Northeast Dairy Magazine | Q2 2022 by NortheastDairyMag

2022 DAIRY TRENDS Indulging in Ice Cream, Avoiding Sugar and Staying Healthy Headline What’s Happening

SOMETHING TO CONSIDER

The Impact of the War in Ukraine

Second Quarter 2022

UPDATE ON THE ISSUES

Midterm Elections on the Horizon

HUMAN RESOURCES

Understanding the Gen Z Workforce

MEMBER NEWS

Summer Association Events

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brothers working for us today? Tougas once did, quality units, craftsmanship, personalized tanks and great after sales service. The Tremblay family wants you to discover our region of origin. Did you know Saint-Jean-sur-Richelieu is a military town settled by the French in 1665, later invaded by the British – at fort St-Jean we even stopped the American invasion. The city was an important port where commercial trade between the USA and Canada was vital for the rest of Canada. St-Johns it was once called along time ago, The Singer company established their manufacturing company in 1906, Saint-Jean. From the Hudson River to Lake Champlain and up the Richelieu River we still stand, a military city – and the home of many transportation companies because of its strategic location.

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contents Second Quarter 2022 • Volume 5, No. 2

FRONT DESK 04

FEATURES

PRESIDENT’S MESSAGE, NDFA

2022 DAIRY TRENDS

Nutritional Catchphrases Are Trending BY DANIEL LAUSCH

PRESIDENT’S MESSAGE, NDSA

Directional Pricing Changing Business BY BILL ELLIOTT

EXECUTIVE VP MESSAGE Dairy Industry Remains Resilient BY OZZIE ORSILLO

LEGISLATIVE REPORT Legislatures Spend Universally BY PAUL HARVEY

MIDTERMS 2022 Where Are We Now? BY PAUL HARVEY

ECONOMIC OUTLOOK

Global Prices, Food Inflation Not Expected to Slow BY GARY LATTA

I ndulging in Ice Cream, Avoiding Sugar, Staying Healthy and Exploring Flavors

BY CAROLINE K. REFF

30 32 33 35

Making Milk Modern

BY GARY LATTA

ASK A BOARD MEMBER

How Is Inflation Impacting the Dairy Industry?

olorful Foods Must C Be Natural

SDA Announces Actions U on Nutrion Security

ho Knew? Milk Has W Four New Nutrients

Celebrate All Summer Long

More Dairy Trends for 2022 2022 Flavor of the Year FDA Yogurt Standard Stayed

SOMETHING TO CONSIDER ar Will Impact Supply, Costs W Around the World

TOOLS OF THE TRADE 50

2022 Insurance Market Trend Report

BY LISA BOLDUC

Employees Want to Work for Companies That Reflect Their Values

What Would a Data Breach Cost You?

BY PATRICK ROST, CISSP, CMMC-AB RP Editor’s Note on Photography Images used in this issue of Northeast Dairy were submitted by various sources and some were taken pre-pandemic, which is why many of the subjects are not wearing masks or other protective gear in the photos.

2 • Northeast Dairy Foods Association, Inc.

he Gen Z Workforce: Understanding Them Might Ease Labor T Shortage

BY CAROLINE K. REFF

OSHA: What to Know About Worker Rights and Protection

contents Second Quarter 2022 • Volume 5, No. 2

NORTHEAST DAIRY FOODS ASSOCIATION, INC. EXECUTIVE VICE PRESIDENT

James “Ozzie” Orsillo PRESIDENT

Daniel Lausch Lactalis American Group

DIRECTOR OF REGULATORY AFFAIRS

Paul Harvey

VICE PRESIDENT

Kevin Ellis Cayuga Milk Ingredients

BUSINESS OPERATIONS MANAGER

Leanne Ziemba

TREASURER

Randi Muzumdar HP Hood LLC

SECRETARY

Ryan Elliott Byrne Dairy

NORTHEAST DAIRY SUPPLIERS ASSOCIATION, INC. MEMBER NEWS 40

MEMBER PROFILE Wade’s Dairy Serving Customers for 129 Years

BY COURTNEY KLESS

MEMBER PROFILE Lactalis Is Growing and “Here to Stay”

BY COURTNEY KLESS

L actalis Recognized at World Cheese Contest

Member and Industry News

PRESIDENT

Bill Elliott Northeast Great Dane

VICE PRESIDENT

Melissa Fryer Alfa Laval

TREASURER

Ryan Osterhout KCO Resource Management

SECRETARY

Bruce Alling Double H Plastics, Inc.

NORTHEAST DAIRY MAGAZINE TEAM EXECUTIVE EDITOR

James “Ozzie” Orsillo oo@nedairyfoods.org

SALES

Anne DeSantis anned@nedairymedia.com

PUBLISHER/DIRECTOR OF SALES

Lesli Mitchell lmitchell@nedairymedia.com

EDITOR

Welcome New Members

Caroline K. Reff creff@nedairymedia.com

Lisa Bolduc, Courtney Kless, Patrick Rost

Leanne’s Kitchen

CONTENT DIRECTOR

PRODUCED BY

Advertiser’s Index

GRAPHIC DESIGNER

Editorial correspondence should be directed to editor@nedairymedia.com. Advertising correspondence and materials should be sent to billbrod@nedairymedia.com.

Bill Brod billbrod@nedairymedia.com

Steve Guglielmo steveg@nedairymedia.com Robin Barnes COVER DESIGN

CONTRIBUTORS

Northeast Dairy Media

POSTMASTER: Send address changes to lz@nedairyfoods.org.

Karley Harmon

STAY CONNECTED

www.nedairyfoods.org www.neastda.org 427 S. MAIN ST, NORTH SYRACUSE, N.Y. 13212 315-452-MILK (6455)

An official magazine of the Northeast Dairy Foods Association, Inc., a nonprofit organization. This publication carries authoritative notices and articles in regard to the activities and interests of the associations. In all other respects, neither the association nor the producer of the publication, Northeast Dairy Media, is responsible for the contents thereof or the opinions of the contributors. The entire contents are © 2022 by Northeast Dairy Media. Nothing may be reproduced in whole or in part without written permission of the publisher. The association and Northeast Dairy Media reserve the right to print portions or all of any correspondence mailed to the editors without liability on its part and no such correspondence will be returned. Visit Northeast Dairy Foods Association online at nedairyfoods.org for current information on association programs and services, or call the association at 315-452-MILK (6455). Questions and comments may also be sent to the association at oo@nedairyfoods.org.

NED Magazine | Second Quarter 2022 • 3

Front Desk

Overload of Nutritional Catchphrases Is Trending, Too. BY DANIEL LAUSCH

PRESIDENT, NORTHEAST DAIRY FOODS ASSOCIATION, INC.

ello and welcome to Northeast Dairy magazine. This issue is focused on dairy trends. To that end, I’d like to talk about some recent industry trends I’ve had on my mind. As you walk down the aisles of your neighborhood grocery store, it is not difficult to see the recent changes to the packaging of many product brands. Packages are getting smaller and changing sizes and shapes (like adding a curve to a bottle that is the same height and width) but now holds 28 ounces where the “old” format got you 32 ounces. The purpose of these changes is to hit a price point while mitigating the effect of overall price increases. In addition to the change in packaging, I’ve noticed other changes to labels and branding, as well. More and more, you’ll notice claims like “Lactose Free,” “Organic Certified,” “Gluten Free,” “GMO Free,” “High Protein” and “Zero Landfill,” just to name a few. Increasingly, consumers are reading labels not only to see what is in the product but also to see what is not in the product. To address that, brands are more frequently highlighting the name of ingredients on the labels 4 • Northeast Dairy Foods Association, Inc.

and then making an “ingredient free” claim, which, in some cases, is leading to putting as many nutritional catch phrases on the product as possible. Industry trends will see more automation happening in our plants and warehouses, all with the goal of producing the same volume of product with less labor. One example is the robotic palletizer, which you can use instead of hand stacking and shrink wrapping a finished pallet. The robotic palletizer works uniformly on all shifts and holiday weekends and is not a scheduling obstacle, plus its preventative maintenance can be scheduled during weekdays. The current general labor shortage will only accelerate investment in labor-saving automation. Sustainability will be a big issue moving forward, too. Many consumers make their choices based on which brands they perceive to be the most sustainable, environmentally responsible or most involved with their community, even if those products are slightly more expensive. The dairy industry is moving toward ways of measuring how sustainable our companies’ practices are, using their own company or industry standards. Companies will develop their own sustainability targets, and investment in renewable energy will only become more important. Recycling

alone involves many questions. What percentage of post-consumer recycled material is in the package a consumer is considering purchasing, and can that container be recycled? What about our renewable energy percentages? What are they powered or sourced by? Another concern is all of the items that fall under the umbrella of our “carbon footprint” and corporate social responsibility. Are we actually reducing the carbon being used or just off-setting it? We need to think about future transportation concerns, as well. For example, how long will it take until we are able to move milk and produce from our farms to processing plants with electric or other environmentally friendly vehicles? How long will it then take our dairy products to get from the manufacturing plants to the buyers’ warehouses or from the warehouses to the grocery stores? When will diesel power units be replaced by more sustainable alternatives? We will need to think about transforming each leg of our transportation operations as we move forward. There are many questions to think about here, and none of us have all the answers. We all need to attempt to understand the industry trends and how to adapt our business models to stay in business in this post-COVID world.

Front Desk

Inflation, Directional Pricing Are Changing the Way We Do Business BY BILL ELLIOTT

PRESIDENT, NORTHEAST DAIRY FOOD SUPPLIERS ASSOCIATION, INC.

recently spent some time in Florida hitting the links, but, driving home up the east coast, there was no avoiding the high price of gasoline along the way. Prices at the pump are probably one of the biggest reminders to today’s consumers that inflation is here and isn’t going anywhere anytime soon. But, like everyone else, I filled the tank and shook my head in disbelief. What choice did I have? The other place I know that consumers are really feeling the squeeze besides restaurants is at the grocery store. I admit, being familiar with the average cost, I often used to just put the things I needed into my shopping cart without thinking too much about it. But, nowadays, I find myself giving some items a second thought. Do I really need that? Everyone is feeling the pinch. And, of course, the dairy industry has not escaped it either, although, luckily, the majority of people still say they are willing to pay a bit more for the nutrition and great taste that comes from the dairy case. Still, the price of dairy is the highest it’s been in eight years! Costs are skyrocketing from farm to table, as the industry has to deal with everything from the high cost of labor, energy, packaging materials, transportation, supplies that make the farms or manufacturing plants run, and more, not to mention the continuing supply chain

problems and reduced manufacturing capacities that are driving up costs even further and don’t seem to be slowing down anytime soon Much of my career has been in sales— I even started as a paperboy at a very early age — and it got me thinking about how the strategies of making a sale have changed in times like these. One thing that stands out is that many companies have adopted directional pricing, which is a hard concept to swallow whether you’re a customer or the salesperson. How do we comprehend a system where you quote your customers a price with the caveat that it may increase just weeks or months before delivery? Let me tell you from experience, the last thing a salesperson wants to do is go back to a loyal customer and inform them the agreed upon price has increased (because, honestly, how often does it decrease in these circumstances?). Sure, customers can cancel, but, usually, they are in dire need for whatever they’ve ordered and have no choice but to pay the higher price. It can strain relationships and customer loyalty that have taken years to nurture. Directional pricing has currently changed the sales dynamic and longtime accepted sales practices. This is, of course, not exclusive to the dairy industry. Every industry is

experiencing much of the same. Some may even argue that directional pricing may, in some cases, be the result of profiteering and companies taking advantage of customers during these difficult times... time will tell! Unfortunately, people have become numb to it on both the sales and customer side because options are, in most cases, very limited. Getting anything from a new kitchen appliance to a new vehicle takes months – or much longer — and price tags seem more like an estimate than a contract. In the end, all companies are laser focused on providing the best quality product at the best possible cost accompanied by unparalleled customer service but, most important, is to honor their commitments to the customer. Let’s hope this “trend” is one that is in the rearview mirror sooner rather than later. We all need to be supportive of each other and always remain positive and upbeat! In other news, we have some incredible social gatherings scheduled for this year that should not be missed! I look forward to seeing you at our various NDSA and NDFA events this spring and summer. Mark your calendars today for some networking and some fun with your Northeast Dairy colleagues in the months ahead. NED Magazine | Second Quarter 2022 • 5

Front Desk

Despite Tough Times, the Dairy Industry Remains Resilient BY OZZIE ORSILLO

EXECUTIVE VICE PRESIDENT, NORTHEAST DAIRY FOODS ASSOCIATION, INC.

ello members, and thank you for taking the time to read through this issue of Northeast Dairy magazine. This issue if full of candid insight from our directors, members and industry professionals covering our theme topics: trends and inflation. Over the past two years, market trends have been all over the map, and, if plotted on an Excel graph, they would follow the peaks and valleys of a jack-olantern smile with no way to forecast the coming years or even months. What a journey it has been! As for inflation, this calendar year, thus far, has been just like the white hot 1980s without the big hair, shoulder pads and parachute pants. It was the mid-1980s when my wife and I bought our first house, and our mortgage rate at that time was a staggering 16%! Then, in the later years of that decade and through the 1990s, the dot-com bubble happened. Mortgage rates came way down. Of course, we refinanced with every significant rate drop, and obscure company stocks were suddenly on Wall Street’s Top 10 list of highest performers. Man, I miss the big hair. Since then, conditions have been stable. Companies and individuals alike had the ability to predict approaching economic changes and adjust income and expenses to soften those blips along the way. Yes, of course there were downturns periodically, but all were short-lived and survivable. However, with current global unrest, economic pressures and supply chain issues driven by so many factors, things are shaping up to form the perfect storm (a very good movie by the way), but with every storm comes calm seas. So, with that in mind, there will be fallout in some sectors from this perfect storm, but our dairy industry is thriving. Our association members are a resilient group. Dairy foods processors, manufacturers and those companies providing goods and services to the dairy industry all play a vital role in 6 • Northeast Dairy Foods Association, Inc.

food supply to the citizens of the United States and globally. In tough economic times, people always look to dairy products for the value-to-nutrition factor, and, as the consumer population continues to look for foods that are nutritious, minimally processed, locally derived, sustainable and affordable, dairy checks all the boxes. Many of our members who process dairy foods, or the products and services needed to make and market those dairy foods, are experiencing a period of marked performance and growth. We see our membership expanding their facilities, retooling others and greenfield expansion projects. So, if you ask me, the trend for dairy and dairy-aligned businesses is upwards and onwards to a very bright future. Inflation, on the other hand, will be with us for a while as input factors settle out over time. So, with that, we can expect the procurement of goods and services to be much more sensitive to the non-tangible components in a customer/vendor partnership. Although price is important with any purchase, other factors, such as assurances, built in redundancy and customer service, all will carry a heavier weight in the decision process, pushing suppliers to refine their business models in a manner that will address and serve the needs of their clients. On that note, let’s get into our networking events of 2022, where you can meet your customers and prospects and hear from industry leaders and law makers about all the great things related to dairy. Wednesday, July 13, 2022: The Bruce W. Krupke Memorial Golf Tournament and Clambake & Pig Roast in Syracuse, New York. Come spend the day with hundreds of folks in our wonderful dairy industry. Loads of fun, food and activities. Tickets can be purchased through our website, and we have secured a special room rate with the Double Tree Hotel at Carrier Circle in East Syracuse.

Front Desk Wednesday through Friday, August 17, 18, 19, 2022: Our annual Northeast Dairy Convention consisting of The New York State Cheese Manufacturers Association, the Pennsylvania Association of Milk Dealers, Northeast Dairy Suppliers Association and Northeast Dairy Foods Association. Speakers for this event are still being finalized, but our agenda is shaping up nicely. Driven by popular demand, we will hold our Speed Networking event again this year, but it will now take place on opening night, allowing our guests to make new contacts upon arrival. Additionally, our participating guests will have the opportunity to request who they desire to visit with. As always, there will be a golf tournament and a very special non-golf activity — but be prepared to release your creative mind for this fun activity. Registration is open through our website and sponsorship opportunities are available. We hope you enjoy this issue of Northeast Dairy magazine. If you have something special happening with your company or a milestone in your history that you would like to share, please let us know and we will include it in a future issue. We look forward to seeing you at our events and thank you for your support.

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NED Magazine | Second Quarter 2022 • 7

Legislative + Regulations Report

LEGISLATIVE UPATE

Flush with Cash, Legislatures Spend Universally BY PAUL HARVEY

ince the beginning of the year, legislatures throughout the Northeast and the nation have been flush with cash both from the federal government and higher-than-anticipated tax receipts, despite near historic levels of inflation. Funds leftover from the American Rescue Plan, passed in March 2021, assisted in funding the Infrastructure Investment and Jobs Plan of 2021, which designates funding for highway infrastructure, investments in clean energy transportation, expansion of broadband access, electric grid updates and access to clean water. States have been using funds from the American Rescue Plan to bolster healthcare systems that continue to deal with issues lingering from the COVID-19 pandemic, such as understaffing from burnout in the healthcare profession and preventing the spread of COVID-19 through mask distribution and at-home testing kits.

COVID DISAPPEARING?

