Checkoff Year-In-Review From Dairy Management Inc.’s Chair Marilyn Hershey and CEO and President Barb O’Brien

Listen as Marilyn Hershey, DMI’s chair, and Barb O’Brien, DMI’s CEO and President, discuss the 2023 National Dairy Checkoff Year-In-Review with Scott Wallin, DMI’s VP of Industry Media Relations. They will go over the highlights and challenges of this year’s checkoff programs including our restaurant and retail partnerships, health and wellness education and collaborations, consumer promotions, international promotions, and the new direction of the Fuel Up youth wellness programs. Tune in to find out!

To learn more about the national dairy checkoff and your local dairy checkoffs, please visit www.usdairy.com.

Host & Guest:

• Guest: Marilyn Hershey, Dairy Management Inc. Chair and Pennsylvania Dairy Farmer
• Guest: Barb O’Brien, Dairy Management Inc. CEO and President
• Host: Scott Wallin, Vice President of Industry Media Relations

Summary

Dairy industry highlights and priorities for 2023. 0:00

• Barb O’Brien, CEO of Dairy Management Inc., discusses the year that was for 2023 and looks ahead to 2024, highlighting the checkoff system’s modernized strategies and focus on building strength across the entire system.

• Marilyn Hershey, dairy farmer and Chair of dairy management Incorporated, shares her experience running a dairy farm in a consumer-centric area near the Chesapeake Bay, highlighting the challenges and opportunities of dairy farming in a heavily populated region.

• Marilyn Hershey and Barb O’Brien highlighted the Dairy Research and Promotion’s focus on sustainability, innovation, and exports, as well as investments in science and food service partnerships.

• Marilyn and Barb discussed how checkoff programs aim to improve efficiency on farms, with a focus on doing the same thing on farms as checkoff does each year.

Dairy checkoff strategies and partnerships. 5:18

• Partnerships with McDonald’s, Domino’s, and others drive new product development and growth for farmers.

• US dairy industry focuses on domestic and international growth, adapting to pandemic challenges.

• Dairy Farmers of America faces misaligned goals and disappointing growth, but remains bullish on menu development potential.

Dairy industry’s future opportunities and challenges. 11:25

• The Dairy Checkoff is focused on building trust and sales through daily efforts, despite challenges and curveballs.

• The Checkoff is leveraging science, including nutrition science and milk discovery projects, to unlock new opportunities and potential applications for dairy products.

• Barb O’Brien: Excited about new dairy innovation opportunities in health and wellness, food service, and beverages.

• Marilyn Hershey: Focused on creating unique protein products that meet consumer demand for new and alternative ways to get protein.

Dairy industry’s future with US Dairy Export Council. 16:01

• Barb O’Brien highlights the evolution of Fuel Up to Play 60 into a dedicated fuel up platform, focusing on dairy as a protein option for youth.

• Marilyn Hershey emphasizes the potential for growth in the global marketplace, with a focus on meeting the unique needs and preferences of different countries.

• Marilyn Hershey emphasizes the importance of adapting to consumer preferences and investing in global platforms to grow the dairy industry.

• Barb O’Brien highlights the Dairy Checkoff’s role in funding scientific research, building trust with consumers, and driving sales over the long term.

Dairy industry’s use of influencers and advertising. 21:32

• Marilyn Hershey and Barb O’Brien discuss the role of influencers in dairy marketing, highlighting the importance of finding unique voices that resonate with consumers.

• The Dairy Checkoff and food service partners invest in advertising and marketing efforts, with farmers seeing the messaging through third-party investments.

Full Transcript (please ignore typos – AI-generated)

Scott Wallin  0:00 

When you look back at the year that was what are some highlights that kind of jumped to the top for you?

Barb O’Brien  0:03 

You know it. It’s been a great year from a dairy Research and Promotion standpoint though I want to start out by saying, I certainly know it has not been an easy year for farmers, the economics, the inputs, plenty of challenges for sure. And that really just motivated us as a staff to want to do more. And that’s really where the year has been focused is in narrowing our our strategies in a way that we know we can drive greater trust and sales.

