Holding the future
Barbara O’Brien, president & CEO of Dairy Management Inc. and the Innovation Center for U.S. Dairy, discusses the issues that face the global industry with Suzanne Christiansen
The new CEO of Dairy Management Inc. (DMI), Barbara O’Brien, has had a long career in the dairy industry, with more than 20 years of experience working on behalf of the US’s 30,000 dairy farmers and dairy importers. Through an evolution of the checkoff business plan, O’Brien created stronger integration and category strategies that have grown the market for America’s dairy farmers, as well as driven increases in positive consumer perceptions around dairy and dairy farming. She is also focused on building a bench of next generation leadership among staff and dairy farmers to ensure the checkoff’s long-term success on behalf of the dairy industry.
Under her leadership of the Innovation Center, 34 companies representing 75 per cent of the US milk supply signed the US Dairy Stewardship Commitment – dairy’s social responsibility pledge to customers and consumers – and US Dairy announced its 2050 Environmental Stewardship Goals. The Innovation Center is a pre-competitive forum that advances collaboration among dairy companies, farmers and others in the dairy community to help ensure a socially responsible and economically viable industry in the future.
She discussed her plans and gave Dairy Industries International an update on the issues facing the global and US dairy industries.
Q. What in your background prepared you for your current role?
I had an early propensity for entrepreneurship. I started a dance company for non-dance majors and more than 30 years later, it still exists. I am interested in developing strategies and ideas that have staying power. Prior to joining DMI, I directed Burson Marsteller’s Chicago-based healthcare consultancy. During my tenure, I provided executive-level counsel for Fortune 500 consumer packaged goods and pharmaceutical clients including Procter & Gamble, Dow Corning, Quaker Oats and Abbott Labs, establishing new strategies for growing clients’ businesses. I also went on to co-found a healthcare consultancy that served the business and marketing planning needs of Chicago-area hospitals and health systems as well as companies in the medical device, pharmaceutical, food and nutrition segments. I like concepts underpinned by science, with the right kind of operational structure.
My early interest and skills at creating lasting strategies have served me well since coming to DMI. I have worked through the entire operation and am currently president and CEO of DMI, the domestic dairy checkoff programme that drives trust and sales of dairy products. In this capacity, I oversee the work of the National Dairy Council, the US Dairy Export Council and GENYOUth Foundation. I am also president & CEO of the Innovation Center for U.S.Dairy.
Overall, this gives me an insight into the checkoff programme. Also, this really complex industry of ours made it a logical choice for me. When in the role of CEO of the Innovation Center, the president of that operation is always a processor. I have worked closely with three CEOs – from Leprino, Land O Lakes and Schreiber Cheese, and over the years they have given me an end-to-end view of dairy.
Q. What do you see as the key issue for the US dairy industry going forward and why?
There are two main issues aside from the port issues, the labour challenge and import pressures – one is external looking and the other internal looking. The external issue is the reputation of the sector, which is interesting and not just a challenge for the US and international dairy, but for all of animal agriculture. There are interesting tensions right now, and we work increasingly with both the United Nations and in world economic forums.
There is a confluence of naysayers, vegans and environmental interest groups, who are a minority in size, but have an outsized voice. They are both cellular and plant based and the coming together of those agendas is creating pressure on the category. It is creating a consumer who is distrustful, so we are focused on being more assertive and taking back this narrative and dispelling some of the myths.
As an overall category, we have a commitment to feed people, and we work to highlight our contribution to the environment, and the ability to employ people, particularly in rural areas. So, we hold that in the one hand.
The internal issue is the economic viability of the category, specifically for farmers. We work for 30,000 dairy farmers of all sizes, large and small and we are seeing that it is difficult to survive, based on all the inputs, the changes in labour, increases in operating costs, and with the federal order system in the US, which makes it difficult to make a living. We are facing the question on ensuring that dairy farmers continue to operate. The economic challenge is the difference as to whether the next generation steps in.
There is also the question of who’s making food choices for whom. As the world dynamics continue to shift, we see emerging countries come into stronger economic times, and the desire for protein is real. I am bullish on continued exports and getting more animal protein into global diets.
