2019 September Board Book

CALIFORNIA MILK ADVISORY BOARD

Board of Directors Meeting

September 11 – September 12, 2019

CALIFORNIA MILK ADVISORY BOARD 2316 Orchard Parkway, Suite 200 Tracy, California 95377 (209) 883-6455 RealCaliforniaMilk.com BOARD MEETING AGENDA Wednesday, September 11, 2019 at 7:30 am and Thursday, September 12, 2019 at 8:00 am Visalia Marriott at the Convention Center 300 South Court Street, Visalia, CA 93291 (559) 636-1111

All matters noticed on this agenda may be considered for action. Items listed on the agenda may be considered in any order at the discretion of the Board Chair. Any item not so noticed will not be considered or discussed. All meeting agendas and notices are available on the California Department of Food and Agriculture website at: https://www.cdfa.ca.gov/mkt/mkt/ . (select meeting notices) Each of the agenda items below will include discussion and possible action by the Board. Time will be allowed for members of the public to make comments on each agenda item. Comment time may be limited based on the number of agenda items and/or number of commenters.

1. Call to Order – Chairman Josh Zonneveld

2. Roll Call – Secretary Essie Bootsma

3. Introduction of Guests

4. Closed Session Pursuant to Government Code section 11126, the Board is authorized to meet in Closed Session for the purpose of considering matters involving: a. Pending litigation – California Milk Producers Advisory Board v. James W. Jones [Government Code § 11126(e)(1)] – CDFA Legal and Deputy Attorney General

5. Reconvene Open Session

6. Financial Report – Treasurer David Vander Schaaf

7. Audit Update

8. Individual District Reports

9. Marketing Branch Report

10. Report from Chairman – Josh Zonneveld

11. Report from Chief Executive Officer – John Talbot

12. Program Review a. Advertising

b. Communications c. Business Development d. Processor Relations e. Producer Relations

Page 1 of 2

13. Long Range Plan Strategy Discussion

14. Breakout Sessions: Advertising/Communications; Business Development/Processor Relations; Producer Relations: followed by Board discussion of Breakout Sessions highlights

15. Guest Speaker – Tammy Anderson-Wise, MS, CAE – CEO – Dairy Council of California

16. International Interns

17. Committee/Industry Meetings Update

18. National Dairy Board Update

19. Minutes of Last Board and Executive Committee Meetings – Secretary Essie Bootsma 20. Other Business a. Previously discussed or tabled agenda item(s) for this meeting b. Items to be discussed at next board meeting

21. Public comment on non-agendized items

22. Adjournment

Americans With Disabilities Act Persons with disabilities needing special accommodation or modification in order to attend or participate in any Board or Committee meeting or other Board activity may request assistance by contacting John Talbot, C.E.O., California Milk Advisory Board at 209-883-6455.

Page 2 of 2

B AGLEY -K EENE O PEN M EETING A CT S ECTIONS 11120 THROUGH 11132 OF THE C ALIFORNIA G OVERNMENT C ODE

Objective of the Act

When the Legislature enacted the Bagley-Keene Open Meeting Act (Act), it imposed a “value judgment” on the Governmental process. In effect, the Legislature said that when a State body sits down to develop its consensus, there needs to be a seat at the table reserved for the public. By reserving this place for the public, the Legislature provided the public with the ability to monitor and participate in the decision-making process. If the State body were permitted to meet in secret, the public’s role in the decision-making process would be negated. Therefore, absent a specific reason to keep the public out of the meeting the public should be allowed to monitor and participate in the decision-making process. If one accepts the philosophy behind the reservation of a seat at the table for the public, many of the particular rules that exist in the Act become much easier to accept and understand. Simply put, some efficiency is sacrificed for the benefit of greater public participation in government. A State body is every state board, council, commission or similar multimember body that is created by statute or by executive order including committees appointed by a State body (if the committee consists of three or more members). A meeting occurs when a majority of a body convenes, either serially (not permitted) or, together in one place, to address issues under the body’s jurisdiction. This includes meetings solely for the purpose of presenting information to a body. Even if no actions or decisions are contemplated, a gathering of a majority of a body to discuss issues under the body’s jurisdiction is considered a meeting under the Act. Serial Meetings occur when a member or staff of a State body communicates by telephone or email individually with a sufficient number of other members to constitute a quorum in order to discuss issues to come before the body. Such serial communications are prohibited by the Act. Social gatherings of a State body are not considered meetings covered by the Act so long as official business is not discussed. Teleconference meetings are permitted provided that information necessary to access the teleconference electronically and a primary physical location are included on the meeting notice, the location is accessible to the public and at least one member is present. Members planning to participate electronically must notify the Board office at least 24 hours in advance. The meeting minutes must reflect those members participating electronically. A Meeting Notice must be published at least ten (10) days prior to the date of the meeting. To avoid issues, issue notice 11 days before meeting at the latest. Meeting Notice must be mailed (or emailed) to anyone requesting a copy and must be posted on the Board’s website. The Meeting Notice must also be posted on CDFA’s website.

What is a State Body?

What Constitutes a Meeting?

What are Serial Meetings?

Social Gatherings

Teleconference Calls

Regular Meeting Notice Requirements

Required Posting

Special Meetings

In order to provide State bodies with a means of holding a meeting on short notice because of the occurrence of an unforeseen event, the Act allows for “Special Meetings” with a 48-hour notice with copies to all national wire services. The purposes for which a body can call a special meeting are quite limited. Examples include pending litigation, legislation and certain personnel actions.

