Looking ahead usually requires a glance back to where we’ve been, and it’s no secret that 2013 was a lousy year for some of us. For others, it was a great year — and kudos to them. Fortunately, each new year gives us all a fresh start, a time to rethink and retool for what’s ahead. The best thing is knowing that we can be masters of our own destinies; we just need a long-range view and plans as to how we’re going to get things right for a better future.
Here are my suggestions to start a dairy industry “to do” list for 2014.
First, my dairy-specific, No. 1 cause celeb for 2014 is to start making the case for phasing out government-set milk prices and letting markets work. I know everyone in the dairy industry takes for granted that government sets milk prices, but talk to a few of your friends and see how many know this simple fact. I find most people are astonished to learn there is this level of involvement in milk pricing by the federal government. But it won’t change without emissaries spreading the word that getting away from this antiquated system holds positive opportunities for everyone, from the dairy farmer to the consumer.
Join IDFA in this conversation and talk about the benefits to producers, processors and consumers. Without government-set minimum milk prices, dairy farmers can compete for higher prices instead of all getting the same blended price. Without government-set minimum milk prices, milk buyers can better manage price volatility using forward contracting and hedge prices using risk management tools. And without government-set minimum milk prices, consumers will benefit from greater market competition. Talk it up and build momentum for change. Moving to market pricing can pave the way for far greater product differentiation and variety, particularly in dairy beverages.
Second, we must elect business-friendly representatives to Congress. I encourage you to make this happen in your state and federal elections in November 2014. Some government issues are a problem for dairy companies in specific ways — and for our future in very big ways. We all have a responsibility to get involved and set things straight.
We need people in Washington who can get our country back on track by reforming entitlement programs. The United States spends 90% of its $2.7 trillion in tax revenue on entitlements, such as Social Security, Medicare, Medicaid, and interest payments on the debt — and this percentage is rising. We cannot solve federal budget problems without addressing the unsustainable expansion of entitlement programs. Send people to Washington who are willing to address these critical issues. Our future is truly at stake on this one, and it’s our job, not someone else’s, to elect people who are up to the job.
Third, we need more innovation and market opportunities. Look at your business and take a fresh look at whether there are things you can do to enliven your sales. Innovate with your products. Consumers like new, convenient and tasty. Listen to people like Harry Balzer, chief industry analyst and vice president of The NPD Group, who presented at the International Dairy Show, and Phil Lempert, the “Supermarket Guru,” who will talk about the latest trends at Dairy Forum. They can really help jump-start your ideas.
Spice it up. Don’t miss new flavor and texture trends, exotic fruits and sweetener alternatives, combinations and pairings that are truly outside the proverbial box. Get on top of the trends and ahead of the market in your product lines.
Be creative with consumer packaging — market, market, market. Your package is valuable real estate; make the most of it and consider making it more environmentally friendly while you’re at it. Include any positive, truthful claims you can to catch consumer attention. Some popular claims with consumers right now are protein, gluten-free, lactose-free and probiotics. Identify and accentuate your products’ positive attributes, whatever they may be. Don’t be afraid to differentiate and stand out in the dairy case.
For help with innovation in products and packaging, check out IDFA’s Gold Business Partner members for collaboration on great ideas.
Fourth, I say “keep up the good work” to those of you developing and marketing products for export around the globe. If you’re not there yet, explore how to jump in. IDFA stands ready to help. Exports have added real value to the dairy category, reaching $4.92 billion from January to September 2013, up more than $1 billion from the same period the previous year.
I recently interviewed Ambassador Ron Kirk, former U.S. Trade Representative, and he said, “Embracing competition, embracing the opportunity to go compete for these new consumers that are coming of age in markets around the world is a great way for us to sustain our way of life and to grow our economy.” We need to make sure we align our policies so this growth can continue as an economic engine for our industry and our country. If you want to hear more about trade, Ambassador Kirk will be our opening speaker at the Dairy Forum in January.
Finally, make every moment count. The new year will be here before we know it, so let’s all commit to taking personal responsibility for improving our products, our industry and our country. It is up to us to make 2014 great.
