International Dairy Foods Association
A lot of opportunity lies ahead for U.S. dairy, but it will demand collaboration, innovation and change.
That’s the message Michael Dykes, president and CEO of the International Dairy Foods Association, delivered at the International Dairy Forum this week.
“We’ve got to think globally. We’re in a new environment. We’ve got to think differently,” he said in a presentation live-streamed from the forum in Palm Desert, Calif.
The top three opportunities for U.S. dairy are building consumer demand, thinking innovatively and opening up new markets.
“Consumers are living in a culture of choice … that brings challenges, that brings opportunities,” he said.
They are requiring clear and short ingredient labels; respect for animals, employees and the environment; and shared values and beliefs with the companies they buy from. They want to be heard, and they want to engage, he said.
Breaking it down, consumers want food with a story, he said.
“They want to know more about it. It’s more than just getting full. It’s more than just eating because they’re hungry. Food’s got a lot of social emotion to it,” he said.
“We all need to participate in telling the story. We can’t just rely on someone else to tell the story for us,” he said.
The industry also needs innovative thinking to meet changing lifestyles and changing demand.
“We’re grab-and-go. We’re no longer sitting around the table eating. We’re eating in the car,” he said.
The industry needs to be thinking about new products, packaging options, portions, calorie counts and the emphasis on protein. And it will require innovation in manufacturing, with more emphasis given to e-commerce, he said.
“The way we shop, the way we purchase, the way we eat — speed and convenience are becoming a bigger piece of that,” he said.
It will require faster filling, longer shelf life and capital investment, he said.
Looking ahead, U.S. milk production will continue to increase and outpace domestic consumption. Today, exports account for about 15 percent of U.S. milk production. In the next 10 years, that will need to be north of 20 percent, he said.
“We’re going to need to be looking for new markets, and we’re teed up to do that successfully,” he said.
The U.S. has an abundant supply of high-quality milk, an unparalleled safety record and an unmatched distribution channel, he said.
“We’re teed up to be successful globally, and we have global competitors. So they won’t just open the doors to us and let us walk in and start doing what we want to do,” he said.
The additional 2 billion people on the planet by 2050 are going to be outside the U.S. and in places that are maybe new and different for U.S. dairy trade, such as Africa and the Middle East, he said.
“A proactive U.S. trade policy is essential for the U.S. We’ve got work to do on that,” he said.