she says.

According to Jennifer Giambroni, director of communications, California Milk Advisory Board (CMAB), the rise in demand for specialty butters can be linked to the growing U.S. foodie culture and demand for hand-crafted foods from local sources, with significant growth in European-style butters that have a higher fat content.

At Spring Hill Jersey Cheese Co., Petaluma, Calif., the company makes four varieties of specialty butters — salted, unsalted, Zesty Garlic and Lemon Shallots — all from organic Jersey milk.

All the butters are made with a traditional recipe modeled after European-style butter, says Larry Peter, owner, Spring Hill Jersey Cheese Co.

“We separate the cream, then let it set in the cooler for three days with the culture in it,” which gives it its distinct flavor, he says. “Then we churn it, just like in the old days. With over 85 percent fat content, this butter is very satisfying.”

In addition, each butter serves its own purpose, Peter adds. Spring Hill’s lightly salted butter, made with French “Guerande” sea salt, is best to eat “as is,” while its unsalted butter is ideal for cooking and baking.

Al Bekkum, licensed Wisconsin butter and cheesemaker, says freshness in butter is paramount at Nordic Creamery, Westby, Wis., where he makes specialty butter and sells it fresh.

Bekkum adds that part of his reason for making these butters was a lack of available fresh butter in the marketplace.

“Our butters are made from milk less than one week out of the cow,” he says.

While Nordic Creamery butters last as long as other types, ideally they should be consumed within a month for the best flavor, he adds.

With this in mind, Bekkum crafts seasonal butters such as a Summer Butter made from April to October when cows are on pasture, creating fresh, herby flavors and a sunny yellow color.

His Harvest Butter is crafted with sweet cream from a dairy herd nourished from fall to spring by harvested grasses and grains to create a distinct creamery flavor and color.

Nordic Creamery also produces a special cultured European-style butter called Spesiell Kremen that is only churned at limited times throughout the year from the same farmstead milk supply, creating a tangy but sweet and complex nutty flavor.

Nordic Creamery also makes a couple varieties of flavored butters — Garlic and Cinnamon.

“People like to spread the Garlic butter on bread and toast to make Garlic bread,” he says, adding that the Cinnamon butter tastes great on toast for breakfast.

All of Nordic Creamery’s butters are either lightly sea salted or unsalted to offer the options for use as a table butter or a cooking and baking ingredient. Butter varieties are available in 8-ounce or 16-ounce plastic tubs, or 12-ounce rolls with a foil or parchment wrap.

In addition, a 2-pound roll or 5-pound tub is available for foodservice and chefs.

Bekkum also is careful in choosing his packaging. His butter is packed into clear cups so consumers can see the bright hues of the fresh butter.

While Nordic Creamery’s butters sell well in Wisconsin, there’s an even larger market for them in Minnesota and Chicago, he says.

Bekkum says customer response to his butters in the Twin Cities was particularly positive when he went there to do an in-store demo and promotion at Whole Foods Market.

He notes that artisan butters typically are more expensive than other types, but the price is worth it.

While his butters typically sell for between $6-$7 a pound, Whole Foods was selling them at more than $10 per pound, and Bekkum sold out of all the butter he brought to the store that day.

“People want a locally-made, handcrafted product, and you’re going to pay a little bit more for great taste in any food,” he says. “Some people think you can just use any generic butter, but the taste is so different.”

Bekkum adds that his butters typically sell “as fast as we can make them.”

Sales of butter also are high at Organic Valley, LaFarge, Wis. In 2009, the cooperative sold more than 7,000 pounds of butter for approximately $24.5 million in sales, says Theresa Marquez, chief marketing executive, Organic Valley.

Organic Valley makes an 84 percent butterfat European-style butter sold in 8-ounce containers.

“It is — in my mind, mouth and kitchen — the very best butter for baking,” Marquez says. “The taste is exquisite.”

Organic Valley also makes a Pasture butter. According to Marquez, testing showed that the cooperative’s milk had a high level of CLAs (conjgated linoleic acids) and omega-3s during pasture season when the grass is rich.

“We realized that we could make high-CLA butter between the months of May and September,” she says.

“We’ve been told over and over by our customers that our butter is the best,” Marquez says, adding that Organic Valley has awards to back up that assessment. In 2009, the cooperative won awards for both its European and Pasture butters from both the American Cheese Society (ACS) and World Cheeses competitions. Its Pasture butter also placed third in the Championship Dairy Product Contest in the salted butter category at the 2009 World Dairy Expo.

She also notes the delicious taste is worth the higher fat content.

“Butter is delicious and yes, it is fat, but eaten with common sense, in moderation, it is an important part of a healthy diet,” she says. “Fats hold vitamins and has an important role in our bodies, and butter has been a staple of the human diet for centuries.”

