July 22, 2019

These Three Disruptors Are Changing The Dairy Industry

 |  By: Mike Opperman

When change happens, we can either embrace it or resist it. Those who are able to evaluate and be receptive to change tend to evolve and grow their business over time. The change resistors tend to stay the same and watch from the sidelines as the industry passes them by.

There are disruptors in the dairy industry that cause change to happen. Tim Taylor, CEO of Valley Agricultural Software (VAS), outlined three of these disruptors at the Connect Summit held in June. 

The first disruptor is the digital transformation that is occurring in the dairy industry.

“[Dairy producers] are aware of it, you’re a part of it, but it’s accelerating,” Taylor said. “Either you need to feel comfortable with it, or someone is going to conquer you with it.”

In order to be comfortable with technology you have to look at it strategically and come up with your own technology playbook, Taylor said. He challenges dairy producers to think of themselves not as a dairy producer, but as the owner of a technology company that milks cows. 

“That’s the mentality of what we have to have strategically in the digital transformation age,” Taylor said.
Part of building your digital playbook will include pulling together your suppliers to collaborate on solutions for your dairy. Think of it as building a partnership between your trusted suppliers and you’re the chairman of the board, Taylor said. Those suppliers, even though they may compete against each other, can help you build your technology playbook. 
Taylor calls it coopetition, where companies that might compete in the same space cooperate with each other to find common solutions. 

“Your suppliers need to measure themselves by the success of your dairy and the success of the industry, not how much product they sell,” Taylor said. 

Another key part of your technology playbook involves connecting people together on your dairy so they have a more clear understanding of the business. 

“There are a lot of people working on a dairy and the dairy is only as good as how connected the workers and leaders are with success factors,” Taylor said. “My conviction has always been the single most important thing you do as a leader is that you connect your employees with the mission of your enterprise so that they know why they wanted to work for you.”

Sustainability is a second disruptor. Dairy farmers have a great sustainability story to tell, Taylor said, but they need to be able to tell it in a more compelling way. 

“Number one, sustainability efforts need to be measurable,” he said. Producers need to be able to measure what goes on and off the dairy, their carbon footprint, document animal welfare efforts, and other actions that lead to sustainability. 
When actions are measurable, then producers can show improvement. And when transparency is added in, the measurements and documented improvements all tell a compelling story. 

The third disruptor comes from consumers. While consumers have been moving away from dairy products, Taylor said this is a trend we can control. He alludes to the issue with butter which, when he was a kid, “wasn’t cool,” he said. Now as consumers understand the benefits of eating a high fat diet, butter has come back into vogue. Like butter, Taylor feels consumers will come back around to preferring dairy products over imitation. 

In addition, consumers are the point where everything comes together. Producers can tell a compelling sustainability story, and the industry can use digital technology to engage with consumers in meaningful ways. 

“We need to take ownership of the digital transformation and consumer preferences because that’s where the intersection takes place,” Taylor said. “And so my feeling is that we can have a tremendous impact.”

Tim Taylor will be part of a CEO panel that focuses on disruption at the MILK Business Conference. For more information and to register for the conference, click here.