Prepping for a CPG Relationship
More dairy operations are attempting to take volatility out of the milk check by either developing their own branded dairy product or partnering with a consumer packaged goods (CPG) company. There are a number of success stories about dairy producers that have been successful, but it takes work outside of regular dairy management to be successful.
“If you are going to sell directly to consumers or enter into a relationship with a CPG you have to have the ability to build your own brand,” says Ryan Toney, strategic account manager with Cargill. His comments came during a session held at the 2016 MILK Business Conference.
“For a lot of these relationships you have to be able to demonstrate a willingness to change your practices.” Some of those changes may go against standard management, such as eliminating a practice or product that consumers may not be comfortable with.
If changes are needed to your operation or management style a CPG partner will want to feel confident that you are capable of delivering a consistent supply. You will need to be frank with yourself as well to know that you can sustain the relationship. “You have to be able to answer if your leadership team has the ability to facilitate and maintain the necessary changes consistently over time,” Toney says.
Any relationship with a consumer-facing company will require a heightened level of transparency. “You have to have the ability and comfort level of talking about how you run your operation, how you treat your cows, full transparency on your story,” says Toney.
Even with your brand story in order, Toney says finding the right relationship with a CPG can be difficult. “Despite what people may think, opportunities to partner with CPG companies aren’t raining down from the sky,” he says. “That’s where marketing and promoting your brand story is going to help you out.”