2022 September Board Book

CALIFORNIA MILK ADVISORY BOARD

Board of Directors Meeting

September 21 – September 22, 2022

CALIFORNIA MILK ADVISORY BOARD 2156 W Grant Line Road, Suite 100 Tracy, California 95377 (209) 883-6455 RealCaliforniaMilk.com BOARD MEETING AGENDA Wednesday, September 21, 2022 at 7:30 am and Thursday, September 22, 2022 at 8:00 am

DoubleTree by Hilton Hotel Modesto 1150 9th Street Modesto, CA 95354 (209) 526-6000

**Zoom option unavailable**

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 Tony Louters

2. Roll Call – Secretary John Vander Poel

3. Introduction of Guests

4. Report from Chairman

5. Financial Report – Treasurer André Brasil

6. Individual District Reports

7. Marketing Branch Report

8. Report from Chief Executive Officer – John Talbot

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

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

10. Committee/Industry Meetings Update

11. National Dairy Board Update

12. Minutes of Last Board and Executive Committee Meetings a. Public comments on agenda items 13. Other Business a. Previously discussed or tabled agenda item(s) for this meeting b. Items to be discussed at next board meeting

14. Public comment on non-agendized items

15. Board Development Session with Westmark Group (Thursday 8-4)

16. 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 f amily- centric” and a host of other descriptors. We can choo se 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. Sinc e 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 packa ge) 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

ADMINISTRATION

Presentation to Board of Directors

September 2022

Statement of Income & Expenses

California Milk Advisory Board Statement of Income and Expenses As of July 31, 2022

Month Ending CY % to Month Ending PY % to Year Ending 7/31/2022 Budget 7/31/2021 Budget 12/31/2022 Actual PY Budget

Revenue Assessment Income *

24,621,513 $

24,868,244 $

41,565,752 $

59% 58%

61% 66%

Non-Assessment Income **

60,397

73,113

105,000 35,000

Other Income Total Revenue Expenses Advertising Communications Domestic Retail

131,469 376%

53,438

534%

24,813,379

24,994,795

41,705,752

59%

62%

11,162,055 2,342,373 2,707,791 730,829 2,245,248 1,008,244 549,569 426,817 400,277

8,946,757 2,177,797 2,908,400 298,701 1,631,855 283,657 492,459 645,237 257,510 225,865 1,137,271 19,009,478 3,969

18,310,000 4,501,000 6,804,000 2,175,000 6,417,388 1,444,000 1,081,600 820,000 715,750 48,000 1,005,000 1,742,624 45,064,362

61% 52% 40% 34% 35% 70% 51% 52% 56% 15% 36% 50% 51% 41% 59% 35% 22% 50% 72%

49% 53% 43% 14% 25% 25% 46% 55% 36% 15% 75% 42% 8%

Foodservice

International Initiative

Tradeshows

Processor Relations Industry Intelligence Producer Relations

Education and Community Relations

7,041

CDIC

365,888 866,312

Dairy Research Foundation

22,812,444

Office Operational

194,678 51,714 14,733 17,967 92,302 26,660 11,475 30,415 42,190 495,297 24,739 30,369 9,275 54,888 32,000 10,967 -

298,085 74,708 2,094 34,942 103,608 19,310 9,998 33,451 36,379

476,000 87,600 42,000 83,000 185,000 37,000 10,000 54,000 82,250 300,000 908,000 55,000 91,000 14,000 125,000 48,000 18,800

63% 66%

Rent

Travel & Automobile

4%

Legal

42% 57% 64%

Insurance - Employee Freight & Postage Employee Education Liability Insurance Money Investment Plan Admin Salary & Wages Board Travel Expenses Board Meeting Expenses Retirement Plan

115%

100%

56% 51%

74% 58%

330,000 513,409 (1,029.00)

0%

110%

55% 45% 33% 66% 44% 67% 58% 44%

64% -2%

6,872 3,900 51,839

9%

Board Per Diem Marketing Branch

22% 41% 63% 58% 62%

Fiscal & Compliance Audit Assessment Collection Fee

28,500 10,900

1,139,669

1,556,966

2,616,650

Total Expenses

23,952,113 $

47,681,012 $

20,566,444 $

50%

43%

Year to Date Payroll: $2,221,405 * Estimated July Assessment at $3,388,140 ** Estimated June and July Non-Assessment at $17,000