Notice Content

The Meeting Notice must include: ▪ Date, time and place meeting is to be held ▪ A specific agenda for the meeting ▪

If there will be a Closed Session, must be on the agenda and must cite Code Section and Subsection providing legal authority for Close Session. ▪ Notice that for every agenda item there will be discussion including public comment, and that board action may occur. ▪ Must list a contact person for questions concerning the agenda or for needed special accommodations. ▪ See example notice and agenda attached. The Agenda should allow opportunity for public comment on each agenda item . Members of the Public should also have opportunity to offer comments on subjects not listed on the agenda (reasonable time limits can be applied) A state body must record in the meeting minutes any action taken by the body and the vote or abstention of each member present for the action. In most cases, there are only two authorized reasons for Closed Sessions for our programs: ▪ Personnel Issues [Government Code Section 11126(a)(1)] ▪ Pending Litigation – Attorney should be present with memo prepared for the board of directors. [Government Code Section 11126(e)(1)] ▪ Chair must announce in open session that the Board is entering into closed session and state the (general) purpose of the closed session ▪ Only board members and people necessary to conduct the business of the closed session should be present ▪ When closed session adjourns, open session must be reconvened and the general nature of any actions taken in closed session must be reported ▪ Minutes of the closed session must be prepared and kept in confidential file

Comments from Public

Minutes Must Indicate Each Member’s Vote on Motions

Closed Sessions

Closed Session Process

Rights of the Public:

▪ To attend meetings free from conditions ▪ To tape, record or broadcast meetings ▪ To comment on any agenda item (may post a time limit) ▪ To make comments regarding non-agenda items (may impose time limit) ▪ To have access to documents provided to board members ▪ To receive notice to all meetings of the board or its committees including agenda ▪ Assurance that the meeting will not begin before the time stated on the notice

California Milk Advisory Board 2316 Orchard Parkway, Suite 200 Tracy, CA 95377 Telephone: 209-883-6455

I. Required Continuation Hearing – A public hearing must be held every five years to consider the CMAB’s continuation. The last continuation hearing was August 19, 2015. The next required continuation hearing will likely occur in the summer of 2020.

II.

Fiscal Year – January 1 to December 31

III. Board Composition – 24 producer members, 24 alternates, and 24 reserve alternates [Public Member is permissive.] There cannot be more than 1 vote from any one dairy production entity. Board seats are allocated in accordance with each district’s production and number of producers. The allocation of seats is reviewed every three years.

IV. Board Terms of Office – March 1 st through February 28 th The terms are for 3 years and are staggered so that one-third of seats must be filled each year.

V. Term Limits – No member or alternate may serve more than four consecutive three-year terms in the same position.

VI. Vacancies – Alternate serves in the stead of vacant position and reserve alternate in the stead of the alternate. Vacancy is not filled until the next annual nomination meeting.

VII. Executive Committee – Each March the Board shall select an Executive Committee consisting of a Chairman, Vice Chairman, Treasurer, Secretary and three additional members of the Board. The Chairman is limited to three consecutive terms.

VIII. Board Quorum and Board Voting Procedures

A quorum is 13 members.

•

• Board actions that do not regard expenditures of program funds and do not regard selection or dismissal of management personnel require an affirmative vote of a majority of the total members of the board. (13 votes) • Board actions related to expenditure of funds for any program requires a ⅔ vote of the voting members present, or 13 votes , whichever is greater . • Board actions related to selection or dismissal of management personnel require a ⅔ vote of the full board. (16 votes) [17 votes if there is a public member appointed.]

IX. Maximum Assessment – Either 10 cents per hundredweight or 1% of Gross Dollar Value

Over

X.

Authorized Activities:

A. Research Authority – Relating to market milk and dairy products, research studies concerning health, food, nutritional, therapeutic, dietetic or such qualities of other food products, for the development of new food products, or for the development of new uses for milk or dairy products. B. Education Authority – Programs may include programs designed to acquaint producers, Producer-Handlers, or other interested persons with quality improvement, including sanitation practices, procedures, or methods as applied to such market milk or dairy products, and may also include educational programs designed to make available to producers, producer-handlers, handlers, and the public generally the findings of research programs. • Milk and Dairy Products Other than Cheese, Ice Cream and Butter - The Board may develop programs of advertising and trade promotion relating to market milk and dairy products, provided , that any such plans, with the exception of plans that make incidental references to brands of cheese, ice cream, or butter as described below, shall be directed toward increasing the sale of such milk and dairy products without reference to any private brand or trade name used by any handler or producer-handler of milk or dairy products. • Cheese, Ice Cream and Butter - The Board may develop advertising and sales promotion plans to allocate funds for promotions of cheese, ice cream, or butter products made with California milk, including promotions in which brand or trade names are used; provided , that the use is incidental to the promotion of the California milk product and not in direct promotion of the brand or trade name; and provided further , that the allocation of funds is made available on a nondiscriminatory basis to all retailers and C. Advertising and Sales Promotion and Market Development Authority: manufacturers of butter, ice cream, or cheese utilizing milk produced in California. Permissible private brand or trade name marketing promotions may include advertising, performance allowances, sales promotions, couponing subject to Section 61375 and in-store promotion programs and materials, and other marketing communication tools • Official Board Brands, Trade Names, Labels and Other Distinctive Designations - The Board is authorized to establish and to regulate the permissive use of official Board brands, trade names and labels, and other distinctive designations of grade, quality or condition, except the grade or quality designations in effect pursuant to State or Federal grade standards, for any product in which market milk or other dairy products are used. Any official Board brand or trade name which is established pursuant to this section shall not be construed as a private brand or trade name with respect to Section 58889 of the Code.