Scott Wallin  0:39 

Hi, welcome to the your Dairy Checkoff podcast where we speak with dairy industry experts, farmers national and local Dairy Checkoff staff to dive into the strategy. They’re driving sales and trust on behalf. I’m Scott Wallen, Vice President of media relations with dairy management Incorporated, and I’m joined today by Barbara Bryan, who’s our CEO and President of dairy management incorporated in Maryland, Hershey, Pennsylvania dairy farmer and Chair of dairy management Incorporated. Today, we’re going to talk about the year that was for 2023. And also look ahead to 2024. But before we jump into some questions, Barb, let’s take a second have an introduction from you.

Barb O’Brien  1:13 

Great. Thanks so much, Scott. You know, I have worked for dairy farmers for a little over 20 years, and in that time, had the opportunity to work across the business, in strategic planning and consumer insights in the partnership area. Actually, I started my career with check off in communications and then in school marketing. So have a real understanding of the strategies of the Unified marketing plan, how we interact with the states and regions. And that, I believe, put me in a position where when the board made the decision two years ago to make me the CEO, they knew that I had the background to build from there. And that’s really what we’ve done these last two years is step back, modernize the strategies, modernize and focus the strategies to get more done. build strength across the entire checkoff system, not just national and local. But importantly, the other companies that farmers invest in, are now integrated into our strategic work. And then look at the staff and make sure there’s not duplication across people have clarity in roles, who’s doing what, and we are driving ahead, to really a checkoff. 2.0 that’s going to deliver even more. Thanks

Unknown Speaker  2:34 

for Marilyn, how about you? Yeah, Duane, and

Marilyn Hershey  2:36 

I have a dairy farm about an hour west of Philadelphia, we milk about 900 cows, and it sits about 40 minutes north of the Chesapeake Bay. So in a very heavy consumer centric area to have a dairy farm. And, you know, I’ve been on the promotion board for the last 10 years and have served as chair for the last five.

Scott Wallin  2:57 

Well, thank you for your introductions. And I’m Scott Wald, Vice President of media relations for dairy management Incorporated. Both you’re ready for some questions now. Sure. So 2023 is almost done. What start with the bar when you look back at the year, that was what are some highlights that kind of jumped to the top for you,

Barb O’Brien  3:13 

you know, it. It’s been a great year from dairy Research and Promotion standpoint, though. I want to start out by saying, I certainly know it has not been an easy year for farmers, the economics, the inputs, plenty of challenges for sure. And that really just motivated us as a staff to want to do more. And that’s really where the year has been focused is in narrowing our our strategies in a way that we know we can drive greater trust and sales. I’ve worked across the staff against a common set of priorities, sustainability, the people of checkoff, innovation, reputation and exports, and have really armed our plan with a set of common outcomes. And we’re all pulling in the same boat against those, those shared outcomes. couple of highlights I would point to the investment in science has become as important as ever, particularly in discovery science, as we’re really laying the ground for innovation and growth over the next five to 10 years. And then the food service partnerships, you know, a long time strategy that has worked well in terms of incremental short term sales year over year growth somewhere in the neighborhood of three to 5% as we work with some of these big catalytic players, to make sure we’re getting milk, cheese, yogurt and powders into the diets of people across the world,

Scott Wallin  4:44 

Maryland from a farmer lens what what are some of the highlights from this past year that have been most meaningful for for dairy farmers,

Marilyn Hershey  4:51 

you know, for for farmers, we always look for efficiencies on our farms, ways that we can do things better. And you know, I would say that’s something we did check off this year we looked at each program, how can we run this program more efficiently? How can how can this work stronger for farmers? So yeah, I look at checkoff doing the same thing that we do on our farms each year. Barbie, you

Barb O’Brien  5:17 

know, what can I just chime in? Because I think Marilyn makes such a good point. And that is that we’re not taking the programs for granted. Long. You know, I talk about strategic patience, but tactical urgency. So to your point, Maryland, stepping back and really ensuring that it’s the right program, the right strategies, the right staff, executing those programs to ensure the relevance and impact today. So thank you. I just was compelled by Maryland’s remarks.

Scott Wallin  5:46 

You know, you touched on earlier partnerships. And that’s a tried and true checkoff strategy, you know, bringing other people’s resources to the table and we see it in so many ways, not just in food service, but can you talk a little bit overall about the value of partners and, and how they keep delivering results for farmers?

