Emerging Leadership Opportunities for US Dairy

Dairy producers face a unique set of challenges and opportunities as the industry navigates the social, environmental and economic issues facing dairy companies in the wake of the COVID-19 pandemic and climate challenges. These elements took center stage at the Dairy Sustainability Alliance’s spring meeting, which took place from 18The tenthand 19The tenthMay in person and digitally.

Organized by the US Dairy Innovation Center’s Multi-Stakeholder Initiative, founded by checkoff, the event attracted more than 270 representatives from dairy value chain organizations, including 25 dairy farmers. The aim was to facilitate the exchange of ideas and best practices and to address common challenges on issues and opportunities affecting the industry to accelerate progress towards shared sustainability goals.

“Never has the opportunity been greater for us to come together and show our collective impact,”Barbara O’Brien, Director of Dairy Products (DMI) and Executive Director of the Center for Innovation, told attendees.

At the event opening, she shared her view on key market forces and trends that have been identified as important opportunities for US dairy.

It has never been more urgent as we work to meet the growing demands and expectations of both customers and consumers around personal wellness, environmental sustainability and food security,”I suggested.

O’Brien said the dairy industry needs to respond to — and take advantage of — these evolving expectations to unleash its full potential.

Generation Z and future-friendly dairy in a digital world

O’Brien said the dairy industry needs to stay relevant, noting that at 72 million strong and with a purchasing power of $100 billion, Generation Z is “the most diverse generation to date.” To meet the needs of this consumer group, dairy makers and teams must reflect and meet their expectations of diversity and inclusion.

Generation Z and Millennial consumers make their grocery store purchases based on their health and wellness opinions, and these consumers are looking for foods that provide energy, a sense of calm, immunity and gut support, fight inflammation and help their kids on their way to a lifelong wellness event.

The dairy expert believes technology plays an important role in “redefining” how people manage health and wellness. O’Brien said COVID-19 has accelerated the do-it-yourself health care movement in the United States, citing statistics showing that more than 60% of Americans use “food as medicine” to prevent health conditions.

These consumers want to support the brands they see as treating animals, the planet, and workers with respect. Consumers have raised their expectations that dairy – and other companies – must lead in providing solutions to societal challenges. O’Brien called this “the idea of ​​goal over profit,” something she said has been reinforced by the pandemic, growing concern about climate change and other social and market forces.

Today’s consumers expect businesses to prioritize purpose, event heard/pic: GettyImages Image Source

People are now demanding more transparency and accountability. She cited the innovation center’s 2050 environmental stewardship goals as a proactive step taken by the industry. This is a voluntary commitment to advance sustainability leadership and to report transparently on progress. To date, 35 dairy companies have joined, representing more than 75% of milk production in the United States.

O’Brien also noted the rapid development of digital technologies and markets. With one in five dollars expected to be spent on groceries in the digital world through 2025, she stressed that dairy needs new digital heights on the agenda.

Bo Hayden, Vice President of Insights/Sales and Trust at DMI, explained the evolution of consumers’ shopping habits and how the pandemic has affected online sales. “The purchase path is not as linear as it used to be,”Hayden said. It used to be, ‘Hey, I’ve seen something on TV or seen it in a Sears catalog. “You’re fast forward to the day you might start your YouTube or Hulu journey. Then you’ll somehow get an Instagram or Facebook ad about something you might have been talking to your spouse or kids about.”

Hayden said Checkoff’s Reset Yourself with Dairy campaign, launched last fall, seeks to immerse dairy products deeper into the world of social media. He said online grocery sales in the pre-pandemic period were 2%, but jumped to 20% during peak periods of COVID-19. Sales have since stabilized to around 13% but dairy has built a strong online retail presence.

“E-commerce retailers love the dairy category,”Hayden said. “75% more dollars are spent when dairy products are in the basket. Dairy is the second largest division after dry goods.”

Key to sustainability despite challenges and costs

Looking to the future of dairy in the United States, industry experts insisted that sustainability efforts continue with promise and opportunity, even with uncertainty around inflation, global conflicts, ongoing workforce and supply chain disruptions, and an increased focus on ESG reporting.

“Sustainability is becoming mainstream. It is part of a normal conversation,”said Brad Anderson, President and CEO of California Dairies. “Maybe five or eight years ago you had sustainability experts talking to sustainability experts, but I rarely speak with a client where the conversation doesn’t start with ‘What are you doing about some form of sustainability? “

“There is a huge opportunity for the dairy industry to lead, to be in front of consumers and build the demand they expect. In the absence of that, someone else is going to fill that void. Whether you’re on a farm, in a processing facility, in a cooperative or any other capacity in the market, your role really matters because consumers They demand it and that demand will be greater tomorrow than it is today.”

Marilyn Hershey, a Pennsylvania dairy farmer who is president of the Dubai Media Incorporated, shared that the stressful economic returns should be part of the conversation.

“It is very important for us to be economically stable and how does sustainability fit into that?”She said. “You have this two-way street where there is a concern about sustainability and the cost of that, but then you realize that customers are asking for it, so it’s a necessary step for us.”

Dairy Sustainability Alliance 2022

Today’s consumers expect businesses to prioritize purpose, event heard/pic: GettyImages Image Source

Take command of the global climate

Speakers at the event suggested that the Global Methane Pledge presents the US dairy sector with an opportunity to help lead the transition of climate-smart dairy products.

The pledge was launched at COP26 and aims to reduce global methane emissions by 30% by 2030. It offers US dairy the opportunity for research and leadership, including collaborations, to promote mitigation of gastro-intestinal emissions.

Nick Gardner, senior vice president of sustainability and multilateral affairs for the founding U.S. Dairy Export Council, emphasized that mitigating methane has long been a priority. The conversation has been accelerated because the intrinsic properties of methane as a potent greenhouse gas with a short lifetime mean short-term reductions of methane can beneficially reduce warming.

“COP 26 is the culmination of many years of growing interest and activity within the global community on agriculture and food systems,”Gardner said. “We must bear in mind that COP26 occurred just months after the height of the United Nations Food Systems Summit, which helped spur increased interest, momentum and urgency at the highest levels of government for the need for further action to reduce the environmental impact of food production.”

Gardner noted the efforts of the Agricultural Innovation Mission for Climate (AIM for Climate), which the United States and the United Arab Emirates launched at COP26 to address climate change and global hunger through increased investment in climate-smart agriculture and food systems innovation.

The Greener Cattle Initiative (GCI), established by the Food and Agriculture Research Foundation and the American Dairy Innovation Center, has been flagged as another important part of the methane solution. It is a five-year public-private partnership aimed at reducing enteric methane emissions from dairy products and cows.

Dr. Joanne Tricarico, Vice President of Environmental Research at DMI and the Center for Innovation, said GCI is in the process of accepting requests for proposals for $5 million in research grants to identify, develop and/or validate scientifically, commercially and socially feasible. Responsible options for methane dilution.

“There are two important components here,”Tricarico said. “Of course, funding is important, but networking and knowledge sharing are also very important, so the right work gets done.”

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