Leveling the innovation playing field

by Donna Berry
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Donna Berry

BOCA RATON, FLA. — The Pure Food and Drug Act of 1906 kick-started the federal regulation of foods in the United States. A noteworthy outcome of the law was the establishment of standards of identity, which are outlined in the Code of Federal Regulations. Standards of identity legally define a food’s minimum quality specifications, as well as permitted ingredients and processing requirements. In the United States, there are standards of identity for cream, milk, ice cream, sour cream, yogurt and some types of cheeses, making dairy the most highly regulated food category, confirmed Cary Frye, vice-president of regulatory and scientific affairs for the International Dairy Foods Association (I.D.F.A.), Washington, D.C., at the group’s Dairy Forum 2015 in Boca Raton this week.

Today’s competitive marketplace demands innovation, and many in the dairy industry believe the standards of identity served their purpose and it’s time to send them to the graveyard in order to NO longer impede innovation. This was a recurring topic of discussion at Dairy Forum.

“Over the years, some traditions have lost their luster,” said Connie Tipton, president and chief executive officer of the I.D.F.A. “Now, they just look like rules, rules and more tarnished rules piled upon each other. They’re dragging us down and keeping us from reaching our full potential as great innovators and marketers. They’re keeping us from delivering on the changing consumer proposition.”

The standards of identity were established to promote honesty and fair dealing in the interest of consumers, something that was very much an issue 100 years ago, but not so much the case these days. In fact, at best, today the standards prevent imitation products from being sold as real dairy, which is actually not even an issue, as most imitation products exist because they want to be non-dairy alternatives.

The dairy industry has long hoped the standards would prevent alternative milk beverages from using the word “milk” in product descriptions. Think soy milk, almond milk, etc. Because the Food and Drug Administration believes consumers are not confused by “milk,” as in that obtained from a cow, and the alternatives, the regulatory agency does not agree the alternatives are in violation of the standards of identity regulations.

Many in the dairy industry believe this fight is a lost cause and not worth any more time or aggravation. But here’s where this issue ruffles feathers. If the milk alternatives may use advanced technologies – ingredients and processing – to produce their “milks,” why can’t the dairy industry incorporate modern technology to produce superior cows’ milk and still call itself milk? In other words, if you can crush, filter and process almonds to become a liquid and call it milk, why can’t a dairy processor use similar technology, sans the crushing, to produce milk?

Modifying the standards to enable processors to better innovate in order to give today’s consumers what they want is part of Ms. Tipton’s vision of the dairy landscape through 2020. In her keynote speech at the Dairy Forum, Ms. Tipton noted consumers are the driving force in today’s marketplace.

She referenced to a speech recently made by General Michael Hayden, a four-star general and former head of the Central Intelligence Agency and National Security Agency, where he stated, “It’s now and increasingly the consumers’ world, and we just work here.”

Engaging the consumer is a must, and innovation is the key to the future global dairy industry, Ms. Tipton said. In her keynote, she called for broader industry collaboration on policy and regulatory changes that would encourage industry innovation to meet escalating consumer demands and growing global markets.

“Our dairy industry has a long, rich culture of values and a deep pool of character, principles and customs fostered by hard-working people who made lots of rules to build and protect product integrity as well as to create a fair market for dairy producers,” she said. “This is part of our industry’s D.N.A. that to this very day is woven into our products and practices.

“But missing from dairy’s early days were competitive, aggressive innovators and marketers, out-of-the-box thinkers and risk takers,” said Ms. Tipton. “Albert Einstein observed that, ‘A ship is always safe at the shore, but that is not what it is built for.’ Let me add, that’s not what our great industry was built for. Not to hug the shore, but to take chances, discover new territories and identify and develop far-flung markets.” 

Risk-taking was different when the standards of identity first were established.

“Getting a safe and affordable product to market was the major risk then and a challenge to be met,” Ms. Tipton said.

She cited an example of the type of innovation the industry needs more of.

“As Businessweek quipped, ‘Coca-Cola wants to buy the world a milk.’ But it’s no joke,” Ms. Tipton said. “The icon of icons of the global beverage industry has entered into a joint venture with the Select Milk Producers co-op to produce a new value-added milk product that is already on grocery shelves. Called Fairlife, it has been formulated to enhance protein and reduce lactose – 50% more protein and zero lactose.”

The Coca-Cola Co. has entered into a joint venture with Select Milk Producers to market a new, value-added milk called Fairlife.

Fairlife is labeled milk, but the standards of identity require so much additional verbiage to use the word milk, that the product description starts to sound like it was made in a lab, something critics have been quick to say. This is not the case. Fairlife is farm-fresh milk pasteurized and processed using modern filtration technology to produce a nutritionally superior milk product.       

In another Dairy Forum presentation on childhood obesity, Philippe Caradec, vice-president of corporate affairs for The Dannon Co., White Plains, N.Y., described how the yogurt giant used ingredient technology to reduce the added sugars in its Danimals drinkable cultured dairy product, which looks like drinkable yogurt but does not meet the standard of identity for yogurt. Yogurt is the No. 1 ingredient on the list, but the product is called a smoothie. Mr. Caradec said parents understand Danimals is a nutritional yogurt product and it does not matter that it’s not a standard of identity yogurt.

Even though yogurt is the primary ingredient in the Dannon Co.’s Danimals drinkable product, it must be marketed as a smoothie, because it does not meet the standard of identity to be called drinkable yogurt.

Fairlife milk and Danimals are proof the standards of identity do not need to impede innovation. But if they were only modified … the possibilities are infinite.

In conclusion, Ms. Tipton said, “A decade ago, the Council on Competitiveness introduced the National Innovation Initiative, which defined innovation ‘as the intersection of invention and insight, leading to the creation of social and economic value.’  We need to make sure we get this translated right for dairy.”

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