Barb O’Brien  6:02 

Absolutely. And and, you know, my hope is that farmers when they see new milkshake or a new McFlurry at McDonald’s, that they know that’s their new product, what you know, and they see that come through television advertising. All of those longtime partners are developing the new menu and product products. Make grimace, a big shake, a big shake hit on social this year noumic flurries as I said, we’ve got new products with Domino’s, the cheesy tots, the new cheesy breads, all of which are driving incremental year over year. And then there’s chicken and cheese, a new area where we’re looking at a lot of upside growth through those partnerships. A scrappy or smaller, scrappier partner in raising canes. But the upside potential of that over time is going to be enormous as we look at cheese and chicken and cheese sandwiches, sauces, sides and beverages so very excited about that new work. And

Scott Wallin  7:11 

Marilyn know, as a dairy farmer, you want to see your checkoff dollars maximize. Can you talk about the value of working with him through others?

Marilyn Hershey  7:18 

You know? Absolutely. And I think when I look, you know, Barbara mentioned, a lot of the domestic partners, we know as farmers, our future depends on a very strong domestic but also a strong export industry. And I would say that’s something we’ve focused on more in the past five years than we did 510 years ago, is looking across our borders and looking at the outside investments, and the outside partners we can have globally, knowing that some of our product 20, nearly 20% of our product, leaves leaves this country. And so we have to look at partnerships that we can have globally as well.

Barb O’Brien  7:59 

You know, Maryland. US DEC is the primary engine on that international growth. And what an amazing job they do day in and day out seeing that firsthand, as you and I both have. But increasingly, we’re looking at how following some of the domestic food service partners into international can complement the work that they do every day. So I’m really proud of how the US Dec and the DMI teams and the state and regional teams are all working together to optimize that export strategy. Absolutely. You

Scott Wallin  8:35 

know, Bob, you and I have worked for farmers for so long. We understand not everything goes as planned on the farm. I think the same can be said too about the Dairy Checkoff strategy. Sometimes things don’t work out the way we had hoped they would. What do we do as a staff and as a team when something may not work? How do we how do we pick up and adjust? by

Barb O’Brien  8:54 

Scott, such a good question and especially in today’s environment, although daily life may feel normal for some of us, you know, we are still living in a post pandemic experience that food service is still recovering schools are trying to figure out how to operationalize themselves. So there are absolutely hiccups every day. You know, I mentioned the raising canes relationship. It’s new as of last year, and the plan was for menu and product development growth. I would say a learning. First of all, there’s a learning curve. Second of all, our goals have been slightly misses skewed or misaligned. They are focused right now on growing infrastructure expanding their footprint in the United States, which has helped grow sort of their core dairy sales. They use milk in their batter they use cheese. So we have seen some growth, but not at the level we expect Did our focus is on menu development. So it’s a misalignment, we’re disappointed. We’ve sat his teams together and have a 2024 plan and feel very bullish about the growth potential. You know, another example is Mayo Clinic, another learning curve, right? It’s a five year partnership, or collaboration. And, boy, there had been some fantastic initial opportunities, new piece of science that’s that’s been approved in the cardiovascular area, and also extensive education of their medical community and their consumer community. Our staff has been up there doing webinars and and training sessions and consumer podcasts, letting them know the Dairy Science and coming through that venue has been, has been fantastic. But there’s been some surprises, we thought in this first year, we’d have more than one study coming through the request for proposal process didn’t happen. So again, little disappointed that we couldn’t have a higher uptake of new projects with them. We’re in round two, round two RFPs that were seven proposals, and we’re feeling good about what will be approved and implemented in 2024. So you just you keep moving on.

Scott Wallin  11:28 

So it’s exciting. And of course, we use the farming analogy, when things don’t always go as planned. You’ve had a front row seat alone with your fellow board members to the strategy when you see things that don’t necessarily work. How do you and the rest of the farmers react to that?

Marilyn Hershey  11:41 

I think we’ve react to it the same way we do on our farms. You know, we all know that every day is going to throw a different curveball. And so yeah, we have we have things that happen in checkoff just like we do our farms. But, you know, on our dairy farms, the cows need to be milked. No matter if we have a labor problem. If we have a mech, mechanical problem. Our cows have to be milked and I would say you know, a checkoff, we still have milk that we need to, you know, we don’t actually move the milk. But we’re building the trust and sales and that has to happen each and every day.