This is evident in California, the nation’s largest butter producer.

“California is the No. 1 butter producer in the U.S., churning out more than 520 million pounds of butter last year,” Giambroni says. “CMAB supports butter sales through its ongoing retail promotion program for products that carry the Real California Milk seal.”

At Straus Family Creamery, Petaluma, Calif., the butter products produced there are very popular with well-known Bay Area chefs and many home cooks, says Liz Scatena, marketing manager, Straus Family Creamery.

Straus cows graze on pasture beginning in early spring through late fall, Scatena says, adding that as feed sources change with the seasons to include silage — cut and fermented legumes and grains — and other vegetarian feeds, the flavor of the butter changes.

The color of Straus’ butter also changes throughout the seasons, Scatena adds.

“The yellow color in our butter comes from beta-carotene found in grasses growing in our pastures,” Scatena says. “In spring when the grass is green, the butter will be more yellow.”

In addition, because Straus’ butter is lower in moisture and higher in fat, baking results include flakier pastries, higher cakes and chewier cookies, Scatena says.

“With a higher ratio of butterfat to water, Straus butters can be cooked at higher temperatures without burning,” she says. “Baked goods brown more evenly and have a delicious butter flavor.”

Allison Wolf, sales and customer service, Vermont Butter & Cheese Creamery, Websterville, Vt., also emphasizes the baking benefits of using butters higher in fat. The company’s European-style cultured butter is low-moisture and has different cooking and baking principles compared to American butter.

“Our European-style butter, with 86 percent butterfat, is very much in demand with chefs in particular,” she says. “It makes pies, cakes and pastries puff up more” than conventional butter would.

The company’s Vermont Cultured Butter is churned in small batches from fresh, hormone-free Vermont cream and cultured for full, rich European-style flavor and aroma, she says.

Vermont Butter & Cheese Creamery also makes a Cultured Butter with Sea Salt Crystals, which Wolf says is often used by chefs as a high-end table butter. This butter is sold in 6-ounce containers for about $6.99, while the regular Vermont Cultured Butter is sold in 8-ounce containers for about $4.99.

“You’ll notice that these products are priced right in line with others found on the shelf,” Wolf says.

The butters also have won awards. The Vermont Cultured Butter took first place in the Salted, Cow’s Milk category and second in the Unsalted, Cow’s Milk category at the 2009 ACS awards.

CMN

ARLINGTON, Va. — The crash of global dairy markets in mid-2008 put U.S. exports on course for a decline in 2009, ending a streak of six straight years of expansion, according to analysis of government trade data conducted by the U.S. Dairy Export Council (USDEC).

Dairy export sales in 2009 totaled $2.32 billion, down 39 percent from 2008’s record level. However, much of the downturn reflected lower world prices; overall export volume was off just 16 percent, at 2.178 billion pounds of milk solids (total-solids basis), USDEC says. Export volume represented 9.3 percent of U.S. milk production in 2009, down from 11 percent in 2008 and 9.8 percent in 2007.

After struggling through the first three quarters of 2009, U.S. export volumes were up 15 percent in the fourth quarter, USDEC says. For the full year, volumes of milk powder, butterfat and cheese were lower, while shipments of whey proteins, lactose and fluid milk were higher.

For cheese specifically, U.S. exports dropped to 239 million pounds in 2009, down 17 percent from the prior year.

U.S. suppliers focused on core markets in Latin America, boosting sales to Mexico by 9 percent and the Caribbean by 4 percent. However, exports to most other destinations declined.

Shipments of butterfat fell to 62 million pounds in 2009, though sales improved in the last four months of the year. U.S. suppliers lost key customers in Russia, Morocco and Japan.

Meanwhile, ice cream exports gained 1 percent to 56 million pounds. Still, exports to Mexico, the primary U.S. market, decreased by 4 percent.

“A year ago at this time, USDEC’s economic analysis suggested overall volumes would drop to 27 to 41 percent in 2009,” says Tom Suber, president, USDEC. “But U.S. exporters retained more of their sales than expected, aided by stronger world markets in the latter part of the year.”

Suber adds that by the end of 2009, U.S. exports displayed far more resilience than forecast in January, and the persistent sales efforts of many value-added exporters mark a further maturation of the U.S. industry.

“U.S. dairy export volume — overall and in all individual product categories — is significant and high in historic context,” Suber says. “In fact, volumes are at levels where exporting is a prerequisite to maintaining a healthy and growing industry.”

However, even though sales held up to some degree, the United States will struggle to become more than an opportunistic exporter of dairy commodities unless it transforms from a production-centric industry to a global-customer-centric one, Suber adds.

