November 6, 2010
While Warning About Fat, U.S. Pushes Cheese Sales
By MICHAEL MOSS

Domino’s Pizza was hurting early last year. Domestic sales had fallen, and a survey of big pizza chain customers left the company tied for the worst tasting pies.

Then help arrived from an organization called Dairy Management. It teamed up with Domino’s to develop a new line of pizzas with 40 percent more cheese, and proceeded to devise and pay for a $12 million marketing campaign.

Consumers devoured the cheesier pizza, and sales soared by double digits. “This partnership is clearly working,” Brandon Solano, the Domino’s vice president for brand innovation, said in a statement to The New York Times.

But as healthy as this pizza has been for Domino’s, one slice contains as much as two-thirds of a day’s maximum recommended amount of saturated fat, which has been linked to heart disease and is high in calories.

And Dairy Management, which has made cheese its cause, is not a private business consultant. It is a marketing creation of the United States Department of Agriculture — the same agency at the center of a federal anti-obesity drive that discourages over-consumption of some of the very foods Dairy Management is vigorously promoting.

Urged on by government warnings about saturated fat, Americans have been moving toward low-fat milk for decades, leaving a surplus of whole milk and milk fat. Yet the government, through Dairy Management, is engaged in an effort to find ways to get dairy back into Americans’ diets, primarily through cheese.

Americans now eat an average of 33 pounds of cheese a year, nearly triple the 1970 rate. Cheese has become the largest source of saturated fat; an ounce of many cheeses contains as much saturated fat as a glass of whole milk.

When Michelle Obama implored restaurateurs in September to help fight obesity, she cited the proliferation of cheeseburgers and macaroni and cheese. “I want to challenge every restaurant to offer healthy menu options,” she told the National Restaurant Association’s annual meeting.

But in a series of confidential agreements approved by agriculture secretaries in both the Bush and Obama administrations, Dairy Management has worked with restaurants to expand their menus with cheese-laden products.

Consider the Taco Bell steak quesadilla, with cheddar, pepper jack, mozzarella and a creamy sauce. “The item used an average of eight times more cheese than other items on their menu,” the Agriculture Department said in a report, extolling Dairy Management’s work — without mentioning that the quesadilla has more than three-quarters of the daily recommended level of saturated fat and sodium.

Dairy Management, whose annual budget approaches $140 million, is largely financed by a government-mandated fee on the dairy industry. But it also receives several million dollars a year from the Agriculture Department, which appoints some of its board members, approves its marketing campaigns and major contracts and periodically reports to Congress on its work.

The organization’s activities, revealed through interviews and records, provide a stark example of inherent conflicts in the Agriculture Department’s historical roles as both marketer of agriculture products and America’s nutrition police.

In one instance, Dairy Management spent millions of dollars on research to support a national advertising campaign promoting the notion that people could lose weight by consuming more dairy products, records and interviews show. The campaign went on for four years, ending in 2007, even though other researchers — one paid by Dairy Management itself — found no such weight-loss benefits.

When the campaign was challenged as false, government lawyers defended it, saying the Agriculture Department “reviewed, approved and continually oversaw” the effort.

Dr. Walter C. Willett, chairman of the nutrition department at the Harvard School of Public Health and a former member of the federal government’s nutrition advisory committee, said: “The U.S.D.A. should not be involved in these programs that are promoting foods that we are consuming too much of already. A small amount of good-flavored cheese can be compatible with a healthy diet, but consumption in the U.S. is enormous and way beyond what is optimally healthy.”

The Agriculture Department declined to make top officials available for interviews for this article, and Dairy Management would not comment. In answering written questions, the department said that dairy promotion was intended to bolster farmers and rural economies, and that its oversight left Dairy Management’s board with “significant independence” in deciding how best to support those interests.

The department acknowledged that cheese is high in saturated fat, but said that lower milk consumption had made cheese an important source of calcium.

“When eaten in moderation and with attention to portion size, cheese can fit into a low-fat, healthy diet,” the department said.

In its reports to Congress, however, the Agriculture Department tallies Dairy Management’s successes in millions of pounds of cheese served.

In 2007, the department highlighted Pizza Hut’s Cheesy Bites pizza, Wendy’s “dual Double Melt sandwich concept,” and Burger King’s Cheesy Angus Bacon cheeseburger and TenderCrisp chicken sandwich. “Both featured two slices of American cheese, a slice of pepper jack and a cheesy sauce,” the department said.

These efforts, the department reported, helped generate a “cheese sales growth of nearly 30 million pounds.”

