Odd Lots Podcast Episode Summary

"The Viral Milk That Helped Set Off America's Protein Boom"

Bloomberg Odd Lots | Hosts: Joe Weisenthal & Tracy Alloway | Guest: Corey Geiger (Lead Dairy Economist, CoBank) | November 8, 2025

Main Theme

This episode explores the rise of Fairlife—a milk brand that became a billion-dollar phenomenon and helped catalyze America’s current protein boom. Tracy, Joe, and dairy economist Corey Geiger dissect how Fairlife’s innovations in packaging, distribution, and nutrition have shaken up the traditional (and often struggling) dairy industry, and what this means for the broader food and beverage landscape, consumer health trends, and dairy farmers themselves.

Key Topics & Insights

The Gym, Protein, and the Rise of Fairlife

• Cultural Shift toward Protein:
  • Gym culture and protein fixation have bled into mainstream dietary trends, with high-protein milks lining the shelves and appearing in gyms.
  • Joe notes: “We're certainly in a protein bull market right now. People really want more protein—for reasons.” (04:24)
• Fairlife’s Origin:
  • Started by Mike and Sue McCloskey as "Athlete's Milk," eventually becoming Fairlife.
  • Not just "milk”—ultra-filtered for more protein, less sugar, low/no lactose, and long shelf life.

Fairlife’s Technological Breakthroughs

• Ultra Pasteurization & Aseptic Packaging (06:25-07:16):
  • Allows milk to be shipped and stored unrefrigerated until opened, extending shelf life.
  • “The portability is it's ultra pasteurized and uses aseptic packaging... you can actually ship it without refrigeration.” – Corey Geiger (06:25)
  • Once opened, typical 14-day fridge life.

The Power of Distribution—Coca-Cola's Role

• Transformative Partnership (09:38):
  • Coke’s distribution reach was crucial to Fairlife’s explosive growth.
  • “It's one thing to be innovative, then it's distribution.” – Corey Geiger (09:38)
• Disruption in a Down Market:
  • While traditional dairy has faced thinning margins and declining demand, Fairlife is a rare, huge profit center.

Dairy Economics & Pricing Mechanics

• History of Milk Pricing (11:00-12:08):
  • Federal milk marketing orders, originally tied to Eau Claire, WI, as a price index hub.
  • Classification system:
    • Class 1: Beverage milk
    • Class 2: Yogurt, ice cream
    • Class 3: Cheese
    • Class 4: Butter and powder
  • "Dairy is very regulated... these orders came about in 1937... to ensure orderly marketing of milk." – Corey Geiger (12:16)
• Changing Business Models (14:14-17:36):
  • Revenue sources: Historically, milk was 90% of dairy farm income.
  • Genomics and gender-sorted insemination have improved both herd quality and beef revenue.

Dairy Farming Efficiency & Genetics Revolution

• Push for Productivity (19:14-20:36):
  • Genetic selection for butterfat, protein, mastitis resistance, fertility, longevity.
  • “Using the best Holstein (or Jersey) bulls, each year we're improving genetics $100 per year… prior to genomics, that was like $13. This is significant improvement.” – Corey Geiger (20:36)
• Cow as Recycler & Input Costs (21:20-23:17):
  • Cows can consume food byproducts (e.g., McDonald’s biscuit rejects, misshapen tomatoes).
  • Feed and labor are biggest expenses; biofuel trends divert corn to ethanol production.

Consumption Trends & Industry Profitability

• Dairy Consumption Patterns (24:08-26:40):
  • "Dairy consumption is actually at the highest level it's been in 40 years... but fluid milk consumption has dropped." – Corey Geiger (24:08)
  • Cheese, yogurt, cottage cheese up; milk for cereal down.
  • “The number of dairy cows are the same… but milk production per cow is up 45% (since 1995).” (25:59)
• Market Polarization:
  • Shift to extremes: whole milk and high-protein products grow, 2% and “middle ground” milks decline.
  • Lactose-free and ultra-filtered milks gaining market.

Retail Placement & Marketing

• Shelf Placement & Branding (28:15-30:39):
  • Dairy is often at the store’s back to encourage whole-store browsing; plant-based milk competition has waned.
  • Shelf-stable options are now found outside the dairy aisle, e.g., health/nutrition sections.
  • “Now there’s others… PepsiCo’s launching clear protein water… shelf space for dairy isn’t just in the dairy aisle anymore.” – Corey Geiger (29:45)

Trend Chasing and Future Investment

• Industry Risks: Consumer Fickleness (32:36-36:05):
  • Protein is hot, but fiber could be next. Investments in processing must keep pace with fads.
  • "Mega trends can reshape categories… mozzarella went from a couple pounds per capita to the most consumed cheese due to pizza.” – Corey Geiger (33:28)
  • Discovery and extraction of useful milk “molecules” (whey protein, lactoferrin, colostrum) drive plant investment.

