2022 March Board Book

CALIFORNIA MILK ADVISORY BOARD

Board of Directors Meeting

March 9 – March 10, 2022

CALIFORNIA MILK ADVISORY BOARD 2156 W Grant Line Road, Suite 100 Tracy, California 95377 (209) 883-6455 RealCaliforniaMilk.com BOARD MEETING AGENDA Wednesday, March 9, 2022 at 7:30 am and Thursday, March 10, 2022 at 8:00 am DoubleTree by Hilton Hotel Modesto 1150 9 th Street Modesto, CA 95354 (209) 526-6000

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 Agricultural 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 Kirsten Areias

3. Introduction of Guests

4. Election of Board Officers and Executive Committee – Dennis Manderfield

5. Report from Chairman

6. Financial Report – Treasurer

7. Individual District Reports

8. Marketing Branch Report

9. Report from Chief Executive Officer – John Talbot

10. Program Review and Proposals a. Advertising b. Communications

c. Business Development d. Processor Partnerships e. Producer Relations f. CDIC

11. Committee/Industry Meetings Update

12. Dairy CARES Update – Michael Boccadoro

13. National Dairy Board Update

14. Minutes of Last Board and Executive Committee Meetings – Secretary Kirsten Areias a. Public comments on agenda items 15. Other Business a. Previously discussed or tabled agenda item(s) for this meeting i. Board Training b. Items to be discussed at next board meeting

16. Public comment on non-agendized items

17. 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.

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 2156 W Grant Line Road, Suite 100 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 September 16, 2020. The next required continuation hearing will likely occur in the summer of 2025.

II. Fiscal Year – The CMAB’s fiscal year is January 1 to December 31.

III. Board Composition – The Board shall consist of 18 producer members and 18 producer alternates. There may also be a public member and public alternate who may not have a financial interest in the milk industry. There may not be more than 1 vote from any one production entity. Board seats are generally allocated in accordance with the number of milk producers within each district. The district allocation of Board seats is reviewed every three years.

IV. Role of Alternates – When a producer member is unable to attend a meeting, he or she may designate any alternate member from their district to serve in their place.

V. Interim Filling of Vacancies – When a producer member position becomes vacant, the Chairman may designate any alternate from the same district to serve as an interimmember until the next round of district nominations and preference voting during which CDFA will seek a replacement. When an alternate producer position becomes vacant, the Board may recommend and the Department may consider appointment of a producer to fill the vacancy or the position may remain vacant until the next round of district nominations and preference voting during which CDFA will seek a replacement. VI. Term of Office – The term of office for all members and alternates is 3 years. Terms are staggered so that one-third of the Board positions are filled each year. Terms begin March 1 and run through February 28 three years later. VIII. Selection /Appointment Process – All members and alternates are appointed by CDFA. Recommendations for producer appointments for each district are generated through a two-step mail process conducted each fall consisting of a self-nomination procedure followed by preference voting. Recommendations for the public positions are generated by a vote of the producer Board members. IX. Executive Committee – Each March the Board shall select an Executive Committee consisting of a Chairman, Vice Chairman, Secretary, Treasurer and three additional Board members. The Chairman is limited to three consecutive terms. X. Board Quorum and Board Voting Procedures – A quorum of the Board shall consist of 10 members. Except as provided in the two exceptions below, actions of the Board shall be valid if approved by a majority of the members present, provided there is a quorum of the Board present. • Any action recommending a minor amendment to the CMAB Marketing Order must be approved by not less than 75% of the producer members of the full Board. • Board actions related to the selection or dismissal of the CEO shall not be valid unless approved by a ⅔ vote of the full board . VII. Term Limits – The CMAB has no term limits. Board members and alternates may serve as long as they continue to be rechosen via their district’s nomination and preference voting process.

Over

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

XII. Authorized Activities:

A. Research Authority – The CMAB may fund research relating to milk and dairy products. Such research may include research studies concerning the production, processing or distribution of milk, the health and nutrition of milk or dairy products or the development of new uses for milk or dairy products. B. Education Authority – The CMAB may fund programs designed to acquaint producers, handlers, consumers or other interested persons with educational information. Such programs may include information regarding quality improvement, sanitation practices, procedures, or methods as applied to market milk or dairy products. Education programs may be designed to also make available to producers, handlers and the public 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 trade name used by any handler or 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 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. C. Advertising and Sales Promotion and Market Development Authority:

CMAB Glossary of Terms

ACV (All commodity volume) – Total grocery dollars attributed to individual retail groups in a defined geographical 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

