• September 5, 2012

Faced with milk sales having hit their lowest level in nearly 30 years, the milk industry is trying to find new ways to defend against beverages including bottled water, sports drinks and bottled teas.

The Milwaukee Journal Sentinel reports that in 2011, total U.S. beverage milk sales were 53 billion pounds, or about 6 billion gallons -- the lowest level since 1984, according to U.S. Department of Agriculture.

Consumers' fear of antibiotics and synthetic hormones have also contributed to milk sales declines, according to market research firm the Harmon Group.

Tom Gallagher, CEO of Dairy Management Inc., says the milk industry must make fast, fundamental changes -- including innovations like shelf-stable products and on-the-go packaging -- or risk letting milk become an irrelevant beverage. Getting milk into schools in user-friendly containers, and marketing chocolate milk as a sports drink alternative, are considered two big opportunities.

Milk consumption has dropped even as yogurt consumption has skyrocketed, and sales of other dairy products like cheese are healthy, Gallagher pointed out. He says the milk industry, instead of engaging in the marketing and innovation needed to grow all brands, has not kept up with consumers' more diverse and less predictable lifestyles.