Current Dairy Farmer Concerns

• Recent Industry Pressures (36:05-38:27):
  • Surplus butterfat has dropped butter prices worldwide, impacting farmer pay.
  • Labor remains a major challenge (“Americans don’t like dirty jobs”).
  • Weather and trade policy (particularly with Canada) are ongoing points of anxiety.
  • "The quota is worth more than the cows, land, or equipment in Canada." – Corey Geiger (38:27)

Looking Forward: The Dairy Industry’s Next Decade

• Innovation vs. Scale vs. Branding (40:42):
  • Dairy’s future demands more advanced genetics, use of robotics, and AI.
  • Success for both farmers and processors will depend on leveraging tech to extract value from every part of the cow and every milk component.
  • “If the protein boom continues, genetics is one of the only ways to improve. We’ll have to use more and more technology on the farms.” – Corey Geiger (41:11)

Notable Quotes & Memorable Moments

• On the protein craze:
  • "When did it become a crime to just eat normally? ... But yeah, we're in a protein bull market right now."
    – Joe Weisenthal (04:27)
• On Fairlife’s packaging breakthrough:
  • “When you go to that aseptic packaging... until you open that bottle, it's got a lot longer shelf life.”
    – Corey Geiger (06:25)
• On U.S. dairy genetics:
  • "The dairy cow is the most researched animal on planet Earth."
    – Corey Geiger (14:14)
• On industry efficiency:
  • “[Milk production] per cow is up 45% during that time. It just speaks to the efficiency of the dairy cow.”
    – Corey Geiger (26:27)
• On shelf placement:
  • "When I'm buying milk at a grocery store, I basically just buy what's at eye level. I do buy whole milk though."
    – Tracy Alloway (28:15)
• On farewells with dark humor:
  • "All I remember from [my grandfather's] cow industry is that he used to name some of the cows after me and my cousin... and then he'd slaughter them and he'd tell us, like, Tracy, number three is no longer with us."
    – Tracy Alloway (47:02)
• On the cow as an efficiency machine:
  • "A cow is just an amazing machine. All of these discarded food products go in... and then every year the cows get better at production."
    – Joe Weisenthal (22:57)

Timestamps of Important Segments

• [03:26] – Introduction to Fairlife and its unique selling propositions
• [06:25] – The science behind ultra-pasteurization and aseptic packaging
• [09:38] – Role of Coca-Cola in Fairlife’s rapid expansion
• [11:00] – Historical background: Federal milk marketing orders and class pricing
• [14:14] – Genomics, gender-sorted insemination, and dairy farm business evolution
• [21:20] – Cow diet, feed recycling, and industry efficiency
• [24:08] – Trends in consumption: fluid milk, cheese, yogurt, cottage cheese
• [28:15] – Shelf placement and consumer behavior
• [32:36] – Protein as a macro-trend and processing plant investments in whey, lactoferrin
• [36:05] – Top complaints and challenges for today’s dairy farmers
• [38:27] – Dairy trade tensions, NAFTA/USMCA, and Canada’s quota system
• [40:42] – Tech, genetics, and the future of dairy farm profitability

Tone & Style

The episode is informed, conversational, and witty—with hosts weaving personal anecdotes and puns (“mooshines”) with in-depth industry insights from Geiger. They probe regulatory, economic, and scientific details without losing the human (and bovine) narrative at the center of America’s evolving milk story.

Summary Takeaways

• Fairlife is emblematic of how technological and distribution innovations—specifically, ultra filtration and partnerships with giants like Coca-Cola—can rapidly upend and reinvigorate a stagnating category like fluid milk.
• Dairy’s comeback isn't in traditional milk, but in value-added products: protein shakes, Greek yogurt, cheese, and even high-protein water.
• Farmers are using cutting-edge genomics and AI to selectively breed more productive, valuable herds—and even to optimize non-milk revenues (e.g., through beef).
• Despite innovation and rising aggregate dairy consumption (cheese, yogurt), fluid milk faces persistent challenges, including shifting dietary fads, intense competition, and the ever-present forces of labor, weather, and geopolitics.
• The future is both high-tech and deeply agricultural: success will depend on leveraging new science, smarter machines, and the cow’s natural evolutionary prowess to keep pace with rapidly changing consumer expectations.

Whether you’re a gym-goer carrying your protein shake, a milk nostalgic, or an investor curious about the next food trend, this episode provides a revealing look at the science, economics, and culture behind America's protein boom.