Organizations (cont…)

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

California Milk Advisory Board Statement of Income and Expenses As of November 30, 2021

Month Ending CY % to

Month Ending

Year Ending 12/31/2021

PY % to

11/30/2021

11/30/2020

Budget

Budget

Actual

PY

Budget

Revenue Assessment Income

38,202,172 $

$

37,548,083

40,486,121 $

94%

94%

Non-Assessment Income

91,463 56,100

93,416

110,000 10,000

83%

83%

Other Income Total Revenue

16,851

561%

19%

38,349,736

37,658,350

40,606,121

94%

94%

Expenses Advertising

15,976,188 3,614,245 4,986,595

15,243,103 3,288,511 4,542,571

18,310,000 4,143,000 6,785,000 2,200,000 6,594,000 1,116,000 1,073,600 1,180,000

87%

78%

Communications Domestic Retail

87%

88%

73%

87%

Foodservice

819,007

751,804

37%

42%

International Initiative

3,450,380

3,137,378

52%

48%

Tradeshows

580,527 744,293 960,956 437,231 18,573 386,853

344,908 710,831 665,342 349,569 14,983

52%

26%

Processor Relations Industry Intelligence Producer Relations

69%

68%

81%

111%

712,750 48,000

61%

53%

Education and Community Relations

39%

31%

CDIC

-

1,500,000 1,516,316 45,178,666

26%

0%

Dairy Research Foundation

1,516,361 33,491,210

1,777,517 30,826,517

100%

0%

74%

72%

Office Operational

389,084 103,753 17,656 42,174 161,947 34,373

341,269 244,932 15,644 40,906 155,007 30,091

476,000 113,750 47,000 83,000 181,984 30,000 10,000 45,000 63,000 300,000 803,812 65,000 77,000 18,000 125,000 45,000 18,800 -

82%

72%

Rent

91%

92%

Travel & Automobile

38%

33%

Legal

51%

49%

Insurance - Employee Freight & Postage Employee Education Automobile Depreciation

89%

92%

115%

100%

9,998

5,400 2,015

100%

36%

-

0%

92%

Liability Insurance

49,632 57,167

38,076 48,225

110%

85%

Money Investment Plan

91%

82%

Retirement Plan

330,000 796,167

400,000 699,016 15,199 18,742 10,800 104,497 40,025 17,025 2,226,867

110%

400%

Admin Salary & Wages Board Travel Expenses Board Meeting Expenses

99%

90%

11,179

17%

23%

38,892

51%

24%

Board Per Diem Marketing Branch

8,925

50%

60%

85,830

69%

84%

Fiscal & Compliance Audit Assessment Collection Fee

44,500 13,600

99%

89%

72%

91%

2,194,876

2,502,346

88%

92%

Total Expenses

35,686,086 $

$

33,053,384

47,681,012 $

75%

73%

Year to Date Payroll: $3,271,994

* Estimated November Assessment at $3,300,000

ADVERTISING & COMMUNICATIONS

Presentation to the Board of Directors

March 202 2

CMAB Advertising Update CMAB Social Media Update CMAB Communications Services Program Press Releases

CMAB Advertising Update

2021 Top-Line Recap

2021 • Day Can Wait “Emails” and “Video Conference” • 131.3MM Impressions • $491K Net in Added Value

2021

• 278 Pieces of Content • 171.2MM Impressions • 9.7MM Video Views • 498K Engagements

Paid Social

2021

• 3.5MM Impressions • 249K Clicks

Paid Search

2021

• 13.8MM Impressions • 6.8MM Views

2021

• 248.6MM Impressions • 150MM Video Views • 2.1MM Clicks

Digital Media

Aug–Oct 2021

• 99.2MM Impressions • 60 Units Across Test Markets

Out-of-Home

• We conducted regular maintenance in 2021 and will carry it over into 2022 • The following pages were added in 2021: o Health and Wellness section of the site o Breakfast Books digital experience (Spanish and English) o Revamped sustainability landing page • In 2022, we will be adding a cheese pairings page