Relentless Marketing

Every day, the nation’s cows produce an average of about 60 million gallons of raw milk, yet less than a third goes toward making milk that people drink. And the majority of that milk has fat removed to make the low-fat or nonfat milk that Americans prefer. A vast amount of leftover whole milk and extracted milk fat results.

For years, the federal government bought the industry’s excess cheese and butter, an outgrowth of a Depression-era commitment to use price supports and other tools to maintain the dairy industry as a vital national resource. This stockpile, packed away in cool caves in Missouri, grew to a value of more than $4 billion by 1983, when Washington switched gears.

The government started buying only what it needed for food assistance programs. It also began paying farmers to slaughter some dairy cows. But at the time, the industry was moving toward larger, more sophisticated operations that increased productivity through artificial insemination, hormones and lighting that kept cows more active.

In 1995, the government created Dairy Management Inc., a nonprofit corporation that has defined its mission as increasing dairy consumption by “offering the products consumers want, where and when they want them.”

Dairy Management, through the “Got Milk?” campaign, has been successful at slowing the decline in milk consumption, particularly focusing on schoolchildren. It has also relentlessly marketed cheese and pushed back against the Agriculture Department’s suggestion that people eat only low-fat or fat-free varieties.

In a July letter to the department’s nutrition committee, Dairy Management wrote that efforts to make fat-free cheese have largely foundered because fat is what makes cheese appealing. “Consumer acceptance of low-fat and fat-free cheeses has been limited,” it said.

Agriculture Department data show that cheese is a major reason the average American diet contains too much saturated fat.

Research has found that the cardiovascular benefits in cutting saturated fat may depend on what replaces it. Refined starches and sugar might be just as bad or even worse, while switching to unsaturated fats has been shown to reduce the risk of heart disease.

The department’s nutrition committee issued a new standard this summer calling for saturated fat not to exceed 7 percent of total calories, about 15.6 grams in a 2,000-calorie-a-day diet. Yet the average intake has remained about 11 percent to 12 percent of total calories for at least 15 years.

The department issued nutritional hints in a brochure titled “Steps To A Healthier You!” It instructs pizza lovers: “Ask for whole wheat crust and half the cheese” — even as Dairy Management has worked with pizza chains like Domino’s to increase cheese.

Dairy Management runs the largest of 18 Agriculture Department programs that market beef, pork, potatoes and other commodities. Their budgets are largely paid by levies imposed on farmers, but Dairy Management, which reported expenditures of $136 million last year, also received $5.3 million that year from the Agriculture Department to promote dairy sales overseas.

By comparison, the department’s Center for Nutrition Policy and Promotion, which promotes healthy diets, has a total budget of $6.5 million.

Although by law the secretary of agriculture approves Dairy Management’s contracts and advertising campaigns, the organization has become a full-blown company with 162 employees skilled in product development and marketing. It also includes the National Dairy Council, a 95-year-old group that acts as its research and communications arm.

Dairy Management’s longtime chief executive, Thomas P. Gallagher, received $633,475 in compensation in 2008, with first-class travel privileges, according to federal tax filings. Annual compensation for two other officials top $300,000 each.

Mr. Gallagher, who declined to be interviewed for this article, was described by board members, employees and food industry officials as an astute executive and effective champion of the sprawling dairy industry.

“He’s a big thinker,” said David Brandon, former chief executive of Domino’s. “A very creative guy who thinks big and is willing to make bets in helping to drive the business on behalf of his dairy farmers.”

Disputed Research

“Great news for dieters,” Dairy Management said in an advertisement in People magazine in 2005. “Clinical studies show that people on a reduced-calorie diet who consume three servings of milk, cheese or yogurt each day can lose significantly more weight and more body fat than those who just cut calories.”

With milk consumption in decline, Dairy Management had hit on a fresh marketing strategy with its weight-loss campaign.

When the campaign began in 2003, a Dairy Management official said it was inspired by newly relaxed federal rules on health claims and the ensuing “rapid growth of ‘better for you’ products.”

It was based on research by Michael B. Zemel, a University of Tennessee nutritionist and author of “The Calcium Key: The Revolutionary Diet Discovery That Will Help You Lose Weight Faster.” Precisely how dairy facilitates weight loss is unclear, Dr. Zemel said in interviews and e-mails, but in part it involves counteracting a hormone that fosters fat deposits when the body is low on calcium.

Dairy Management licensed Dr. Zemel’s research, promoted his book and enlisted a team of scientific advisers who “identified further research to develop more aggressive claims in the future,” according to a campaign strategy presentation.