CMAB Glossary of Terms

ACV (All commodity volume) – Total grocery dollars attributed to individual retail groups in a defined geographic trade area . Advertising awareness – One diagnostic tool that companies use to gauge the success of a campaign, advertising awareness studies measure whether or not consumers have knowledge of the ad or recall seeing it.

Advertorial – An advertisement in a print publication designed to look like a news or feature article.

Brand – A name or symbol that identifies a company’s product as distinct from those of its competitors. A well-developed brand communicates a promise to the consumer about a product’s unique benefits.

Broker – An agent who is authorized to buy or sell products for another organization. Brokers facilitate the movement of dairy products from processors to retail stores.

California Dairy Quality Assurance Program (CDQAP) – An educational program collaboratively offered by the California dairy industry, state and federal regulatory agencies, and the University of California. Its goal is to encourage, through education and voluntary certification, science-based dairying practices which promote the health of the consumer, the environment and dairy livestock. California Dairy Research Foundation (CDRF) – The mission of the CDRF is to increase the utilization of milk through investments in research. The scope of this research includes dairy foods, dairy herd health and food safety, nutrition and dairy quality assurance. California Department of Food & Agriculture (CDFA) – The CDFA promotes and fosters confidence in California agriculture by implementing and communicating public policy and programs. The CDFA interfaces with the dairy industry in a variety of areas including exports, promotion and research marketing orders, producer milk pricing, pooling and distribution of milk revenue, quality and sanitation, and animal health.

Cable TV – Television service purchased by consumers that is carried to homes by direct wires (cables).

Centralized buying – Under a centralized buying system, the responsibility for product selection and purchase is consolidated in a central market office, rather than with the individual stores.

Club store – A members-only, large-scale, high-volume store that stocks a large number of products that sell at low prices. Examples include Costco and Sam’s Club.

Control label products – A brand developed by a small regional or local wholesaler, as distinguished from a brand bearing the name of a manufacturer or producer. Control label products are typically distributed to a limited number of retailers.

Cost-per-engagement (CPE) – A means of measuring digital and social media advertising effectiveness that shows the cost when a digital ad or piece of social media content is engaged with.

Cost-per-thousand (CPM) – A means of measuring advertising effectiveness that shows the cost, per 1,000 people reached, of buying advertising space or time in a given media outlet.

Cross-promotion – A sales promotion that uses one brand to promote another, non-competing brand.

Dairy Management, Inc. (DMI) – A non-profit organization that conducts integrated programs in marketing communications, promotion and research on behalf of America’s dairy farmers. It was formed in 1995 by the National Dairy Board and the United Dairy Industry Association. Designated Market Area (DMA) – Is a region or territory where people get the same television and radio options. They are often linked by major metropolitan cities, but in rural areas, can be combined. Nielsen divides the country into 210 DMAs. These areas represent 210 television media markets.

Foodservice – The business of making or serving prepared foods, as in a restaurant.

Gallup – A market research company that tests television and radio commercials, print ads and Internet ads to measure their effectiveness. Gallup tracks ads after they run to measure how effective they are at reaching a targeted market segment.

Green House Gasses (GHG) – Includes water vapor, carbon dioxide, methane, nitrous oxide and ozone. The balance of these gasses in our atmosphere control the temperature at the surface of the earth.

Independents – Food retailers that are one-store operations. Independents are usually small businesses serving local communities.

In-store demos – Retail store promotions which involve handing out product samples directly to consumers staffed by a trained local product demonstrator.

Integrated campaign – A marketing campaign that employs a variety of promotional methods – advertising, public relations, direct marketing, in-store promotions -- and coordinates them so they work together to reach the greatest number of people.

IRC (instant redeemable coupon)/on-pack IRC – A coupon placed directly on a product that either gives a price off on that package or a related product in the store immediately at check-out.

IRI (Information Resources, Inc.) – A company that gathers data on food products sold in supermarkets and grocery stores nationwide, and sells it to subscribers. The data is collected on a weekly basis from the stores’ scanners, and IRI analyzes it to provide information on pricing, speed of sales and geographic distribution. Lifestyle Balancers – A term used to describe our core, most loyal dairy purchasers so that we can target them effectively with media. Rather than using demographic terms (e.g., women 25-54), we have identified several psychographic (behavioral/attitudinal) descriptors our best consumers have in common, such as: “Use food as a social connection,” “Balance health with enjoyment,” “Food is an extension of my personal image,” “Strongly family-centric” and a host of other descriptors. We can choose media channels that target consumers who exhibit these types of behaviors/attitudes. Millennials, Moms and Hispanics over-index within the Lifestyle Balancer group. Mat mail – A publicity method in which a brief feature story on a product is formatted and typeset so that newspapers can run the story as-is. The mat mail typically includes a visual and is distributed to small suburban daily and weekly newspapers. Media Monitoring – A company that monitors traditional and online media as well as social media and captures articles for its customers. For example, through Ketchum, the CMAB contracts with Cision and Lexis-Nexis to capture news and feature stories on California dairy. This enables the CMAB to track its publicity efforts. (formerly Clipping Service)

Merchandising – Drawing attention to products inside a store by arranging them in creative, eye- catching displays.

