Milling & Baking News - November 21, 2017 - 20

Industry Activities

Millers, bakers launch study of
checkoff program feasibility
Continued from Page 1

issues that impact its sales, while having a more substantial investment to
support the category through consumer marketing," the G.F.F. said.
Many other agricultural sectors employ checkoff programs. To qualify, an
industry must produce and market an
agricultural commodity defined as a
food, feed, fiber or livestock and any
product thereof. Other well-known
checkoff programs include the Pork
Checkoff, Cotton Incorporated and
MilkPEP.
Effectiveness of checkoff programs
is measured in return on investment,
and the U.S.D.A. cites current programs having R.O.I.s in a range from
$3 and up to $18 for each dollar invested by the industry.
Campaigns are kept free of specific
brand names, highlighting for consumers category benefits. A checkoff
program leaves brands and companies, as always, to compete on their
own unique attributes and benefits,
the G.F.F. said.
The idea of exploring a potential
checkoff program for grain-based
foods has been percolating for about
four years, Christine Cochran, executive director of the G.F.F., told Milling & Baking News. Interest emerged
in 2013 when interviews were conducted with those in the industry to
gauge stakeholder feedback of how
the Foundation was progressing in the
pursuit of its mission. The interviews
were conducted by Statler Nagle

L.L.C. Jean Statler, a founder of Statler
Nagle, had been part of Wirthlin Associates in the early 2000s, and in that
capacity conducted values research toward what became the G.F.F.
In a more recent assessment process, launched beginning in 2016, Tom
Nagle, a managing partner of Statler
Nagle, conducted 55 interviews across
about 35 companies.
"Checkoff was one
of a number of ideas on
the table in 2013 and in
interviews in 2016," Ms.
Cochran said. "The volume of the conversation
went up in last year's Cochran
interviews."
During the exploratory stage, millers, bakers and other G.F.F. supporters
were asked what success would look
like, and increased sales were the principal goal for the group.
"What we heard back is that our
current programming is worthwhile
and valuable," Ms. Cochran said.
"The challenge that was recognized
in just about every interview is that
G.F.F. is not big enough to move the
needle when it came to sales growth.
We as a Foundation are at a point of
evolution, and there is a need for a
bigger industry commitment to help
turn the ship."
Work will progress on multiple
fronts during the feasibility phase
currently under way, Ms. Cochran
said. In addition to reaching out to
G.F.F. investors to tell them that the

Checkoff program commodity-benefit cost ratios
($ in millions)
Program
Almonds
Beef
Cotton
Eggs
Hass Avocados
Pork
Soybeans
Potatoes
DMI
MilkPEP

Budget
$62
$72
$80
$20
$56
$88
$118
$18
$280
$100

Budget as
per cent of
total sales
1.1%*
0.2%
0.4%
0.2%
1.0%
0.4%
0.3%
0.4%
0.5%
0.6%

Benefit
cost ratio
6.2
11.2
5.7
3.5
3.25
17.4
6.5
5.2
4.5-7
4.5-7

*Majority of almond assessment is returned for qualified activities
Source: Grain Foods Foundation

20 / November 21, 2017

Milling & Baking News

Incremental $
$381/$6,000
$806/$42,000
$456/$21,000
$68/$12,000
$183/$6,000
$1,536/$23,000
$768/$47,000
$70/$4,000
$1,260-1,960/$60,000
$450-700/$16,000

exploration process has begun, a steering committee is being structured. The
committee will serve as a "guiding
group," Ms. Cochran said. Under current plans the steering committee will
hold its first meeting in January.
According to the G.F.F., the steering committee will have representation from milling and baking. The
group will "establish parameters and
guardrails and ensure that all voices
and perspectives are heard and considered."
Guided by the steering committee,
task forces will be created to more
deeply understand issues confronting
the grain-based foods industry with
the objective to identify opportunities
to better "protect and promote" the industry's products. One task force will
be focused on consumer and customer
market research, assessing behaviors
and industry perceptions, as well as
values research. A second task force
on innovation will look for potential
areas of growth and development.
Ongoing grains nutrition research will
continue to be conducted to determine
credible claims about the nutritional
benefits of the industry's products.
These task forces will be responsible for helping define the overall
scope and strategy of a potential
checkoff program, Ms. Cochran said.
In addition to millers and bakers,
task forces will include experts from
retail, academia, associations and allied partners.
The Foundation has engaged outside counsel, heavily experienced in
various industry checkoffs, to explore
the drafting of a baking industry petition should the steering committee
decide to move forward. The draft
would then be disseminated for industry feedback in a U.S.D.A. comment period.
"The industry is tasked with drafting the proposal," Ms. Cochran said.
"It's a negotiation with U.S.D.A.
The department is very interested in
governance questions. Equitability.
Consensus."
After the comment period, the
U.S.D.A. will publish a final proposal
and oversee a referendum to approve
or reject the launch of a checkoff program either immediately or on a delayed basis. Any company that would
be assessed is eligible to vote, Ms. Cochran said.
If established, the checkoff program
would be overseen by an industrygoverned board and by a staff hired
by the board. The U.S.D.A. appoints
the board with representation from all
bakingbusiness.com / world-grain.com

http://www.bakingbusiness.com http://www.world-grain.com

Milling & Baking News - November 21, 2017

Table of Contents for the Digital Edition of Milling & Baking News - November 21, 2017