However, states within the association are eager to move past COVID-19, even though certain areas are seeing a rise in cases and hospitalizations that are being fueled by two new, highly-contagious sub-variants of Omicron. Vaccines were made widely available at the end of March and beginning of April in 2021, but low vaccination rates and relaxing face-covering requirements allowed the rapid spread of the Delta variant, and later the Omicron variant, and kept cases and hospitalizations high throughout 2021. This year, cases have been trending 8 • Northeast Dairy Foods Association, Inc.

lower in part due to a higher vaccination rate nationwide and the availability of booster shots for recommended individuals. Vaccination trials for those 5-years-old and younger continue to move forward as health experts search for answers for this remaining age group. Elected and health officials continue to express cautious optimism simply due to the unpredictability of the virus and how it will impact communities, while also encouraging those who are fully vaccinated to receive a booster and continue to wear a mask in indoor settings.

ENVIRONMENTAL PROTECTION AND INVESTMENT

In addition to these measures, states have also introduced landmark legislation to mitigate the effects of climate change. Extended Producer Responsibility and eliminating intentionally added PFAS (polyfluoroalkyl substances) to products are the most popular types of legislation this session. Nearly every state, except for Maine, which passed its version in July 2021, and New Hampshire, has some version of EPR legislation introduced in their respective legislative bodies. While these pieces of legislation are certainly popular among environmental advocacy groups, business and agriculture industries have expressed skepticism at their abilities to comply in the timelines in the proposed legislation, typically within two to three years after the legislation is signed into law. These concerns stem from persisting supply chain issues and inflation levels that are already impacting consumer prices stemming from overall

Legislative + Regulations Report increased demand and ongoing trade sanctions imposed by the previous administration. Post-consumer content legislation, which aims to increase the amount of recycled content in new products, often accompanies or follows proposed EPR laws. Recyclable products are already required by federal law to contain a small percentage of recycled materials. States, like New Jersey and Maine, are looking to increase those requirements to 30% well before the end of the decade. As always, we will continue to monitor these types of legislation to ensure that the standards set are obtainable and effective.

FARM LABOR OVERTIME DECISION LOOMS

On Jan. 28, 2022, the New York Farm Labor Wage Board voted to lower the overtime threshold from a 60-hour work week to a 40-hour work week for agricultural laborers. This recommendation, however, has yet to be formally received by New York State Labor Commissioner Roberta Reardon. The estimated cost of overtime wages for agricultural workers was a major feature of the fiscal year 2022-2023 New York State budget process that received final approval on April 7. The budget calls for a Farm Employer Overtime Credit that will allow farmers to claim 118% of all overtime hours worked by their employees up to 60 hours. This tax credit, however, will only be issued on a semi-annual basis and not quarterly, as had been requested by agricultural organizations. Once the labor commissioner officially receives the Farm Labor Wage Board’s final recommendation, it is subject to a public comment period before the commissioner makes a decision.

INFLATION IS STILL HERE, AND JOB OPENINGS STILL ABOUND

Inflation continues to plague the marketplace, causing higher consumer prices punching in at a record 40-year high. Wages have struggled to keep up with the increasing costs of consumer goods, washing out any gains that wages may have made since the restarting of the economy almost a year ago. Low unemployment rolls are also affecting recovery, even as certain economic sectors attempt to lure job seekers with sign-on bonuses and other incentives. Experts have expressed that COVID-19 variants and sub-variants could be a cause for concern, especially in customer-facing industries like restaurants and retail. Workers in these positions, typically younger adults, have expressed frustration, particularly in low wages despite rising costs of living. As companies have started to rehire, job candidates have also had the ability to negotiate better benefits, such as higher pay, healthcare benefits and paid time off, while also considering multiple job offers. The ability

for job seekers to consider multiple job offers has left companies in a lurch when seemingly for-sure candidates suddenly turns down an offer after spending weeks on the interview process.

HANDS OFF MY CHOCOLATE MILK!

One topic that has received much attention is New York City Mayor Eric Adam’s attempts to ban chocolate milk from school lunches. It all started when the mayor also launched a new initiative to promote healthy eating in New York City schools by instituting Vegan Fridays. Former New York City Mayor Bill de Blasio had instituted similar healthy eating campaigns featuring Meatless Mondays and Meatless Fridays during his tenure as mayor and received similar backlash from both students and the general public. Adams’ plan for Vegan Fridays, however, faced significant backlash from the dairy community because dairy products are not plant-based. A couple days later, the mayor likened eating cheese to consuming illicit drugs. Before continuing, two items should be noted at this point. The first is schools are required to serve milk, regardless of the day of the week, in order to receive federal funds for school nutrition programs. The second item that should be noted is that New York City public schools already provide alternative meals specifically for students who have religious or medical-related dietary requirements. Now enter the assault on chocolate milk. Two weeks after announcing Vegan Fridays, Adams doubled-down on his distaste for dairy products by announcing his desire to unilaterally remove chocolate milk from schools. This measure, he claimed, was in an effort to combat consistently high rates of childhood obesity and the need to remove sugar from the diets of kids in order to promote healthy eating habits. This move generated even more backlash, prompting a bi-partisan response from members of New York State’s Congressional delegation, asking the mayor to back off his proposal. Congresswoman Elise Stefanik went so far as to also introduce legislation in Congress that would require schools to offer flavored milk options. Adams responded to the letter stating that he would back off the ban… for now. These are just some of the issues we’re keeping an eye in terms of impact on the dairy industry and our members. If you have a question about any of the aforementioned topics, please reach out to me at ph@nedairyfoods.org. Paul Harvey is the director of regulatory affairs for the Northeast Dairy Foods Association, Inc.

NED Magazine | Second Quarter 2022 • 9

Legislative + Regulations Report

MIDTERMS 2022

Where Are We Now? BY PAUL HARVEY

eflecting on writing this piece, I find myself longing for the warm embrace of summer, even as Old Man Winter temporarily dashes these hopes with one last snowstorm in April. Some attribute global warming to this phenomenon, but I personally attribute this to nature’s reminder that unpredictability is both necessary and good for the human condition. Now, before you think I’ve lost my mind, let me explain. If life were predictable and routine, there would be very little necessity for change, progress and innovation. We would never find sufficient reason to increase productivity or convenience for processes in our daily lives. It is, however, necessary for some things to remain consistent, like that of elections.

WHAT ISSUES ARE IMPORTANT TO YOU?

2022 being an even-numbered year, it is very difficult to imagine that we are once again starting to see mailers, door-knockers and phone calls from volunteers and candidates alike from the various levels of state and federal governments asking for your support. This election is even more special, because this is the first election that will take place under redrawn districts resulting from the census. While half of the Northeast will not head to the polls until August and September, the other half — Maine, New Jersey and New York — will decide on their respective candidates for the general election in early June, just as you are receiving this issue. It is important, however, to remember that no matter when your day to vote is, that you exercise your right to do so based on issues that are important to you. In this message, however, I would like to highlight two issues that the association will be paying particular attention to throughout the campaign season. But first, a little background to where we are. 10 • Northeast Dairy Foods Association, Inc.

In the first two years of a presidency, the incumbent’s party historically loses any existing legislative majorities achieved at inauguration. This year’s elections, as previously mentioned, are also influenced by the redrawing of federal congressional and state legislative lines based on those census results. For the Northeast, most will not see major changes, unless you live in New Hampshire, New York or Vermont. Unlike most of the nation, New Hampshire has not yet enacted boundaries for its congressional districts. Historically, both of New Hampshire’s congressional districts have remained relatively geographically consistent and politically competitive. However, Republican majorities in the state legislature, the branch responsible for creating and enacting the new maps, passed a map that Gov. Chris Sununu has declared that he will not approve. Even though New Hampshire’s primary is not until Sept. 13, the filing deadline for candidates is June 10, 2022. The New Hampshire Supreme Court, the state’s highest court, has already appointed a special master, or overseer, to complete the redistricting process if the governor and the general court do not arrive at a solution in time for the candidate filing deadline. In New York State, New York City, ironically, recorded population growth over the last 10 years, despite higher costs of living and the dramatic impacts of the recent pandemic, while the state still recorded overall population loss. What does this mean? Since each state legislative district is constitutionally required to have districts of relatively equal populations and the number of representatives stays the same, the location of districts will undoubtedly change. However, the legislative districts produced by the voter-approved independent commission faced opposition in both legislative chambers from the start, which allowed the legislature to draw their own maps. The legislature-drawn maps

Legislative + Regulations Report faced legal challenges soon after their passage and signature by Gov. Kathy Hochul. The courts initially allowed the lines to continue in effect and allowed the regular candidate filing deadlines to remain, so as to keep the June 28 primary date as scheduled while the challenges made their way through the appeals process. On April 27, 2022, the New York Court of Appeals officially ordered the congressional and state senate lines enacted by the legislature be redrawn by a court-appointed special master. At the time of publication, it is unclear when primaries for respective offices will be held. This uncertainty makes it more important that we, as an association, and you, as a voter and business owner, engage in state-level issues to assist elected officials in making informed policy decisions. Finally, Vermont will see a change in its at-large congressional district for the first time in almost two decades. Upon the announcement of Sen. Patrick Leahy’s retirement, current at-large Congressman Peter Welch announced his intention to seek Leahy’s seat. This change will likely produce a spirited competition for those seeking to win their respective party’s nomination.

Despite all of delays and challenges, candidates have not been deterred by talking about issues that have been atop the minds of Americans in recent months. Inflation will continue to effect voters as they consider the continued rise, most notably at the pump and in the grocery store. Some state and local governments have responded to rising gas prices by temporarily reducing the amount of taxes collected on gasoline sales. Connecticut and New York have either suspended or reduced their collection of tax on gasoline sales, and legislators in other states within the association are introducing legislation to do the same. Other states, like Maine and New Hampshire, are looking to surpluses in their state budget proposals to provide direct relief to residents in the form of checks or reduction in property taxes to offset higher costs of living associated with inflation. Federal dollars from the American Jobs Plan and the Infrastructure Investment and Jobs Act both passed in 2021, have been influential in assisting states with healthcare-related programs and infrastructure projects to boost job creation in both immediate projects — like roads and bridges — and

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Legislative + Regulations Report

long-term renewable energy projects, such as electric-powered public transportation and infrastructure for electric vehicles. These federal funds have allowed states to pursue projects that might have otherwise been delayed, while simultaneously sending tax dollars back to state residents in the form of tax relief.

THE CONFLICT IN UKRAINE

The second major issue that we will be monitoring is the ongoing conflict in Ukraine. As the conflict continues to progress without resolution, the international community continues to respond to the crisis by economically cutting off Russian markets to international trade. While most of the sanctions have focused on Russia’s energy supply, Russia has not been able to export its agricultural products to Central Asia and South America, where they are experiencing short supply, because of limited access to international financial systems. China, a major wheat exporter for the region, has suffered catastrophic floods destroying its crop, forcing it to buy more foreign wheat. Ukraine, another major exporter of wheat, also faces challenges as European fertilizer manufacturers limit their production due to fuel costs. This has limited their ability to plant crops necessary to not only feed their own but also to export as a source of revenue to fend off Russian aggression. This tightening has led not only to higher prices in the United States 12 • Northeast Dairy Foods Association, Inc.

but also warnings from international aid groups concerning larger-scale humanitarian crises in poorer, less-self-sufficient places.

RESEARCH THE ISSUES

Most state legislatures will finish up their legislative sessions by the end of June. Massachusetts, New York, New Jersey and Rhode Island meet yearround, but only extremely necessary and important business will recall campaigning incumbents back to their respective capitals for legislative work. Maine ended its legislative session on April 20, and Connecticut concluded its business in early May. Congress will continue to meet regularly, minus district work periods, until August when campaign season will be in full-swing. Although there are many high-profile races and issues happing around the nation, I highly encourage you as an association member to dedicate 10 minutes a week to research local issues that impact you and your community. Since starting at NDFA, I have hosted a monthly legislative meeting call on Zoom exclusively for our members on the first Tuesday of each month to keep you informed about the happenings taking place both inside and outside of state capitals, as well as within the association. The Zoom link, along with our easy-to-read bill tracker, is sent out one week prior to the call. During this time, questions are encouraged pertaining to

specific topics or pieces of legislation. If I am unable to answer particular questions during the call, please email me at ph@nedairyfoods.org, and I can respond to you directly. If I receive multiple questions about the same topics, I will be sure to answer them in the next forum. Again, please note that these calls are for NDFA members only. If you are an NDSA member, please reach out to Ozzie Orsillo at oo@nedairyfoods.org. As noted author Susan Saltzberg stated, “Voting is the expression of our commitment to ourselves, one another, this country and this world.” We, as Americans, have the unquestionable gift and blessing to participate and have our voices heard through choosing those to represent us, not just in elections, but also through speaking directly with our representatives. If there is a local issue you have a question about, if you have questions about a policy issue, or even on who your elected officials are and how to contact them, I encourage you to reach out to me and start a conversation. I would be thrilled to provide you with resources to engage with your community. I wish all of our members a safe, healthy, and fun summer. Paul Harvey is the director of regulatory affairs for the Northeast Dairy Foods Association, Inc.

Economic Outlook

ECONOMIC OUTLOOK

Global Prices, U.S. Food Inflation Not Expected to Slow Anytime Soon BY GARY LATTA

s global food prices continue to surge, we turn to many reports to keep abreast of the developing situation. One of these is the monthly United Nations Food and Agriculture Organization’s Food Price Index. The FAO index is a weighted average of a select basket of world food commodities presented over a base period. The index tracks the most globally traded food commodities and reports their weighted average monthly. The five commodities groups that the FAO tracks are dairy, meat, sugar, vegetable oil and cereal. The latest FAO Food Price Index climbed almost 13% in March and was the highest on record since the index began 60 years ago. The new record in

U.S. PRODUCER PRICE INDEX, BUREAU OF LABOR STATISTICS

Percent

12 10

PPI

12-month % change

Total

Total less foods, energy, and trade services

12 10

-2

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

NED Magazine | Second Quarter 2022 • 13

Economic Outlook

March eclipsed February, which was also a record high. The March index was 33.6% higher than March of 2021. The U.N. reports that global food prices were already at a 10-year high prior to war breaking out in Ukraine. Dairy appears to be much less affected by the war, rising only 3% in FAO’s index. Meat was up 5%, sugar up 7%, cereals up 17% and vegetable oils up 23%. Vegetable oils and cereal prices are soaring because Russia and Ukraine supply over half of the world’s sunflower oil and significant amounts of corn and wheat. While most of Russia and Ukraine exports are sent to nearby European nations, the impact of potential shortages is rippling through the interconnected global economy. The latest U.N. report of the conflict’s impact on global food, energy and financial systems sparked deepening concern over the recent sharp increases in consumer prices. In a world already 14 • Northeast Dairy Foods Association, Inc.

shaken by COVID-19, the fallout from this war is having an alarming effect on developing countries lacking the natural resources and infrastructure to feed themselves. Some countries in Europe, the Middle East and Africa will likely be forced to seek alternate global supplies. That action will put upward pressure on global prices. The U.N. is calling for international help to assist poorer countries facing surging food prices and scarcity. The United States Agency for International Development works to provide life-saving food assistance to the most vulnerable around the world to reduce hunger and malnutrition. USAID, in addition to the U.N., is stepping up to help with food assistance around the world. Large grain producers in the U.S., Canada, Argentina, France and Australia could ramp up production to help fill the supply void. However, these countries

are experiencing their own dilemma of high energy prices, labor shortages, rising interest rates, equipment availability, inflation and fertilizer prices. In the case of fertilizer, availability is as much of a concern as price. The cost of fertilizer has increased 30% to 40% in many countries, including some places in the U.S. Russia, a major supplier of fertilizers to many countries, is being shut off from exports by both their own choosing and by embargo restrictions placed by other countries. Russia supplies approximately 14% of global fertilizer exports and has suspended outgoing shipments. Most analysts believe this will continue to have a strong ripple effect across global food markets. Gas is a key component of fertilizer manufacturing, and high gas prices in all parts of the world have helped propel fertilizer prices up globally. Again, price is one concern;

Economic Outlook availability is another. Ag producers could be reluctant to expand if key inputs like fertilizer become too difficult to obtain or too costly to support expansion. U.S. food inflation is not expected to slow anytime soon, according to Bank of America, Forbes and the USDA. Analysts believe U.S. food inflation will hit 9% by the end of 2022, as food companies are now more comfortable with passing costs on to consumers. Increased fuel prices and labor shortages within the supply chain are continuing to exacerbate the situation. Fuel prices have eased a bit with the release of some national petroleum reserves but are still very high. The U.S. Producer Price Index is the official measure of price changes for the industry. The data

Innovative

is collected by the U.S. Bureau of Labor Statistics, which defines the PPI as a family of indexes that measures the average change over time in selling prices received by domestic producers of goods and services. PPIs measure price change from the perspective of the seller. This contrasts with other measures, such as the Consumer Price Index, which measure price change from the purchaser’s perspective. The PPI for March increased 1.4%, following increases of 0.9% in February and 1.2% in January. For the 12-month period from March 2021 to March 2022, the PPI increased 11.2% and is the largest increase for any 12-month period since the calculation was first introduced in 2010. The PPI is one of the oldest economic time series

Sustainable

compiled by the Federal government and was first published in 1902. Global milk production is expected to remain flat for 2022. Production estimates are down from earlier in the year as rising farm input costs are playing a bigger role now. New Zealand, Australia, Argentina, the European Union and the United States are not expected to increase production this year much beyond 2021 levels. The overall prognosis for global milk production is flat to down. Dairy producers around the world are making difficult choices, such as substituting less expensive feed or culling some of the herd to stay profitable. Milk prices are rising globally but may climb to the point of consumer resistance. Compared to the retail price of meat, oil and cereal, dairy products are still a consumer bargain. CONTINUED ON NEXT PAGE ►

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NED Magazine | Second Quarter 2022 • 15

Economic Outlook

U.S. $ PER POUND

CME Weekly Average Cash Grade AA Butter Prices

2.90 2.80 2.70 2.60 2.50 2.40 2.30 2.20 2.10 2.00 1.90 1.80 1.70 1.60 1.50 1.40 1.30 1.20 1.10

04/29/2022 GRAPH USDA, DMN; SOURCE CME GROUP USDA/AMS/Dairy Market News, Madison, Wisconsin, (608)422-8587 Dairy Market News website: http://www.ams.usda.gov/market-news/dairy

U.S dairy exports remain brisk because our price remains competitive internationally. In 2021, the U.S. exported 51.1 billion lbs. of milk on a skim-solids basis, which represented 22.6% of production. The USDA forecasts that 2022 dairy exports will be 50.3 billion lbs. on a skim-solids basis, representing 22.2% of production. March milk production in the U.S. was down 0.4% from March of 2021 and follows similar drops in February of 0.7% and January of 1.5%. Total first quarter milk production was down 1%. Production per cow inched up 7 lbs. in March. Producers added 15,000 cows in March, but the monthly total was 68,000 head short of March 2021. Northeastern states that were among the top 24 reported by the USDA in March 2022 show New York down 1%, Vermont down 0.9%, Pennsylvania down 2.2% and Ohio down 3.4%. The decreases can be attributable to a drop in cow numbers 16 • Northeast Dairy Foods Association, Inc.