ADVERTISING & COMMUNICATIONS

Presentation to the Board of Directors

September 202 2

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

CMAB Advertising Update

2022 Top-Line Recap

2022 (4/3/22 – 7/31/22) ● California Freestyle :60 (Grammys), :30 (Barn and

Skateboarder), :15 (Barn and Skateboarder), Spanish (:30 and :15) ● 89MM Impressions

2022 (1/1/22 – 7/31/22)

• 202 Pieces of Content • 129MM Impressions • 2.1MM Video Views • 423K Clicks

Paid Social

2022 (1/1/22 – 7/31/22) • 1.6M Impressions • 138K Clicks

Paid Search

2022 (4/4/22 – 7/31/22)

• 1.9MM Impressions • 1.5MM Views

2022 (4/4/22 – 7/31/22)

• 81.4MM Impressions • 41.6MM Video Views • 1MM Clicks

Digital Media

2022 (4/3/22 – 5/1/22)

• We conducted regular maintenance in 2022. • The following web enhancement will take place in late 2022: o Spanish RCM.com • 32MM Impressions • 56 Units Across LA (Transit Shelters and Wild postings) • $45K in Added Value Impressions • 134 QR Code Sessions 2022 (4/4/2022 - 4/17/2022) ● 3x Key CA Markets (Los Angeles, San Diego, San Francisco) ● 2.2MM Impressions

Out-of-Home

RCM.com

Radio

2022 Media The 2022 campaign, California Freestyle, launched April 3 during the 64th Grammy Awards on CBS in all CA markets. The campaign fully rolled out the week of April 4 across Broadcast and Cable TV, CTV, pre-roll, and social. To support launch, we also had OOH in LA (transit shelters and wild postings from Santa Monica to Hollywood) and a partnership with iHeartMedia across terrestrial radio (LA, SF, SD), podcasts (all CA), and social (all CA). In addition to the California Freestyle campaign, we’ve also supported a number of local retail promotions so far this year—January Smoothie campaign, Lent, Tacos, Tequila, y Más, Summer Snacking, and next up Hispanic Heritage Month and the Holiday campaign. 2022 Campaign Since the launch of California Freestyle, we have continued to maintain awareness of the campaign through development of monthly social content, from recipes and influencer collaborations to national food holidays and a California Freestyle video refresh. In August, we assessed our top-performing English-language and Spanish-language California Freestyle videos where we optimized and updated messaging to direct online viewers to the RCM website.

Sample of updated California Freestyle video creative:

In late fall, we will develop new social concepts under the California Freestyle platform focusing on fall and winter holidays, while continuing to drive awareness and affinity for Real California Dairy. Out-of-Home We leveraged the power of OOH to hype up the California Freestyle campaign with immersive Freestyle murals and transit shelter postings, placed in California’s most influential cities/neighborhoods for food culture.

The murals and shelter postings feature the art from the music video and delicious food shots. A direct link to the video campaign launched the same week, maximizing synergies between the two mediums. Several units across LA were able to run longer than the contract date, which has garnered over 10MM added value impressions at a value of $45K. According to the latest DB5 tracker, 25% of respondents recall having seen the OOH advertising. Those that have seen the ads have strong positive perceptions of the campaign and are likely to take away strategic messages like produced/made in California and quality.

iHeart Media Partnership As another way to support the launch of California Freestyle, we tapped into the reach of iHeartRadio’s local talent through DJ endorsements and podcast live reads. DJ Endorsements – 2.2MM Impressions over 2 weeks Over that time period we saw a 6.6% lift in web traffic from the DJ voiced reads across all three markets, resulting in over 1.2K attributable visits.