One such study was conducted by Jean Harvey-Berino, chairwoman of the Department of Nutrition and Food Sciences at the University of Vermont. “I think they felt they had a lot riding on it,” she said of the weight loss claim, “and felt it was a cash cow if it worked out.”

“I’m a big promoter of dairy,” she added, noting that her research was also paid for by Dairy Management.

But by 2004, her study had found no evidence of weight loss. She said Dairy Management took the news poorly, threatening to audit her work. She said she was astonished when the organization pressed on with its ad campaign.

“I thought they were crazy, and that eventually somebody would catch up with them,” she said.

Her study was published in 2005, and at scientific meetings she heard from other researchers who also failed to confirm Dr. Zemel’s work, including Dr. Jack A. Yanovski, an obesity unit chief at the National Institutes of Health.

But in late 2006, Dairy Management was still citing the weight-loss claim in urging the Agriculture Department not to cut the amount of cheese in federal food assistance programs. “The available data provide strong support for a beneficial effect of increased dairy foods on body weight and body composition,” two organization officials wrote, making no mention of Dr. Harvey-Berino’s findings.

Having dismissed the weight-loss claim in 2005, the federal nutrition advisory committee this summer again found the underlying science “not convincing.”

The campaign lasted until 2007, when the Federal Trade Commission acted on a two-year-old petition by the Physicians Committee for Responsible Medicine, an advocacy group that challenged the campaign’s claims. “If you want to look at why people are fat today, it’s pretty hard to identify a contributor more significant than this meteoric rise in cheese consumption,” Dr. Neal D. Barnard, president of the physicians’ group, said in an interview.

The trade commission notified the group that Agriculture Department and dairy officials had decided to halt the campaign pending additional research. Dr. Zemel said he remained hopeful that his findings would eventually be upheld.

Meanwhile, Dairy Management, which allotted $12.4 million for nutrition research in 2008, has moved on to finance studies on promising opportunities, including the promotion of chocolate milk as a sports recovery drink and the use of cheese to entice children into eating healthy foods like string beans.

An All-Out Campaign

On Oct. 13, Domino’s announced the latest in its Legends line of cheesier pizza, which Dairy Management is promoting with the $12 million marketing effort.

Called the Wisconsin, the new pie has six cheeses on top and two more in the crust. “This is one way that we can support dairy farms across the country: by selling a pizza featuring an abundance of their products,” a Domino’s spokesman said in a news release. “We think that’s a good thing.”

A laboratory test of the Wisconsin that was commissioned by The Times found that one-quarter of a medium thin-crust pie had 12 grams of saturated fat, more than three-quarters of the recommended daily maximum. It also has 430 calories, double the calories in pizza formulations that the chain bills as its “lighter options.”

According to contract records released through the Freedom of Information Act, Dairy Management’s role in helping to develop Domino’s pizzas included generating and testing new pizza concepts.

When Dairy Management began working with companies like Domino’s, it first had to convince them that cheese would make their products more desirable, records and interviews show. It provided banners and special lighting for the drive-up window menus at fast food restaurants, recalled Debra Olson Linday, who led Dairy Management’s early efforts in promoting cheese to restaurant chains before leaving in 1997.

By 1999, food retailers and manufacturers were coming to Dairy Management for help.

“Let’s sell more pizza and more cheese!” said two officials with Pizza Hut, which began putting cheese inside its crust after holding development meetings with Dairy Management, according to a memorandum released by the Agriculture Department.

Derek Correia, a former Pizza Hut product innovations chief, said Dairy Management also helped find suppliers for the extra cheese. “We were using four cheeses, if not six, and with a company like Pizza Hut, that is a lot of supply,” he said in an interview.

And unlike with its advertising campaigns, Dairy Management and the Agriculture Department could point to specific results with these projects. The “Summer of Cheese” promotion it developed with Pizza Hut in 2002 generated the use of 102 million additional pounds of cheese, the department reported to Congress.

“More cheese on pizza equals more cheese sales,” Mr. Gallagher, the Dairy Management chief executive, wrote in a guest column in a trade publication last year. “In fact, if every pizza included one more ounce of cheese, we would sell an additional 250 million pounds of cheese annually.”

Working with some of the largest food companies, Dairy Management has also pushed to expand the use of cheese in processed foods and home cooking. The Agriculture Department has reported a 5 percent to 16 percent increase in sales of cheese snacks in stores where Dairy Management has helped grocers reinvent their dairy aisles. Now on display is an array of sliced, grated and cubed products, along with handy recipes for home cooking that use more cheese.

The strategy is focusing on families whose cheese “habit” outpaces their concern about the health risks, Dairy Management documents show. One study gave them a name: “Cheese snacking fanatics.”