2018

Analysts believe U.S. food inflation will hit 9% by the end of 2022, as food companies are now more comfortable with passing costs on to consumers. and flat to a slight drop in production per cow. The milk-feed price ratio recently took a dip as the protein dairy feed value rose to offset milk prices. Except for dry whey, all wholesale dairy product prices have been rising. Wholesale product prices from the USDA’s National Dairy Products Sales Report show from March 5 to April 2, 40 lb. cheddar blocks rose 22 cents to

2019

2020

2021

2022

$2.2034 per pound and 500 lb. barrels rose 16.4 cents to $2.1292 per pound. Butter climbed 10.2 cents a pound to $2.7912, while nonfat dry milk rose 4 cents to $1.8225 per pound. Dry whey decreased 1.4 cents to $0.7846 per pound. Dry whey demand has been down slightly because exports to China to supplement swine feed is not as brisk as last year. Wholesale prices announced weekly in the National Dairy Products Sales Report are used to calculate monthly class prices announced in Federal Milk Marketing Orders. With some lag, NDPSR prices typically follow those announced sooner at the Chicago Mercantile Exchange. Looking ahead at the remainder of 2022, USDA noted that the number of milk cows increased from January to February after contracting for eight straight months prior. The USDA is not yet speculating if a dairy herd expansion is something that will continue later in

Economic Outlook

U.S. $ PER POUND

CME Weekly Average Cash Cheddar Block Prices

3.00 2.90 2.80 2.70 2.60 2.50 2.40 2.30 2.20 2.10 2.00 1.90 1.80 1.70 1.60 1.50 1.40 1.30 1.20 1.10 1.00 0.90 04/29/2022 GRAPH USDA, DMN; SOURCE CME GROUP USDA/AMS/Dairy Market News, Madison, Wisconsin, (608) 422-8587 Dairy Market News website: www.ams.usda.gov/market-news/dairy

2018

2019

2020

2021

2022

GIVE US SOMETHING TO CHEW ON. Are you introducing an interesting product? Have you instituted cutting-edge processes? Are you welcoming a new hire? Is your business expanding, moving or changing?

Do you have other news to share? Northeast Dairy magazine is always looking for Member and Industry News. Email your information, news releases and/or captioned photographs to us at editorial@nedairymedia.com.

NED Magazine | Second Quarter 2022 • 17

Economic Outlook Dairy product export prices for Oceania and Western Europe

(Dollars per pound) Product Butter Cheddar cheese Skim milk powder Dry whey Whole milk powder

Region Oceania Western Europe Oceania Oceania Western Europe Western Europe Oceania Western Europe

February 2022 2.984 3.142 2.637 1.932 1.895 0.700 2.019 2.410

March 2022 3.152 3.260 2.799 2.072 2.000 0.736 2.101 2.518

Change 0.168 0.118 0.162 0.140 0.105 0.036 0.082 0.108

Source: USDA, Agricultural Marketing Service, Dairy Mark et News.

2022. Despite a global need for more milk, higher market prices may not be enough incentive for producers to expand production significantly. The mounting ccording to the most recent Milk Production report published by USDA, National Agricultural costs of farm inputs, rising interest rates tatistics Service (NASS), in February, estimated milk production in the United States was and the possibility of consumer resis7.515 tance billion pounds, down 1.0 percent from February 2021. Milk cows totaled 9.370 million to higher prices may be enough to ead, 96,000 fewer February 2021. However, the number of cows in February was cause somehead producers to delaythan expansion ,000 head above month, which is the first month-over-month increase in the plans. Then factorthe in theprevious uncertainty of looming political decisions at the state umber of cows since May 2021. The average milk per cow in February was 1,869 pounds, up which jeopardize competitiveness, poundlevel, from February 2021. It is worth mentioning that milk cow productivity increased from and it gets more challenging. 5.5 pounds per day in January to 66.8 pounds per day in February (+1.2 pounds), which is a Federal Milk class prices have been arger increment compared to the same period in 2020 (+0.8 pounds) and 2021 (+0.6 pounds), rising and are expected to continue s shown in the graph below. upward. The Class III price for March 2022 climbed to $22.45 per cwt and is $6.30 above March 2021. The Class IV U.S. milk cow2022 perwas day price per for March 24.82 per cwt and is $10.64 above March 2021. Pounds Class prices have been driven upward by higher prices of cheese, nonfat dry 69 milk and butter. Looking ahead at the remainder of exports in 2022 for that product to China. 68 2022, the USDA feels milk production Rising cheddar cheese prices are expected to more than offset a drop 67 will stay close to flat. U.S. product prices Gary Latta is a dairy product specialist will likely remain below global competin dry whey. Therefore, the Class III consultant for the 66 itors, so exports should remain brisk. price for 2022 is raised to $22.75 per Northeast Dairy Higher exports and rising domestic and cwt, $1.10 more than forecast in the Foods Association, 65 international prices in recent weeks have month prior. Higher projected prices for Inc. He has more than 30 years of motivated the USDA to raise its forenonfat dry milk and butter now elevates 64 experience in casts conservatively. The one exception the Class IV price forecast for 2022 to providing economic analysis, statistics 63 is the dry whey price forecast, which $24.75, which is an increase of $0.75 and information to the dairy processing Jan Feb Mar Apr Sep Oct Nov Dec was lowered a few cents due to weaker aboveMay the forecastJun made last Jul month. Augindustry.

Recent Supply and Use Data

18 • Northeast Dairy Foods Association, Inc.

2020

Source: USDA, National Agricultural Statistics Service.

2021

2022

Something to Consider

War Between Russia and Ukraine Will Impact Supply, Costs Around the World BY GARY LATTA

ombined, Russia and Ukraine are responsible for growing substantial portions of essential agricultural commodities that are exported to other countries around the world. The significance of this region is remarkable. Both countries are blessed with rich fertile soil that yields abundant harvests that benefit the world.

UKRAINE AND RUSSIA SHARE OF GLOBAL MARKETS-VOLUME, 2018-2020 Barley Corn Sunflower Sunflower Oil Wheat

RUSSIA 14.2 2.0 19.6 23.1 24.1

UKRAINE 12.6 15.3 4.3 49.6 10.0

Source: International Food Policy Institute, DC

The USDA estimates that, together, Russia and Ukraine are responsible for at least 30% of global trade in wheat. The USDA is forecasting the war between these two countries is likely to reduce wheat exports from that region by at least 12%. Lower exports of wheat, corn, barley, sunflower products and other essentials will elevate already rising food costs around the world, including the U.S. However, the impact to other countries will be more acute and far reaching than the U.S. Nearly fifty countries depend on Russia and Ukraine for a third of their wheat imports, and 26 of these are dependent on that region for half of their wheat requirements. The war is

also shrinking the availability of corn, barley and sunflower oil exported from the region. Russia is the world’s top exporter of fertilizer and other nutrients used in farming around the world. International sanctions imposed on Russia has caused it to retaliate by curtailing its fertilizer exports, reducing availability and driving up global prices. In response to the fertilizer situation, the USDA recently announced a new $250 million grant program to support sustainable American fertilizer production to help supply American farmers. “Recent supply chain disruptions from the global pandemic to Putin’s unprovoked war against Ukraine have shown just how important it is to invest in this crucial link in the agricultural supply chain here at home,” said Agriculture Secretary Tom Vilsack. The U.S. is a significant importer of fertilizer and is among the top two or three leading purchasers. The USDA lists the top producers of fertilizer components to be China, Russia, Canada and Morocco, with Belarus also providing a sizable share of potash. Fertilizer prices around the world have doubled and tripled from last year because of Russia’s price escalation. Limited supplies of relevant minerals, soaring energy costs, global demand sparked by higher commodity prices, over reliance on fertilizer imports and a lack of competition in the fertilizer industry are all driving up costs. In early April, the USDA’s Foreign Agriculture Service published a report detaling several factors that were already driving higher input costs prior to the war. Now war has added other variables and is contributing to upward cost pressures for all countries around the globe. Ukraine is a major supplier NED Magazine | Second Quarter 2022 • 19

Something to Consider of grain exports to other countries and is the second largest European nation behind Russia. Known for its rich fertile soil, Ukraine has earned the nickname as the “breadbasket of Europe,” furnishing 12% to 15% of the world’s grains. As of late, grain exports from Ukraine have ground to a halt, as Russia controls the Black Sea and most shipping ports. Agriculture production, processing and distribution in Ukraine has become perilous since the war broke out. Dairy farming is challenging enough when things are going right. Imagine what dairy farming must be like with a harrowing war taking place around you? Surprisingly, there is still some dairy farming and processing taking place in Ukraine in the middle of this war. Some Ukrainian dairy farms have been forced to close because of damage to their facilities or herd due to Russian bombing. Videos of destroyed dairy farms in Ukraine have sparked outrage in Europe. There are reports of dairy farm families forced to slaughter their cows for food as Russian tanks shell their neighborhoods. Interviewed Ukrainian dairy farmers report difficulties securing supplies and transporting them to the farm because many roads and bridges are out. Driving is dangerous, and finding routes around bombed areas adds cost. Securing enough fuel to keep the farms running is increasingly arduous because the Russians have cut off supplies and bombed storage depots. The landscape, waterways and seaports are riddled with mines. Unexploded ordnance is everywhere. The Ukrainian dairy industry is different from that in the U.S. Since 2019, Ukraine has been a net importer of dairy products. Over 50% of the cows in Ukraine are owned by private households that lack modern milking and cooling equipment. Most of these distribute locally around the farm. The majority of processing plants in Ukraine are older and inefficient compared to the U.S. and EU. It is estimated that nearly 97% of the cheese in Ukraine is imported from the EU. Mykola Solsky was appointed Ukraine’s agricultural minister in late March of this year when he replaced the previous minister who resigned due to health concerns. Solsky has been vocal in the press and is trying to keep the world informed of the impact of war on Ukraine’s agriculture and food supply. He recently reported that Ukraine has banned or limited exports of wheat, oats, barley, beef, poultry and other goods to maintain their supplies so that his country has enough food to eat through the war. He estimates Ukrainian grain supplies will plunge by 25% to 50% in 2022. Solsky reported that wheat fields have been bombed out, the supply chains are in ruins and a considerable amount of agricultural labor are off to the front to fight the war. Solsky valiantly proclaimed, “Ukrainian farmers will sow everywhere it can be achievable.” 20 • Northeast Dairy Foods Association, Inc.

Reports forewarn of global food destabilization if Ukrainian and Russian crops are not exported at traditional levels. Experts agree there will not be any food shortages in the U.S., but prices will continue to rise. However, countries in Europe, North Africa, Central Asia, Afghanistan, Lebanon, Sudan, Syria, Yemen and others are likely to struggle securing necessary food supplies at affordable costs. It is too early to estimate how much additional U.S. grain and other food will be exported to help fill global deficits. Already the United Nations Food Council and USAID are asking for the world’s largest agricultural producers to step up for the sake of humanity. No doubt, additional U.S. product will be exported as global demand soars. This will add more cost pressure to domestic supplies. As U.S. food prices rise, consumers will be faced with making tough decisions on how to stretch their dollars to make ends meet. Recent reports reveal that while U.S. dairy product prices are rising, consumers are buying less dairy as they shop within their budget. Many consumers are being forced to make trade off decisions between groceries and gas for the car. Under normal circumstances, higher demand and higher farm prices trigger production expansion that eventually bring prices back down. Many experts believe this phenomenon might not take place this time around because of rapidly rising ag input costs. The ongoing drought in the western half of the U.S. continues to plague that region. Producers in all areas of the world will have to weigh the tradeoff of higher receipts against higher and rising costs. Let us hope for an end to this war, the suffering and a return to something more normal. This could could take some time, as the global fallout of the ongoing war is yet to be determined.

Gary Latta is a dairy product specialist consultant for the Northeast Dairy Foods Association, Inc. He has more than 30 years of experience in providing economic analysis, statistics and information to the dairy processing industry.

ASK A BOARD MEMBER THE QUESTION:

Inflation is expected to continue to affect the dairy industry throughout 2022. What has been the most significant impact on your area of the dairy industry to date, and what steps are you taking to combat it?

Inflation Is Impacting Every Aspect of the Dairy Industry

here seems to be no stopping inflation. At the time of publication, the inflation rate in the U.S. was approximately 8.5% – a 40-year high – with food prices and gasoline costs surging. Added to this have been the combined impact of supply chain shortages, interest rate hikes, the war in the Ukraine and, of course, the pandemic. Labor shortages have caused a dramatic increase in wages, as companies in dairy, trucking and every other related industry, fight to keep and attract employees. And, supplies of every kind have larger price tags. Unfortunately, many companies are forced to pass these

costs along to customers and consumers. This has become clearly evident in the grocery store, where prices are up over 8% compared to the same time last year according to CNBC, and, there seems to be no end in sight as the USDA predicts an additional 3% to 4% increase by the end of 2022. Nearly 9 in 10 Americans said they have noticed prices rising all around them, according to survey research company Morning Consult, and most Americans say that inflation is one of their top concerns right now. Gasoline and the cost of food at the grocery store seem to be what Americans gauge inflation by the most, likely because these NED Magazine | Second Quarter 2022 • 21

Board Members items are necessities. People can put off the purchase of a car or dishwasher, but there’s not many choices when it comes to driving your car or making your family dinner. According to the New York Times, food makes up 13% of what people buy, yet its high prices were mentioned by 90% of 1,900 people surveyed. Obviously, the dairy industry has been greatly impacted by inflation, as well. From farm to table, everything is expensive. We asked our own thought leaders – members of the boards of directors of both the Northeast Dairy Foods Association, Inc. and the Northeast Dairy Suppliers Association, Inc. – to weigh in on the following question as it pertains to their sector of the industry: Inflation is expected to continue to affect the dairy industry throughout 2022. What has been the most significant impact on your area of the dairy industry to date, and what steps are you taking to combat it? “Working in the energy sector for the last 15 years, we have never seen prices inflate this quickly in such a short time. Dairy producers consume more energy than some colleges we work with. With the anticipation of the rising costs, we fixed their electric rates long term. Hopefully, when the contract ends, these market prices will drop. If energy costs stay this high, it’s going to be a struggle for producers to go from paying 5 cents to 18 cents per kWh. This scenario is putting pressure on all sectors of the dairy industry, especially the ones that didn’t budget for this.” –Wendy Martin, CEO, Energy Partner Consultants

22 • Northeast Dairy Foods Association, Inc.