Network TV – A group of television stations that are linked for the simultaneous broadcast of the same programs. With the network system, advertisers can reach a larger audience at a lower cost-per-person than with a single station.

Nielsen – Nielsen is a company that collects sales data on products sold in supermarkets, like cheese and dairy products. These data allow manufacturers to track sales of their products.

Publicity – A form of public relations that takes the form of editorial exposure, such as a news or feature article about a product. Publicity differs from advertising in that the company doesn’t pay the newspaper or TV station to run the story. POS (Point of Sale)/POP (Point of Purchase) – The in-store promotion of a product to make the product stand out among its competitors. POS can range from a simple ad that is hung on a grocery store shelf to a large, elaborate display. Private label – A brand developed by a large retailer or wholesaler, as distinguished from a brand bearing the name of a manufacturer or producer. Since manufacturers’ brands have large advertising expenditures built into their cost, a private brand can buy the same goods at a lower cost and sell them at a lower price. Qualitative research – Advertising research that explores issues deeply to gain insight into how consumers feel about a product and why they buy it. Qualitative research relies on in-depth interviews with open-ended questions like “How do you decide which cheese to buy?”

Quantitative research – Research that gathers measurable information from a large number of consumers. The surveys use closed-ended questions that require a simple answer.

Rating points – The measurement of the actual viewing or listening audience for a program or commercial. If a program has a rating of 10 points, it means that 10 percent of all households in a particular area had their television sets tuned to that program. A program with a high rating will deliver a large audience to advertisers for their commercials.

Retail authorizations – Approval by retail chains for their local and regional buyers to purchase merchandise for their organization.

Rotation – The pattern of how television and radio commercials are aired during the broad time period purchased by the advertiser. If an ad runs in the same time period on different days each week, it is called a horizontal rotation. If the ad runs throughout a particular day, it is a vertical rotation. Satellite media tour – A publicity method that allows a celebrity or company spokesperson to participate in up to 25 interviews per day with TV reporters. The person being interviewed sits in a television studio and is connected to remote locations via satellite hook-up, increasing the reach of the publicity program at a relatively low cost. SKU (Stock Keeping Unit) – A number associated with a retail product for inventory purposes. Retailers use SKUs to identify and track individual products. Each product must have a SKU, and each SKU must be unique; for example, a pint bottle and a quart bottle of the same product have separate SKUs. According to recent research, the average number of SKUs carried in a typical supermarket is 30,580. Short-Lived Climate Pollutants (SLCP) – Short-Lived Climate Pollutants include black carbon, methane, tropospheric ozone, and hydrofluorocarbons (HFCs). They have relatively short atmospheric lifetimes but are believed to have significant warming impacts on climate.

Slotting fees – Fees that supermarkets charge suppliers and manufacturers to place their products on the shelf.

Spot TV – Commercial time on local television stations, as distinguished from commercial time on a network.

Talent Fees/Residuals – Fee paid to actors used in a broadcast commercial.

Unique Visitors Monthly (UVM) – Refers to the number of distinct individuals requesting pages from the website during a given period, regardless of how often they visit. Visits refers to the number of times a site is visited, no matter how many visitors make up those visits. United Dairy Industry Association (UDIA) – UDIA coordinates with its members, 18 state and regional dairy promotion organizations, to develop and implement programs and services to support the dairy industry. Universal product code (UPC) – Grocers use the UPC to identify products and prices, and to track their sale. UPCs are translated into barcodes (a series of vertical parallel bars printed on a product’s package) that are read or “scanned” by electronic cash registers. Video news release (VNR) – Information about a product produced in a video newscast format and distributed to the news departments of television statements. If, after the news director reviews the VNR and he/she decides to use it, the video is typically edited and aired as a news item during a newscast. Warehouse store (superstore ) – A large-scale, high-volume store that stocks a large number of products that sell at low prices such as Wal-Mart. Can be called a “warehouse club” if the store sells only to members such as Costco or Sam’s Club.

Wire service (Associated Press) – A newsgathering organization that that collects stories for newspapers and distributes them electronically to subscribers.

Cheeses

Artisan Cheese – Refers to cheeses that are handmade in small quantities with respect for the tradition of the cheese. Artisan cheeses can be, but are not necessarily, made from milk obtained from animals located on the farm where the cheese is made. Commodity Cheese – Describes popular varieties of cheese typically produced in large quantities with a flavor profile that appeals to the majority of consumers. These cheeses are sold in supermarkets, either as branded products or under private labels, or distributed for foodservice use. In California, Cheddar, Jack and Mozzarella (low-moisture form) are popular commodity cheeses.

Farmstead Cheese – Refers to cheeses made from milk obtained from animals located on the farm where the cheese is made.