RCM.com

2021 Research In 2021 we conducted the following research studies: • Dairy Consumer Inteligence Update • Media Weight Tests o Elevated weights on TV/OLV o OOH • Campaign Effectiveness Study • Business Opportunity Analysis & Positioning Research • MMM These studies provided many valuable learnings that informed our 2022 plans. Below are a couple of higlights from the 2021 research: • Audience refinement—Lifestyle Balancers 2.0 • Heavier media weights improve key metrics such as awareness, attitudes, and purchase intent • OOH, when added to the mix, improved campaign recognition • Hispanics in California are an important consumer with growth potential • Shifting media from national to California yielded positive results in our MMM Below are more in-depth snapshots for the OOH media weight test and MMM. OOH Media Weight Test The OOH Media Test helped us to understand the power of the medium, especially as we think about launching new work in 2022. • Incremental media weight directly raises campaign reach and recall, with campaign recall gains significantly higher in media test markets than the rest of California (ROC). • Fresh media placement (OOH) effectively generates both incremental campaign reach/recall, as well as complements and enhances overall campaign impact (campaign recall, messaging, etc.). • Additional mediums (OOH) offer an opportunity to layer synergistic but unique messaging (quality and variety) without distracting from the core communications strategy—just as we have seen with social media efforts. • Qualitatively (low base size), additional mediums (OOH) also reach different demographics. Overall, a short period of OOH is insufficient in its own right to transform an established product like CA Dairy; however, layering in onto a 360 campaign inclusive of video can help significantly increase recall and reach with relatively low CPMs.

MMM Shifting focus to the CA market in Year 3 drove positive results for the Seal products: • CA Seal CTS increase was +121% • Marketing investment in CA helped to offset the declines experienced in Year 3 from Trade and Core • Spot TV and Paid Social had the highest CTS (contribution to sales) across marketing channels; synergies drove an additional $7.3MM retail sales in the CA geography; Video and Paid Social drove the largest synergy volume • Consumer Promotions were more effective year over year for Seal products; programs focused on multiple categories had better efficiency; “June Dairy” and “Support Local” campaigns had the highest CTS • Instacart and Ibotta had a CTS above $4 with Milk outperforming all other categories • Shopper Marketing performance was relatively low (CTS below $2) when compared to Instacart and Ibotta • PR investment was allocated mostly outside of CA; efficiency was up in Year 3, with the “General Consumer” campaign reaching a CTS above $16 for both the Cheese and Milk categories Based on everything we learned from the MMM, campaign effectiveness study, and media weight test, we were able to build out a plan for 2022 that achieves the following: • 4x more TV weeks vs. 2021

• Increased TV weight during launch (100 TRPs/week vs. 50) • Hiatus periods leading up to Primaries and General Election • Projected 29% increase in volume vs. replicating 2021 • 95% Reach / 28x Avg. Freq / 93% 3+ / 90% 5+ / 86% 7+ Media

We launched the 2021 brand campaign (with Day Can Wait creative) on 2/8 across digital/TV and continued exposure through end of year. As a complement to the brand work, we supported in-store promotions throughout the year; Lent (Hispanic-inspired dairy recipies), Summer Snacking, Back-to-School, Hispanic Heritage Month (Texas markets), the 2021 Holiday campaign, as well as Recyle the Jug in partnership with MilkPEP. The local promotions ran a mix of digital banenrs, social, and influencer content. For 2022 we’re excited to launch the new “California Freestyle” campaign on March 28 across TV, CTV, pre-roll, and social. Ads will be running within home, food, and family content. As a complement to the TV and digital video launch, the team is actively exploring other channels to support the new work across OOH and Audio.

Similar to 2021, we’ll also be supporting local promotions, which kicked off with the January smoothie promo. There will also be paid media behind Lent; Tacos, Tequila y Más; Summer Snacking; Hispanic Heritage Month and Holiday Mornings Mean More.

2022 Campaign During the December board meeting, the new campaign “California Freestyle” was presented and approved. We are now further developing that campaign with plans to go into production in February with a goal of being on air by the end of March/early April. California Freestyle is a music-driven campaign that celebrates California Dairy and the place it comes from. It’s inclusive of all of California—both places and people. We are partnering with a musical artist who lives in California to sing the song and be featured in our creative. In addition to the video, we are also concepting support ideas/concepts to live under the California Freestly umbrella including: launch social, recipe content, health/wellness content, and sustainability content. 2021 Creative Recap: In 2021, we ran our “Day Can Wait” breakfast-focused TV campaign across all channels. This work will continued to be featured through Q1 2021 until the new campaign is ready.

Social Content Throughout 2021, we ran a variety of content across messaging objectives (recipes/health/sustainability). We also had a couple of unique social series, including our Breakfast-Time Stories that were created and promoted via our social channels

Out-of-Home We featured milk, yogurt, butter, and cheese breakfast-themed billboards throughout San Diego, Sacramento, and Fresno. We also ran Spanish-language units in each market.