“Like all businesses, WestRock has also been impacted by a rapid rise in material, labor, freight and other input costs. Since the onset of the pandemic, the paperboard and corrugated packaging industry has seen an unprecedented surge in demand for our products, fueled by the shift to grocery store shopping, along with strong e-commerce demand across many industries. With paper being the major cost component of corrugated boxes, strong demand and spot supply shortages have fueled a string of cost increases outside of our control. For our customers in the dairy industry, we have developed efficiencies with respect to pooling orders to optimize order quantities, and we ship full trailer loads whenever possible. We have also operated on weekends to support their increased demand, preventing any downtime. New designs have been developed with fiber reduction in mind, including lower profile designs, such as trays, where possible. Finally, we have not added any fuel surcharges to our customers products.” –John Bucklin, Western New York business unit sales manager, WestRock

“As a milk hauler, the biggest impact on us is the fact that the cost of operating a trucking company continues to go up, along with the cost of living for all of our employees – gas, heating oil, electric, groceries, health care, etc. Unfortunately, the only way we have to compensate the company and the employees for these increases is to go to the cooperative/dairy farm producers and ask for rate adjustments to cover these growing costs. It hurts to go to the producers for help because they are trying to survive the same cost increases we are. But, in most cases, they understand that the hauler is a major link in the chain to get their products to market, and there aren’t any replacement links available.” –Rick Wadhams, owner, Wadhams Enterprises

Board Members “Weidenhammer is working to secure and enhance its domestic-based supply chain, as we are getting a lot of new inquires for food service packaging due to the supply chain issues from products coming in from Asia and Europe; find more innovative and sustainable substrates and coatings that will enable the containers to be more easily recycled and possibly compostable – waste reduction/end of life. And, increase recycled content in substrates used today and new water based coatings to replace the polyethylene coatings that are used today. Our coating requires less heat to seal then LDPE -- probably not a huge cost saving, but an energy savings none the less.” –Glenn J. Emory, general manager, North America, Weidenhammer New Packaging, LLC

“Inflation is impacting industries across the globe, and the dairy sector is no exception. As a manufacturer of process equipment, inflationary pressures have affected nearly every aspect of our business operations. Unfortunately, there are no quick, easy or economically painless ways to blunt the impact. Like all companies struggling with the significant rise in inflation, the pressure to contain increased costs, while simultaneously maintaining acceptable margins and lead times, is enormous. The costs to obtain, fabricate, assemble, test and ship our equipment has risen dramatically. Our equipment requires a variety of metals to manufacture, and the rise in price and availability has affected our entire industry’s price structures and production schedules. Steel prices, for example, have increased over 200% since March of 2020. Trading of nickel, a key component of stainless steel, was halted in March as prices hit the upper limit of both the London Metal Exchange and the Shanghai bourse. The rise in inflation has also brought about a rise in wages, especially as all industries are vying for talent in an extremely tight labor market. As someone on the technical sales end of the industry, I listen to and sympathize with the frustrations from our channel partners and end-users. Rising equipment costs, coupled with increasingly longer lead times, are affecting the dairy industry all the way from equipment manufacturing through installation. It’s like the tail wagging the dog, where end users are having to alter their construction/installation timelines to meet the realities of limited raw material availability. Ultimately, increased raw material and manufacturing costs at our facilities directly lead to increased pricing and purchasing costs for the day-to-day business operations and long-term projects of America’s dairies.” –Melissa C. Fryer, sanitary heat transfer business development manager, food & water division, Alfa Laval Inc.

“With the rate of inflation being as high as it has been in 40 years, it has certainly become more expensive to operate our business. As many know, a large reason for the rise in inflation has been the cost of energy coupled with strong consumer demand and a lagging supply chain. That said, our response to inflation has been multi-faceted. Inflationary pressures have nudged our company to take a harder look at certain fundamentals, such as our product mix, customer pricing and/or payment terms (where possible), secondary suppliers and our finished good inventory levels – to name a few items from a very long list. In addition, we’ve also had to make some unorthodox maneuvers to navigate the inflationary storm. For instance, while we made significant market adjustments to non-exempt pay in early September 2021, we also recently began supplying Byrne Dairy & Deli gift cards to all team members in an effort to help offset the recent surge in gas prices and transportation costs. Moving forward, the above list may grow or narrow based on the effectiveness of the Federal Reserve’s response.” –Ryan Elliott, management, Byrne Dairy

“As a co-packer, we have a contract with our customers, and increases in pricing are passed on to them as part of making their product. My concern is what is yet to come and how it will affect our farming community with fertilizer and seed prices expected to be at an all-time high. Most likely the milk pricing will not compensate producers for this increase.” –Ray Gerwitz, dairy manager, Steuben Foods

NED Magazine | Second Quarter 2022 • 23

2022

DAIRY TRENDS

24 • Northeast Dairy Foods Association, Inc.

2022 DAIRY TRENDS

Indulging in Ice Cream, Avoiding Sugar, Staying Healthy and Exploring Exciting Flavors

s prices go up in the grocery store, consumers are making more careful choices based on cost, added value, flavor and even fun! While some categories are an exception, overall, consumers are putting plenty of dairy products into their shopping carts despite inflation. The reasons vary – from the knowledge that dairy products are a healthy choice to shear indulgence during trying times. Whatever the reason, dairy remains popular, and the industry continues to roll out options that will keep consumers coming back for more. Northeast Dairy asked Donna Berry, a food scientist, editor, consultant and food blogger (berryondairy.com), for an overview of what some of the trending and most popular dairy foods items are in 2022. “Overall, people are eating more dairy these days, but they are looking for certain things when it comes to dairy choices,” she explained. “They want excitement in the flavors they choose, Yes, everyone likes their chocolate

BY CAROLINE K. REFF

or vanilla ice cream, but people want adventure and are willing to try flavors that push the envelope a bit.” People also care a great deal about where products are produced, according to Berry. They like that most dairy products are made from U.S.-based ingredients, which are often sourced locally. The idea that the milk that goes into the bottle — or the ice cream or the cheese — comes from a cow that’s just a short drive away is very appealing to consumers. If that product is made from simple, clean ingredients, all the better. Adding to that is consumers’ concern with products that are produced using earth and animal-friendly practices. Health is another reason that consumers are drawn to dairy. Most know that dairy is a protein powerhouse packed with vitamins and other nutrients that promote immunity, strong bones and an overall healthy diet. Finally, Berry acknowledges that plant-based dairy alternatives are here to stay – at least some of them – but it’s no longer as much of an either/or situation at the grocery store. Some people clearly like their

plant-alternative products, but they like their dairy, too. Here’s a closer look at some of what’s trending in 2022 throughout the various dairy categories, according to Berry.

ICE CREAM’S THE DREAM – IN EVERY FLAVOR IMAGINABLE

How about a bowl of ice cream filled with pieces of Lucky Charms cereal or a scoop that tastes like an everything bagel? They are out there in the freezer section just waiting for you to give them a try! According to Berry, the ice cream space is “exploding with flavor and innovation,” probably more so than any other dairy category.

Second Quarter 2022 • 25

2022 DAIRY TRENDS Brands that are working to remain relevant in this competitive space know that new ice cream flavors are essential. The sky’s the limit when it comes to what some companies including in their offerings – from Everything Bagel with flavors of onion, garlic, sesame and poppy seeds, and cream cheese to Pizza, an ice cream with a mozzarella base mixed with tomatoes and basil. And, consumers seem eager to at least try these unconventional ice cream flavors. Limited edition flavors are also extremely popular, as “here today; gone tomorrow” choices typically have consumers clamoring for more thanks to savvy marketing, a fear of missing out and a natural curiosity about what the next flavor might be. Even “mystery flavors” are popular with daring customers willing to buy a pint and roll the dice on just what taste adventure might be waiting for them inside. “The flavors that have been coming out are bizarre and off the wall, but many of them are pretty good,” said Berry. “Ice cream makers are really pushing the limits with flavor innovation. Right now, ice cream is all about indulgence, creativity and how bizarre a flavor can be!” Pints are powerful and focus on the indulgence consumers want. While a bit pricier, pints allow consumers to try a new flavor without committing to a half-gallon. The pint section of the freezer section is a popular spot that continues to grow, and it seems price is no option, as consumers continue on their flavor adventure. Remember the joy of a Nutty Buddy or a Fudgsicle as a child? Well, novelty ice cream products aren’t just for kids anymore. In fact, some of these premium products are specifically marketed to adults looking for a bit of indulgence, as well as portion control. Consumers also like novelty ice cream items because they are “grab-and-go.” One of the 26 • Northeast Dairy Foods Association, Inc.

biggest opportunities seen in novelties is the “better for you” concept, which brings the added value of things like high protein, probiotics, botanicals and fortifications into these treats. A number also offer low or no-sugar added options, something that has become one of the biggest trends in food, in general, lately, as consumers are all about eliminating sugar from their diets. Other popular additions to novelties include whole ingredients that consumers can see with their own eyes — like a hunk of strawberry or a piece of almond. Co-branding has become popular in dairy, particularly in the ice cream space, as have exclusive partnerships with retailers. But co-branding is no longer just referencing a nostalgic dessert or licensing a familiar character with an ice cream flavor or brand. Today’s co-branding is about teaming up with another company and recreating its product into a new ice cream flavor and/or creating a flavor that is exclusive to a specific retail chain. For example, Little Debbie’s recently collaborated with Hudsonville Ice Cream to introduce seven ice cream flavors available only at Walmart that combines the famous snack cakes with delicious ice cream. Some of the popular flavors include Cosmic Brownie (brownie batter ice cream filled with mini rainbow chips and brownie pieces), Oatmeal Cream Piece (vanilla crème ice cream with soft oatmeal cookie pieces and a hint of molasses) and Swiss Rolls (chocolatey cake ice cream with chocolate cake pieces and a swirl of whipped cream). In the end, consumers simply love their ice cream. They’re eager to try new flavors and interesting combinations – and are willing pay for it. Ice cream manufacturers are taking notice and bringing more and more unimaginable flavor combinations to the freezer. We can’t wait to see what’s next!

2022 DAIRY TRENDS

YOGURT, COTTAGE CHEESE AND MORE

According to Berry, cultured dairy products – yogurt, cottage cheese, sour cream, cream cheese and dips – are concentrated sources of protein and other dairy nutrients that are highly beneficial. Another benefit is that the dairy industry has the ability to make most of them with U.S.-sourced ingredients, and, even better, local ingredients. This is especially important at a time when prices are rising in the grocery store, as it keeps prices down, helps the economy and is good for the environment. Overall, “yogurt has such a healthful halo that everyone is trying it,” said Barry of what is arguably the most popular product in the cultured dairy product group. “And, its reasonable price only helps keep it a dairy standard for a lot of consumers.” A big plus is no or low-sugar products, which have become increasingly more available in the yogurt space. As stated, many consumers are steering clear of sugar as much as possible in all of their foods, while protein reigns supreme. Many, particularly younger consumers, have quickly adapted to a flavor profile that is less sweet – and they don’t feel deprived. Consumers are also finding added value in cultured dairy products. This

might come in the form of a particular milk source – like grass-fed, A2 or regenerative organic – or from the introduction of international recipes and flavors. For example, U.S.-based DAH! incorporates the ancient Indian culture with modern technology to create unique flavors and products like its slow-cultured Lassi smoothie, which combines tomatoes with mixed berries and whole milk (and also 15 billion probiotics per serving). Similar to ice cream, yogurt is appearing on the shelves in limited batch flavors that create an urgency and/ or curiosity that spurs consumers to buy. In the U.K., for example, one manufacturer created a limited edition, premium

yogurt with strawberry and champagne to celebrate the Platinum Jubilee of Queen Elizabeth II in February, which was only available for one month. Other companies are creating what are referred to as “premium dips” that are considered healthier alternatives to traditional dips, mayonnaise and cream cheese. Kefir, spreadable cheese from feta to mascarpone, Greek yogurt and more are just some of the bases that make these dips attractive to adventurous eaters looking for interesting tastes, new textures and healthy options.

NED Magazine | Second Quarter 2022 • 27

2022 DAIRY TRENDS And, cottage cheese continues to rebound from its reputation as an old-fashioned diet food to become a protein packed snack with sweet and savory options that are more relevant to today’s consumers. Kemps, for example, a business of NDFA member Dairy Farmers of America, continues to grow in this space with single-serving cottage cheese in new and exciting flavors like bacon cheddar and bacon ranch.

CHEESE IS A CLASSIC WITH A FEW ADDED TWISTS

Berry noted that there is not a lot of headline news when it comes to cheese. People love their cheese, and they continue to consume it. Its sales continue to grow year-after-year with no signs of slowing down. There are a few trends, however, as people are still cooking at home – a result of the pandemic. Because of this, cheese manufacturers continue to look at innovative ways to make cheese more recipe-friendly with “better melt” capabilities that include more cream and higher fat content. Kraft, for example, has added its cream cheese into some of its shredded cheese products. Surprisingly, charcuterie boards are hotter than ever. Some thought this trend would go by the wayside during the pandemic, as people didn’t seem to want to share a common tray of food, but this assumption proved untrue. “There’s a big difference in what people say and what people do,” said Berry, who, as a food scientist, questions the popularity of charcuterie boards that tend to be filled with high sodium, cured meats filled with nitrates. “Even if you add some fruits or vegetables, there’s not a lot of healthy eating going on around a charcuterie board.” Still, social media is full of unique charcuterie creations and ideas, and there 28 • Northeast Dairy Foods Association, Inc.

are eateries popping up around the country where diners can create their own charcuterie boards for in-house dining or take-out. Cheese manufacturers are paying attention, as they continue to market products with snacking and charcuterie in mind, offering smaller portions of specialty cheese that allow consumers to explore new flavors without making a huge commitment to a larger quantity. Berry acknowledged that there are a lot of plant-based cheese alternatives out there, but “they don’t even come close,” she said, noting that many don’t melt well or simply just don’t taste like the real thing. And while new plantbased cheese products continue to be introduced, and consumers are willing to try them, that doesn’t mean they’ll be coming back for more. “I don’t see plant-based cheese alternatives hurting the sales of real cheese,” she added. “There’s just no comparison.”

WOULD YOU LIKE A GLASS OF MILK?

Fluid cow’s milk is, of course, the dairy standard, but it’s popularity continues to struggle. Most of today’s milk consumption is aimed at children for its high protein and vitamin content. Still, the same parents who are buying milk for their children’s health are not necessarily consuming it themselves. Younger consumers – particularly Generation Z and Millennials – do like their plant-based milk alternatives, particularly oat “milk.” Interestingly though, these demographics do not see oat “milk” as an alternative to cow’s milk. They’re not picking one over the other; they’re simply choosing oat “milk” because they like it. Much of this

is driven by coffee shops like Starbucks, which feature oat milk and other plantbased beverages in their highly marketed and popular offerings. For example, one of Starbucks’ most popular beverages, the Frappuccino, can, in almost all cases, be made with cow’s milk, oat milk, almond milk or coconut milk. Oat “milk” is just undeniably popular, according to Berry, even superseding almond milk, which definitely ruled the plant-alternative beverage space for quite some time. Through intense marketing, consumers know that oat “milk” is manufactured through an easier and cleaner process, and that is just what the younger generations, in particular, like to hear. Still, there are those who will always relish a cold glass of cow’s milk, and there are plenty of options. Organic, lactose-free and A2 are just some of the options out there. Higher protein milks like Fairlife! are still niche but are gaining traction. And, flavored milks have become increasingly popular despite many having a higher sugar content. Chocolate is by far the most popular

2022 DAIRY TRENDS with kids and adults, as is strawberry and banana. But new flavors like lime, coffee, vanilla and even white chocolate are tempting milk lovers, too. While many of these can be high in sugar, manufacturers continue to look at creating recipes made with more natural ingredients. While the debate continues, schools across the nation continue to allow chocolate milk in schools, for example, because many know that the benefits of the all-important protein, calcium and vitamins found in cow’s milk outweigh the additional sugar. Those who are drinking milk are usually consuming it at home, however, with few people ordering it in a restaurant. Interestingly, milk’s biggest competition in a restaurant is a glass of water, as those enjoying a night out are still leery of a sugary glass of soda or even, in some cases, the sugar found in alcoholic beverages. “We’re consuming more dairy than ever before, just not in liquid form,” said Berry. “We’re certainly eating more of our dairy than drinking it these days.” From adventurous eaters looking for exciting new flavors to those counting on dairy product to continue to provide them with healthy choices, there is so much to be offered in the dairy space, and consumers are paying close attention to its value and creativity. Just like any food category, trends will come and go, of course, and the dairy industry is certain to see some of what’s “hot” today be passe tomorrow. But, what will never be trendy is the nutritional value of real dairy products in so many delicious forms. Editor’s Note: Thanks to Donna Berry for lending her insight and expertise in the dairy space, as well as excerpts from her dairy blog, to this article. Follow her at www.berryondairy.com.

