Last week’s Dairy Experience Forum in St. Paul, Minn., brought together dairy farmers, industry experts and partners with the goal of sparking disruptive innovation to drive the industry forward. The second annual forum, hosted by Midwest Dairy and Dairy Farmers of Wisconsin, built upon last year’s forum to continue important conversations around dairy innovation, sustainability and the consumer mindset of Generation Z.
“Last year’s forum challenged us to dive deep into how we can put the consumer above everything else and provide an excellent dairy experience,” said Lucas Lentsch, CEO of Midwest Dairy. “This year’s forum was designed to take that discussion to the next level and equip us with insights and tools to pave the way for disruptive dairy innovation. Our hope is that attendees take what they learned and bring it to their local/industry groups, boards, co-ops, and other partners to challenge the status quo thinking.”
Nearly 400 dairy farmers, processors and partners attended the three-day event held at the Saint Paul RiverCentre July 16-18, 2019. Speakers and panelists included industry leaders from Amazon, Ben & Jerry’s, General Mills and Taco Bell, as well as U.S. Dairy Export Council president and CEO, Tom Vilsack.
Among the highlights of the event was a live Generation Z consumer focus group of eight young adults ages 18-21 that discussed how their generation’s personal values and perceptions of food impact how they make purchasing decisions. During the discussion it became apparent that while Generation Z (born between 1996-2010) has some similarities to the millennials who proceed them, they are also very different. Overall, the group identified themselves as skeptics, career-focused, more protective of their social media exposure, concerned about equality and driven to make the world a better place. Given their on-the-go-lifestyles, convenience is a top priority, which provides numerous untapped opportunities for dairy to innovate and create products that will fit consumers’ ever-changing needs.
“It is essential that we think about the values of Gen Z now in order to establish trust and brand loyalty among a generation that will have huge buying power in the years to come,” said Lentsch. “As an industry, we need to pay attention to what they care about and be proactive in creating innovative products that meet their needs, instead of being reactive and missing opportunities. Gen Z is setting the trends today that other generations will follow tomorrow, so it is essential that dairy is part of that conversation.”
Building off the discussion of proactive and disruptive innovation, Lentsch hosted an Innovation Panel, which reinforced that in order to truly innovate, the dairy industry needs to tap into the consumer mindset and establish a type of brand love for dairy. During this panel, marketing and product development leaders from Associated Milk Producers Inc. (AMPI), General Mills and Sartori Cheese discussed the need for consistent and spontaneous innovation in order to spark brand love. As an industry, dairy has always been very consistent – providing a fresh, nutritious product produced by farmers. However, there is opportunity for dairy to be more spontaneous by creating products that disrupt the category and meet consumers’ needs in new and unexpected ways.
When discussing an example of disruptive innovation, General Mills Director, Dairy Platform Supply Chain Leader Erika Thiem shared the story of a recent journey her team took after seeing a loss of market share in the traditional yogurt segment. They knew they needed something different – even if it meant possibly cannibalizing some of their own sales.
“We needed to find out why consumers were firing traditional yogurt products in the category,” said Thiem. “Falling in love with what the problem was, led us to create a new French-style yogurt which fulfills the need of a consumer who’s looking for a calm moment to relax. Taking the time to understand the job the product needed to do for the consumer really helped us follow the innovation path.”
Another hot topic of the forum was a discussion about e-commerce and how it is both changing the way consumers shop for their food and also how they discover new products. With online food sales expected to grow 20 percent by 2023, there is opportunity for dairy as consumers will continue to seek out foods that are fresh, local, convenient and align with their values. While the process for discovering these foods might look different in the future, e-commerce is very exciting as it allows niche products to reach an even larger audience much faster and to build brand loyalty much more quickly than traditional brick-and-mortar stores. Research shows once a consumer buys your product online, they are likely to purchase it time and time again.
“The e-commerce panel reminded us that while shopping for your food online will only increase over the years, it doesn’t mean that traditional grocery stores will go away – we will just need to think differently about how we bring our products to market in each of these avenues,” said Allen Merrill, Midwest Dairy chairman of Midwest Dairy’s board of directors. “For example, future consumers may buy all their groceries online, but they will still visit their local grocery store to explore and discover new products and brands. This offers a tremendous opportunity for new dairy innovation, and that is very exciting.”
Former U.S. Agriculture Secretary Tom Vilsack and president and CEO of the U.S. Dairy Export Council also shared insights about today’s global consumer and the opportunity for dairy to meet the needs of consumers around the world, which is essential as the world’s population continues to grow at a rate of 1.07% a year, equaling roughly 82 million people.
“Roughly 95-97 percent of the world’s population lives outside the U.S. and that is a population that continues to grow,” said Vilsack. “It’s a younger population in developing and developed countries where incomes are rising, the middle class is expanding, and cities are growing. There is a tremendous demand for dairy protein. So, in addition to having so many consumers for our products, the world needs and wants dairy.”
Lastly, sustainability continues to be an important driver for consumers, and the Generation Z focus group participants, as well as several speakers, discussed how farmers are the solution for sustainability issues – not the problem. On the front lines and with a deep investment in animal and land stewardship, dairy farmers can address root sustainability issues like water usage, greenhouse gas emissions, caring for the earth and animal welfare. While this is an everyday mission for farmers, speakers challenged farmers to proactively share the stories about how they are caring for the world in tangible ways in order to better connect consumers with the truths about dairy farming and sustainability.
Next year’s forum will continue to build on these important conversations. For more information on this year’s forum, visit DairyExperienceForum.com.
Midwest Dairy™ represents 7,000 dairy farm families and works on their behalf to build dairy demand by inspiring consumer confidence in our products and production practices. We are committed to Bringing Dairy to Life! by Giving Consumers an Excellent Dairy Experience and are funded by farmers across a 10-state region, including Minnesota, North Dakota, South Dakota, Nebraska, Iowa, Illinois, Missouri, Kansas, Arkansas and eastern Oklahoma. For more information, visit MidwestDairy.com. Follow us on Twitter and find us on Facebook at Midwest Dairy. For relevant conversations about issues and trends in the dairy community, listen to Dairy on the Air.