Local Promotions In 2021 we ran several local promotions: • Lent (Hispanic Cheese) • Summer Snacking • Mornings Mean More Back to School • Hispanic Heritage Month • Holiday Mornings Mean More

Each campaign featured English and Spanish paid banners and social. A few of the campaigns were also accompanied by an influencer program as well. To kick off 2022, we’ve launched the Smoothie campaign as part of the Renew, Reset, Restore retail campaign to kick-start consumers on their healthy New Year’s resolution. For the remainder of the year we’ll be launching the following local promotions: Hispanic Lent; Tacos, Tequila y Mas; Summer Snacking; Hispanic Heritage Month and Holiday Mornings Mean More. Below is some of the creative from 2021.

CMAB Social Media Update

RealCaliforniaMilk.com Last year we launched our Health and Wellness site pages and revamped our Sustainability landing page on RCM.com. In 2022 we will continue to add to these information hubs and provide consumers and industry professionals with the latest information on dairy health benefits and California’s strides in creating a greener future. This summer we’ll be launching a Cheese & Wine page that will inform consumers of all the amazing pairings you can make with California cheese.

Search Engine Marketing In 2021 we achieved our 90% Brand SOV goal ensuring we appear when consumers are actively searching for CMAB. We also maintained presense in other relevant searches, including dairy products, new recipes, and breakfast topics. We are always optimizing to be available and attract qualified traffic. We’ve continued to update our search effort to be more modular, allowing us to be more flexible and personalized in our messaging. Non-Brand campaigns are geo-targeted to California only,

while Brand campaigns run nationally. The “dairy mythbusting” SEM campaign launched in Q1. This campaign focuses on addressing common misperceptions related to Health and Wellness as well as Sustainability. We are serving ads to those who are searching for facts/answers online. After seeing 3x improved performance in Q3 and Q4 2021, we have continued running this initiative into 2022. 2021 Paid Search Impressions Clicks

CTR

3,594,313

249,238

6.93%

Appendix Paid Social Performance: The chart below shows social metrics for evergreen content across FB/IG, Pinterest, and Twitter from January through December 2021. January – December 2021: Content Impressions Engagements Video Plays Breakfast 33,026,846 65,323 151,320 Breakfast Books 17,202,158 47,566 1,099,812 Culture/Social Holiday 4,094,787 39,103 25,523 Day Can Wait 7,879,182 1,058 6,781,708 HHM Influencers 4,289,822 9,735 - Fall Baking Influencers 4,081,442 17,495 - Holiday 7,408,218 23,838 - Other 26,170,112 84,831 34,806 Recipes 40,215,437 64,343 466,189 Local 22,927,442 123,288 - Yule Log 3,935,784 21,390 1,159,892 Total 171,231,230 497,970 9,719,250

CMAB Communications Services Program

COMMUNICATION SERVICES Public relations activities in Q1 2022 focused on supporting CMAB functional business priorities and delivering key messages to differentiate California dairy among consumers and health professionals with a continued focus on the new normal and consumer communications landscape. Key Communications Strategies: • Strengthen awareness, affinity and preference for CA based dairy in CA markets • Highlight milk, cheese, butter, yogurt, cottage cheese and ice cream in creative/messaging • Nurture re-discovered habits and usage occasions that drive dairy sales (breakfast,snacking) • Reach consumers where they are, share farm to table, sustainability and culinary stories • Continue to maintain role of dairy in fitness/health for consumer, professional audiences • Spotlight value of dairy: monetary, nutritional, flavor in PR and social media messaging • Promote CA progress in achieving climate neutrality • Continue to provide relevant information/tools for foodservice operators Regional (California)/National Consumer Real California Milk Excelerator Innovation Competition Results: Excelerator Finalists Press Release: 225 Story Pick-Ups/167.1M Impressions Excelerator Winner Press Release: 240 Story Pick-Ups/168M Impressions The CMAB’s third annual innovation competition, the Real California Milk Excelerator named sleep-friendly ice cream, Nightfood as the grand prize winner for the best emerging product using California milk and dairy ingredients. Nightfood will receive $150,000 in resources and funding, as well as coaching and support from the CMAB to order to bring their product to hotel locations across the U.S. In Q4, the Excelerator competition was amplified through two press releases and posts on CMAB’s LinkedIn.

Holiday Cheese Centerpiece/Cookie Exchange Board Results: 1,053 Story Pick-Ups/196.1M Impressions

CMAB created and shared two new pieces of content to encourage holiday entertaining with Real California dairy products: The Holiday Cheese Centerpiece, developed in cooperation with Jessica Lawrenz, and the Cookie Exchange Board.