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NED Magazine | Second Quarter 2022 • 29

2022 DAIRY TRENDS MAKING MILK MODERN

MilkPEP Webinar Highlights How Milk Can Stay Fresh in the Minds of Consumers

attes and cold brew. Green juice. Protein shakes. Plant-based beverages. Wine in a can. Energy drinks and even bottled water. These are just some of the most popular beverages consumers are purchasing right now. So, where does milk fit in to this crowded selection of liquid refreshment? Making Milk Modern, a recent webinar presented by MilkPEP, discussed the opportunity for “milk to play in the modern beverage space,” offering some of the latest research on how the dairy industry can help make this delicious staple more competitive with so many other choices. Panelists included Kikke Riedel, vice president, strategy & insight, MilkPEP; Jasmin Esquivel, brand strategy direction, Grupo Gallegos, a marketing and advertising firm; Dana Colbert, vice president, Radius Global Market Research; and Laura Hoffman, senior insight strategist, Radius Global Market Research. “Modern is not something that consumers immediately associate with milk versus a milk-alternative that is relatively new to the market,” said Hoffman at the start of the presentation. The presentation based its target audiences on a “Love Meter,” a framework for understanding consumers’ milk engagement – both functionally and emotionally – that includes milk “lovers” (72% of the population) who are huge fans of milk, “neutrals” (34% of the population), who are considered “auto pilot” shoppers and are indifferent about milk; and “haters” (11% of the population), who do not believe in any of the positive aspects of milk. “Lovers” have a median age of 55 years, on the cusp of Generation X and Baby Boomers. “Neutrals” fall squarely into Generation X, and “haters” are primarily Gen Z and Millennials. It is, however, the “confused regulars” and the “doubters” that were the focus of the webinar, as they account for 37% of milk consumption nationwide and are considered a “critical source of volume to defend.” “Confused regulars” (primarily Generation X) are defined as those who believe in the functional benefits of milk but are confused by what they consider 30 • Northeast Dairy Foods Association, Inc.

conflicting information, while “doubters” (primarily Millennials and some Generation Xers) believe that milk has some benefits, particularly for their children, but tend to purchase alternative beverages for themselves.

SO, WHAT MAKES A BEVERAGE “MODERN”?

According to the webinar, these on-trend products have at least some of these five common characteristics: • Unique packaging that is different from that of store and mainstream brands in terms of container shape, design aesthetics and color • Manufacturing by smaller, lesser-known brands (particularly true in the dairy space) with store brands and mainstream brands often considered the least modern • An association with a recent, trending health benefit from ingredients, i.e., electrolytes, CBD or Kombucha • Distribution in specialty stores at a premium price, often with limited availability • Significant promotion on social media by celebrities or other well-known influencers While, admittedly, milk sits towards the bottom of the modern beverage scale, along with orange juice and many sparkling and still waters, it’s not always the product itself that can move its popularity. Often, it is what’s specifically in the bottle or even the look and make-up of the container itself that can drive consumers to various milk products. For example, Northeast Dairy Foods Association member Ronnybrook Farm Dairy Inc. has a retro-shaped glass milk bottle that gives consumers the feeling that old is cool again. “The bottle doesn’t look like a typical milk carton or jug, so it felt like it may be a more modern brand of dairy milk,” said one doubter surveyed, reflecting the popular opinion that visually appealing and unique packaging really does seem to matter to consumers when it comes to any beverage. Clear glass bottles that can be reused or at least recycled are very popular with consumers, as is any kind of packaging

2022 DAIRY TRENDS Photo courtesy of MilkPEP.

that is considered eco-friendly and/or biodegradable, like compostable cardboard. On the other hand, Organic Valley Dairy Milk, a brand that does come in a traditional carton, was still noted as being modern due to its product’s natural processes. Popular brand Fairlife!, too, was considered modern for both reasons – an unusually shaped bottle and the impression that the brand is “taking a more ethical stance to how they produce and process their milk.”

DESPITE POPULARITY OF MILK ALTERNATIVES, CONSUMERS HAVE AN EMOTIONAL CONNECTION TO MILK

According to this webinar, plant-based milk alternatives, particularly those made from oats and peas, are considered very modern, even beating out almond milk, which has become somewhat of a category staple. The good news for fluid dairy milk is that many consumers say they have an emotional connection to beverages in the dairy space because they simply enjoy a great glass of milk or have a connection to happy childhood memories like milk and cookies. Consumers say that milk “feeds the soul” in ways that other foods and beverages do not. In addition, today’s consumers are looking for real, natural beverages that are not altered or ultra-pasteurized, as well as organic products that are not highly processed or artificially manufactured. They want smaller, lesser-known brands that are more “craft-like” (similar to the current popularity of craft beer). These are often perceived as more caring than mainstream brands, as are organic brands that seem to connect clearly with

the concept of “modern” due to the association with a better treatment of animals and a more natural process. Value added is also critical in making milk modern. Consumers already assume that cow’s milk contains protein, calcium and Vitamins A and D, but they want more, including: • No antibiotics or hormones • Lower sugar options • Added protein and iron for muscle building and growth • Immunity boosters • Lactose free options for easier digestion • Pre and probiotics for better digestive health • Anti-inflammatory benefits • Collagen for improved skin And, finally, making milk modern also means offering something that tastes great – and a bit unique. Although only 6.6% of dairy milk is flavored (in comparison to 43% of milk alternatives), today’s consumers are leaning towards interesting flavors like caramel, raspberry, berry blends, banana, peach and dark chocolate. However, these delicious flavors are still expected to be naturally derived. This is a huge opportunity for the dairy industry, as consumers like flavored milk and want more of it. While milk is seen as a traditional staple, there is potential in making it stand out in an ever-growing beverage case. The momentum is there, as is the potential for those milk products that market themselves as premium, unique, full of health benefits and in keeping with the values of today’s savvy consumer. Editor’s note: Information from Making Milk Modern was based on data from Simmons Research, LLC, and IRI. NED Magazine | Second Quarter 2022 • 31

2022 DAIRY TRENDS

FOR 2022 E-Commerce Remains Strong But Not for Dairy

Spread It Around

The trend towards both clean label and sustainable products continues to increase, and consumers are taking these factors into consideration when making purchasing decisions. To this end, Anchor, the consumer brand of New Zealand dairy cooperative Fonterra, recently introduced New Zealand Organic Butter, which is certified carbon zero. New Zealand has one of the lowest on-farm carbon footprints in the world, making Anchor uniquely qualified to offer consumers a butter option that helps reduce their environmental impact.

Milk for Cats … and Dogs?

The Natural Pet Food Group recently rolled out K9 Natural and Feline Natural Pet Milk, a milk that comes from free-range, grass-fed New Zealand cows and is treated with lactase so pets can easily digest it. It is boosted with taurine to aid the heart, eye health and immune function, as well as flaxseed oil to help maintain a shiny, itch-free coat. The product is the first of its kind in the North American pet milk category, according to Laela Johnson, brand manager. “Our passion is pet health and making sure healthy habits, like staying hydrated, are extended to the furry members of our family,” she said. 32 • Northeast Dairy Foods Association, Inc.

According to research firm IRI, consumers, many of whom started shopping for food online during the height of the pandemic, continue to keep e-commerce going strong at the grocery store. However, shoppers are reluctant to let in-store shoppers select their produce and date-sensitive items like dairy products. Stay tuned to see if this changes, as companies work to further improve the e-commerce shopping experience.

What’s Clean Label? It’s Not That Simple

The term “clean label” has become more common in the dairy industry, as consumers are prioritizing the health of both the planet and themselves. Clean label products are defined as food products that have a limited number of ingredients – and those ingredients are simple, not highly processed, and derived from natural sources. They do not contain additives or preservatives. In simpler terms, they are ingredients that consumers can understand and recognize – for example, “cream” versus “microparticulated whey protein concentrate.” Other definitions of clean label refer to products that are certified organic and/or contain non-GMO ingredients. Clean label is part of a movement that is associated with foods being more natural. However, there is no specific regulations or legal definition to classify the term, so it can mean different things to different people.

2022 DAIRY TRENDS

2022 Flavor of the Year Embodies Desire for Food, Beverages That Are “Better for People and Planet”

hen most people hear the word “botanicals,” they probably think more about shampoo than dairy. However, there’s plenty of opportunity in the dairy space with this year’s selected flavor, as it plays well into consumers’ desire for clean labels options, the interest in flavor adventure and the importance of consuming products that are natural and have health benefits. Teas, herbs and spices are being incorporated into dairy products like yogurt, not only for naturally derived taste but also natural ways of coloring food. Botanicals can also be used as additives that complement dairy products by adding fiber and natural forms of caffeine. Yes, it’s new and different, but it’s another opportunity for dairy to continue to meet its consumers where they are with what they want to consume. Firmenich, the world’s largest privately owned fragrance and taste company, is excited to announce its 2022

Flavor of the Year, Magical Botanical, responding to a transformed society’s need for enhanced well being and creativity.

A LIMITED EDITION CREATIVE COLLECTION

“This is our 10th Flavor of the Year, something our customers have really come to look forward to,” said Emmanuel Butstraen, president of Firmenich’s Taste & Beyond division. “To help serve the consumer-driven diet transformation with food and beverages that are better for people and planet, we aimed to develop a creation that embodies this transformation. We tapped into the extraordinary talent and creativity of Firmenich flavorists across the world to create something entirely new, inspired by the transformative and

healing notions of botanicals.” The Magical Botanical flavors were designed around a core of intriguing botanical ingredients and culinary herbs of natural origin and traceable sourcing that are also known for their healing and immunity-supporting powers. Firmenich creators paired these ingredients with dynamic elements of surprise and delight, transforming them into great-tasting flavors. The resulting flavor collection was designed to inspire new creativity in a wide variety of applications across sweet goods, savory foods and beverages.

CREATIVITY FROM COLOR AND TRENDS

This marks the first time Firmenich has created a new flavor by blending a variety of natural elements for its Flavor of the Year launch. This year also brings the unveiling of a sensory partnership between Firmenich and the global color authority, Pantone. Inspired by an unprecedented moment of global transformation, both Firmenich and Pantone NED Magazine | Second Quarter 2022 • 33

2022 DAIRY TRENDS have chosen to introduce entirely new creations as the Firmenich Flavor of the Year and the Pantone Color of the Year, respectively. Pantone Color of the Year 2022 is PANTONE 17-3938 or Very Peri, an entirely new periwinkle blue hue enhanced with a vibrant violet-red undertone. It was created by Pantone using the universal language of color to reflect these uniquely transformative times. “Like Pantone Very Peri, Firmenich’s Flavor of the Year aims to capture the emerging themes we’re seeing in the world around us by translating new trends and consumer emotions into positive sensory experiences,” said Mikel Cirkus, global creative director, Taste & Beyond.

INSPIRED BY TRANSFORMING MARKETS

Firmenich’s consumer and market data tell the same story. Its proprietary Flavor Knowledge Portal, fueled by Mintel data, leverages more than 10 years’ worth of data across millions of launched products to uncover patterns and trends around food and beverage innovation. This data reveals that even before COVID-19, food and beverage companies began accelerating their bets on botanicals. “Hot drinks, alcoholic drinks and baked goods are the most common applications, and we also see substantial numbers of brands talking about botanicals on packaging in applications from sauces and snacks to juices,

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dairy and nutritional drinks. In sensory terms, this is driving growth in the use of flavor notes that we classify as flowery, herbal and tea tonalities within our AromaSphere flavor description system,” said Firmenich Global Head of Human Insights Jeff Schmoyer.

THE MAGIC OF COMBINING BOTANICALS

“To stretch our creativity even further, this year we challenged our flavorists to create blends of botanicals that fit these trends and also are evocative of the Pantone Color of the Year 2022. Botanicals lend themselves naturally to creative blending in food and beverages. Over the past decade, the use of combinations of flavors had been on a steady increase in launched consumer packaged goods, cresting at 45% of all launches in 2018,” Schmoyer remarked. “While we’ve seen a slight slowdown in the launch of multiway blends during COVID as manufacturers focused on single hero ingredients with benefits (such as our 2021 Flavor of the Year, ginger), there are clear indicators that consumers have become considerably more creative at home in the kitchen and are hungry for more interesting and complex flavors outside the home, as well.” In the most recent wave of Firmenich’s global consumer tracking across 22 countries, the top three behavior changes noted by consumers during the past year were “a major improvement in cooking ability,” “becoming more passionate about food overall” and “increased use of herbs and spices.” According to Schmoyer, “All of this points to a surge in intentional consumer creativity and interest in learning to work with and combine nature’s most aromatic and culinarily relevant plants to create unexpected food and drink experiences for the future.”

2022 DAIRY TRENDS FDA Yogurt Standard Stayed

On March 22, the U.S. Food and Drug Administration published a notice to clarify that the effectiveness of certain provisions of the yogurt standard identity rule has been stayed. The final rule, published on June 11, 2021, amended the standard of identity for yogurt and revoked the definitions and standards of identity for low-fat yogurt and non-fat yogurt. Dairy standards of identity are subject to formal rulemaking procedures, which provide a 30-day period for any person adversely affected to file an objection and request for hearing. If objections are properly filed, then the provisions to which objections were made do not go into effect (meaning they are “stayed”). Because the FDA received objections to certain provisions of the final rule within this timeframe, the affected provisions are stayed pending final FDA action on the objections.

Colorful Foods Must Be Natural

hefs always say that people eat first with their eyes, which is why the color of what we eat and drink can be so important. But, today’s consumers not only want food that looks good. They also want food that is colored naturally and still tastes delicious. More than ever, artificial flavoring and colors are a no-go in foods, and dairy is no exception. In fact, research shows that consumers are actually willing to pay more for foods that are considered natural when it comes to ingredients. And, they’re checking products for simple ingredients and “clean labels.” They want real peaches in their Peaches ‘n Cream ice cream and responsibly sourced cocoa in their Rocky Road. To meet that demand, more and more of the coloring that goes into dairy products today is derived from fruits, vegetable

and other botanicals (i.e., teas, herbs, spices). Carrots and sweet potatoes can make for a bright orange. Berries and beets can lend a blue or purple hue. And, even spices like turmeric (yellow) and paprika (orange) can be added to the mix. It’s not as simple as it sounds, however, as using these natural ingredients for color must not impact taste – and that can be a challenge. In addition, natural ingredients must be able to withstand manufacturing processes, transport and storage, while also maintaining product integrity. Arguably, the dairy industry has never before been faced with such a health conscious consumer base – most likely impacted by the pandemic – but innovators are working around the clock to make sure dairy products not only come in every color of the rainbow but are sourced naturally, too.

NED Magazine | Second Quarter 2022 • 35

2022 DAIRY TRENDS USDA Announces Actions on Nutrition Security

griculture Secretary Tom Vilsack recently announced a report detailing the U.S. Department of Agriculture’s Actions on Nutrition Security. This report highlights USDA’s commitment to advancing nutrition security, and the consistent access to safe, nutritious food that supports optimal health and well-being for all Americans. Vilsack gave a speech at Teachers College, Columbia University, showcasing the USDA’s robust efforts to tackle nutrition insecurity. The address underscored the USDA’s commitment under the Biden-Harris Administration to prioritize bold nutrition security efforts that will help ensure all American children and families have consistent and equitable access to healthy, safe and affordable food. Nutrition security builds on the important work the USDA and its partners are doing to promote food security by increasing the department’s focus on diet-related chronic diseases — a leading cause of death in the U.S. Nutrition security further emphasizes the importance of tackling long-standing health inequities. Research shows communities of color, families with children and people in more isolated areas of the country, including tribal communities, are disproportionally affected by the toll of diet-related chronic diseases. “The COVID-19 pandemic brought food insecurity to the forefront of the national conversation and shined a new light on the devastating toll of chronic disease, with an estimated two-thirds of COVID hospitalizations in the U.S. related to diet-related diseases,” said Vilsack. “Across the department, we recognize that food and health are inherently intertwined, and we’re leaning into our powerful tools to help reduce chronic disease, advance equity and promote overall well-being. We look forward to working with our stakeholders to achieve this vision.” 36 • Northeast Dairy Foods Association, Inc.

The plan outlines the USDA’s four-pillar strategic approach to leveraging all its assets to move toward nutrition security for all Americans. These strategies include: • Meaningful Support: Providing nutrition support throughout all stages of life • Healthy Food: Connecting all Americans with healthy, safe, affordable food sources • Collaborative Action: Developing, translating and enacting nutrition science through partnership • Equitable Systems: Prioritizing equity every step of the way An integral part of all four pillars is the USDA’s nutrition assistance programs, which are the most far-reaching tools available to ensure all Americans have access to healthy, affordable food.   Broadly, Americans suffer from poor nutrition. When compared to the recommendations of the Dietary Guidelines for Americans, the average American diet earns a rating of 59 out of 100 points. Poor diet increases risk of heart disease, diabetes, obesity and more. Beyond impacts on health, this also has negative effects on productivity, health care costs, military readiness and academic achievement.    USDA is engaged in several efforts to help improve Americans’ diets, including: • Modernizing WIC to reach more eligible mothers and their children and better meet their nutritional needs through updated food packages that reflect the recommendations of the National Academies of Science, Engineering, and Medicine and the Dietary Guidelines for Americans. • Building on the success of the school meal programs by issuing transitional nutrition standards while engaging with stakeholders to update the standards in a way that reflects the latest science and works for people on-the-ground.

2022 DAIRY TRENDS • Helping SNAP participants make the most of their benefits, which were strengthened by the Thrifty Food Plan re-evaluation to ensure SNAP participants can afford a nutritious, practical diet. • Focusing on nutrition education efforts across all its nutrition assistance programs – including SNAP-Ed, WIC breastfeeding support and promotion, and MyPlate – and ensuring they meet the needs of the diverse audiences they serve.

The USDA is transforming America’s food system with a greater focus on more resilient local and regional food production, ensuring access to healthy and nutritious food in all communities, building new markets and streams of income for farmers and producers using climate smart food and forestry practices, making historic investments in infrastructure and clean energy capabilities in rural America, and committing to equity across the department by removing systemic barriers and building a workforce more representative of America. To learn more, visit www.usda.gov.