Over 91% of those attributable visits came from new visitors to CMAB’s site. LA KISS FM 102.7 DJ: Rubi Gonzales (M-F 5-10a) SF Wild 94.7 DJ: Selena (M-F 6-10a) SD Channel 93.3 DJ: Chino (M-F 6-10a)

Podcast Reads – 4.4MM Impressions over 7 weeks All CA – Targeted to LB 2.0s - Tori & Jennie - 9021OMG

Paid social posts - 5MM impressions, 537K video views, 7K engagements

Research Update: Report on California Freestyle Performance For Q2, our research focus was on learning about the impact of the California Freestyle campaign. Since it had been in-market for multiple months, we’re now at a point where we can look at performance and evaluate its impact on the larger Real California Milk brand. According to the Q2 report from our research partner, DB5, California Freestyle has outperformed our two previous brand campaigns and has led to the highest level of unaided awareness for Real California Dairy since 2017. The response to our vibrant, bright, and entertaining campaign has also generated strong results in overall campaign awareness and the highest level of sponsorship association we’ve ever seen. Coming out of the Q2 research, we’re continuing to monitor month-by-month performance to see if these trends persist or if we start to see any shifts. And these results as well as future results will play a strong role in informing our approach to the 2023 brand campaign. Social Content Strategy Update In Q2 2022, we took a step back and reevaluated our social content strategy moving forward. Over the years, we expanded into more social platforms and increased the number of social content posts each month, so we wanted to take a step back to make sure our media investments are working as hard as they can for us. Through analyzing historical content performance and how our content pillars have been represented in content, we landed on a new approach of “Fewer Things. Done Better. Seen More.” With this new approach, we’re producing less content overall and putting more media investment behind fewer pieces of content to increase reach per post.

Below are the top-performing creatives in Q2:

Local Promotions In 2022, we completed four digital campaigns in support of various local promotions that highlight dairy in a variety of different ways. ● Renew, Reset, Restore January Smoothie: Elevated awareness and drove purchase of Real California Milk products with a primary focus on nutritious dairy ingredients for smoothies and smoothie bowls in the new year through digital banner creative, paid social content, and amplifying influencer partnership content. ● Hispanic Lent: Positioned Real California Milk processors as leaders in Hispanic-style dairy during the Lenten season through paid social content. Focused on Hispanic consumers looking for non-meat meal solutions and non-Hispanic home cooks seeking to elevate their meals with better quality and Hispanic-style ingredients. ● Tacos, Tequila, y Más: Leveraged the pairing of different beef taco recipes with tequila based beverages through digital banner creative and paid social content, which directed consumers to recipes on the RCM website. ● Summer Snacking: Kicked off National Dairy Month by advocating for dairy as a wholesome, indulgent, and nutritious way to snack in the summer months through digital banner display and paid social content. In this local promotion, we performed a CTA test to determine if “Make Now” or “See Recipe” resonated with the audience. Performance data indicated both CTAs overall resonated with the audience, with “Make Now” performing slightly better in English-language creative and “See Recipe” (“Ver Recta”) performing better in Spanish-language creative. Coming Up: ● Hispanic Heritage Month: Drive awareness and strong consumption of Hispanic-style cheese, crema, breakfast cream, and buttermilk dip by leveraging Hispanic Heritage Month in September through digital banner creative and paid social content in Texas. Paid social content includes amplifying influencer content. ● Holiday Mornings Mean More: Position Real California Milk dairy products as nutritious ingredients to elevate holiday breakfast and brunch meals.

CMAB Social Media Update

Snapshot of creative from the 2022 Summer Snacking local promotion:

RealCaliforniaMilk.com

In July 2022, we launched the Cheese & More landing pages, developing a destination on the website that educates consumers and drives awareness about different pairings with cheese. We built an engaging content experience including a featured pairing carousel comprised of lifelike illustrations, e.g., Cheddar & Chardonnay, Dry Jack & English-Style Brown Ale, etc.

As consumers scroll through each of the landing pages on their desktop or mobile, they can find a comprehensive pairings chart of cheese categories with recommended wine, beer, non-alcoholic drinks, and chocolate pairings, as well as a designated Tips and Tools resource center featuring relevant articles and supplemental materials on all things cheese. Lastly, we introduced a Buzzfeed-like pairing quiz to match users with the best recommendation based on their answers to curated questions.

