Is Dairy Really “Today’s Greatest Business Opportunity”?

Owen RobertsProclaiming dairy, or any sector for that matter, “today’s greatest business opportunity,” is bold indeed. But that was the way dairy was positioned at a huge animal feed symposium that concluded last week at Alltech’s world headquarters in Lexington, Kentucky.

Using milk as an example, participants at various sessions at the symposium heard how dairy has mostly gone unbranded. One presenter showed a graphic of a few unassuming jugs of milk, the kind you’d find in the dairy section of any grocery store, juxtaposed against an image of the new Fairlife brand of milk.

By some marketing standards, Fairlife’s packaging isn’t exactly exotic. But compared to much of dairy, it’s dazzling. And no wonder – Fairlife is marketed by Coke.

But the insinuation at the symposium was clear: consumers undervalue dairy as a nutrition source, and a large part of that is due to its conservative packaging, marketing and image.

Milk, they say, doesn’t have stopping power at the grocery store where buying decisions are significantly influenced. Despite successes such as the wear-a-milk-moustache campaign, it seems product differentiation and value-added products are in their infancy.

Greek yogurt, for example, took the sector by storm mainly by capitalizing on dairy’s natural advantage — that is, tasting good and being good for you. Alltech thinks there are other big scores like that waiting for dairy to spread its wings, prompting it to declare the sector such a great business opportunity.

It was grand prelude for an event happening in Ontario this Thursday, when the $25-million dairy research portion of the Livestock Research Innovation Centre opens at the Elora Research Station. The facility will be open to the public from 11 a.m. to 4 p.m.

It’s quite the project, to say the least. The facility will house 240 free-stall dairy cows in eight groups for research trials, and 24 cows in tie-stalls for projects where more research instrumentation and cow monitoring is required. A rotary parlour, as well as a voluntary milking robot, will simulate the varying requirements of dairy farmers.

As well, facilities have been built for preparing laboratory samples, and space for equipment for further milk processing on-site.

One thing you won’t see at the opening is cows. They’ll be brought in after the action dies down, and research actually begins later this summer.

To attend the Elora open house, register here.

The University of Guelph’s founding colleges have led the drive toward best dairy production practices for more than 100 years. Along the way there have been many breakthroughs, including the development of omega-3 enriched milk (marketed as Dairy Oh!), technology to identify cows with high natural immunity to disease, and dozens of advances in feed composition and animal welfare.

The province believes in the future of dairy in Ontario. It’s given $20 million to this research facility, with the remainder coming from the Dairy Farmers of Ontario and the federal government. In fact, this is the first infrastructure initiative of a new partnership between the Agricultural Research Institute of Ontario, the Ontario Ministry of Agriculture, Food and Rural Affairs, the University of Guelph and the Livestock Research Innovation Corporation. It’s an encouraging sign for producers.

Rich Moccia, the university’s associate vice-president for strategic partnerships, says the facility “puts us ahead of the curve,” and that’s where dairy producers here need to be. Competition is ramping up all over, including China, where Alltech, Nestlé and the dairy industry worked with a couple of U.S. universities and other major industry players to develop their own world-class dairy research and training facility.

Ontario’s new research facility is distinguished significantly by farmer involvement. Farmers have invested significantly in the Livestock Research Innovation Centre operation. The research that comes out of it will be sensitive to the needs of all — starting with livestock themselves, as well as industry and consumers.

 

Owen Roberts

Owen Roberts directs research communications and teaches at the University of Guelph, and is president of the International Federation of Agricultural Journalists. You can find him on Twitter as @theurbancowboy

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One Comment

Dan

A good $25 million commercial idea does not need taxpayer assistance. Other kinds of $25 million ideas apparently need $20 million from the provincial government and $3 million from the Feds. If private interests only cover 8% of the cost, are they in a position to really get ahead of the “curve”?

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