The American Dairy Association of the Midwest, alongside Midwest Dairy and Dairy Farmers of Wisconsin, hosted this year’s forum to foster conversation about dairy innovation, sustainability and marketing to Gen Z consumers.
Speakers from Amazon, Ben & Jerry’s, General Mills, Taco Bell and the US Dairy Export Council (USDEC) led panels and round tables for nearly 400 attendees about opportunities in dairy, including meeting the needs of consumers around the world.
Lucas Lentsch, CEO of Midwest Dairy, said, “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.
“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.”
Establishing brand loyalty with Gen Z
Among the top issues brought forth at the forum was the challenge of marketing to Gen Z shoppers, and keeping them interested in dairy rather than the long list of alternatives.
Allen Merrill, the Midwest Dairy Board Chairman, told DairyReporter that the live Gen Z consumer focus group put on at the forum came to the conclusion that young people are most interested in convenience when it comes to their food and beverage products.
“They said they don’t have enough time to do everything and they want the ability to stop and pick things up that are healthy and nutritious, but yet they like new things,” Merrill said.
“They don’t want some of the old staples. They want something that intrigues their mindset and kind of backs up the way they think.”
Midwest Dairy said the group self-identified as skeptics, career-focused, more protective of their social media exposure, concerned about equality and driven to make the world a better place.
Lentsch said, “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.
“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.”
Challenging the brick-and-mortar format
Panelists emphasized that the dairy industry needs to “tap into the consumer mindset and establish a type of brand love for dairy” to master successful innovation, with the belief that there is opportunity for dairy to be more spontaneous.
“We do have some innovation in dairy, but are we hitting the right things that they want? I think that’s part of what we’re trying to figure out [with the forum],” Merrill said.
Another obstacle facing the dairy industry is the rise of e-commerce, resulting in consumers buying everything online, including groceries. Merrill said the category is trying to figure out how dairy fits into marketing beyond brick-and-mortar retail.
But Midwest Dairy pointed out that e-commerce is exciting because it allows niche products to reach a larger audience faster and to build brand loyalty more quickly.
“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,” Merrill said.
Sustainable growth and carbon footprints
A presentation from Tom Vilsack, CEO of the USDEC, touched on trade and tariff tensions affecting dairy farmers. Merrill said Vilsack shared that though it’s had negative effects, it’s also created an opportunity to challenge US dairy to look at other markets without tariffs and restrictions.
Though it’s a slow moving process, Merrill said researching the interests of these alternative markets can help dairy processors determine what type of products will work and if it’s feasible for them to grow globally.
“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,” Vilsack said.
At the forum, attendees also discussed hot-button sustainability issues like water usage, greenhouse gas emissions, environmental preservation and animal welfare. It’s an important topic for younger consumers, overlapping with Gen Z and their demand for convenient, healthy and sustainable products.
“Day in and day out, as dairy producers we have the ability to keep lowering our carbon footprint and be sustainable, but it’s going to take time because it’s taking some money to do it. I think as long as we keep moving forward and working toward that, we show that we’re being responsible,” Merrill said.