The importance of the overseas channel was evident last year, when lost export sales contributed to an oversupplied U.S. market, he says.

“U.S. exporters are still not doing everything necessary to sustain international volume gains,” Suber says.

For example, Suber says last year the United States surrendered market share and volume in the nonfat dry milk/skim milk powder (NDM/SMP) sector to almost all competitors. New Zealand largely replaced U.S. supply in key markets like China, and even Argentina gained ground, he says.

“NDM/SMP is a category we should own, but large parts of our industry still treat exports as primarily surplus disposal instead of serving their customers by meeting buyer specs,” Suber says, adding that similarly, the United States lost almost all butterfat sales claimed in the prior year.

“Unless the United States deals with the fundamental problems that make it the residual supplier to the world, it will remain the last-in/first-out player in base commodities, which accelerates volatility,” he says.

The international market turned quickly on U.S. exporters in mid-2008 and continued into 2009. The high prices of 2007-08 spurred production growth throughout the world.

In addition, recovery from severe drought on New Zealand’s North Island combined with industry expansion on the South Island boosted New Zealand’s production by nearly 10 percent in the 2008-09 marketing year, Suber says.

“Faced with softening global demand from soaring price inflation as well as fallout from the worldwide recession and credit crisis, Oceania suppliers priced aggressively to prevent inventories from building,” he says. “When world selling prices fell below U.S. support levels for basic commodities, it took U.S. suppliers out of the market.”

Meanwhile, in Europe, eroding world prices prompted the reinstatement of its export subsidies, which also contributed to lost U.S. share, Suber adds.

Although world markets improved dramatically in the second half of 2009, average commodity prices in 2009 were still 30 to 40 percent below the 2008 average, he says.

With the ever-present volatile markets, USDEC projects overall U.S. dairy export volumes to increase 7 to 12 percent in 2010, as global demand cautiously recovers, world commodity prices sustain most of the strength shown at the end of 2009 and U.S. suppliers remain engaged with their overseas customers.

Large inventories from Europe continue to hang over the market, but milk production in Oceania is forecast to decline in the 2009-10 marketing year, USDEC says.

In addition, European Union and U.S. milk output is trailing year-ago levels as well, and the European Union has suspended export subsidies for the time being — all of which should support historically strong world markets in 2010, USDEC says.

CMN

WASHINGTON — The International Dairy Foods Association (IDFA) and the U.S. Environmental Protection Agency (EPA) have signed a Memorandum of Understanding (MOU) to promote increased energy efficiency in U.S. dairy processing facilities.

Through EPA’s ENERGY STAR program, IDFA and EPA will work together to provide valuable management tools to help dairy processors measure and control energy in their manufacturing facilities and document energy savings achieved.

IDFA and EPA believe that manufacturers seeking to manage energy more efficiently may benefit from resources that EPA can leverage and develop within the industry.

Under the MOU, IDFA and EPA will reach a greater number of processors, help them progress toward greater energy efficiency and establish systems capable of delivering and sustaining energy savings in the long term.

“IDFA is pleased that members will get recognized for what many are already pursuing,” says Clay Detlefsen, vice president for regulatory affairs, IDFA. “We are also excited that the dairy industry will have an opportunity to show EPA and the public that we are serious about energy efficiency and sustainability.”

EPA introduced the ENERGY STAR program in 1992 as a voluntary, market-based partnership to reduce greenhouse gas emissions through energy efficiency.

Today the ENERGY STAR label can be found on more than 60 different kinds of products, new homes and commercial and industrial buildings. Products and buildings that have earned the ENERGY STAR designation prevent greenhouse gas emissions by meeting strict energy-efficiency specifications set by the government. Last year alone, Americans, with the help of ENERGY STAR, saved about $19 billion on their energy bills while reducing the greenhouse gas emissions equivalent to those of 29 million vehicles, IDFA says.

Under the MOU, IDFA plans to:

• Encourage U.S. dairy processors to participate in the ENERGY STAR program, in ENERGY STAR’s Focus on Energy Efficiency in dairy processing and in the use of ENERGY STAR’s energy management tools and resources;

• Provide the opportunity for forums where industry, IDFA and EPA may interact on the use and development of energy tools; and

• Assist EPA in evaluating the performance of the initiative.
In addition, EPA, through ENERGY STAR, has tools, expertise and services oriented toward corporate energy management, including:

• Energy management program development guidance and management tools;

• Listings of energy service and product providers;

• End-user networks;

• Web- and teleconference-based trainings;

• Formal recognition of energy performance achievements of dairy processors; and

• An ENERGY STAR Industrial Focus on Energy Efficiency in Dairy Processing, including a national plant energy-performance indicator (EPI) to evaluate the energy efficiency of select types of dairy processing plants in the United States.

CMN