International Dairy Foods Association (IDFA) recently held its Dairy Forum event in Palm Desert, California where executives and other industry leaders connected to discuss innovations made and challenges faced across the sector.
K&R Managing Partners Ed Yuhas and Gary Weihs were in attendance and noted the positive outlook across the industry, despite significant hurdles.
“Even with the current struggles with the supply chain and labor shortages, there is an overwhelming optimism overall regarding the future of dairy,” Weihs said. “And not just for 2022 – this reaches further into the future than just this year.”
Those struggles aren’t just faced by the dairy sector, but some of the key areas seeing innovation and growth within the industry are also areas that pose roadblocks due to human capital needs.
There are three areas drawing the attention of the industry: sustainability, nutrition innovation, and information technology.
Weihs stated that in order to stay competitive, companies have to shift to a global mindset. The market is competitive but also offers immense opportunity if companies are willing to evolve and continue innovating.
“It has become very apparent that if a business isn’t already sustainable or at least has a path to get there outlined, they aren’t going to stay competitive,” Yuhas said. “This has become a requirement, both through regulations and consumer preference.”
Many organizations have already begun that process and continue to implement new technologies and processes to stay competitive. Automation and optimization allow production operations to flourish, and companies investing in those systems are seeing the benefits.
“We’re moving fast here in the U.S. and take milk for example – it’s relatively inexpensive here compared to other parts of the world because our operations are so efficient,” Weihs stated. “Focusing on further advancement of nutrition innovation, such as high protein milk products, as avenues of growth and opportunity is happening across the board.”
Each of those key areas identified offers a serious challenge alongside the opportunity presented.
“These areas are set to see tremendous growth and innovation,” Yuhas commented. “But that only happens successfully when there are the right leaders in place to guide that momentum. We can see that those areas are the big leadership needs for 2022 and beyond.”
The dairy industry as a whole is on a figurative precipice as executives in this sector get closer to retirement. The identification, development, and retainment of highly skilled professionals is vitally important in all sectors right now given the current workforce landscape.
One way to help combat that challenge is through strategic recruiting and retention processes as well as succession planning. Companies working to proactively plan for the departure of executives set their organizations up for success, Weihs and Yuhas agreed.
“As this generation of executives make their exit, companies who have invested in their talent early on will see the benefits of those practices,” Weihs said. “Having a professional in there who already knows your business, knows your customers, knows your product … it allows for the executive to hit the ground running that much faster.”
Another avenue business can take when looking at their human capital challenges is opening the doors to candidates outside the sector. While the idea of bringing someone in from a different industry can be daunting, the change can take a business to new levels.
“Taking that risk is significant, undoubtedly, but the reward can be huge. Roles between sectors have obvious differences, but there are many areas that overlap,” Yuhas said. “The difference in perspective invigorates and energizes organizations and that encourages new ways of thinking. That kind of spark changes company culture from the inside out.”
Cultivating a culture of innovation and collaboration leads to better retention, something every organization can benefit from today.
