Bonus 7 - How Is The Checkoff Building Demand For U.S.Dairy Through International Pizza Partnerships

Host & Guest:

• Host: Scott Wallin, Vice President of Farmer Relations and Media Relations, Dairy Management Inc.
• Guest: Beau Hayden, Nancy Gannon, Vice President of Global Growth Platforms & Partnerships, Dairy Management Inc.

Transcript (AI-generated, please ignore the typos)

Scott Wallin   0:00  

Hey everybody, it's Scott Wallen with dairy management Incorporated. And welcome to a bonus episode of the urine dairy check off podcast where we speak with check off leaders and farmers about strategies that are driving sales and trust of us dairy and we've got a great subject to address today, how we're putting more US produced cheese into the global marketplace. And joining me is my colleague, Nancy Gannon, who serves as Vice President of Global Growth platforms and partnerships. Nancy, how you doing today?

Nancy Gannon   0:30  

I'm doing all right. Scott, thanks for having me.

Scott Wallin   0:32  

Well, absolutely. You know, every time you and I talk, I can just feel the excitement and the enthusiasm, and you also make me very hungry. By the way, when you talk about all these great pizza innovations that are happening in these other countries, and that's where, that's what we really want to focus on today, is what we're doing some of our pizza partners globally. But before we kind of get into some of the specifics, you know, the dairy check off has long enjoyed this strategy of working with and through partners in the food service channel for so many years. You know, you talk about the successes here in the US with McDonald's Taco Bell dominoes, and we've taken that model now and we've replicated it in the international marketplace. So first of all, kind of give us a background and an overview of how we got here, what made sense for us to kind of explore these partnerships internationally.

Nancy Gannon   1:21  

And this is a great question, Scott, and you know, it's been an evolution over time, and it lot of it really started as we think a while back, with the formation of use deck and really understanding, where do we go in the markets in the world? How do we create a greater presence of us cheese outside of our borders, and they've done an excellent job of learning about markets, opening them up, and sharing those opportunities across the check off in a really inspiring brands, companies and us internally here at DMI to say, how do we grow demand externally, outside of the US, and with such great success in the US, as you mentioned, Taco Bell, Domino's, even at a time, Pizza Hut. The question then became, how do we take that and use all of the learnings of the success that we had and say, Where are those companies growing outside the US? The world is big, the world is international, and in order to stay competitive, we need to go beyond our own borders. So by having relationships with some of those big multinational quick service restaurants here in the US, we could then say, okay, how do we bring that internationally? And that's where we really decided to focus on pizza. Pizza is obviously a huge user of cheese. You know, it's 80% of what you buy when you buy a pizza. And so really tapping into those opportunities, the relationships that we had, as well as the priority markets that use deck, has helped open up for the industry. We are able to find really good relationships, both regionally and locally, in outside markets, aside from the US.

Scott Wallin   3:07  

So one of those partners is Pizza Hut, and we are in Indonesia. What's going on there? What kind of programs are in place right now? So

