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GFF Checkoff Update: May 2019

 

Why a Checkoff?

Mandatory industry marketing programs make sense when there are shared problems at a scale that defy individual company solutions.

Enhance industry reputation among consumers and value chain stakeholders

Give consumers permission to consume the bread basket of products they know and love

Change retailer and food service perceptions of the role of bread basket products

Drive growth, market share, revenue and profits

Program Structure

Total annual budget of approximately $15 million.

Allocation: 85 percent bakers: 15 percent millers

Assessment: combined baker and miller contributions to equal $0.16 per CWT of
wheat flour to produce bread-basket products

  • Bakers: $0.136 per CWT of flour
    Millers: $0.024 per CWT of flour

Products subject to assessment: The Bread Basket

  • Included: fresh and frozen sliced bread, unsliced bread, rolls, buns, bagels, naan, pitas, other flatbreads, English muffins, biscuits
  • Excluded: tortillas, organic products, products sold in the frozen section of a grocery store, bars, crackers, or sweet goods

Exemptions: Companies using or selling less than 750,000 CWT of wheat flour. To claim an exemption, Bakers and Millers must substantiate one of the following:

  • The Baker annually purchases less than 750,000 CWT of wheat flour to produce bread-basket products;
  • The Miller annually sells less than 750,000 CWT of wheat flour to produce bread-basket products; or
  • The Miller is also exempt from assessment on that portion of wheat flour sold to an exempt baker, even if the miller would otherwise be subject to assessment on that wheat flour

Collection: Bakers are responsible for collecting the assessments from millers and remitting them to the Board along with their own assessments

What do we get?

Total annual budget of approximately $15 million

Accountability: A checkoff program and staff is accountable to a Board of Directors made up of the companies that fund the program. You are the governors of your dollars and program. Checkoff Boards are subject to USDA oversight and required to report an annual ROI analysis.

* Based on historical averages of existing programs AND based on studies commissioned by the Feasibility Steering Committee

The Approval & Termination Process

All Bakers and Millers subject to the Order must pass a referendum in support of the program within 3 years of its launch or it ceases to operate.
  • Rationale: A delayed referendum allows Industry to evaluate a program’s effectiveness before approving it.

Referendum Requirements: To pass, the following requirements must be met or exceeded:

  • Approved by a majority of Millers subject to the Order (50 percent + 1)
  • Approved by a majority of Bakers subject to the Order (50 percent + 1)
  • Approved by Bakers representing at least 60 percent of the volume of all bread-basket products produced by Bakers voting in the referendum

If approved, the Order is subject to a referendum every 7 years.

To terminate operation, 3 companies may call a referendum at any time.  Termination requires the following requirements are met or exceeded:

  • Approved by a majority of Millers subject to the Order (50 percent + 1)
  • Approved by a majority of Bakers subject to the Order (50 percent + 1)
  • Approved by Bakers representing at least 50 percent of the volume of all bread-basket products produced by Bakers voting in the referendum