Specialty Cheese – A broad term that describes non-commodity cheeses. Specialty cheeses are cheese varieties with distinctive flavor profiles catering to a special niche in the market. Specialty cheeses can be unique varieties of cheese (i.e., Camembert, St. George, Teleme) or specialized versions of popular cheeses such as Cheddar, Jack or Mozzarella (i.e., raw milk Cheddar, Dry Jack, high-moisture Mozzarella). This category also includes handmade artisan and farmstead cheeses. Specialty cheeses are typically sold as branded products in specialty food stores and in supermarket gourmet cases.

Organizations

CARB – California Air Resource Board CARES – Dairy CARES CCOA – California Creamery Operators Association CDC – California Dairy Campaign

CDI – California Dairies, Inc. CDFA – California Department of Food and Agriculture CDQAP – California Dairy Quality Assurance Program CDRF – California Dairy Research Foundation CEPA – California Environmental Protection Agency CFMPB – California Fluid Milk Processor Board CMAB – California Milk Advisory Board

DCC – Dairy Council of California DFA – Dairy Farmers of America DIC – Dairy Institute of California DMI – Dairy Management, Inc. DWR – Department of Water Resources

IDFA – International Dairy Foods Association IFIC – International Food Information Council IMGC – International Milk Genomics Consortium LOL – Land O’ Lakes MilkPEP – Milk Processor Education Program MPC – Milk Producers Council NMPF – National Milk Producers Federation USDA – United States Department of Agriculture

USDEC – U.S. Dairy Export Council WUD – Western United Dairymen

ADMINISTRATION

California Milk Advisory Board Statement of Income and Expenses As of June 30, 2019

Month Ending CY % to Month Ending PY % to

Year Ending 12/31/2019

6/30/2019

6/30/2018

Budget

Budget

Actual

Budget

PY

Revenue Assessment Income

20,149,642 $

17,495,279 $

39,500,000 $

51%

45%

Non-Assessment Income

57,524 50,961

151,309

230,000

25%

39%

Other Income Total Revenue

-

-

20,258,127

17,646,588

39,730,000

51%

45%

Expenses

Advertising

7,724,749 1,712,623 2,547,116

7,015,325 1,607,018 2,074,565

19,555,000 3,923,000 6,317,000 1,600,000 6,280,000 1,070,000

40%

37%

Communications Domestic Retail

44%

46%

40%

38%

Foodservice

404,358

359,569

25%

23%

International Initiative

2,038,276

2,106,434

32%

39%

Tradeshows

317,690 311,400 197,072 182,817

649,087 311,112 222,713 150,118

30%

60%

Processor Relations Industry Intelligence Producer Relations

660,000 600,000 456,904 48,000

47%

51%

33%

56%

40%

33%

Education and Community Relations

2,985

1,760

6%

4%

Dairy Research Foundation

748,896

971,048

1,497,792 42,007,696

50%

50%

16,187,982

15,468,749

39%

39%

Office Operational

224,554 127,594 21,748 32,026 77,875 14,001

219,525 145,948 22,855 39,231 62,069 14,372

476,000 260,000 47,000 83,000 127,000 30,000 15,000 30,000 36,000 40,000 100,000 775,000 55,000 85,000 30,000 115,000 25,000 17,000

47%

72%

Rent

49%

59%

Travel & Automobile

46%

49%

Legal

39%

52%

Insurance - Employee Freight & Postage Employee Education Automobile Depreciation

61%

44%

47%

36%

-

- -

0%

3,083

10%

0%

Liability Insurance

14,865 27,578

32,655 21,304

41%

82%

Money Investment Plan

69%

47%

Retirement Plan

100,000 393,159

-

100%

0%

Admin Salary & Wages Board Travel Expenses Board Meeting Expenses

394,432 40,908 21,382 14,675 26,033

51%

53%

37,978 19,454 11,775 58,826 29,200

69%

74%

23%

25%

Board Per Diem Marketing Branch

39%

49%

51%

29%

Fiscal & Compliance Audit Assessment Collection Fee

- -

117%

0%

-

0%

0%

1,193,717

1,055,389

2,346,000

51%

50%

Total Expenses

17,381,700

16,524,138

44,353,696

39%

40%

Year to Date Payroll: $1,496,323

8/21/20191:48 PM

Comparative Statement of Income and Expenses_June

June 30, 2019

ADVERTISING

2019 Topline:

Q1: Respect the Tortilla // Bribe Q2: Respect the Tortilla // Dad’s Pancakes

Q3: Respect the Tortilla // Bribe Q4: NEW: Enter the Golden State

We’ve promoted 41 pieces of content across Facebook and Instagram from January to June

• 19M Impressions • 2.6M Video Views • 142K Engagements

Paid Social

2.09M Impressions 33.4K Clicks

Paid Search

1.74M Impressions 483K Views

Purpose: Expand TV exposure to laptop, mobile and tablet

• 66M Impressions • 46M Video Views • 230K Clicks

Digital Media

Q1-Q3: Regular maintenance updates including featuring seasonal recipes, sustainability news and food trends Q4: Introducing a revamped RCM.com that will be further integrated with Enter the Golden State

Enter the Golden State Campaign Launch In Q4 this year, we will be launching our Enter the Golden State campaign consisting of the following elements: • 3 new Enter the Golden State TV spots, which will also run online

• Enter the Golden State companion banner ads • Enter the Golden State contextually relevant banner ads • Swipe to Enter the Golden State social series

