02 February 2015
Five years is a small stretch of time, but in the short span from now until 2020, the world will see about $20 trillion in global GDP growth, a billion additions to the global middle class and (deepening the worldwide urbanization trend) 350 million people moving from rural areas into cities. The dairy producers best prepared for these and other dramatic changes are the ones best positioned to succeed.

At the recent Dairy Forum 2015—presented by the International Dairy Foods Association (IDFA)—industry leaders gathered to discuss consumer trends, common challenges and what lies ahead. IDFA President and CEO Connie Tipton shared her view of the future in the keynote presentation, “Dairy’s 2020 Vision.” In this post, she shares more insight on coming shifts in the consumer landscape, potential growth areas, regulatory challenges and product innovations—perspectives that could help dairy professionals maximize along the value chain down the road.

What are the most significant changes the dairy industry will face over the next five years?

I’ve heard it said that “it’s the consumers’ world and we just work here.” That certainly gives us a lot to think about as we contemplate our future in a global dairy industry. Today’s consumers hunger and thirst for more than foods and beverages; they crave information and have gained increased power and a stronger voice through technology and social media.

We’ll see more product innovations and practices to meet a growing breadth of consumer wants and needs, including increased variety, better-for-you products, sustainable processes and recyclable packaging, milk from cows that are cared for humanely, product availability when and where they want it, and choices that are local and “fresh.”

More products will be designed for specific population segments, like people over 50 and Millennials, people born between 1977 and 1994.

Global demand has increased volatility in dairy markets. We’re working to reform government regulated pricing to allow better, faster market signals and development of risk management tools to have better control over input costs and pricing that works better for customers.

We’ll need workforce development and immigration reform because our dairy farmers rely on migrant workers and our food production is dependent on them.

What dairy trends offer the greatest areas for growth right now, especially where fluid milk products are concerned, and why?

Fluid milk processors have a big challenge in the face of declining sales, but opportunities do exist. Product innovation and more reliable input costs would create a more stable business environment for product and packaging development.

Also, consumers’ increased demand for products packed with protein gives milk and milk products another opportunity for growth.

How can processors look to positive global growth trends?

We’ve seen enormous growth in export demand for U.S. products and expanded trade opportunities that stretch into the future, and we believe the dairy industry can play a key role.

Global growth is largely in cheese and milk powders, and they often are different products than those sold domestically. Fluid milk, yogurt and ice cream still are primarily reliant on domestic sales.

How is the industry crossing over into the other ‘aisles’ with dairy innovation pursuant to on-trend ingredients, functionality and emotional appeal?

Here’s a great example of just the type of partnerships and innovation we need: Coca-Cola has entered into a joint venture with Select Milk Producers co-op to produce Fairlife, a new value-added milk product that has 50 percent more protein and zero lactose.

We need to convince the Food and Drug Administration to allow other better-for-you dairy product innovations to fit within various dairy standards of identity.

Dairy ingredients will continue to provide protein and other-sought after attributes for inclusion in new product categories.

Promotional opportunities with product partners offer another opportunity for growth, especially for products like soups and cereals that are made with or go better with milk.

Why is it important for processors to include sustainability practices?

Energy and water use are major costs that can and are being reduced through sustainable practices in dairy processing. But today’s consumers are also concerned about our sustainable practices, and they have a growing list of questions they want answered. Was the farm environmentally responsible? Did the processing facility employ sustainable practices for precious resources like energy and water? Is the packaging recyclable? These are potential factors that can make or break a consumer’s purchase, so sustainability is important to the dairy industry on many levels.

Are there any current or upcoming federal regulations dairy producers should prepare to address in their businesses?

In general, the industry is being dragged down by rules and regulations that haven’t kept pace with improvements in processing, infrastructure, transportation and technology. Whether they are milk pricing, product standards of identity or restrictive labeling requirements, they all add up to a straightjacket on innovation and marketing, which we can ill afford in today’s dynamic global marketplace. Regulation of commerce, services and transportation increases costs and heaps on inefficiencies. On the other hand, deregulation spawns greater competition, innovation and consumer choice.

Read Tipton’s full “Dairy 2020 Vision” keynote here.

Learn about the top emerging dairy consumer trends here as outlined by Todd Shilk, dairy category manager at Tetra Pak U.S. and Canada.

In January 2004, Connie Tipton was appointed president and CEO of the International Dairy Foods Association (IDFA), representing the nation’s dairy manufacturing and marketing industries and their suppliers.

As a senior executive of IDFA for more than thirty years, Tipton has held a leadership role in virtually all areas of the association, including legislative and international affairs, economic policy analysis, public relations, marketing, education and training, and trade shows. She helped to launch the annual Capitol Hill Ice Cream Party and encouraged legislation that created the famous “Milk Mustache” campaign. Tipton also led successful legislative campaigns to lessen government involvement in regulations that reduce dairy product marketability.

This year, The Bryce Harlow Foundation honored Tipton with its prestigious Business-Government Relations Award for her “significant contributions to the advocacy profession through a lifelong career as an exemplary role model.”

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