FLAVOR OF THE YEAR

Flavored milk offers a clear, recent example of the influence packaging plays on children's product preference and selection. When dairies began to transition their single-serve milk lines from gable cartons to plastic bottles several years ago, the category began showing signs of a revival. More recently, new lines of flavored milk, single-serve milkshakes and even carbonated milk packaged with colorful,

Flavored milk offers a clear, recent example of the influence packaging plays on children's product preference and selection. When dairies began to transition their single-serve milk lines from gable cartons to plastic bottles several years ago, the category began showing signs of a revival. More recently, new lines of flavored milk, single-serve milkshakes and even carbonated milk packaged with colorful, kid-targeted graphics have become a growth engine of the dairy industry. Sales of flavored milk are up more than 10%, while sales of other types of conventional milk remain flat or down.

The venerable milk carton was simply hard for kids to open and, often, wasn't kept cold enough. "It was not the best product that we could put in front of them," said Chris Moore, vice president of food-service channel development for Dairy Management, the Rosemont, Ill.-based industry marketing agency.

In 2002, the National Dairy Council released a year-long study on the impact that flavor varieties and enhanced packaging could have on school milk sales. The results of the study, involving 100,000 students in 146 schools, were dramatic. Sales of milk spiked 22% in secondary schools and 15% in elementary schools. Participation in school lunch programs rose 5%, compared with schools in a separate control group.

Moore said quick-service restaurant chains McDonald's and Wendy's both saw a similar, 20% increase in milk sales after launching private-label "milk chugs" in eight-ounce, plastic bottles last year.

"We believe the results of these efforts in food service and schools will help build a solid customer base for milk well into the future," said Moore.

Milk Sales Through November 2004

Whole milk: -2.9%

2% Reduced-fat milk: -0.2%

1% Low-fat milk: -4.0%

Skim milk: -0.8%

Flavored milk*: 10.3%

*Includes 2%, 1% and fat-free flavored milk. Source: USDA/Milk Producers Education Program