Nancy Gannon   3:15  

we have had a partnership with Indonesia. This is our second year of a partnership with them. It actually started regionally with Pizza Hut overall, in APAC, and as we worked through that relationship and saw some success with the regional team, the Pizza Hut regional team said, Hey, why don't you guys go and work with some of our local markets? Because essentially what that allows us to do as a check off, is get closer to the demand, get closer to the consumer, get closer to actually influencing ltos and marketing programs and USTS marketing programs. And that's exactly what we're doing in Indonesia. So over the two year partnership that we've had with them, there's been a lot of really fun success. The great thing about working with pizza hut in Asia and particularly in Indonesia, is not just the people, but how open they are to innovation and to doing things differently and in a really modern way. And you can see this in three areas that they've been focusing on. The first is actually a lot of the ltos and innovation that they do put into the marketplace. Indonesia is a very, very young country. The average age is 29 if you think about that. So it's young kids looking for a hip, cool, new things to do, things to put on their Instagram Facebook is so outdated in Indonesia, it's Instagram and Tiktok, and that's what they want. They want to share experiences with their friends about what they're doing during the day, what music they're listening into. And Pizza Hut has tapped into that by creating innovation that's very buzz worthy in. Asia, and what that looks like is a few things. The one is called Pizza Hut melts. It's a handheld think of a thin cow zone pizza sandwich filled with cheese. And what they do is you can put your own toppings in but they also have different periods, so they've partnered with hip hop artists in Indonesia that actually promote the melts along with the US cheese that goes in it. In addition to that, as we think about how young people are living today, they're still living with their families in Indonesia, it's a very multi generational family culture, so you'll have two or three generations of families living in the same house, which means not everyone wants to eat the same thing every night. So they've introduced a court set pizza, which is four different crusts, four different cheeses and four different flavors all in one pizza, so the families can still eat together, enjoy that precious meal time that they so appreciate every night, but everyone gets a little bit of something that makes them happy. So grandma, mom and the teenage daughter can all share a pizza together and still have that great family moment. I think one of the most exciting things that we've done, from an LTO standpoint, is very specific to the Indonesian culture. So for those of you who don't know, Indonesia is actually has the largest Muslim population in the world. As a result, what they typically eat is halal food, and they celebrate very specific religious holidays like Ramadan. Ramadan is a great time for families to come back together. And with the 1000s of islands in Indonesia, it's a time where people will go from one island back to visit their families for a great week of just celebration and spending time together centered around food. Pizza Hut capitalized on this as well as the idea of bringing family together, and created an extra spicy Ramadan holiday meal. There's pizza, there's chicken, there's pasta, there's cheese on nearly everything. But the entire campaign is around coming back with your family. And if you think about your family here in the US, there's always fun times you have with them, like everyone's laughing, everyone's giggling. There's always a little bit of hassle. Maybe mom has her sharp tongue, maybe Uncle George acts a little crazy. And the same thing happens globally. So the entire campaign is around coming back to mom's spicy tongue and seeing if she can handle the spicy pizza. So it's a great tie between culture, religious beliefs, tradition and holidays and Pizza Hut. And the initiative was extremely successful, especially around the holidays, when people have a lot to choose from, they actually chose pizza using our US cheese. So great LTO story from Indonesia, and that's the fun, exciting thing that you see in the marketplace. But it's not just about fun, exciting things as a developing country, one of the things that's very important to us as a check off and to grow us cheese is to help the country itself. So us is us. Deck has done an excellent job of meeting with the Indonesian government, talking with them about the importance of dairy nutrition, talking about how our farmers can help Indonesian farmers grow their industry as well. So we're rising all tides for dairy overall, because we know it's the nutrition powerhouse for the world. Well, with that pizza hut in Indonesia, heard about what the team was doing and also talked with the government, and so we at DMI have partnered with them to revamp their children's pizza program from a nutrition standpoint. So instead of just giving kids pizza, we're giving them milk. We're giving them pizza with healthy, nutritious cheese and vegetables and meats. And on top of that, we've actually taken the entire program. They have a chef kids pizza program, and we've infused it with dairy and cheese nutrition. So the kids are doing activities to learn about where cheese come from. Cheese comes from, how nutrition it is nutritious is how it fits with, you know, their daily eating habits. And it's teaching moms and caregivers at the same time. So pizza, it's not just doing fun stuff in Indonesia, they're actually doing things to help the health of the population, which I think is really exciting. And I can't finish talking about Indonesia without talking about my favorite initiative, which actually just launched four months ago. And I hope our farmers are excited about as this as we are, because it's called cheese overflow. And hopefully you guys will see some pictures, some amazing videos, even some user generated videos from the young folks in Indonesia. But cheese overflow is exactly what it sounds like. It is a giant pot of us mozzarella cheese that is melted and poured on any. Single Pizza Hut item you want, the most popular thing it's poured over is cheese. So think of a heavy cheese pizza with more cheese on top. It's also popular on their chicken dishes as well as pastas, but essentially the cheese is poured all down. You got a beautiful cheese pour and pull and then they take a hand held blowtorch and torch it on the pizza, on the pasta. It's a great diamond experience. People are getting it takeaway as well, and you get that crispy crunch from the torch spots, plus the ooey gooey, melty mozzarella everywhere. It is actually something that has inspired them to not just have it as a two month promotion, but expand extend it into a three month promotion. With our support, they're hoping to continue the visual cheese campaign with new innovations in the future. But that's a huge win for us farmers, and a huge win for dairy overall. So pizza Indonesia is a great partner, not just for innovation and getting cheese in the hands of consumers, but for nutrition and childhood development and growth, as well as really pushing the boundaries for what US cheese can do.

