When the Going Gets Tough...
June 1, 2005
Whwn the Going Gets Tough...
I am extremely pleased to have this opportunity to salute the Top 100 dairy processors in the nation. Even after a decade of Dairy Field putting this ranking together, I’m still in awe each year at the innovations and creativity that dairy companies show to stay competitive in a market that is increasingly squeezed by a wide range of pressures.
The past year is an excellent case in point. Down on the farm, record-high prices have been a welcome sight, but for processors and manufacturers buying milk and dairy ingredients, those high prices have created some tough times. It’s tough for everyone to manage such wide price swings — producers and processors alike — which is why IDFA has long advocated strengthening risk-management tools for the industry.
Unfortunately, while one sector may benefit in the short term from the price swing, the entire industry is hurt when dairy loses market share to competing products and ingredients that step in at lower, more reliable costs. And the competitors we now face are fierce.
So how do dairy companies continue to survive and grow in such an environment? What are they doing to thrive despite the many challenges?
The answer is, they think BIG. Dairy companies are among the most innovative players in the food and beverage industry at a time when consumers are demanding new products that fit into a specific lifestyle, have more nutritional benefits and excite their taste buds. It just takes a walk into the local grocery store, convenience store or restaurant to see all of the imaginative ways that dairy processors are giving the customer what they want. Yogurt in portable containers for all age groups. Ice cream that cuts the fat and keeps the flavor. Milk flavors and packaging that capture kids’ attention. Broad selections of cheeses that allow Americans to discover new favorites. Dairy ingredients as part of a growing array of food and snack items, including foods that meet special dietary needs.
And, dairy manufacturers continue to stay on the cutting edge in marketing. Anyone in doubt should take a look at IDFA’s Achieving Excellence Awards competition. The contest’s categories expand nearly every year in order to make sure we’re current with the methods that dairy marketers are using to reach out to consumers: ethnic marketing, Web sites, print and broadcast ads, packaging design, multi-media initiatives, promotions and point-of-sale efforts, to name a few. Even as the categories grow, so does the competition as the entries flow in and show amazing creativity and effectiveness.
Industry marketers took a big step in the right direction this year by rolling out branded efforts regarding the dairy/weight-loss connection. These marketing initiatives expand the “healthy halo” that our products have long enjoyed with consumers due to dairy’s powerful nutritional package. The dairy/weight-loss efforts give people one more great reason to keep dairy in their diets and have been particularly effective since Americans are more concerned than ever about weight management.
As we celebrate these accomplishments, I must note that all of this activity is taking place in an industry that is possibly the most regulated one in agriculture. Think of what could be achieved if the industry pulled together to take a good, hard look at the policies and regulations that we contend with, since they remain many of our largest challenges.
If given more flexibility in the federal standards of identity, we could be rolling out even more new products to meet consumer demand. If we had a cohesive federal dairy policy, producers and processors could channel energies into creating new markets rather than fighting old battles. IDFA stands ready to work with anyone who wants to make the United States the best place in the world to make milk products and ingredients.
I applaud the Top 100 companies profiled here, as well as all dairy foods companies, for thinking big and doing big things in a big way, despite the pressures they face. It is their continued perseverance and excellence that makes the outlook bright for dairy in today’s marketplace.
Connie Tipton is president and chief executive officer of the International Dairy Foods Association.$OMN_arttitle="When the Going Gets Tough...";?>