What Is Food Security? Food security is having enough calories. Nutrition security is having the right calories.

600,000 Americans die each year due to diet-related diseases like diabetes, obesity and heart disease.

85% of health care spending is related to diet-related chronic disease (Source: usda.gov)

Poor nutrition is the leading cause of illness in the United States.

Diet-related diseases hit hardest in communities with high food insecurity.

The USDA is working to ensure nutrition security, and dairy foods can be an important part of that initiative. NED Magazine | Second Quarter 2022 • 37

2022 DAIRY TRENDS

Who Knew?

Milk Has Four Newly Discovered Essential Nutrients

o worries. Milk is still as healthy as it’s always been, but recent data from the USDA has shown that there are more nutrients in milk that meet the threshold to call them an “excellent source.” This information was a topic in a joint webinar by MilkPEP and global technology solutions company DMI called Powerful Ways to Talk About Milk. So, what are these new nutrients? Drum roll, please! Zinc, selenium, iodine and potassium. These added benefits tie in with consumers’ ever-growing interest in foods that include true health benefits to support a healthy body and immune system.

ZINC

Zinc helps maintain healthy skin, supports cell growth and is necessary for protein synthesis and production of genetic material. It’s even required for a proper sense of taste and smell. As the body has no way to naturally store zinc, daily intake – through a glass of milk, for example — is essential.

SELENIUM

Selenium is made up of more than two dozen selenoproteins that are critical in reproduction, thyroid function, DNA synthesis and protection from infection. 38 • Northeast Dairy Foods Association, Inc.

IODINE

Iodine boosts cognitive development, and potassium can naturally enhance performance. It is essential to healthy thyroid function, which, in turn, helps regulate the body’s metabolism. Iodine is also essential for proper fetal and infant bone and brain development.

POTASSIUM

Potassium helps maintain healthy blood pressure and supports overall heart health, kidney function and normal muscle function, while also helping maintain the body’s central nervous system. Every 8 oz. glass of milk provides not nine but 13 essential nutrients to help the body remain healthy and strong. While many products have tried to duplicate the outstanding benefits of milk, none have proven to be as naturally nutritious as the real thing. All in all, these help “position dairy as the power food for overall wellness,” according to the webinar. As a result, milk is now an excellent source of these 13 essential nutrients: • Calcium • Pantothenic • Protein Acid (B5) • Vitamin D • Phosphorus • Vitamin A • Zinc • Riboflavin (B2) • Selenium • Niacin (B3) • Iodine • C o b a l a m i n • Potassium* (B12) *Source: USDA FoodData Central. FDA’s Daily Value (DV) for potassium of 4700 mg is based on a 2005 DRI recommendation. In 2019, NASEM updated the DRI to 3400 mg. Based on the 2019 DRI, a serving of milk provides 10% of the DRI. FDA rule-making is needed to update this value for the purpose of food labeling.

2022 DAIRY TRENDS Celebrate All Summer Long … Dairy is synonymous with

summertime! With Dairy Month

in June and National Ice Cream Month in July, what

With Dairy

JULY 14: National Macaroni and Cheese Day JULY 17: National Peach Ice Cream Day

could be better than to enjoy dairy all summer long?

JULY 17: National Ice Cream Day

around a variety of “dairy days” suited for almost

JULY 23: National Vanilla Ice Cream Day

Plan your poolside celebrations and beach BBQs every taste and flavor. Mark your calendars now!

JUNE 2021

DAIRY MONTH

JULY 25: National Hot Fudge Sundae Day JULY 25: National Wine and Cheese Day

JUNE 1: World Milk Day

JULY 26: National Coffee Milkshake Day

JUNE 2: National Rocky Road Ice Cream Day

JULY 29: National Lasagna Day

JUNE 4: National Cheese Day

JULY 30: National Cheesecake Day

JUNE 7: National Chocolate Ice Cream Day JUNE 18: National Cheesemakers Day

AUGUST 2021

JUNE 20: National Vanilla Milkshake Day

NATIONAL EAT DESSERT FIRST MONTH & NATIONAL GOAT CHEESE MONTH

JUNE 20: National Plain Yogurt Day

AUG. 2: National Ice Cream Sandwich Day

JUNE 20: National Ice Cream Soda Day

AUG. 6: National Root Beer Float Day

JUNE 21: National Peaches and Cream Day

AUG. 7: National Raspberries and Cream Day

JUNE 26: National Chocolate Pudding Day

AUG. 8: National Frozen Custard Day

JUNE 27: National Ice Cream Cake Day

AUG. 9: National Rice Pudding Day

JUNE 28: National Tapioca Day JULY 2021

NATIONAL ICE CREAM MONTH JULY 1: Creative Ice Cream Flavor Day

AUG. 14: National Creamsicle Day AUG. 17: National Vanilla Custard Day AUG. 19: National Soft Ice cream Day

JULY 4: Celebrate the Birthday of the U.S of A!

AUG. 18: National Ice Cream Pie Day

JULY 7: National Strawberry Sundae Day

AUG. 21: National Spumoni Day

JULY 13: National Nitrogen Ice Cream Day

AUG. 25: National Banana Split Day

(Source: juleeho.com; holiday-and-observances.com) NED Magazine | Second Quarter 2022 • 39

Member Profile

Wade’s Dairy Has Been Serving Its Customers for 129 Years BY COURTNEY KLESS

n a shelf in his office, Douglas Wade Jr. has milk bottles that date as far back as 1912, some of the first produced by his great grandfather, Frank Henry Wade. Wade, the current president, is part of the fourth generation to run Wade’s Dairy. “I think my earliest recollection goes back to maybe when I was 8 years old, and the milkman would pick me up at my parents’ house,” he said. “I would ride in that milk truck, sitting on a wooden milk crate, no seatbelts, open doors, just bouncing around. I have a wealth of knowledge from growing up in this business.” Frank Henry Wade started Wade’s Dairy more than a century ago – in 1893, to be exact. “The story goes that he had 25 or 26 cows,” said Wade. “He would actually start his chores at midnight, and, around 5:30 or 6 a.m., he would go out in a horse and buggy with a big can of milk and a ladle and stop at each home. The people would be waiting for him because they would plan their breakfast around when the milkman was coming. He would ladle a quart of milk into whatever pitcher they came out with, and then be on his way to the next customer. He probably served about 20 or 25 families, and he went out every day.” In 1907, he moved from Easton, Connecticut, to Fairfield, Connecticut, and began pasteurizing his milk, selling it under the F. H. Wade label. In the years that followed, Frank’s son, John, joined him, and his other son, Howard, built a dairy plant behind his home 5 miles away and began selling milk under the H.F. Wade label. In 1933, when Frank retired, the brothers came together and started Wade’s Dairy. The company would continue to grow and adapt from there. Around 1970, Wade’s Dairy added school milk and started using a machine called a spin-welder, which turned two pieces of plastic into a bottle, added milk, sealed it and put the finished half pints into a crate – all at a high rate of speed. Wade said, at one point, the company was producing as many as 100,000 half pints of milk each day. 40 • Northeast Dairy Foods Association, Inc.

Then, in 1973, the oil embargo began. “All of a sudden, our plastic containers that all the schools loved became very expensive compared to paper,” said Wade. “By 1976, we were out of the spin-weld business because the embargo just made it non-competitive. That was a major change for us.” In the late 1980s, Wade’s Dairy changed direction again. It reached a deal with Guida’s Dairy to package its milk, so it closed its plant. “That opened a lot of avenues for us,” said Wade. The company grew from there, going from $2.6 million in sales in 1987 to $40 million in sales last year. “We’re very open to change,” said Wade. “When home delivery was really going off the cliff so to speak, we didn’t give up the battle. We kept changing and looking at every opportunity, and that spin-welder was a huge opportunity. Shutting down the plant was a very good move for us because it allowed us to really branch out. We got into a whole host

Member Profile

of ancillary products. Right now, we are still a milk company, but we have diversified.” These days, Wade’s Dairy distributes a variety of dairy products (and other food items) to school systems, delis, convenience stores, restaurants and healthcare facilities, all of which are within 90 miles of its facility in Bridgeport, Connecticut. Those products include milk, plant-based milk alternatives, cheese, eggs, butter, yogurt, ice cream, juice, baked goods and soup. Wade’s Dairy has also added several shelf stable products to its offerings, such as creams and single serve milks for its school lunch programs. “One of the things that makes us really unique right now is that our milk is coming up from Clover Farms in Pennsylvania,” said Wade. “Reading, Pennsylvania, is like Connecticut was 100 years ago. It’s all fertile farmland, and Clover Farms sits in the middle of all of these farms. Its processing plant is family-run; it runs like a clock. I’ve never had any quality issues. It’s a good, clean product.” And the company didn’t slow down during the pandemic. “We have done extraordinarily well,” said Wade. “It opened up a world of opportunities for us.” One example is food giveaways. Wade’s Dairy held 48 over the course of the pandemic at its facility. The company also brought back its home delivery service, which it had discontinued in 1992 after 100 years.

“The phone started ringing with people wanting to know if we do home delivery,” said Wade. “Within a matter of four or five weeks, we had 300 customers. But, within a matter of another two months, people felt safe again to go out shopping, so home delivery lasted all of six months. But it was an amazing run. Everyone kept remarking what a great pivot it was and how extraordinary it was to go back to our roots. Even though it was for a short period of time, it was a whole lot of fun.” Though a lot has changed throughout its history, Wade’s Dairy has remained committed to customer service. “That’s what we’re known for,” said Wade. “Most everyone I serve as a customer has my phone number. It’s a new world out there. Changes are fast and furious, and you just have to keep your customers informed about what’s happening. We like to have their back because without the customer we are nothing. When you’ve been around for 129 years, you hope you’ve been doing some things right.” Courtney Kless is a staff writer for Northeast Dairy Media.

NED Magazine | Second Quarter 2022 • 41

Member Profile

Firmly Rooted in the Northeast, Lactalis Is Growing and “Here to Stay” BY COURTNEY KLESS

actalis Group began as a small family cheese company in 1933. The company has grown significantly since then, adding milk, butter and yogurt to its offerings and selling its products in 94 countries around the world – including the United States. But there is one thing that hasn’t changed. “Our values of ambition and engagement with simplicity — those go back almost 100 years and are still widely talked about within the company,” said 42 • Northeast Dairy Foods Association, Inc.

Chris Bona, director of U.S. communications for Lactalis. “We’re the world’s largest dairy company, but it still feels like we’re a small company at every level.” Nearly nine decades ago, André Besnier founded the Lactalis Group in Laval, France. In the early 1980s, the company opened its first facility in the United States, an import office in New York City for European cheeses. Lactalis would continue to expand in the United States from there, acquiring Sorrento Cheese and establishing a corporate office in Buffalo, New York,

in 1992 and expanding its production of Italian cheeses with a new plant in Nampa, Idaho in 1999. There have been numerous other acquisitions since then, including Kraft Heinz’s natural cheese business, which was finalized at the end of November. Lactalis now has 11 plants in the United States. “Lactalis in the United States began in the Northeast, and this has been the market that has driven our recent external growth, mostly through the acquisition of broad-based branded products that are located here,” said Don Heins, manager of U.S. communications for

Member Profile Largely because of those acquisitions that have been made in the Northeast, we have grown from $1.7 billion in revenue in 2017 to $3.3 billion in 2021.

the company. “Largely because of those acquisitions that have been made in the Northeast, we have grown from $1.7 billion in revenue in 2017 to $3.3 billion in 2021. The United States is Lactalis’ second largest market in the world [behind France].” Now run by the third generation of the Besnier family, the Lactalis Group has four divisions in the Northeast: Lactalis Heritage Dairy, the cheese businesses acquired from Kraft Heinz; Lactalis American Group, the rest of its largely

European cheese business; Lactalis U.S. Yogurt, its yogurt businesses; and its ethnic cheese division, Karoun Dairies. The company’s product portfolio features a number of global and award-winning brands, including Galbani (Italian cheeses), Président (specialty cheeses, gourmet butters), Parmalat (milk), Black Diamond (cheddar cheese), Green Mountain Creamery (yogurt), Stonyfield (organic yogurt), Siggi’s (natural yogurt), Cracker Barrel (cheese) and Breakstones (cottage cheese, ricotta, sour cream).

Lactalis was most recently recognized for its cheesemaking excellence with 20 medals at the World Championship Cheese Contest, including nine gold (see page 45). Lactalis’ premier global brands, Galbani and Président, received eight awards. Bona estimated that in the United States alone, 4.6 billion pounds of milk are collected by the company for product production each year. “We want people to know Lactalis for a couple things,” said Bona. “One is that we want to be an employer of choice. We want to be a place where people want to come and grow their career. [At our national meeting], I can’t tell you how many people I bumped into that have been here for 20, 30, 40 years. I ask them, ‘Why do you stay?’ and they have wonderful things to say about the culture and the products. And ,number two, dairy leadership is really important for us. We’re a company that consumers might not yet know by the corporate brand, but they will know us by our product brands. When you look at the premier brands, they’re well-known, well-established, beloved brands.” Even with all of its success, the company is still looking for new ways to “inspire” and “delight” its customers. CONTINUED ON NEXT PAGE ► NED Magazine | Second Quarter 2022 • 43

Member Profile “Innovation is an important part of the company’s business strategy,” said Bona. One recent example is the introduction of UP2U RECOVER, a line of protein drinks and unflavored protein powder. Both feature a fast-absorbing protein, and the drinks do not contain any added sugars (instead, dragon fruit is used as a sweetener). “What makes it unique is the whey that we take is not necessarily a byproduct, but we extract native whey from milk, which means the protein count is higher, and so the absorption rate in the body is higher,” said Bona. “For a sports enthusiast or athlete looking to recover, they’re getting a really high amount of protein absorbed very quickly. Comparatively, other protein drinks that aren’t made of protein, that more pure version, it takes more time throughout

the day to absorb in the body.” Clearly, a lot has changed since 1933, but the company’s culture and core values have remained the same. “Those values that we had years ago still come through,” said Bona. “So, what does it feel like to work at Lactalis? Whether you’re in a production plant or you’re in a corporate office, it feels like you’re working for a family who is passionate about cheese and dairy. We like to be close to the consumers and customers, providing them fresh food. We like to be close to the farms and family tables to get products to our customers, which is why we are so invested in the Northeast.” And Lactalis has no plans to change that any time soon – both in the United States and beyond. “We’re committed to the dairy

industry and to being a world leader in dairy,” said Bona. “Our brand products are beloved by consumers. Galbani and Président are premier brands. Kraft is a premier brand. Siggi’s. Stonyfield. If you look at how we’ve been growing the business, we’re invested in the space as a pure dairy company. In the future, especially in the U.S., we’re going to continue to invest in our products, in our people and in our manufacturing plants. Culturally, it’s a company with roots in manufacturing. We’re here to stay.” Courtney Kless is a staff writer for Northeast Dairy Media.

buyersguide.neastda.org

REACH MEMBERS BY ADVERTISING IN THE NORTHEAST DAIRY CONNECTION • The ofﬁcial membership e-newsletter of the Northeast Dairy Foods Association, Inc. and Northeast Dairy Suppliers Association, Inc. • Strong open rate of 26% and a click-through rate of 24%.

TWO ADVERTISING OPTIONS AVAILABLE FOR THE E-NEWSLETTER • A Spotlight Ad allows your company to have a 50 word description at the very top of the newsletter, as well as a logo, plus a 600x300 spotlight ad in the body of the text. • A banner ad is a 600x150 ad that is placed in the body of the newsletter.

Contact Bill Brod by emailing billbrod@nedairymedia.com or calling 315-445-2347, ext. 138.

44 • Northeast Dairy Foods Association, Inc.

Member Profile

Lactalis Recognized at World Championship Cheese Contest

actalis, the world’s leading dairy company, was recognized for its cheesemaking expertise at the prestigious international World Championship Cheese Contest, winning 20 medals including nine gold across its broad portfolio of products. The contest is considered the world’s premier technical competition for cheese, butter and yogurt. Lactalis’ premier global brands, Galbani and Président, received eight awards. Président brand of cheeses have been enjoyed by consumers and customers in the United States for more than 40 years. Medals were won by both Président artisanal U.S. import and domestic products. Président Cremeux Triple Crème Brie received a gold medal, along with a blue cheese made from sheep milk that is marketed outside the United States. Président Wee Brie and Président Salted Normandy Butter were honored with silver and bronze medals, respectively. The Galbani brand is celebrating its 140th anniversary in 2022 and received gold, silver and bronze medals for its ricotta cheeses. Galbani Classic Ricotta won the gold medal in the Ricotta Cheese Division, while Galbani Low Fat Ricotta earned silver and bronze medals. Galbani Marinated Fresh Mozzarella was honored with a bronze medal. Additionally, Bella Gento Mascarpone, which is sold in the culinary industry to restaurants, earned a gold medal in the soft cheese category. Lactalis also received five gold medals for its whey protein powder products that are used by Lactalis’ sports-related businesses, including the UP2U Recover protein drink that was recently launched in the United States. “We are honored to be recognized for our delicious and nutritious portfolio of iconic and beloved cheese products,” said Gilles Meziere, CEO, Lactalis North America. “This recognition by the cheese making industry reflects the teamwork and dedication of the Lactalis family of employees who work every day to inspire and delight our customers and consumers with our fresh products.” The World Championship Cheese Contest is a premier international contest held biannually by the Wisconsin Cheese Makers Association. The contest recognizes the foremost cheesemakers in the world by judging product submissions for their flavor, color and texture, salt, color, finish, packaging and other attributes. This year’s contest was held in March and comprised submissions from cheese producers spanning 29 countries and 33 U.S. states.