This fall, we will launch our one-to-one Spanish experience on RealCaliforniaMilk.com for our U.S.-based Hispanic audience. This experience provides us an opportunity to better serve our audience with culturally relevant content and improve the usability and overall value of the website for this audience. Search Engine Marketing Search is always changing, and we must continue to change with it. This year we’ve focused on optimizing toward the most cost-efficient keywords, maintaining 80-90% Branded SOV, updating the campaign based on Google’s latest changes (responsive and expanded text ads as well as moving from broad match to phrase match keywords), and incorporating Spanish language keywords and search ads. Non-Brand campaigns continue to be geo-targeted to California only, while Brand campaigns run nationally. We also meet with the MilkPEP, DMI and CA Milk Processor search teams several times per year to discuss search strategies and ensure we are not duplicating efforts. The “dairy mythbusting” SEM was implemented in 2021, and is continuing throughout 2022. This campaign focuses on addressing common misperceptions related to dairy and Health & Wellness as well as dairy and Sustainability. We are serving ads to those who are searching for facts/answers online and directing them to content on the RCM.com site.

2022 Paid Search: Impressions

Clicks

CTR

1,634,232

138,537

8.48%

Appendix

Paid Social Performance: The chart below shows social metrics for evergreen content across FB/IG, Pinterest, Twitter, and TikTok from January through July 2022.

January-July 31, 2022:

Content Recipes

Impressions Engagements Video Plays

52,046,309 55,562,765 3,797,689 5,884,051 2,958,863 4,811,969 3,378,487

197,228

6,313

Freestyle Video January Smoothies LA Advertorial Recycle the Jug Summer Snacking Tacos, Tequila, y Más

2,447,774

1,023,474

14,595 115,054 122,888 953,898 17,104

0

135,165 916,038

0

CMAB Communications Services Program

COMMUNICATION SERVICES Public relations activities in Q2 and July/August 2022 focused on supporting CMAB functional business priorities and delivering key messages to differentiate California dairy among consumers, health and wellness, and retail/foodservice audiences. 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, health 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 California Freestyle Campaign Results: 368 Stories & Posts/191M Impressions The CMAB kicked off Q2 with the launch of the “California Freestyle” consumer campaign focusing on California dairy in collaboration with Latina singer-songwriter, CRYS. The PR support campaign delivered high profile coverage in both English and Spanish media and featured the first-ever music record made of California cheese, along with a free consumer download of the featured track. The CMAB also partnered with lifestyle influencers to promote California Freestyle recipes featuring California dairy on their social media channels.

Tacos, Tequilas y Más Results: 102 Stories & Posts/17.5M Impressions, Geotargeted to California; Content in English + Spanish (1,181 Stories/183.9M Impressions Outside of California)

The CMAB partnered with The California Beef Council and E. & J. Gallo’s Camarena Tequila for a two month “Tacos, Tequila y Más” consumer promotion focused on Cinco de Mayo. CMAB partnered with influencers @presleyspantry and @nibblesnfeasts to create epic taco party spreads and distributed to media contacts and amplified this messaging on influencer and Real California Milk’s owned social channels.

Summer Snacking Results: 360 Stories & Posts/172M Impressions

The Summer Snacking retail campaign ran June through July and was supported through PR, media and social media influencer content. The CMAB partnered with social media influencers @stellanspice (Tik Tok/IG), @nibblesnfeasts (IG), and @presleyspantry (IG) to createsponsored social content featuring Summer Snacking recipes. To tap into consumer’s love of snacking, CMAB conducted a statewide snacking survey to tease out dairy snacking favorites (with Smoothies edging out Milkshakes based on generation), which was shared on the wire and continued support with content Real California Milk owned social channels.

Health & Wellness Results: 1 Story/2.6M impressions

The CMAB communicated ongoing outreach to consumer and health and fitness professionals, including information about the role dairy plays in sustainable nutrition. We continued outreach to the editors and freelance writers who attended the March Sustainable Nutrition session at the Nutrition News Update Conference, resulting in an “Eat This, Not That!” story on the “4 Surprising Effects of Drinking Milk”. We also distributed sustainable nutrition related stories in the Ketchum Newsflash E-Newsletter that reaches 120 media RDs (60% open rate).

