Speeding up sustainability

The battle for milk will be global, and Gen Z will call the shots on sustainability, but dairy is ahead of other sectors, according to industry experts

The International Farming Community Network held its 21st annual supporters conference in the English city of Chester 26-28 September, with online participation on 27 September. The live and online events drew participants from all areas of the globe, with over 330 participants in total. This year’s conference evolved around the topic of transformation of the sector in two ways: firstly, the sector needs to earn the licence to operate by pursuing high sustainability standards and secondly, by convincing the current and future generations of the benefits of milk.

The online panel discussions tackled the issue of who the future dairy consumer is and how to align businesses with market expectations. Roxi Beck, consumer engagement director at the Center for Food Integrity, and Phibro; Erik Elgersma, visiting lecturer at the VU School of Business and an independent dairy consultant; Chris Brown, senior director of sustainable supply chains for Asda; and Bob Hutchinson, CEO of Müller Milk Ingredients, were on hand to discuss the key issue, “Who is the future dairy consumer and what do they look like?”

Beck began by noting, “Generation Z is poised to change the future of food. This includes people born between 1997 and 2012, which according to studies, has a distinct set of values,” she observed. They are one of the fastest growing economic powers globally, with spending worth US$33 trillion by 2030 and amounting to one-third of the total population. “They are the most racially and ethnically diverse, and by 2026 the majority will be non-white. They are less likely to drop out of high school and more likely to enrol in college. They were born with a smart phone in their hands, so they are likely to champion technology to solve problems. Worldwide, 96 per cent of them own a smart phone, and this increases to 97 per cent in the US.

“They are active on social media and gaming, and gravitate towards stories, regardless of channel. There is more appetite for longer form social content. More than 50 per cent of them are on TikTok and/or Instagram more than once per day, and 75 per cent look at YouTube,” she said.

Further, 79 per cent would purchase a product based on recommendations by influencers on social media, 53 are looking to TikTok for food inspiration, and 30 per cent are shopping online every week. “Food goes beyond sustenance for Gen Z. They are focused on nutrition but also tied to identities, with the environment and sustainability top of mind: 75 per cent agree the world is at a tipping point, 68 per cent are personally impacted by severe weather, and 32 per cent say it influences their food choices,” Beck noted.

In order to engage with these consumers, companies have to focus on their passions and goals, she added. “You must offer what they crave: transparency, video, tours, social media access, and your tech and innovation outcomes – showcase your environmental stewardship. It helps to seek out and engage authentic influencers, pursue conversations and engagement with patience. These are people who want to understand and know more, but don’t have the context. Don’t be afraid to use the terminology they’re using. Animals, planet and people are the things this generation are thinking of.”

Hutchinson advised, “You have to be flexible on what you do with the product. An incredibly volatile price environment is a challenge, so we work long term with our customers, to make sure we have long term supply agreements with our farmers, and are doing everything we can get them the right return for their products. This has to be a three-way agreement with our farmers and suppliers.”

Beck pointed out that it was about learning from other industries. “We need to think about the influence of tech and not what we believe is important. Consumers want food that is nutritionally wonderful, and healthy ingredients mixed with treats. They like food that is simpler and closer to what nature provided. Here is what dairy is doing.”

The new technology, when it began, talked about digital engagement, and didn’t get hung up on how the tech got built, she said. “Instead, it was about, if you want to call your mum, do that here, or share an image. They identified what consumers wanted and gave them a solution. The dairy industry has to continually think how dairy serves the end consumer and work towards that as well.”

Beck added, “If we start with that end in mind, showing that dairy products are whole foods without added colours and nutrition, this is how they will be used by the body, they will be accepted. However, you need to have people who can tell the story more convincingly than you. The closer you are to the profit, the less trust is there from a consumer.”

Brown of Asda states, “This is a huge opportunity to talk about quality of the products. There is more and more information on the label, but people spend 20 seconds in front of the shelf. The challenge is how to take vast amounts of complex information and distil it down to things that are genuinely actionable. Consumers have to have to have that transparency, and trust the products are good. There is a real opportunity for dairy to be a natural superfood.”

Calling Taylor Swift

An audience member asked what an authentic influencer was. After someone suggested having Taylor Swift drink milk on Instagram to much laughter, Beck replied, “The answer is very frustrating. An influencer is in the eye of the beholder and is somebody already chosen by the person considering what they’re going to pay attention to. For me, as a mother with teenagers, it has to do with what’s going on in my life. I’m trying to access them to get tips and tricks for nutrient dense foods like dairy. There is no silver bullet, save for Taylor Swift!

“The people need to be authentic to us, as an industry, and to tell the story for the audience to find that information interesting. We can apply the lens of entertainment and enlightenment, and help them to understand that we are a good source of nutrition, by helping them choose dairy. Gen Z are guilt-ridden and stressed out, and they don’t want food to be a source of the stress. Foods equip your life and help you to cope. Also, if anyone can find Taylor Swift’s number, I’m on board and let’s make that happen!”

Beck did warn the assembled about taking this generation lightly. “Word to the wise, those kids will have $33 trillion of buying power by 2030, and if they see somebody as taking the power away from them, they will go elsewhere. Companies should be telling stories about being transparent – who are they as people, its values as a company, how it plays out day to day. Just as we don’t have one definition for sustainability, this is the opportunity for consumers: we care about it, and this is what it means to us.”

A query arose about the younger consumers in emerging economies. Beck noted, “In developing countries, the first thing they start spending money on is protein. There is a huge opportunity to talk about choice in emerging economies, and what is important to them.”

There was also a discussion about how to ensure dairy how remains part of the future shopping basket. Elgersma stated that it was important to ensure that a small minority of people, which reject any involvement of animals in production, should not be the influencers of the future.”

