• by Karlene Lukovitz  @KLmarketdaily, January 6, 2009

The dairy industry is partnering with Domino's Pizza, and also seeking to partner with other pizza chains, in an effort to boost both cheese and pizza sales.

Dairy Management Inc. (DMI), the not-for-profit association funded by dairy producers that works to increase demand for U.S. dairy products, announced that its partnership with Domino's will focus on introducing a line of high-quality specialty pizzas that will use up to 40% more cheese.

DMI, together with state and regional dairy organizations, will invest approximately $10 million to support the nationwide campaign launch, assisting Domino's franchisees in advertising, public relations, local market promotions and communications activities. Domino's own investment will approximately quadruple the overall campaign funds, according to DMI.

The partners will measure the overall increase in pizza and cheese sales in test markets and how the changes in unit pricing at the consumer level affect total sales, DMI reported.

A Domino's spokesperson praised DMI's efforts in working with the chain on the program, adding that program details will be officially announced in coming weeks.

DMI has also formed an industry task force to develop a full action plan for cooperative dairy/pizza industry initiatives.

About 25% of total U.S. cheese produced is used on pizzas, according to DMI spokesperson Joe Bavido.

Increases in cheese prices during 2008 recently caused McDonald's to raise the price of its Double Cheeseburger with two cheese slices from 99 cents to $1.19 (and introduce a one-cheese-slice burger on its Dollar Menu), and pizza chains have been grappling with the same challenge.