Dairy cooperatives think adding new categories is beneficial.
In order to thrive in the modern dairy industry, a cooperative must provide more than simply milk, butter, and cheese. Chairman of the Dairy Farmers of America board of directors and owner of a dairy farm in Rogersville, Missouri, Randy Mooney, suggested that marketing products like lattes, protein shakes, nutritional drinks, and decadent delights would align with customer preferences.
Presenters at the D.F.A.’s annual convention in Kansas City on March 20th frequently expressed views similar to this one regarding value-added products. Glanbia plc’s group managing director, Siobhán Talbot, also discussed the diversification of her cooperative.
The D.F.A. has increased the variety of its retail brands. Kemps brand introduced probiotic milk in 2% and fat-free versions in 2017. According to Rick Smith, President and CEO of the D.F.A., Frappuccinos are still having a “phenomenal ride.”
In 2017, whole string cheese was introduced under the Borden brand of the D.F.A. to satisfy consumer demand for full-fat dairy products. Under the Borden brand, snack cheese bars with Colby Jack, Pepper Jack, mild cheddar, and Gouda were also introduced. According to Mr. Smith, the D.F.A. intends to “freshen it up” with the Borden brand this year. He then on, “We might be rediscovering cottage cheese,” in reference to potential product launches in 2018.
The D.F.A. has more than 14,000 farmer members and relocated its offices from Kansas City, Mo., to Kansas City, Kan., last year.
Dairy farmers would choose to see this development as an opportunity rather than an infringement on their privacy, according to Mr. Smith, as consumers’ desire to know the source of their food is growing.”If everyone could see He remarked, “They would be amazed at what you do.”
He mentioned the D.F.A.’s partnership with Newtrient, which aims to increase sustainability by developing technologies that turn manure into goods like soil conditioners, fertilizers, and electricity, as well as Kibler Dairy Farm, Inc. in Warren, Ohio, which uses solar energy.
“Transparency and education are necessary for people to feel good about the way food is produced,” Mr. Smith stated.
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With net sales of $14.7 billion in 2017, the Dairy Farmers of America recorded a 9% increase from $13.5 billion in 2016. The rise was caused by both higher milk prices, which averaged $17.63 per cwt in 2017 as opposed to $16.30 in 2016, and an increase in unit sales.
The D.F.A. and Glanbia plc are partners in the joint venture Southwest Cheese Co. L.L.C., which is headquartered in Clovis, New Mexico and produces cheddar cheese and whey components. They are also a part of a new joint venture that is developing a production factory in Michigan for cheese and whey, which is scheduled to begin operations in 2020.
According to Ms. Talbot, “many of Glanbia’s dairy operations are actually in strategic partnerships.” “I believe that is a successful model.”
In 2017, the company purchased Grass Advantage, L.L.C., a Newport Beach, California-based company that owns brands for plant-based nutrition, and Body & Fit, an online direct-to-consumer brand located in Heerenven, the Netherlands.
At times, we’re fairly willing to step outside of our comfort zone, Ms. Talbot stated.Glanbia’s acquisition of Body & Fit shows that it is expanding its online presence.
“We intend to allocate substantial resources towards recruiting fresh talent, expanding our technological infrastructure, and enhancing our ability to interact with customers on both the ingredient and brand levels to achieve unprecedented success,” stated Ms. Talbot.Glanbia sees four themes where dairy has space to grow, as she pointed out.
According to Ms. Talbot, “there is a huge trend for health and wellness.” Convenience is a huge trend right now. The way that consumers interact with brands, nutrition, and food has all changed as a result of technology.