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Milk marketing consolidation could prompt agency review By Jim Kirk and Daniel S. Levin

CHICAGO–The two national dairy associations’ decision to consolidate marketing efforts is expected to shake up assignments a

Under an agreement between the National Dairy Board and the United Dairy Industry Association, all national advertising for fluid milk will now fall under the jurisdiction of the UDIA, with a $50 million budget allocated to the task. Until now, both organizations operated separately and their efforts overlapped.
D’Arcy Masius Benton & Bowles/Chicago currently handles the UDIA business through the American Dairy Association, the UDIA’s marketing arm. McCann-Erickson/San Francisco handles the National Dairy Board’s fluid milk advertising, worth roughly $30 million.
A meeting next month between the boards of the UDIA and the National Dairy Board is expected to decide whether the two boards will seek one agency to handle the combined milk business. Insiders say a one-agency consolidation is almost assured for the fluid milk business, and that the board may vote to open the business up to a review beyond the two incumbents.
Chicago ad consultancy Jones-Lundin already has been contacted by UDIA officials, according to one source. Bob Lundin would only say his company responded to a questionnaire regarding “advertising management organization.”
The ADA and National Dairy Board already are jointly reviewing agencies for promotional marketing. Flair Communications is ADA’s promo shop; Beaumont-Bennett/ New York is NDB’s promotions agency. Five other agencies also will make capabilities presentations next week. Combined promotional spending for the two agencies falls in the $12-15-million range.
“A committee of dairy farmers will get together next month to discuss a number of issues” said Gordon McDonald, senior vp/advertising and marketing for the ADA. “Anything is possible. The worse thing I could do is to predict what will happen.”
Officials at DMB&B wouldn’t comment.
McDonald confirmed that all fluid milk marketing will fall under the management of the UDIA, while all marketing for non-fluid milk, such as butter, ice cream, and cheese, would fall under the National Dairy Board. “Both groups will participate in all the planning,” McDonald said. Grey Advertising/N.Y. handles the National Dairy Board’s non-fluid milk products.
Both groups announced late last month that for the first time they would develop a joint business plan for 1994, outlining national marketing programs with local state and regional input. The meeting will happen about a month before dairy farmers are expected to vote on a referendum to dump the National Dairy Board. Some farmers have complained that the board hasn’t fully served the farmer. Farmers contribute 5 cents for every 100 pounds of milk produced to the National Dairy Board. Another dime goes to the ADA and other state and regional programs.
UDIA’s McDonald said that the National Dairy Board’s decision to join forces with the UDIA had nothing to do with the current Dump the Dairy Board campaign. “They are unrelated events. The consolidation was in the works more than a year ago,” McDonald said. “The dairy farmer is contributing 15 cents for every 100 pounds. This is an effort to spend the dollars in a single coordinated plan.”
Copyright Adweek L.P. (1993)