NED Magazine | Second Quarter 2022 • 45

Member News

Member and Industry News

he New York State Office of Parks, Recreation and Historic Preservation officially launched the New York State Historic Business Preservation Registry to showcase the state’s businesses that have been in operation for at least 50 years and have contributed to their communities’ history. This registry started as a result of a bill passed by the state legislature and all nominations must be sponsored by a state elected official. Additionally, the program will provide educational and promotional assistance to help these businesses stay open for at least another 50 years. Agri-Mark was nominated for inclusion on this registry by Assemblyman Billy Jones. “We’re honored to be included in the historic business registry and we thank Assemblyman Jones for the nomination,” said Bill Beaton, CEO, Agri-Mark, Inc. “Our Chateaugay cheese plant has been a part of the local economy since the early 1900s, and it has manufactured McCadam cheese for over 70 years. The plant is as much a strategic part of the local community and the economy of the North Country as it is to Agri-Mark’s cooperative business. Since we purchased the plant in 2003, we have continued to produce the highest quality dairy products under both the McCadam and Cabot brand names. From Adirondack Wicked Sharp Cheddar to Muenster and pepperjack, our dedicated plant production team produces award-winning cheeses year-after-year that our customers and consumers crave. We’re proud to continue the cheesemaking legacy in Chateaugay and to be recognized as a historic business.” In February 2022, Gabriella Taylor was named the 20222023 New York State dairy ambassador. Taylor formerly 46 • Northeast Dairy Foods Association, Inc.

served as the Wayne County Dairy Princess in 2021. In her role as dairy ambassador, Taylor will serve as a spokesperson and advocate for dairy farmers by attending special events to educate consumers on the nutritional benefits of milk and dairy foods, how farmers care for their cows and land in order to produce a sustainable product, and the importance of the dairy industry to the New York state economy. She will receive a scholarship and an internship opportunity with the American Dairy Association North East. Katie Jasmin was named first associate ambassador, and Annika Donlick was selected as second associate ambassador. They will also receive scholarships, and both will assist the New York State dairy ambassador with training, appearances and other duties. The competition was sponsored by the American Dairy Association North East. Dopkins & Company, LLP, a full-service certified public accounting and consulting firm, announced that Andrew J. Reading, CPA, will serve as a judge for the 2022 New York Business Plan Competition. Presented by the Upstate Capital Association of New York, the NYBPC is a venture creation and innovation competition that encourages innovation and entrepreneurship throughout New York’s colleges and universities. This year’s IDFA conference welcomes 35 exciting and innovative flavors into its annual Ice Cream Flavor Contest. Judged by ice cream industry professionals in attendance, the ice cream that took the prize for the Most Innovative Ice Cream Flavor was Purple Daze by The Ice Cream Club, Inc. This black raspberry ice cream with a black raspberry crinkle and dark chocolate

Member News raspberry cups “iced” out the competition with its deliciousness! In the Most Innovative Ice Cream novelty category, the Northeast Dairy Foods Association saw two member winners. While first place went to Blue Bunny Strawberry Cheesecake Twist Cone by Wells Enterprises, Inc., Perry’s Ice Cream Company, Inc., received second place for its Yellow Cake Sundae Crunch Ice Cream Bar, and third place went to Dairy Farmers of America for its Strawberry Rhubarb Cobbler.

and its member-owner network. This award category honors efforts that “relentlessly innovate to solve health and climate crises” and businesses making the biggest impact on their industries and culture whole – ultimately thriving in today’s ever-changing world. According to Land O’Lakes, more than 40 million Americans lack broadband access in both rural and urban areas. For more on Corporate Social Responsibility, see the article on page 52.

Farm Credit East recently released its 2022 Insights & Perspectives report, which includes market outlooks for multiple sectors, including dairy, grain and oilseeds, greenhouse and nursery, lobster, forest products and vegetable crops. “As we’ve seen in the past two years, Northeast farmers, commercial fishermen and forest products businesses are resilient and continue to think strategically about their businesses and adjust as necessary,” said Mike Reynolds, Farm Credit East CEO. “Farm Credit East has tapped into our network of experts, both internal and external, to produce this year’s report. Our goal is to provide producers with the knowledge and expertise needed to inform their business decisions.” The report’s first article is an update from Farm Credit East Director of Knowledge Exchange Chris Laughton on the state of Northeast agriculture, commercial fishing, and forest products. Two of particular interest to the dairy industry are: • Dairy Outlook by Christopher Wolf, Cornell University • Green Industry Outlook by Charlie Hall, Texas A&M University To view the report, titled 2022 Insights and Perspectives, visit FarmCreditEast.com/reports.

Schenck Process, LLC, is proud to announce the launch of its brand new B2B e-commerce site. This is an exciting development in the group’s online offering and demonstrates an ongoing commitment to innovate the overall customer experience. By providing a platform that streamlines the accessibility of its key component portfolio, Schenck Process has been successful in simplifying valuable customer interactions. Aimed at trading customers initially within their EMEA locations, the new site will provide these customers with increased visibility on the breadth of the Schenck Process key component offerings for a variety of industries, including food. An automated ordering and quotation system will simplify the buying process for customer transactions while still ensuring the best functionality, security and support are available. The products featured on the e-commerce platform commonly have standard specifications, making an automated channel for ordering them a much more efficient service.

Great Lakes Cheese recently broke ground on a new stateof-the-art manufacturing and packaging plant in Franklinville and Farmersville, New York. With a capital investment of over $518 million, the project is the largest infrastructure investment in company history. Great Lakes Cheese will retain 228 jobs in the area, while added 215 more. It will also double its milk consumption to 1.42 billion pounds each year, a direct benefit to New York’s dairy farmers. The new plant will replace the company’s existing facility in Cuba, New York, when completed in 2025. Land O’Lakes, Inc. was named fourth on the Fast Company’s World’s Most Innovative Company’s list in the Corporate Social Responsibility category. The company was recognized for convening the American Connection Project to close the digital divide through dozens of partner organizations

Calling all youth coaches, club leaders and advisors. Kids in uniform can now order anything from the Stewart’s Shops cone counter and receive $1 off any regularly priced item. This deal applies to any youth uniform, including sports jerseys, concert attire or other club apparel. The offer is part of Stewart’s effort to proudly support the youth in the company’s communities. In 2022, Stewart’s plans to donate $1.2 million to various organizations that provide recreational activities to children. WestRock Company, a global manufacturer of differentiated paper and packaging solutions, broke ground on a 285,000-square-foot expansion at its consumer packaging facility in Claremont, North Carolina. The $47 million investment was bolstered by a performance-based grant from the One North Carolina Fund and is expected to create 50 new jobs by the end of next year. The expanded facility and its employees will support WestRock’s production of sustainable, fiber-based packaging for some of the world’s leading food, food service and beverage brands. WestRock has more than 50,000 employees and more than 300 locations worldwide. NED Magazine | Second Quarter 2022 • 47

Member News

NEW MEMBERS The following new member recently joined Northeast Dairy Foods Association, Inc., or the

The Northeast Dairy Suppliers Association, Inc. For more information about the benefits and

services available from both the Northeast Dairy Suppliers Association, Inc., and the Northeast Dairy Foods Association, Inc., contact Leanne Ziemba at 315-452-MILK (6455) or lz@nedairyfoods.org.

AMERICOLD

Jason Adams Regional Business Dev. jason.adams@americold.com 20 Big Wood Dr. Westfield, MA 01085 678-488-6731

HYGENIX INC.

Bud Watts Vice President, Business Development bwatts@hygenixinc.com 514 Cape Fear Blvd. Carolina Beach, NC 28428 919-274-9401 www.hygenixinc.com

48 • Northeast Dairy Foods Association, Inc.

INTEGRATED PACKAGING MACHINERY (IPM)

Tom Wiersma Business Development Manager tom.wiersma@callipm.com 801 Fox Row Court Rockford, MI 49431 616-293-3411 www.callipm.com

PAGE & PEDERSEN, INC. Jacqueline M. Page President jackie@pagepedersen.com 158 West Main St. Hopkinton, MA 01748 Fax: 508-435-8198 Phone: 508-435-5966 www.pagepedersen.com

SESSLER COMPANIES

Alex Walsh Business Development and Communications Mgr. awalsh@sesslercompanies.com 1281 State Route 96 Waterloo, NY 13165 315-539-3353 www.sesslerwrecking.com www.sesslerenv.com

Leanne’s Kitchen

Comfort Food Made with Delicious Dairy Many of our members may know Leanne Ziemba as the

business operations manager for the Northeast Dairy Foods Association, Inc., and the Northeast Dairy Food Suppliers, Inc., in our N. Syracuse, New York, office. But we’ve discovered she also is queen of the kitchen, as she has some delicious recipes that include fresh, wholesome dairy products.

Creamsicle Frozen Dessert INGREDIENTS:

• 1 package Mother’s Coconut Cocadas or M o t h e r ’s M a c a ro o n Cookies • 2 - 8 oz. containers of Cool Whip

INSTRUCTIONS:

1. Crush Coconut Cocadas to a fine crumb. Reserve one cup of cookie crumbs for topping. 2. Divide remaining cookie crumbs in half. 3. Mix one half cookie crumbs and one 8 oz. container of Cool Whip. Mix until well blended. 4. Spread in the bottom of a 9 x 13 baking dish.

• 1 quart of orange serbet

5. Freeze until firm.

• 1 quart of vanilla ice cream

6. In a large bowl, scoop out 1 quart of orange sherbet and 1 quart of vanilla ice cream. (Half of a 1/2 gallon of each flavor)

• Mandarin orange slices a n d f re s h m i n t f o r garnish

8. Spread over the frozen Cool Whip cookie crust.

• Whipped cream

7. Slightly mix together, so you can still see vanilla. 9. In a bowl mix the other half of the cookie crumbs and the other 8 oz. container of Cool Whip until well blended. 10. Spread over the top of the ice cream/sherbert mixture. 11. Sprinkle with 1 cup of reserved cookie crumbs. 12. Cover with foil and freeze until firm, usually overnight. 13. Garnish with whip cream, orange slices and fresh mint. NED Magazine | Second Quarter 2022 • 49

Business Trends

2022 Insurance Market Trend Report BY LISA BOLDUC

ver the last decade, workers compensation premiums have been reduced exponentially. Companies who were paying $500,000 in annual workers comp premium now pay $50,000. That is a substantial, favorable difference on the bottom line. What drove this difference? The worker’s compensation market has been softening steadily; state and carrier filed rates are reduced. Simply put – it is what the market is bearing. Insurance markets are cyclical, inconsistent and dependent on a myriad of factors. 2022 has felt more energetic from a carrier-broker partnership perspective. Our carrier partners are actively pursuing to meet with brokers and agencies in person. Underwriting models were more conservative, focusing on underwriting scrutiny, rate increases and profitability over the past couple of years. Carriers are getting more aggressive and flexible when it pertains to new business. This is beneficial for companies that have favorable risk profiles and maintained a relationship with their incumbent carriers. The $5 billion global insurance market will continue to evolve and be subject to market trends. Property & Casualty lines have different contributing factors and considerations. There is an air of optimism in our conversations with underwriters but still some friction within the details of specific risk profiles. See below for a quick summary by line of coverage.

PROPERTY

Weather and climate disasters exceeded $1 billion in 2021. Valuation remains a concern especially with recent inflation. Rate increases and capacity challenges remain for certain classes of business, like agriculture, mining, habitational and chemical to name a few.

CASUALTY

Insurers are eager to write new business. This is the case for primary workers compensation, general liability, automobile and umbrella/excess insurers for accounts less than $500 million in 50 • Northeast Dairy Foods Association, Inc.

revenue and small-to-medium fleets. Auto liability losses remain prevalent, but, surprisingly, product liability losses have grown at a higher rate. Keep this in mind when determining appropriate umbrella and excess limits. Risk transfer is also a method to protect the balance sheet resulting from liability losses.

INTERNATIONAL

This line continues to be highly profitable for insurers, which results in lower rates for buyers. Global litigation is much more suppressed compared to the litigious environment within the U.S. There is a war exclusion on most policies, including global policies. However, insurers are observing the Russia and Ukraine Conflict because there are ancillary coverages for political and security evacuations.

CYBER

Price increases remain over 50% for most buyers. There was a slight decrease in claims in 2021, but they are still up 70% from 2019 and 250% from 2017. The claims are more sophisticated, which are associated with larger claims expenses. Underwriting information is scrutinized, and system security requirements are enforced for buyers. Also, limit capacity continues to be restricted and self-insured retentions continue to increase. NDFA and NDSA members should understand system access points and understand that cyber criminals are targeting manufacturing industries. For more information on various insurance related issues and options, contact Brown & Brown at https://www.bbrown. com/contact/.

Lisa Bolduc is an assistant vice president at Brown & Brown, the fifth largest insurance brokerage in the nation. She is a board member for the Northeast Dairy Suppliers Association, Inc.

NED Magazine | Second Quarter 2022 • 51

Business Trends

Employees Want to Work for Companies That Reflect Their Values

n a continued effort to attract and retain employees, companies are focusing more than ever on corporate social responsibility efforts, often referred to as CSR. Why? Because today’s workers, particularly Millennials and Generation Z, tend to seek out companies that align with their own values. What these values are can differ from employee to employee and company to company, but the bottom line is that CSR tends to improve employee morale and lead to greater productivity and retention. Corporate social responsibility can mean supporting nonprofits working for any number of causes, whether that be through cash donations or giving employees time off to volunteer. But, it can also mean taking care of employees, too. Two years into the pandemic, companies are displaying their commitment to their workforce, for example, by instituting dedicated sick days, paying a greater portion of health insurance premiums or contributing toward student loan debt. Other examples of CSR can involve workplace practices like operating a paperless office or starting a recycling program. Large or small, employees take notice. If a workplace culture aligns with their values, they tend to stay; if it doesn’t, they may look elsewhere. According to the Center for Creative Leadership, 85% of Millennials believe that making a difference in the world is 52 • Northeast Dairy Foods Association, Inc.

more important than professional recognition. A survey by Net Impact found that 72% of students about to enter the workforce (Generation Z) are seeking a job where they can “make an impact.”

STEWART’S SHOPS EXEMPLIFIES GIVING BACK

Many members of the Northeast Dairy Foods Association and the Northeast Dairy Suppliers Association incorporate CSR into their company values. One that stands out for its continual generosity to its customers, employees and community is Stewart’s Shops, a 77-year-old company that started out as an ice cream shop in Ballston Spa, New York, and now has more than 350

convenience stores and 4,500 employees across the Capital Region of Upstate New York and in Vermont. According to Connor Lynch, public relations specialist for the company, it’s important for Stewart’s to be able to do good and share its success with their customers. “Sharing and giving back is a part of who we are,” he said. “We think it is important to support our communities the same way the communities support us.” In 2022, Stewart’s goal is to donate $8 million dollars across its market areas. These donations go to charitable non-profits, schools or municipalities, in an effort to improve the communities surrounding Stewart’s locations.

Business Trends Throughout the pandemic, Stewart’s has provided over $1 million in relief to hundreds of organizations impacted by COVID-19. Its COVID-19 relief grants helped organizations continue to provide support to communities in need. School districts were able to keep their backpack programs stocked with bread, milk and eggs, ensuring that children had plenty to eat. Organizations were able to purchase art supplies for community members to use in stressful times, and Stewart’s helped some organizations expand their virtual learning programs. The company even partnered with various counties to provide more than 21,000 free COVID19 tests and vaccination sites. Stewart’s, which refers to its employees as “partners,” believes that its partners are supportive of its initiatives because they, too, are part of the various communities the shops support. (Through the company’s Employee Stock Ownership Plan, partners own over 40% of the company.) “Our partners live and work in these places, so when we, as a company, give back and improve a community, it’s their community we are improving,” said Lynch. The company often partners with its community members through initiatives like its annual Holiday Match Program, started in 1986, where Stewart’s matches customer donations from Thanksgiving to Christmas Day each year. This initiative alone has raised over $34 million in total for thousands of nonprofit organizations since its inception. Partners get especially excited for the Holiday Match campaign each year, and shops even compete to collect the most donations or have the most growth from year-to-year. It’s not unusual to see partners setting up outside the various shops dressed as Santa Claus in an effort to secure more donations. Company president, Gary Dake, even works a shift in

the shops that collect the most money during the holidays! Stewart’s is thrilled to share a sense of pride companywide. “We feel like most people want to work for a company that gives back,” says Lynch. “What’s special about our giving is that it stays local. People are proud to work for a company that gives to organizations that

make a difference where they live.” “It’s not uncommon for partners at Stewart’s Shops to work here for 20-plus years,” he added, noting that the company was recently voted a Top Workplace for the sixth times by Albany, New York’s Times Union newspaper. “That just goes to show how much our partners values us.” NED Magazine | Second Quarter 2022 • 53

Business Trends

What Would a Data Breach Cost You? BY PATRICK ROST, CISSP, CMMC-AB RP

ith an average cost of a data breach in the United States at a staggering $8.64 million in 2020, allocating a budget to identify and prevent a data breach is more critical than ever. Although the largest incidents make headlines, businesses of all sizes are subject to cyber threats. In this article, we examine ways to mitigate your risk. There are many questions and concerns when reviewing your company’s cybersecurity plan and budget. One of them should always be, “What would a data breach cost us?” Answering this question will help put your budget and efforts in perspective to make sure you are spending enough time and allocating enough budget to identify, prevent and, if needed, respond to a data breach. Before looking into the costs, let’s first define a data breach. A data breach is a security incident where information is intentionally. or unintentionally accessed, softened or used by an unauthorized party. Note that it is considered a breach if information is accessed by an unauthorized party. This means when a user has access to your system but never exfiltrates data it is still a breach. Let’s start by breaking down the factors that contribute to the cost of a breach. 54 • Northeast Dairy Foods Association, Inc.