Hispanic Heritage Month Promotion Retail Support Results: 10 Stories & Posts/10.4M Impressions

CMAB celebrated Hispanic Heritage Month with a retail promotion in Texas showcasing Hispanic cheeses and cremas made with Real California Milk. We partnered with three Texas based influencers to create recipes and promote on social media, as well as on the RCM website. Sponsored content was featured digitally in Houstonia and San Antonio magazines and on their social channels. Taboola placed related headlines on geotargeted media sites to drive back to a Hispanic Dairy landing page with featured recipes and additional usage ideas (10,742 clicks).

Holiday Mornings Mean More Results: 21 Stories & Posts/21.3M Impressions

In November and December, holiday focused breakfast recipes were promoted on our social channels and on the RCM website. Sponsored content was featured in San Francisco Magazine, LA Magazine, and Delish. Taboola placed related headlines on geotargeted media sites to drive back to the recipe landing page with featured recipes and additional usage ideas (9,382 clicks). Additionally, the CMAB partnered with lifestyle influencers to promote holiday recipes on their social media channels.

Health & Wellness Professionals The CMAB communicated ongoing messaging targeting health and fitness professionals, including important information about the role dairy plays in health and wellness. We continued a partnership with American Academy of Physician’s Assistants (AAPA) for dairy related content on their member platforms. The CMAB also partnered with the National Athletic Trainers Association, which featured a social takeover and advertorial. We worked with lifestyle influencers to amplify messaging. The CMAB continued its partnership with Jordan Mazur, dietitian for the San Francisco 49ers, for content and inclusion in in Men’s Journal editorials.

CMAB also continued partnerships with consumer-facing wellness influencers to share content about California milk and dairy.

Health & Wellness Professional Education American Academy of Physician Assistants • Social Posts: 2 Post/116K Impressions • Eblast Ads: 6 Placements/140K Recipients • December E-Newsletter: 70K Recipients

• Retargeting Ads: 62K Impressions National Athletic Trainers Association • Advertorial: 45K Impressions • Social Takeover: 4 posts/91.5K Impressions Consumer Outreach Influencer Partner Social Content • Run Eat Repeat: 14 Posts/308K Impressions • College Nutritionist: 10 Posts/5M Impressions (includes 2 value added Pins) • Paid Amplification: 2.8M Impressions Earned Media • Men’s Journal w/Jordan Mazur: 3 Stories/8.4M Impressions Foodservice General Program • Earned Media: 1 Story/25K Impressions o Catersource • Print Advertising General Program: 196K Impressions • Digital Advertising General Program: 807K Impressions

• Advertising Over-Delivered/Added-Value: 598K Impressions • Social Media Amplification: 455K Impressions • SEM: 36K Impressions • Paid Amplification YouTube: 240K Impressions Contest/Competition Support • Dairy2Go Social Amplification: 13K Impressions • Pizza Social Amplification: 706K Impressions Sustainability Milk Jug Recycling Campaign Results: 304 Stories/Placements/137.5M Impressions In early Q4, the CMAB launched a public information campaign in partnership with MilkPEP to support recycling of plastic ½ gallon and gallon milk jugs. The “Recycle The Jug” initiative encourages consumers to recycle their HDPE (#2) plastic milk jugs, while presenting information on the plastic recycling process. It is being

supported by an integrated communications program that includes radio ads, social media influencer integration, earned media and a standalone website – recyclethejug.com. A Spanish language version of the site and media materials launched in November. The campaign is supported by partners in the dairy and recycling industry and includes a new “Recycle the Jug” icon, which will soon be appearing on milk jug packaging. The CMAB partnered with lifestyle influencers to communicate “Recycle The Jug” messaging. Mythbusting

CMAB continued the search + intercept and content discovery campaign designed to help dispel common myths about California dairy and sustainability. This included sponsored ads through Taboola, as well as a three-part sponsored article partnership with the LA Times with the first part launching in Q4 and the remainder in Q1 of 2022. Dairy Mythbusting: Taboola Sustainability: 7.4M Impressions (represents a partial month, as content launched in late Q3) Health & Wellness: 13.2M Impressions LA Times Sponsored Content (1): : 5.6M (Full impressions pending) California Dairy Reputation California Dairy Farmer Social Influencer Team Results: 114 Posts/214K Impressions

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 continued to provide support to team members to build their channels. 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.