Q. How has the market changed since you came into it and in what direction?
There have been three things over the last 20 years in the competitive sector. Dairy is a dominant commercial category and competitive sectors have taken note, and what has happened over the last 40 years has been in terms of an explosion of beverage options. In the past, it was milk, juice, coffee and maybe soft drinks. Now, it’s sports drinks, tea, coffees of all types, and the reinvention of the water category for three times the price, along with many other beverage choices. Dairy has benefited from a lot of the expansion.
The second change is the consumer themselves. The good news is that their desire for dairy is very strong in the US. Looking at the most recent figure for 2020, the average per capita consumption is 655 pounds per person annually and this continues to rise. The difference is how they choose to take their dairy – there are declines in fluid intake and people are now eating their dairy. Whey protein continues to grow, butter utilisation is strong, while yogurt is fairly flat. Consumer demand is strong but changing.
The third trend is globalisation. I spent my first 20 years in dairy, another ten years as a consultant, then joined the staff. During that time, the balance of domestic versus global has been fascinating to watch. The numbers have gone from three per cent up to 17 per cent for US dairy exports, for example.
We are making the right investments and installing the right capability to continue to meet those needs. For example, bubble teas are a whole new segment and that’s due to globalisation. The diversity of the US farmers is one of our secret solutions (sauce) – we have both large and small, different geographic operations, and dairy is very nimble as a US industry. In other parts of the world, we’re seen as industrialised, but only a minority of American farms have over 2,500 cows – they do produce an enormous percentage of the volume.
Q. How do you expect the Mayo Clinic linkup to assist with the image of dairy and with increased uptake?
I am so excited about our collaboration with Mayo Clinic, particularly in two things: we are a science-based organisation, and under the umbrella of DMI is the National Dairy Council (since 1915), which has always been a science and education arm of the industry. This Mayo Clinic collaboration is a modernised complement to that legacy of research. There are 5,000 scientists at Mayo, a very practical science foundation, and this will help us look at areas for research. These include metabolic conditions, exploring new claims and health impacts we know are important to today’s consumers – such as inflammation, calm, sleep, and digestive health. For consumers such as millennials those in Gen Z, those are their worries, and they look to food as medicine – so we’ll be digging deep into those areas.
Based on the new science we bring forward, the Mayo scientific community is willing to work and use their voice, not just for professionals, but with consumers too.
Q. What do you consider your greatest challenge/achievement?
I think our challenge for dairy is our relevance as a category, and to join the dots between our reputation and the need to continue to innovate and stay relevant for the next generations. Consumers are willing to vote with their dollars by supporting brands, companies and products for doing good by doing well. The challenge is to help them see dairy as meeting their needs and being a good steward and to bring our story forward, with our critical role in a healthy diet and planet. We are two sides of the same coin.
When looking on-farm and going to the marketplace, it is not an either/or choice. The source for dairy, the interdependent cow, is dependent on a plant-based diet and this is the root of the products. Consumers want choice and want to experiment.
Q. What does a typical day look like for you?
I have been eight months in my new role and there is no typical day. I’m still in the whirlwind of an exciting new opportunity and I consider myself a relational leader – it’s about building relationships and ensuring a two-way dialogue. I spent the first six months on the road, talking to hundreds of processors, farmers and industry leaders, and taking in their perceptions of the state of the industry and the challenges ahead – what can I do with the incredible investment by farmers for the next 10 years.
When on the listening tour, I’ve shared with farmers a vision and set of priorities that are essential to the future of US dairy. We are continuing to listen and now laying out a vision for strategies for the future under the acronym ASPIRE: Action Through Sustainability People, Innovation, Reputation and Exports. Those are the fundamentals that we need to bring to the next level of capability to drive growth and viability for partners.
There is a lot of detail behind the areas, including technology, science, and the people with the right talent and employing the right workforce. The market’s tight for labour so retaining what we have is key while looking at what are the next skills, technology and the future skills we need. Robotics and automation and innovation are all going to be so critical.
Q. Outside of work, what are your hobbies/interests?
Spending time with my family. I married my high school sweetheart almost 35 years ago. One of the silver linings in the pandemic is that our kids came home and we all hung out, cooking, hiking and skiing – and we all really enjoyed our time together.