Scott Wallin   11:12  

So you did it now I'm hungry. I mean, my good is that, that whole pot of cheese thing, I'm just sitting here visualizing what that must look like, and absolutely, we've got to get that here in the States. But you, you gave us such a comprehensive overview of Indonesia. There are so many wonderful things. We're doing, such creativity, that spicy tongue thing too is is amazing. So it's so exciting there. But I know you're not done. We also need to switch over to Japan now, where, again, we're working with pizza. What are some of the programs in place there? So

Nancy Gannon   11:43  

Japan, like Indonesia, has been a partner with us for two years. We are actually just over there a few weeks ago and and met with the team in person, and they introduced us to their new president. So we have great relationships with the senior executive team there, and it's really good because they are so supportive of the partnership and what we're delivering. And actually are saying we want to come to the US. We want to meet the farmers. We want to see where our teas comes from. And I think that's a testament to the relationship that we've developed with them and the value that they see that the checkoff is bringing. So from a relationship standpoint, Japan is top notch, and from an actual growing demand and creating interest for us cheese, they've also done some amazing things that are very culturally relevant. So I'm not sure how many of you follow rugby. I kind of follow it. I watched the sevens once in a while, but when the rugby was in Japan, they actually did a really cool promotion where they would give you discounts and some special items when you order delivery from Pizza Hut in Japan. But the box was actually designed to promote rugby by being able to wipe it out, fold it up and play rugby in your living room with a box that transformed into a rugby ball. So I'm not sure how many mothers allowed their fathers and sons to play rugby in their small living rooms, but hopefully it was a good time. It was a great promotion, and created a lot of buzz for sustainability, for rugby and for Pizza Hut Japan overall, which is really fun. On top of that, similar to Indonesia, we do like to tap into national and cultural beliefs and traditions. Japan has a lot of festival periods, whether it's the Sakura Festival, the cherry blossom festival that most people are familiar with, or even other seasonal festivals. One of the most popular festivals is called Tsukimi. And Tsukimi is basically Autumn Festival. It's the viewing of the moon. So what you see in Japan is lots of orange and golden and moon shaped things, whether you're transforming a regular chocolate chip cookie into like an orange moon shaped one, everyone's all about it. People will over buy anything having to do with zucchini. So Pizza Hut made a zucchini handheld melt. It was the beautiful, cheesy, gooey handheld melt that they always delivered, but they put a golden egg in the center of it, so when you bit into it, it's almost like having a royal burger with that melted egg and the cheese right in the middle, only it was hand held pizza, calzone type item, so popular, just available during the festival period, and we're able to support them in that. And the beauty of it is, every time we are able to support them in the initiatives, Pizza Hut, Japan does a really amazing job of putting the made with us cheese logo on everything that they do. So it's not just innovation. It's about creating positive equity for us cheese overall. And that's why I'm really excited. For two things that they're doing right now. One is creating equity around a pizza day in Japan, a National Pizza Day, and not just one that happens once a year, but one that happens once a month. And we've helped them create essentially the Japanese version of taco Tuesday in Japan, and it's called Hutto day. So if you say eight in Japanese, it sounds like Hutto, which sounds like hot, which sounds like Pizza Hut. So it's a great way to own the eighth, ninth and 10th of every month, where you can get special pizzas, special ltos and special discounts to make pizza hut part of your week. Because in Japan, unlike the US, where people are probably having pizza three to five times a week, if not a month, pizza in Japan is maybe ordered four times a year. So to be able to transform it from four times a year to 12 times a year is a really big increase for Pizza Hut and for us cheese that goes on it. So we're excited about really democratizing pizza for folks. The other thing we're excited about is actually a big, big, big news that we just I think it's what the 16th today? Yeah, we can, we can talk about it now. But Pizza Hut is actually really focusing on in Japan, using cheese us, cheese as a key differentiator, to show their quality, to show their taste, and to get people excited about buying pizza from Pizza Hut. So from October 1 and it will now become permanent. So for the foreseeable future, they are increasing all of their on top of cheese usage by 30% so 30% more cheese on every single Japan Pizza Hut pizza from now on out, and that's because of the opportunity that the check off had to work with them, to talk about the benefits of us cheese, to talk about the sustainability and supply that we're able to offer, as well as the quality, and tell some of our farmers stories. There's a reason. They want to come to the US. They want to meet the farmers. They want to see the cows. They want to see how things work, because they truly believe in what we're doing together. And I think the increase of pizza cheese from by 30% is a really, really big deal. And I guess the last thing I want to say is it's not just mozzarella with Pizza Hut Japan. Oftentimes when we talk about pizza internationally, we think mozzarella, but it's a mix of cheese that goes on top of those pies. And right now we are actually testing us Gouda in Japan with pizza hut in Hokkaido. So they're testing it in 40 stores right now, and we're really committed to thinking, Yes, mozzarella, but what can we do beyond mozzarella to help our farmers and help us cheese internationally? You