Additionally, in 2020, we will be extending this campaign further through a series of tactics including experiential/sampling, PR initiatives, wild postings and print, additional banner ad support, new social content series, influencer support and e-commerce partnerships. Media: Upcoming in Q4, and for 2020… We will see some adjustments to our TV buy to align with our Lifestyle Balancer’s media consumption. Some of the larger changes include: • New cable networks that our new LB target are more partial to. • Removing some networks that our new LB target is less aligned with. • Allocating some funds to Unwired Cable, which allows us to buy top LB networks at a 40% savings. • As a major shift, we will now be buying cable only, as broadcast does not allow us to reach our target as efficiently as it had in the past. Media Support for Enter the Golden State In support of the new creative launch in Q4, we’ll be adding some new elements to our digital plan. • Contextual ads (potentially around weather and travel) – playing off the idea of the Golden State being a physical place. • Dynamic banners showing users how to get to the “Golden State,” which includes

directions to the closest store selling products with the seal. • Increased social support at the time of campaign launch. A refresher on our target

“Lifestyle Balancers.” These consumers eat dairy often and buy it for their family. Some shared traits and behaviors that define this group are: • They use food as a social connection • They are curious and love to explore • They value balanced health

How does this translate to how we buy media? These traits and behaviors inform our media buy in several ways, including the TV programming we choose and digital partners we run ads with. Some additional traits of our LB audience look like this from a media target standpoint: • Mostly women • Over-index Hispanic • Skew younger than our previous 25-54 target • Over-index as moms • Buy and consume dairy An update on our 2019 digital media?

Our digital media plan for 2019 launched in April and is designed to deliver 106M+ targeted views and 136M targeted impressions. The plan consists of both national and local video and offers support for business development programs. Through the first half of 2019, the buy has delivered:

• 66M Impressions • 46M Video Views • 230K Clicks

Social Content: We have continued to repurpose our top-performing food and farmer content. We will have new social content to support our Enter the Golden State campaign launch in Q4 and additional content series to introduce in 2020.

Better With Cheese

Monday Melt

Farmer Content

Recipe Content

RealCaliforniaMilk.com: As we developed the Enter the Golden State campaign, we saw an opportunity to translate elements of the campaign to the website. We will be making a series of updates to the site to launch in late September/early October. • Updating existing modules, using our Enter the Golden State campaign as the filter and through-line throughout

• Creating a unique landing page for the campaign • Creating a unique landing page for CA sustainability • Identify new opportunities to highlight the RCM seal YouTube Marketing :

Our 2019 YouTube efforts continue to focus on supporting the CMAB TV ads and recipe videos. All recipe videos will continue to link to recipes on RCM.com. Below are our first half 2019 metrics and top-performing posts (based on view rate and CPV).

Paid YouTube through January-June 2019 Impressions

Views

Clicks

CPV

1,735,650

482,547

1,259

$0.04

Search Engine Marketing: This year, we are continuing to spend on Google only to help increase our share of voice on the largest search platform. To focus our efforts, we worked alongside the business development team to identify key markets that have high RCM product inventory and markets that hope to see growth. 2019 Paid Search (January - June)

Impressions

Clicks

CTR

Avg. Position

2,090,581

33,422

1.60%

1.9

COMMUNICATIONS

Public Relations Program

COMMUNICATION SERVICES Public relations activities in Q2 2019 focused on supporting CMAB functional business priorities and delivering key messages to differentiate California dairy among consumers and health professionals. Drive consumer demand for CA Dairy in select regions of the U.S CMAB Functional Priority Increase Value of the Seal/Activate the Seal Activation Regional Consumer Events • San Diego Cheese Festival • Field to Vase Dinner (Sacramento) June Dairy Month/Buy Local Key Messages Delivered California is a source for quality, sustainable artisanal cheeses. Look for the Real California Milk seal California dairy means real food from real people Consumer Outreach/California: San Diego Cheese Festival, Field to Vase Dinner Real California Milk sponsored the Liquid City Cheese Festival, which was held May 19th in San Diego and the Sacramento Field to Vase Dinner, held June 12 at the state capital where attendees sampled California cheeses and received materials with the Real California Milk seal and key messages about California dairy at these events. In support of the June Dairy Month/Buy Local retail promotion, CMAB partnered with San Francisco-based chef Melissa King to create custom recipes shared with consumers in Northern California through a direct link campaign, social media amplification, a press release and earned media. Working with CDFA, Governor Gavin Newsom proclaimed June as Real California Milk Month, which was announced through a press release highlighting the contribution of dairy farm families to the state’s economy and local communities. CMAB social channels and producer influencers also supported the national World Milk Day message (June 1) and the #GiveAGallon initiative through the Undeniably Dairy campaign. CMAB Functional Priority Reframe the Dairy Health Story Activation Influence the Influencers Key Messages Delivered California milk and dairy products are a healthy, tasty way to get essential vitamins and minerals June Dairy Month/Buy Local Results: 44.6M impressions

California dairy is a healthy source of protein Dairy fits into modern diets, healthy eating plans Look for the Real California Milk seal

Nourish Social Influencer Event Results: 290k impressions (to date)

The CMAB hosted a Nourish social media event to connect with and educate nine hand-picked health and wellness influencers about the Real California Milk seal, dairy nutrition and sustainable farming practices in an engaging setting. Experts, including dairy farmers Megan Silva and Maureen Lemos as well as Ashley Rosales of the California Dairy Council were on hand for the event. Fourteen Instagram stories were posted during the event, with an additional pieces of follow-up content expected throughout the summer for an anticipated 1.3M impressions for the activation.