Scott Wallin  12:20 

You know, we’re far I think one of the most exciting things for us are the opportunities. I mean, we are in so many different places as a Dairy Checkoff. And we almost have this blank slate ahead of us where we’re going. I mean, when when you kind of look ahead to the opportunities for us what kind of rises to the top.

Barb O’Brien  12:35 

Oh, Scott, it’s, it is so exciting. And I would say it starts with science. The farmers have really allowed us to double down in nutrition science in particular, which is so core to who we are. And in the discovery areas. We’ve had this amazing project with UC Davis, I think, you know, first digitizing the science, so taking the universe of published science in dairy nutrition, and putting AI and machine learning behind it, so it’s much more accessible and usable. So that’s been step number one, there’s a second project that is a milk Milk discovery project where we’re looking at the macro ingredients, the micro ingredients, and then the molecular components that make up this incredible product that comes out of the cow. And discovering a whole new set of potential applications. We’ve got the science, we’ve also done some great consumer work, a new study that’s looking at health and wellness needs for people. When you start to look at future conditions, where dairy can play dairy products, both in their current form, and in new forms we can’t even imagine yet, there is something like a $350 billion opportunity for dairy to step into new spaces. Just satisfy people’s needs for for solutions. Food is medicine, you hear everybody talking about it. Food is medicine or prescription prescriptive solutions. This is our opportunity to step in and play in that space. So very excited that the research is all teed up. And we’re really going to start to drive it in 2024 and 2025. But

Scott Wallin  14:27 

science has got to get farmers excited too, because there’s something else beyond the science that maybe you see such opportunity for,

Marilyn Hershey  14:34 

you know, I I look at the protein craze that’s going on right now, in this country, everybody, you know, they’re focused on health and fitness and wellness. And so I look at that and understanding that we have a quality protein that is that goes far and above some of these alternative proteins and it’s just important that we continue to look for new ways. Consumers want their proteins in new ways. They want it in new products, they want it unique. And they’re going to look for those unique ways that they can get the protein. And so I think it’s important that we look outside the box. We don’t we don’t focus on status quo. We don’t just keep doing things the way we’ve been doing for years. And look for those unique ways. Because ingredients is another area. I think that when we look at the future ingredients, it’s going to be a way that people get their dairy. And so how do we play in that space?

Barb O’Brien  15:38 

Putting dairy in whole new forms? Right? Absolutely.

Scott Wallin  15:42 

You know, it’s hard to believe the year is almost done. And we’ve been talking about 2024 for some time already. When you look to the new year, what are what are you most excited about?

Barb O’Brien  15:52 

You know, I mentioned, you know, the new innovation opportunities, not just in health and wellness, but in food service and beverages. The other area that I’m excited about is our work with youth. The farmers this past year, again, looking at sort of a changed world, a post pandemic school building a whole new generation of kids who are now going through schools, whole different set of needs and expectations. The farmers encouraged us to step back and really look at youth comprehensively, both in schools and out of schools. So we’ve got a new strategy. In Play. We’re evolving our longtime program Fuel Up to Play 60 to a dedicated fuel up platform that is really about being food forward, being dairy food forward and ensuring that children, teens understand the critical role that dairy can play as a protein option, whether that’s for sports, or for energy, or for muscle development, or for mental wellness, dairy can play in so many ways in their lives. We’re looking at a broader base of partners. After 15 years, we have ended the partnership with the National Football League. That said they wanted to stay at the table. So we still have a no cost Memorandum of Understanding where we’re going to work together along with other sports entities, farming and youth organizations, health and wellness organizations. So I am very excited about sort of coming back into the market, approaching youth in a much more comprehensive way and showing them that dairy is such a critical part of their day to day to day lives.

Scott Wallin  17:40 

You know, Marilyn, when we talk about opportunity, you have been so involved with the US dairy Export Council, and there’s a world of opportunity out there for us. You’ve been on mission shifts, you’re seeing what’s happening, the impact we’re making with global sales. What are some thoughts you have in the global marketplace for us dairy,

Marilyn Hershey  17:56 

there’s a there’s a big place for us in that global marketplace. And I think, you know, the CEO, Krista harden has done a wonderful job. The CEO of us Dec crystal harden has done a wonderful job with relationships across the globe, and nurturing those relationships and helping helping us develop that relationship in that country. And then also looking at how is it that they want dairy? You know, other countries, Southeast Asia has a different flavor profile than we do in the in this country? How do they want dairy? And how do they use dairy? And how do they need it? Because, you know, that’s one thing. We’re seeing all these other countries, they need protein, they need dairy, they need the nutrition, the nutritional value that dairy brings. But we also have to offer it in ways that they want to consume it. And so that’s that’s an area whether it’s an ingredients, we see, we see companies in the United States investing in in, in global platforms. So it’s very important that we have a presence there and just continually have our eyes on that.