Scott Wallin   18:04  

know, again, the marketing creativity and pizzazz, it's it's amazing to hear all this excitement around cheese that's produced here in the United States. I love hearing the interest they have in our dairy farmers. And you know, the labels that show the cheese comes from the US, and certainly that promotion of 30% is just outstanding. That's such great news, and thank you for sharing that here with us. You know, we've talked a little bit about something that kind of amaze me is when you sit back and think, you know, here we are in the United States, but 95% of the global population is outside our borders. You've got this be sitting here thinking there's this more opportunity out there for the check off to further explore, kind of just give me a top line overview of the strategy of what else might be might we be looking at globally? Think

Nancy Gannon   18:54  

a lot of people, you know, the US is a big place, and people don't always realize how much is outside of our borders, I had the opportunity to live overseas, and one of the biggest thing that always surprised me was just there's so much opportunity. Asia is still on our doorstep and hungry for us cheese. So as we think about markets that use deck has prioritized for growth and opportunity, Asia remains top of mind, especially Southeast Asia. So we're going to continue to find the right partners in pizza in other qsrs, explore burgers, explore other places in Asia. But one of the other big opportunities is actually in the Middle East, and we see a lot of our pizza partners growing in that space through franchises in the area. If you think about it, a lot of Western consumers travel all over the world, and they want taste of home wherever they go. In addition to that, the local populations are really becoming globalized everywhere, so Middle East Asia are going to be those heavy spots. Young population looking for cheese, and open to understanding other cultures, other ways of eating, and understanding where they can get really high quality products from. So we're looking forward to seeing what the future in Asia looks like, and what pizza burgers and who knows what else looks like in the Middle East as well. It's going to be a really, really fun couple of years. And I think beyond just QSR partnerships, there's a huge opportunity for brands, manufacturers and processors here in the US to begin to explore those opportunities as well. And that's one of the beautiful things about the DMI international team, is, yes, we do our QSR partnerships, but we also work with processors, brands and manufacturers to say, what untapped opportunity could you also get when we partner together? So we're very open. We're seeking partnerships all the time. That makes sense for our farmers, and we're looking forward to seeing growth in the Middle East as well as Southeast Asia now and for years to come. You

Scott Wallin   21:03  

know, it's just so cool to hear all that. And yeah, there's, there's more to go get, so no pressure. But I know you and your team are working to find, find those opportunities that make sense for us. And you know you're dealing with somewhat of a blank canvas, you know, with 95% again, of that population outside our borders. So I know we'll connect again on some more work that you're doing. Nancy, thank you so much for your time today. It was so good hearing all these overviews of the work you and your team are doing.

Nancy Gannon   21:28  

Thank you, Scott. And thanks to all the farmers who are probably listening to this in the field getting ready for the fall. So keep up the good work, guys,

Scott Wallin   21:35  

absolutely. We'll talk soon. Thanks again. Dairy farmers, be sure to check out other episodes of The your dairy check off podcast on your favorite platforms, including Spotify Stitcher and iTunes, also make sure you check out our new website, Dairy checkoff.com thanks for joining us today. You.