Nina Teicholz Webinar Following the Nourish event, CMAB hosted a webinar with author Nina Teicholz, of The Big Fat Surprise to talk about “Science and Changing Viewpoints on Dietary Fat”. In addition to influencers from the Nourish event, the webinar was made available to the dairy farming community as well as other industry representatives. Health Professionals: Health Expert Social Media Content Results: 4 posts/124k Impressions Nurse Barb Dehn’s Q2 social content focused on the benefits of milk and dairy for student athletes, cheese and diabetes as well as Hispanic dairy. Health Influencers: Social Media Influencers Results: 20 posts/1.5M impressions CMAB continued its partnership with social media

influencers Run-Eat-Repeat and Diet Assassinista to share content that showcases how California dairy fits within an active, healthy and balanced lifestyle. CMAB also worked with Katie Morford (@momskitchenhandbook) to promote California cheese during a book signing in San Francisco for PREP: The Essential College Cookbook.

CMAB Functional Priority

Activate the Seal/Position CA as Essential FS Partner

Activation

Foodservice PR and Advertising CAFÉ Conference

Key Messages Delivered:

Innovative chefs use Real California dairy products California is the leading producer of Hispanic cheese and dairy products California is the leading producer of pizza cheese

REAL Makers Campaign: Advertising Results: 1M print/673k digital impressions

Q2 REAL Makers foodservice advertising focused on hacks from Bone Kettle (Rujak), Tasting Room (Mexican Pizza) and Alta Calidad (Hispanic dairy). A secondary advertorial (paid advertorial) spotlighting dairy’s role in the plant-forward trend at foodservice, appeared in the National Restaurant Association’s “Show Daily” during the NRA show in May. Finally, a Business Reply Card (BRC) sized insert with a link to the CMAB’s Hispanic-dairy 101 foodservice video appeared in Restaurant Business. REAL Makers: Public Relations Results: 63k print/183k digital impressions Q2 media coverage included print and digital pieces in Flavor and the Menu and Food Management (x2). CAFÉ Meeting Place Conference The CMAB participated as a gold sponsor in the Center for the Advancement of Foodservice Education’s (CAFÉ) annual conference in Charlotte, NC. During the conference, which was attended by more than 130 culinary educators and culinary students, the CMAB showcased how California dairy fits foodservice trends like plant forward and reducing waste during a reception at Johnson & Wales and a presentation – The Changing Plate: How California Dairy Enhances the Cuisine of Today & Tomorrow – by North Carolina chef Michael Beers at Central Piedmont Community College.

CMAB Functional Priority

Establish California as the undisputed leader in sustainability Benchmark and Share Out Sustainability Milestones California is a source for quality, sustainable dairy foods. Importance of California dairy industry to state economy Look for the Real California Milk seal California dairy means real food from real people

Activation

Key Messages Delivered

California Dairy Sustainability Byline Results: 115k impressions

A bylined article highlighting milestones in California dairy sustainability was placed on the GreenBiz site – a website that delivers content on business, technology and sustainability for all industries. A modified version of the byline was shared through Dairy Business and the Tulare County Farm Bureau and Oakdale Leader. Frank Mitloehner TED Talk Pitch Tapping into science to dispel misinformation about dairy, livestock and climate change, the CMAB worked with Dr. Frank Mitloehner to put together a pitch for a TED talk on the topic “Can we eat our way out of climate change” and coordinated a nomination with Dr. Mitloehner and Temple Grandin. We continue to explore other options to share this information. CMAB Functional Priority: Activate the Real California Milk Seal/Ongoing Communication of CA Dairy Story, Shared Values CMAB supported farmer team member content development to encourage positive conversations about California dairy in their social communities, which included recommendations around dairy, food and agriculture posts. CMAB amplified posts on its owned channels and conducted a training session with team members to continue to develop their skills. California Dairy Communicators CMAB provided communication updates to the group around various issues activities to align on information and responses. Daily Monitoring & Social Listening CMAB monitored traditional and social media daily, tracking Real California Milk proactive coverage, dairy and food industry trends, and issues (food safety, environmental, animal care, drought, etc.). The team provided an analysis and POV on impacts pertaining to the California dairy industry, in addition to recommendations for amplifying positive stories on Real California Milk owned social channels. Key Messages Delivered: California dairy means real food from real people Look for the Real California Milk seal 99% of California dairies are family owned California Dairy Social Media Team Results: 257 posts/469k impressions

SOCIAL MEDIA Overview Through Q2 2019, we’ve promoted 41 pieces of content across Facebook and Instagram: • 19M impressions • 2.6M 10-sec video views • 142K engagements

Starting in October, we will introduce new social creative to support the launch of our Enter the Golden State TV campaign, and will look to roll out additional Enter the Golden State creative throughout 2020.