Connecting and collaborating

Mike Jerred, global technology manager at Cargill, took a look at ways to connect and collaborate in his presentation. “Sustainability in practice is a collaboration story. All that information, putting the data together, and how we connect to the consumer, goes back down through the supply chain. Agriculture is how we will address climate change, protect our water and feed a growing population. Agriculture is not the largest emission sector globally, but it is a big one and it is important to tackle this globally.”

He noted there have been significant improvements in efficiency of the dairy animals, when looking at genetics, manure management, animal feed production and feeding the cows. “However, we don’t have ruminant animals without methane,” he said. “If we get rid of all methane, we have no ruminant. When looking at on-farm productivity, expertise in animal nutrition and health, it is about developing solutions to reduce methane emissions. It comes back to the data, and we have to know it if we’re going to manage it properly. Software and data come into play, in generating better diets, and linking back into sustainability. We also want to be able to have levers to pull to further reduce methane.

“For example, Cargill offers Dairy Max and SilvAir, the latter which is a nutritional solution to lower enteric methane production by up to 10 per cent, while maintaining milk production and performance, in partnership with FrieslandCampina. Farmers are the hub, but discussions need to take place with the rest of the supply chain as well,” he states.

Guilherme Augusto Laidens Feistauer, global business development at dsm-firmenich, pointed out, “A dairy farming future is one that is more resilient, sustainable, profitable and with lower emissions, to make ‘waste’ a museum artifact. It is often paralysing to think about the three or four things to do something about.” However, there are consequences and implications of antibiotic residues in milk because it has a toxic and allergen residue effect to humans, he observes. “How many milk trucks can you contaminate with one gram of penicillin? The answer is 15 trucks. And how much money down the drain? About £100,000 for a very little amount of antibiotic residue. One cow produces one to 40 litres per day, so if a single cow is contaminated, you can lose a silo’s worth.”

Feistauer observed there is a lot of heterogeneity at farm level in testing, but it’s about positive reinforcement, in order to create conditions for farmers to do the right thing without impacting their pockets.

There are a couple of solutions for farmers and processors in testing, and five key actions for processors, he stated. Test one’s carousel setup with broad spectrum tests and you will have the data about quality of milk earlier. It is then much easier to have a conversation with the supplier about how much is being paid for the milk. On a farm level, one should require animal-level, antibiotic residue testing, and outline a stricter, clearer, penalty system. “Enforcement is important, and don’t let that milk enter the silo until they have best in class – have the means to guardrail the milk,” he said. The way for new techniques to be adopted is through peer interactions. “Getting farmers to teach each other is the cheapest and most effective way for new techniques to be installed,” he opined.

Carbon assessments

Tara McCarthy of Alltech and former chief executive of Bord Bia, was on hand to discuss carbon assessments and the need to invest in the future of agriculture. “It’s about putting the producer at the centre of how we structure ourselves, not just about technologies. It’s mixing tech with data and support services. There are many global challenges, ranging from inflation to climate change.”

That being said, “Our climate change is the cow,” she observed. “We can’t just talk about emissions, because it’s oversimplifying the system we’re trying to navigate. We have an obligation to embrace that complexity, and we have to restructure how we operate, to join the dots between soil, crops and animal nutrition. if we don’t align them, we will miss the opportunity to build our reputation, and we have to work together for a planet of plenty.

“This needs data proof and rigour behind it, because this is food you’re putting into your body. Nobody in the agri-food industry is looking for shortcuts here, and we have to trust science and gather data,” she added.

John Allen of Kite Consultancy, asked the panel, “How do you view the innovations coming down the line, in terms of how well it creates solutions?”

Jerred of Cargill replied, “Very close, because we have to make recommendations to farmers. Core to our business is to see how that tech will add value for customers.

McCarthy explained, “We reach out to entrepreneurs, we enable them or invest in them, to make progress faster. Open approach is what’s required, and urgency is necessary. None of us have time here. Collaborate, collaborate, collaborate. We know we can’t do this on our own.”

Feistauer said, “if you have to design a system of innovation, you probably wouldn’t wind up with what we have today. The key innovators are working in silos, instead of commodifying as quickly as possible, and scaling the science as much as possible. We have to think about the kind of collaboration we have.”

McCarthy further noted, “So much of the conversations depend on the kinds of questions we ask. How do we feed nine billion people on the planet? Sustainably? We should insist that’s the only question we answer.”

Hayley Campbell-Gibbons, head of sustainability at Kite Consulting, also queried, “How can we as a sector go faster? The retailers being driven by pressure cooker, and pressing everyone down the chain. There is no silver bullet, and no solution other than this path that we are on. Meat and milk are the commodities with the biggest impact in the supply chain.”

Looking into this future, Campbell-Gibbons, emphasised: “Sustainability is an investment and not just a cost. It will be a prerequisite, and a reduction in carbon emissions has to be delivered so that dairy is perceived as a good product.” Brown, representing the supermarket chain Asda, could only support this by stressing that “sustainability was a qualifier nowadays and needs to be done in order to be able to sell a certain product.”

All speakers agreed that it was important to focus on sustainability and especially on the reduction of the carbon footprint, though the ideal road to achieve this goal was not necessarily the same. Jerred from Cargill suggested, “It would be better if the industry sets up these standards before the standards will be set up others,” mainly governments. McCarthy from Alltech, on the other hand, favoured public private partnerships because “if they together get it right, then there is a profit for all and we work together for a planet of plenty. Consumers need to be told of the benefit whenever anything happens with their food, so the benefit is worth the price they pay.”

Panel:

Next year’s conference: Hokkaido, Japan, 29 June- 2 July. West meets the East. Asian dairies- standing on locally, thinking of globally. 25th IFCN Dairy Conference. www.ifcndairy.org

 

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