The Hip New Drink: Milk

"Chug" bottles may give sales a much needed boost

Can a trendy plastic bottle accomplish what Bill Clinton, Martha Stewart, and Dennis Rodman couldn't? In the three years since those famous faces--along with just about every other celebrity's mug--have appeared in the milk mustache ad campaign, milk consumption in the U.S. has continued its quarter-century slide. Per-capita sales fell another 1% last year--and have dropped more than 20% since 1970.

But now there's hope, thanks to a single-serve package taking advantage of all the attention those ads have brought. Dean Foods Co., the nation's largest dairy processor, has seen sales shoot up since introducing its "chug" container, which is designed to compete with colas, juices, and designer water. The chug is shaped like a classic milk bottle, but it's resealable, fits in a car drink-holder, and keeps milk fresher. "It's the most innovative thing to come out of the dairy industry in the 15 years I've covered it," says Prudential Securities Inc. analyst John M. McMillin.

In Illinois and Wisconsin--among the first states to get chugs--pint sales are up 74% since last fall's introduction, the company says. Chocolate milk accounts for much of the gain--a good sign for milk sellers who hope to crack the elusive teen market with chugs.

Other distributors--Cincinnati's United Dairy Farmers and H.P. Hood Inc. in Chelsea, Mass.--have also come out with new containers, and more dairies are likely to follow. But Dean isn't resting on its chugs. Next up: expansion into eight more states, including New York, and new flavors like strawberry. Moo.

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