Barb O’Brien  19:09 

You know, Marilyn, it’s been it was so neat to see the US deck team in action. And one of the things that struck me Scott was as they go into a new market, whether it’s a developed relationship or an emerging one, they are not going in to take over the domestic or the local dairy business. They’re going in as partners to help grow the whole pie. And we were in Mexico recently where we definitely saw the potential of their domestic business to grow but also for us dairy to continue to thrive in that environment and in complementing or supplementing what they’re doing locally. So it really it’s a mindset and a strategy that’s very different.

Scott Wallin  19:56 

So many exciting opportunities for sure. So as we wrap this up, what’s one thing you would want farmers to most know about the Dairy Checkoff?

Barb O’Brien  20:07 

You know, I think for me, it’s if not checkoff, who, who would be doing the fundamental science to ensure, you know, we’re continuing to lift up the entire category, whether that’s a nutrition in new r&d product opportunities, or in the on the environmental side, if not check off who would be digging deep to understand and invest in, in what’s next with consumers. And not just millennials, who we spend a lot of time talking about, but Generation Z and the generation after that, and where the boomers are going, as Maryland said, there are so many new product opportunities, but it’s not a one size fits all. If it wasn’t the checkoff who would be spending the time at retail serving as category captain or with food service building these new menu opportunities. You know, we’ve seen the pressure on farmers, we’ve seen the pressure on the category from competition, if not check off who would be sort of fundamentally representing the category in a way that builds trust and drive sales over the long term.

Scott Wallin  21:23 

And certainly you speak with your farming peers across the country frequently what’s the one thing you most want them to understand about our team?

Marilyn Hershey  21:32 

The checkoff team is focused, focused on new ways to make sure that that dairy is trusted. Dairy is important. Dairy is valued in the eyes of the consumer. And influencers is one way, you know that we look how advertising has evolved. Look at how strong and how strong the impact is that influencers have on people buying, buying any kind of product. And you look at that. And it’s just it’s an area that, you know, the checkoff saw that and they they shifted their focus and started working with influencers. And we look at Mr. Beast and that influence that he has had on on the globe, really, everybody knows Mr. Beats, we were in Mexico and talking to the farmers and their kids played the Minecraft or whatever game it is that Mr. Beast plays. I don’t understand that. But he is understood by a lot of the next generation. And so it’s it’s finding that unique influencer. And I would say to that the checkoff is has a very strong foundation. And so what has been built over the over the years, as Barb said, We can’t lose that. And if we lose that, we’re going to have to start from ground zero. And it’s going to take decades to build back to that trust and sales that we have today.

Barb O’Brien  23:01 

You know, Marilyn, you talk about the role of influencers. The reality is, is as we’ve looked to others, other people’s voices, whether that’s food service partners or athletes or or chefs, we’re probably where we are spending less dollar direct to consumer ourselves. So the farmer you know, I just before I worry that the farmer doesn’t see you know, the big campaign from DMI or or the Dairy Checkoff in and of itself. They’re seeing the messaging through other people’s investment, where they are, they’re investing far more than we ever could. In advertising. If you think about it, some of our food service partners are spending billions of dollars. But it’s a shift, we’re asking farmers to sort of take that shift with us to look to third parties, who we think can bring more visibility, more credibility, and ultimately more more sales to the message.

Scott Wallin  24:05 

We covered a lot, a lot of 2023 but a lot of exciting stuff for 2024 as well. And I really appreciate you taking time today to kind of walk through the highlights and in the future with me. For dairy farmers want to hear more about various issues affecting the dairy community. Subscribe to this podcast on your favorite platform, including Stitcher, Spotify and iTunes. And be sure to visit us dairy.com For farmers. Until next time, thank you so much

Transcribed by https://otter.ai