Current and potential dairy consumers live all around the world, providing the U.S. dairy industry a tremendous opportunity for growth. Entering an emerging market, of course, is not easy, and many logistical aspects must be worked out. At the core, though, is the goal of providing products people want.

“You have to be obsessed with the consumer,” said Patty Stroup in a panel discussion during the International Dairy Foods Association’s Dairy Forum. Stroup is a senior vice president and chief procurement officer at Nestlé and chief executive officer of Nestrade S.A.

“What does the consumer want today, and what will they want in the future?” she asked rhetorically. Characteristics such as sustainably produced, greenhouse gas reductions, healthy aging, and package size are just some of the factors that might appeal to different audiences.

“You have to spend more of your time understanding what it is your customer is looking for and building a strong strategy around that,” she advised the dairy community. “Develop your strategy around what you know and make the plan robust enough to change when things change.”

When it comes to developing countries, nutrition is a big driver, and Stroup said we can use dairy as a carrier for necessary nutrients in the diet. She explained that the World Health Organization estimates that 1.5 million people die each year from iron or vitamin A deficiency, and those are two nutrients dairy products can carry.

“Dairy already has a health halo,” she said. At Nestlé, they look at the micronutrients that are needed in a specific region and determine ways dairy can help deliver that nutrition.

She emphasized the importance of looking at the habits and culture of an area and working along those lines. “Don’t bring something in that doesn’t relate to their culture and eating habits,” she said. “Bring something that complements them.”

She also touched on plant-based alternatives, calling them neither a friend nor a foe.

“We can pretend consumers don’t want this, but then we would be wrong,” she said. “If the consumers that want this, we need to provide that offering. We can decide if it is going to be us or someone else.”

She explained that in some countries, it is a better fit to augment dairy with less expensive products that may be plant-based. For instance, her company recently launched a dairy and soy combination in the Middle East.

“You have to figure out how to get the right level of nutrition there at a price they can afford, and sometimes 100% dairy is not affordable to them,” she said from a food processer perspective. She likened it to a total mixed ration; like farmers, they are pulling together nutrients from what is available, low cost, and palatable.

The bottom line is that U.S. dairy is an important source of nutrition for people around the world, and the global market is important to the U.S. dairy industry. To grow, we need to keep our eye on the needs and wants of the consumer.

“There is a massive opportunity globally for the U.S. to participate, but we have to be obsessed with what the customer is looking for,” Stoup concluded.

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(c) Hoard's Dairyman Intel 2024
January 29, 2024
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