Dairy Solutions Group
Bethesda, Md.

Competition in the dairy case is fierce these days, due to continued consolidation and the development of national brands. However, one organization has found a way to compete in this hotly contested category by bringing independent dairies together to maximize purchasing power and leverage their collective knowledge.

Dairy Solutions Group was founded in 2004 by six of the strongest independent dairies in the nation. Today, the organization is considered one of the most respected buying groups in the industry.

Members benefit from the group's unique and cost-efficient method of purchasing high-volume bulk items used in fluid milk processing, marketing and distribution. Among these items are chemicals and supplies; resin, gable-top cartons, plastic tops and other packaging materials; and raw ingredients such as sweeteners and milk powders. Through Dairy Solutions, members also have access to group liability and other insurance programs.

"By streamlining purchasing overhead and pooling our resources, we are helping our members manage costs and ultimately giving them an edge in an increasingly competitive marketplace," says Warren Erickson, the group's chairman and executive vice president of Anderson Erickson Dairy in Des Moines, Iowa.

Dairy Solutions Group is not a marketing organization with a shared identity and products. Rather, the organization gives members one powerful voice through joint purchasing, says Ron Rubin, executive director.

Importantly, Dairy Solutions Group also offers invaluable networking that takes place formally and informally among members from independent dairies of all sizes and throughout North America.

"There isn't a better way to succeed in our ever-changing industry than by hearing about the real-world experiences from peers," says J.T. Wilcox, vice chairman of Dairy Solutions Group and director of operations at Washington-based Wilcox Dairies. "One of the biggest advantages of our organization is that we give our members an open forum to discuss trends and issues, and to share resources and best practices at their respective companies."

As important as peer-to-peer interaction is the relationship Dairy Solutions Group has established with vendors.

"Innovative programs, strict pricing confidentiality and our participation in program design mean that vendors want to work with us," Rubin says. "They also know we treat them fairly and that we bring a committed volume to their programs."

Dairy Solutions Group operates upon a low-overhead business model. The group is managed by board of directors comprised of its members, along with Rubin and a director of purchasing, who each bring extensive knowledge and experience to their positions. The group contracts with an outside organization to handle personnel, administrative and accounting functions.