Editor’s note: This is an edited version of the speech delivered by IDFA President Tipton at the Dairy Forum in Orlando, Fla., on Jan. 28. Read the entire speech at idfa.org.
We as an industry understand what the former editor of the Harvard Business Review Theodore Levitt meant when he observed, “Creativity is thinking up new things. Innovation is doing new things.”
That’s what our great industry is all about. Doing new things. Matching creativity to innovation and innovation to the tastes and needs of an ever-changing world. Questioning long-held views. Getting in front of change, setting the pace, maintaining our global competiveness through innovation while the hesitant fall behind. Sure, we have some challenges, but they pale when compared to our future’s full promise and potential.
Science and technology are two of the primary drivers. They’ve produced a tectonic shift with waves rippling throughout our industry. They’ve changed virtually everything from the farm to the office building to the kitchen. Phil Lempert, the Supermarket Guru, even predicts that smart phones will soon network with kitchen appliances to allow shoppers to see how much milk is left in the fridge.
Indeed, science and technology have increased our speed and enhanced our efficiency and effectiveness in so many positive and meaningful ways. From animal breeding and herd health, to product development, to processing, packaging and global distribution — all of these activities have radically changed in the last 30 years. And I would argue, for the better.
But here’s a troubling example of change that seems to be headed in the wrong direction. Over the past year, several legislators have encouraged the FDA to require labeling of genetically modified or engineered foods, even though the agency has deemed the products to be safe.
On Election Day 2012, California voters defeated by a 53 to 47 percent margin Proposition 37, a ballot initiative requiring labels on foods containing GMO ingredients sold in the state.
However, the California victory may be short-lived. The drumbeat for GMO labeling is as loud as ever and proponents are taking their show on the road. They are training their eyes on other states, such as Washington, Vermont, New Mexico, Connecticut and Rhode Island, and even cities to pursue similar ballot initiatives.
So how do we go about eliminating the pressures of GMO labeling campaigns? How do we put a needle in their balloon of fear and falsehoods? One of the best ways is to launch an educational campaign around the benefits of biotechnology and its role in feeding a growing world population in a sustainable manner.
The United Nations’ Food and Agriculture Organization predicts that global food production will have to increase by 70% by the year 2050 to feed an additional 2.2 billion hungry mouths. Although not a solution in and of themselves, GMO crops can certainly play an important role in the war against world hunger. The anti-GMO zealots need to get off their high horses and see what the rest of the world really looks like from the ground up.
Ellen Schmitz of the Symphony IRI group says that dairy products continue to hit the right note with health and weight conscious consumers. And she’s right. Lots of Americans are looking for more protein in their diets, especially low-fat sources of protein. And meat is looking less and less attractive while dairy is catching their eye, as it should. Dairy is a naturally good source of protein, including many low-fat and fat-free options: cottage cheese, Greek yogurt, protein-fortified milk. So, look for even more protein claims on dairy products over the next year.
Less cooking and greater convenience are also great selling points for dairy. The growing foods are the ones that require less cooking and effort, like yogurt, a stick of string cheese or an ice cream novelty. Let me repeat [Harry Balzer, chief industry analyst of the NPD Group]’s most salient point: “If you understand yogurt, you understand what this country wants from its food suppliers. It wants a food that satisfies breakfast, lunch, supper; it can be the snack, it can be the main dish or it can be the side dish. You can have what you want, and I can have what I want, and we all have yogurt. And then I think it’s good for me. Isn’t that what we want?”
However, one thing the U.S. dairy industry has taken for granted for most of the past 40 years is that farm milk will always be there to meet domestic processor and manufacturer demand. But, is that still the case today, and what about in the future?
There are some disturbing trends that could be a harbinger of what lies ahead. For example, over two-thirds of the growing demand for U.S. farm milk has been for dairy exports. This is a huge turnaround. And not only is the export product mix very different from what our domestic consumers want, but the amount needed can vary significantly year-to-year and even month-to-month.
Going forward, one thing is for sure. The conventional thinking that farm milk will “always be there when we want it” has to change. Fortunately, dairy farm operators are spending much more time than ever before on strategic planning to ensure that the feed they need will be there when they need it. Processors and manufacturers must also pay attention to this issue, as the answers may well be different in different parts of the country.
Federal milk pricing regulations, food standards and other dairy laws – some of which date back to the 1930s – have not kept pace with the times. They are antiquated and still have us in a vise-like grip. They squeeze the life out of product innovation, inflate costs and stifle industry growth both at home and in the global marketplace.
We must embrace the marketplace rather than government patriarchy and add value at every step from the farm to the consumer, while keeping affordability foremost in our minds.
We can no longer live in the deep freezer of Federal regulation. To start the thawing-out process, we will propose to draft federal legislation that allows meaningful innovation without changing the characterizing ingredients in the food. With such a change, dairy companies could use safe and suitable alternative ingredients and processes and still market their products within the existing dairy food categories that consumers have come to know and recognize.
It’s time to get serious about finding solutions that help everyone in the supply chain. So as we again work on new safety net programs for dairy producers this is a critical consideration. We must consider farms, processors and manufacturers, exporters and consumers for our industry to find true success.
So let me leave you this morning with the observations of the great English statesman and philosopher Edmund Burke: “The battle of life in most cases is fought uphill, and to win it without a struggle is almost like winning without honor. If there were no difficulties, there would be no success; if there was nothing to struggle for, there would be nothing to be achieved.”