CMAB News Bureau To increase awareness for CMAB programs and initiatives with key trade and industry audiencers, CMAB News Bureau releases distributed in Q2 and July/August included the Real California Milk Excelerator launch and finalists (Innovation); the Cal-Mex Invitational andReal California Pizza Contest finalists and winners (Foodservice): Summer Snacking campaign (retail); California Freestyle campaign; and #CADAIRY4GOOD initiative.

Foodservice General Program Results Earned Media: 9 Stories and Posts/304K Impressions Print Advertising: 189K Impressions Digital Advertising: 862K Impressions Advertising Over-Delivered/Added-Value : 432K Impressions Social Media Amplification and SEM: 861K Impressions Foodservice was supported by ongoing print and digital advertising and communications through earned media pitching, trade releases and always on social media amplification through the RCM B2B social channels (FS IG/FS, LinkedIn).

Center for the Advancement of Foodservice Education (CAFÉ) Leadership Conference In June, CMAB worked with chef Paul Sorgule to educate culinary instructors about Cal-Mex and California Hispanic-style cheeses as well as California dairy’s leadership in sustainability as part of its Gold Sponsorship of the CAFE Leadership Conference in Portland, Maine. During the three-day event, the team met and shared information and on-trend Cal-Mex recipes with 128 instructors.

FS Contest/Competition Support Contest Social Amplification Results: 15 Posts/438K Impressions The 2022 Real California Pizza Contest was amplified through the Real California Milk Foodservice Facebook and Instagram pages. Pre-contest organic content captured during the contest, and post-contest content was shared to showcase innovation in the pizza category and how California cheeses and dairy products are helping to lead in the space. Press releases covering the announcement of the contest, as well as the finalists and winners also were distributed.

Sustainability LA Times Article Promotion Sponsored Social Posts/Banner Ad Results : 896K Impressions Sustainable Grazing Board Results: 1,041 Stories/249M Impressions

A Sustainable Grazing Board image and storyline was created to highlight the byproducts that make up a California dairy cow’s diet and share the story how the use of byproducts from food and fiber production reduce the need to source other feed and reduces water and land usage, while also keeping byproducts out of landfills. The sustainable grazing board and sustainability message was shared through Real California Milk’s owned social media platforms, as well as with the media.

Mythbusting Dairy Mythbusting Taboola Health & Wellness Results : 11.9M Impressions Sustainability Results: 12.3M Impressions

The CMAB continued the search + intercept and content discovery campaigns designed to dispel common myths about California dairy topics like sustainability, health, and wellness. This included sponsored ads through Taboola, as well as ongoing promotion for the three-part article partnership with the LA Times.

California Dairy Reputation Shredding Hunger: 367 Stories/190M Impressions

The CMAB kicked off June Dairy Month and it’s #CADAIRY4GOOD initiative at the Sacramento Food Bank & Family Services with the announcement of the Shredding Hunger pilot program focused on increasing access to nourishing dairy foods for families in need throughout California. California Ag Secretary Karen Ross joined representatives from Feeding America and the California Association of Food Banks for the media event. The pilot will provide five truckloads of one-pound cheese shred packages to 11 Feeding America and California Association of Food Bank sites. This is phase one of a partnership with Feeding America, which will deliver over $1 million in resources to food banks and feeding programs to source California dairy foods including cheese and fluid milk. Phase two of the program will focus on fluid milk with community milk drives and grants for food banks during September Hunger Action Month. The positive message of #CADAIRY4GOOD will be shared via social media. Innovation

Real California Milk Excelerator Excelerator Results: 225 Stories/154M Impressions CMAB announced the 4th annual RCM Excelerator innovation competition and call for applications in May with a focus on “Open Innovation” and an announcement of eight finalists in mid-August. Ongoing media outreach will focus on the cohort as well as business stories

spotlighting the drive for dairy innovation. California Dairy Innovation Center (CDIC)

Communications support support for CDIC initiatives included news on grant funding received as well as upcoming CDIC short courses and conferences, and grants available for innovative processors and producers within the dairy industry. California Dairy Farmer Social Influencer Team Results: 97 Posts/148K 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, including an in-person media and messaging session in May.