Social Content: Recipe Videos Recipe videos are still a major part of our content mix. Below are the recipe-specific metrics on Facebook and Instagram through Q2 2019: • 10.5M impressions • 1.9M 10-sec video views • Top performer: Spicy Carrot Nachos (VTR of 27%)

Monday Melt Monday Melt is short, dairy-focused GIF food content. Below are metrics through Q2 2019: • 195K 3-sec video views

• Top performer: Cheese Bubbles (VTR of 45%)

Better With Cheese This photo series highlights popular day-specific food occasions and how cheese can make them better. Below are the metrics through Q2 2019:

• 86K impressions • 8.6 engagements • Top performer: Egg and Cheese Bagel (ER of 15%)

Farmer Videos We have continued to tap into the Growing Up Dairy and CA Dairy Stories video content to show the people behind California Dairy. Below are the metrics through Q2 2019: • 6.1M impressions • 649K 10-sec video views • Top performer: From Farm to College (VTR of 15%)

Appendix

The chart below shows social metrics for evergreen content on CMAB-owned channels through Q2 2019. “Other” includes metrics from website recipe posts and local campaign promotions: Content Impressions Engagements 10-Sec Video Views Tastemade 8,501,043 66,239 1,597,592 Cooking Panda 2,017,980 20,529 343,297 Better With Cheese 86,085 8,661 - Monday Melt 486,093 778 57,358 California Dairy Stories 4,714,689 3,578 452,508 Growing Up Dairy 1,468,842 1,592 197,047 TV 184,544 75 25,574 Other 1,903,413 41,445 - Total 19,362,689 142,897 2,673,376 The chart below details metrics by quarterly messaging objective through Q2 2019. Content Impressions Engagements 10-Sec Video Views Breakfast Content 5,730,368 64,246 887,706 Hispanic-Dairy Content 4,913,022 50,547 849,400

Coverage Dashboard

In the Media Executive Overview Q2 2019

TOPLINE RESULTS

8% Health

46.7 M Impressions

593 Stories/Mentions Consumer + Foodservice Traditional/Social Media

1.7 M Impressions

95% CA 5% National Reach

42% Farmer/ Sustainability

100% Key Message Delivery

Angle

Consumer + Foodservice Traditional/Social Media

Foodservice Advertising

50% Food

DETAILED RESULTS Ranked by t r ad i t i ona l / soc i a l med i a imp r es s i ons ( + f oodser v i ce adver t i s i ng f o r bus i nes s ob j ec t i ves ) To t a l imp r es s i ons ex ceed t he t op l i ne number due t o s t o r i es /men t i ons i nc l ud i ng mo r e t han one f unc t i ona l p r i o r i t y and/o r mes sage

TOP 3 FUNCTIONAL PRIORITIES

TOP 3 BUSINESS OBJECTIVES

TOP 3 MESSAGES DELIVERED

1. Activate the Seal 45.9 M Impressions

1. Real People, Family Farms 41 M Impressions

1. Consumer Demand: Value of the Seal Real food and/or real people content + Dairy Social Team

2. Consumer Demand: Dairy Health Story Dairy health, protein, fats and/or nutrients content

2. Look for the Seal 22.2 M Impressions

2. Ethnic Foods/Butter (tied) 23.6 M Impressions Each

3. Consumer Demand: Industry Leader Foodservice Advertising

3. Real Food 22.1 M Impressions

3. Win with Healthy Snacking 2.1 M Impressions

Activities Overview Q2 2019

Nourish Health & Wel lness Influencer Event

CDI Media Training

• Experts educated 9 curated Cal i fornia-based heal th and wel lness inf luencers about dai ry nutr i t ion and sustainable farming pract ices • 290K impress ions in Q2 (1.3M ant icipated in total )

• 13 part icipants • Topics covered: •

Ca l i forn i a da i ry l eadersh ip

• • • •

Act i v i st act i v i t i es Susta inab i l i ty

Food safety

On farm Mud / F lood ing

Dairy Social Media Influencer Team

Reputation Management

• Issues support • Cr i s i s plan development • Master Messaging updates • Economic Impact Report support • Dai ly tradi t ional & social media moni tor ing and report ing • DMI Cr i s i s Dr i l l part icipat ion

• 2 Social Media inf luencer trainings • June Dai ry Month content

Activate the Seal Q2 TOP 3 FUNCTIONAL PRIORITIES DETAILED REPORT

325 Stories/Mentions

45.9 M Impressions

1 Sustainability Summit Event

4. ACTIVATION XX impressions XX mentions 5. ACTIVATION XX impressions XX mentions 2. JUNE DAIRY MONTH RELEASE 20.2 M Impressions Chef Melissa content, summer entertaining 3. CHEF MELISSA DIGITAL AD 2.9 M Impressions Two recipes geo-targeted in California TOP 3 TACTICAL ACTIVATIONS Ranked by over a l l imp r es s i ons 1. PROCLAMATION RELEASE 20.5 M Impressions Governor’s recognition of RCM Month

KEY INSIGHTS Two press re l eases told di f ferent s tory angl es to mark June Dai ry Month. A re l ease that highl ighted the dai ry indus t ry ’ s cont r ibut ions to Cal i fornia generated the mos t impress ions for Q2. The second re l ease featured innovat i ve chef rec ipes and summer enter taining t ips , l everaging content f rom a retai l promot ional brochure .

2. TACTIC XX metric

3. REAL PEOPLE, FAMILY FARMS A pi ece by CEO John Talbot s t rongl y pos i t ioned Cal i fornia dai ry ’ s sus tainabi l i ty ef for t s .

3. TACTIC XX metric