LOST BUSINESS COSTS

Research performed by the Ponemon Institute, an independent research company, and IBM found that in 2020 lost business accounted for nearly 40% of the average cost of a breach. Further: • Customers lose faith in the company when they are notified of a breach or hear about it in the news and may look to end the business relationship. • Potential customers will likely look to another company that they feel can protect their data better.

TIME IS MONEY: COSTS RELATED TO IDENTIFYING AND CONTAINING THE BREACH

The 2020 study also discovered that the average time it took to identify and contain a breach was 280 days. Responsiveness is definitely a contributing factor to recovery; companies that were able to contain in fewer than 200 days saved an average of $1 million. Also, note there will be additional costs , such as attorneys’ fees. You may also incur legal costs to pay settlements due to federal and state laws (Health Insurance Portability and Accountability Act/HIPAA, Family Educational Rights and Privacy Act/FERPA, Gramm-Leach-Bliley Act/ GLBA, Sarbanes-Oxley Act/SOX, New York State Shield Act, etc.) that regulate the disclosure of a breach and may require settlements to be paid. Businesses operating globally may face

Business Trends similar laws in other countries, such as the European General Data Protection Regulation/GDPR and the United Kingdom’s Data Protection Act/DPA. These laws typically add regulatory fines that are calculated per breached record, as well as fines, if they determine the proper protections were not in place. Based on the Ponemon/IBM research, the average cost of a data breach globally in 2020 was $3.86 million. However, costs to the United States-based businesses faced the highest average cost at a staggering $8.64 million. Health care entities faced the highest industry average cost at $7.13 million. Unfortunately, recovery is not a fast process. Approximately 40% of costs are incurred after the first year, 15% are incurred after the second year and further costs extend beyond year two. When the global average cost is $3.86 million, the cost of a breach also varies based on size of the company. Companies with fewer than 500 employees still face a staggering average cost of $2.35 million globally, while companies with 5,001 to 10,000 employees have the highest average at $4.72 million globally. These statistics reflect that companies of all sizes can be breached and incur a large cost. Even though smaller companies have lower averages, cyber criminals recognize the security controls may be easier targets to breach and remain at high risk of incident.

vector, stressing the need for secure passwords. Following compromised credentials in frequency is cloud misconfiguration, vulnerability in third-party software and phishing.

HOW DO YOU PREVENT A BREACH?

In the scenario that a breach occurs, there are several factors that can mitigate or amplify the cost. Mitigating: Incident response testing is the leading mitigating factor, saving businesses an average of $295,870 during a breach. Other mitigating factors are business continuity plans ($278,697 average savings), employee training ($238,019 average savings) and encryption ($237,176 average savings). Amplifying: Complex security systems were the leading amplifying factor, costing businesses an average of $291,870. Other amplifying factors are Cloud migration ($267,469 average cost), security skills shortage ($257,429 average cost), compliance failures ($255,626 average cost) and remote workforce ($136, 974 average cost). Ultimately, the best way to avoid these costs is to avoid a data breach altogether. But, in the event an incident occurs, your best recourse is to plan now to mitigate the factors and minimize the risks to your business. For more information on how to mitigate risk of a breach, contact Patrick Rost at prost@dopkins.com.

WHAT’S CAUSING THE BREACHES?

The research by Ponemon and IBM also report on threat vectors responsible for breaches. They found that compromised credentials are both the most frequent and most costly threat

Patrick Rost is a senior information security consultant at Dopkins & Company, LLP, a member of the Northeast Dairy Suppliers Association, Inc.

Milestones Celebrating Longevity in the

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Laws, Taxes, Regs. Matter

SCHOLARSHIPS

NDSA AWARDS $14,000

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S HUMAN RESOURCE

Cybersecurity Risks

N DAIRY CONVENTIO

Highlights of 2021

nedairyfoods.org Fourth Quarter 2021

Catch up on the previous issues of Northeast Dairy Magazine. Visit issuu.com⁄nedmagazine

NED Magazine | Second Quarter 2022 • 55

Human Resources

THE GENERATION Z WORKFORCE Understanding Them Might Ease the Labor Shortage and Make Companies Stronger BY CAROLINE K. REFF

hen my son graduated from college a few years ago, the keynote speaker at his graduation was Mark Stoever, former CEO of Monster.com. Stoever told the graduates that they would most likely have as many as 20 jobs in their lifetime. Twenty jobs! His point — to an admittedly tech-based group of graduates — was that there were so many opportunities out there at the click of a button that they would continually have opportunities to try something new. It was still a startling statistic to most of the Baby Boomer and Gen X parents in the crowd who had worked for two or maybe three companies in their careers. But, to the eager graduates, it was an exciting possibility. While this was a few years before anyone could have imagined that a global pandemic would dramatically change the way people work – maybe forever – it does ring true, more so today than ever, as a labor shortage has given employees the ability to ask for and expect higher wages, greater perks and a greater sense of work-life balance because they know there are so many other options out there right now. If they don’t like one, they can quickly move on to the next. But this type of work environment has also caused frustration for companies across every industry, including dairy, as companies do all they can to not only attract but retain quality employees. In talking to some of our own members in the dairy or related industries, the topic of labor shortages always seems to come up. We simply can’t find anyone to fill these jobs – even though we are paying higher than normal wages. We hire people, and then they just don’t show up. People simply don’t seem to want to work hard. The employees we do have are simply getting burned out. While the labor shortage is a cross-generational, societal problem, it is apparent that the group just starting to enter the job market, born between 1997 and 2012 and labeled “Generation Z,” does have some new expectations when it comes to entering the job force. Does everyone agree with them? No. But, has it become necessary to make changes to a workplace environment in order to keep them? It certainly seems so. 56 • Northeast Dairy Foods Association, Inc.

According to Lynne Vincent, assistant professor of management at Syracuse University’s Whitman School of Management, organizations in every industry need to prepare for Generation Z. Vincent asserts that members of Generation Z are entering the workforce with less work experience than previous generations because they were raised to focus on extracurricular activities while in school, rather than encouraged to take on part-time jobs at the local scoop shop or restaurant. Many have been raised by so-called “helicopter” parents, who brought them up in a “culture of safety” that revolved around protecting them. While intentions were good, this has left this generation “without a lot of practice being autonomous, independent individuals.” As a result, Vincent said, these new employees may need some help learning the skills necessary to hold down a job – whether it be in a dairy manufacturing plant or in an accounting firm. Many truly don’t have the knowledge of essential job responsibilities. (Note: While this is a research-based observation, it is not intended to portray everyone in this group but is instead a generalized overview.) To overcome this deficit, Vincent suggests that employers take it upon themselves to give new employees an onboarding that includes a candid preview of job expectations – not only the positive aspects but also the challenges. Gen Zers needs to be told the essential job responsibilities, the expectations for hours worked, what tasks they are really going to be asked to do, that they are expected to show up every day, and even basic things like what to wear to work – whether it be the safety requirements of steel-toed boots or the concept that athletic wear is not appropriate for an office environment. Employers also need to let these new employees know that failure is, in fact, an option. Vincent suggests making checklists of what is expected of them the first week, the first month and the first year, so that they get a sense of what they need to learn. Employers who take the time to facilitate such a process will likely have a much better rate of retention. Gen Zers tend to think that work will always be “interesting and meaningful,” according to Vincent. And, while that’s the

Human Resources

goal for any job, most experienced employees know that reality does not always meet that expectation every day. Interestingly, “Generation Z has never known a time when they did not have a smartphone in their hands,” said Vincent. This may not sound like a great trait to everyone, but it can be. Gen Zers are digital natives. They grew up with computers, the internet, Google, Instagram and texting as a primary form of communication. But, what they lack in face-to-face communication skills, they make up for in tech savvy abilities that can really benefit an organization (and who of us Gen Xers or Baby Boomers don’t need a little IT help from time to time?). This group is excellent with managing information on digital platforms and can typically jump right in when it comes to technology. In fact, they might even have a few ideas that could move your business forward. Generation Z does have an innate need for achievement and a bit of a healthy fear and anxiety about doing a good job in the workplace. They are drawn to risk and entrepreneurship (so don’t turn a deaf ear to their ideas because they might have some good ones), but they want their thoughts to be valued. Despite the stereotype that younger workers are here today and gone tomorrow, Gen Zers are “not necessarily interested in hopping from job-to-job, but they do want growth,” according to Vincent. And, while many may be impatient, any way an employer can offer them opportunities to focus on their internal development or give them a chance to use their skills in different ways is a positive step to retaining them. There’s no question that Gen Zers, more than ever, want a greater work-life balance and may choose that aspect even over salary. This can be a tough one for the nose-to-the-grindstone requirements of so many jobs in the dairy industry, but it is something to keep in mind. Gen Zers want a reasonable amount of vacation days and sick days. They need health insurance and want wellness programs and gym memberships. And, they also have come to expect perks like gourmet coffee and bagels in the break

room, tokens of recognition for a job well done, and the ability to work remotely at least a few days a week as the world starts to return to a post-pandemic normal. They also want to work for companies who care – not only about their employees, but about the environment, their animals, their processes, their communities, social justice, diversity, equity and inclusion and more. Gen Zers will, very likely, choose a company that showcases its values over one that doesn’t. All this can be a lot for a company to take in, and many are reluctant to change the way they’ve operated for generations. After all, there’s work to be done! But, according to Vincent, organizations may have to change how they recruit, select and train this new workforce if they want to combat the labor shortage. “It’s not necessarily a bad thing,” she explained. “This type of change can help growth for all workers – not just the younger ones. It might even encourage experienced workers to become more engaged and pass their knowledge along by collaborating with new hires.” Vincent suggests tapping into the Millennials – who are now a bit older (between the ages of 26 and 42) and stepping into management positions. “They are a little more attuned to the needs of Gen Z and can be role models who provide a very clear social reference,” she said. “Gen Zers can look to them and see that skills and progress are obtainable on the job and think, ‘I can do that, too.’” There’s no stopping the fact that Generation Z is the next wave of available workers. They need jobs, and companies need employees – now more than ever. A mutual understanding and respect between employer and employee can help Generation Z succeed in the workplace. And, while this doesn’t make them the workforce of days gone by, that doesn’t mean they can’t be loyal and valuable employees that can make an organization stronger. Caroline K. Reff is the editor of Northeast Dairy magazine. NED Magazine | Second Quarter 2022 • 57

OSHA UPDATES What to Know About Worker Rights and Protection

re you concerned about health and safety on the job? Learn how OSHA protects you, as well as what to do if you think you are not being protected at work. Here are some frequently asked questions and answers.

• •

Q: What happens after I file a complaint?

A: Each complaint is evaluated by OSHA to determine whether it should be handled as an off-site investigation or an on-site inspection. Written complaints that are signed by workers or their representative and submitted to an OSHA area or regional office are more likely to result in on-site OSHA inspections.

Q: What are my employer’s responsibilities?

A: Employers have the responsibility to provide a safe workplace, including: • A workplace free from serious recognized hazards and compliance with standards, rules and regulations issued under the OSHA Act • Examining workplace conditions to make sure they conform to applicable OSHA standards • Making sure employees have and use safe tools and equipment and properly maintain this equipment • Using color codes, posters, labels or signs to warn employees of potential hazards • Establishing or updating operating procedures and 58 • Northeast Dairy Foods Association, Inc.

• •

•

communicating them so that employees follow safety and health requirements Providing safety training in a language and vocabulary workers can understand Developing and implementing a written hazard communication program and training employees on the hazards they are exposed to and proper precautions for employees with hazardous chemicals in the workplace. (A copy of safety data sheets must be readily available.) Providing medical examinations and training when required by OSHA standards Posting, in a prominent location within the workplace, the OSHA poster (or the state-plan equivalent) informing employees of their rights and responsibilities. Reporting to the nearest OSHA office all work-related fatalities within 8 hours, and all work-related inpatient hospitalizations, all amputations and all losses of an eye within 24 hours. Keeping records of work-related injuries and illnesses . (Employers with 10 or fewer employees and employers in certain low-hazard industries are exempt from this requirement.) Providing employees, former employees and their representatives access to the Log of Work-Related Injuries and Illnesses. On Feb. 1, and for three months, covered employers must post the summary of the OSHA log of injuries and illnesses.

OSHAUpdates • Providing access to employee medical records and exposure records to employees or their authorized representatives. • Providing to the OSHA compliance office the names of authorized employee representatives who may be asked to accompany the compliance officer during an inspection. • Not discriminating against employees who exercise their rights under the act. • Posting OSHA citations at or near the work area involved. Each citation must remain posted until the violation has been corrected or for three working days, whichever is longer. • Posting abatement verification documents or tags. • Correcting cited violations by the deadline set in the OSHA citation and submitting required abatement verification documentation. • Encouraging all employers to adopt a safety and health program. Safety and health programs, known by a variety of names, are universal interventions that can substantially reduce the number and severity of workplace injuries and alleviate the associated financial burdens on U.S. workplaces. Many states have requirements or voluntary guidelines for workplace safety and health programs. Also, numerous employers in the U.S. already manage safety using safety and health programs, and OSHA believes that all employers can and should do the same. Most successful safety and health programs are based on a common set of key elements. These include management leadership, worker participation and a systematic approach to finding and fixing hazards.

Q: What should I do if there is a dangerous situation at work?

A: If you believe working conditions are unsafe or unhealthy, you may file a complaint with OSHA concerning a hazardous working condition at any time. If possible, bring the condition to your employer’s attention. If the condition clearly presents a risk of death or serious physical harm, there is not sufficient time for OSHA to inspect, and, where possible, a worker has brought the condition to the attention of the employer, the worker may have the right to refuse to work in a situation in which he or she would be exposed to the hazard. If you have questions about what to do, contact your local OSHA office, which will keep your information confidential.

Q: What if I am injured at work?

A? If you are injured, call a supervisor for help. If the supervisor is not available, get medical assistance or call 911.

All employers must notify OSHA within eight hours of a workplace fatality or within 24 hours of any work-related inpatient hospitalization, amputation or loss of an eye.

Q: Can someone file a complaint for me?

A: Yes, a complaint can be filed on your behalf by an authorized representative or a labor organization or other employee bargaining unit; an attorney; any person acting as a bona fide representative, including members of the clergy, social workers, a spouse and other family members; government officials or nonprofit groups; and organizations acting upon specific complaints and injuries from you or your coworkers. In addition, anyone who knows about a workplace safety or health hazard may report unsafe conditions to OSHA, and OSHA will investigate the concern reported.

Q: What are my rights during an inspection?

A: When the OSHA inspector arrives, workers and their representatives have the right to talk privately with him/her before and after the inspection. A worker representative may also go along on the inspection. Where there is no union or employee representative, the OSHA inspector must talk confidentially with a reasonable number of workers during the course of the investigation.

Q: Does OSHA have other resources to help me?

A: Each OSHA region has a labor liaison whose job it is to maintain communication with organized and unorganized workers. Employees can contact the liaison if they need help, if they want to establish a relationship between a group and OSHA or if they want to establish or update a health and safety system in the workplace. Need to contact OSHA? Call the toll-free number: 1-800321-OSHA (6742) (Source: osha.gov/workers) NED Magazine | Second Quarter 2022 • 59

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Articles inside

What Would a Data Breach Cost You?

OSHA: What to Know About Worker Rights and Protection

Employees Want to Work for Companies That Reflect Their Values

The Gen Z Workforce: Understanding Them Might Ease Labor Shortage

2022 Insurance Market Trend Report

Welcome New Members

Member and Industry News

More Dairy Trends for 2022

Making Milk Modern

2022 Flavor of the Year

Indulging in Ice Cream Avoiding Sugar, Staying Healthy and Exploring Flavors

Who Knew? Milk Has Four New Nutrients

MEMBER PROFILE

MEMBER PROFILE

Lactalis Recognized at World Cheese Contest