By: Blake Anderson – President & CEO/ADPI
What’s in your Business Plan?
I recently had the opportunity to attend IDFA’s Dairy Forum in Orlando, FL and network with numerous dairy industry players and rainmakers from across the country. The theme of the forum was “Inspire.” Programmed content/sessions addressed Leadership, People, Policy, Sustainability, Innovation, and Politics. There were many presentations “in session” and as important conversations “out of session” relative as to what to expect in 2023, how to plan, and importantly how to execute against a Business Plan. The common thread was that the “what and how” conversations revolved around how does an organization in today’s “reality” even develop Business Plan that is relevant to short and mid-term marketplace realities.
Below is a list of Business Plan Assumption points widely and often heard and relative to the many different genres of dairy industry organizations. After all, you can’t make a “Business Plan” without having pertinent assumptions that are based on what you know, don’t know, and expectations are related thereto.
2023 Business Plan Assumptions:
- Industry consolidations will continue (producers; processors, sellers, marketers, distributors)
- Industry Event attendance on average will remain below pre-pandemic levels
- On farm margins remain under pressure re: feed inputs, labor, regulatory compliance
- US and EU recession fears incentivize fiscal spending conservatism by members, industry, consumers.
- Industry event sponsorships scale back
- Lack of skilled/ semi- skilled labor/workforce impacts top line growth and supply chain fundamentals
- Sustainability and ESG activities continue to evolve but not at a pace that CPG customers and their consumers desire, thus increasing pressure on an already stressed “B2B2C” system.
- Geopolitical issues (Europe, China, North Korea, Russia, Middle East) continue to be significant disrupters to advances in climate change initiatives, food security, energy, and global trade.
- Political divisiveness, inward focus, and lack of “bipartisan” collaboration in the USA political landscape continues until 2024 elections with collateral damage to needed reforms in policy increasing.
- Farm Bill, FMMO reform, and potential FDA/USDA refinement stymies innovation in the short term.
- Lack of enforcement on current “on the books rules and regs” by regulatory agencies emboldens bad behavior by “disrupters” with no consequences acting as a deterrent.
- “Alternative to Dairy” product makers and marketers continue to survive and thrive in our current dairy industry turmoil, and continue to gain share of stomach/ minds of consumers by espousing often false and misleading information about their products and efficacy/ attributes.
- China dropping pandemic restrictions likely to backfire and impact trade flows in and out of the US.
- Infrastructure investments will have a positive impact, but minimal in 2023.
- Supply Chain repair has started, and is critically dependent on technology and collaboration of stakeholders.
- Return of previously outsourced manufacturing “beyond borders” begins but will take time to impact supply chain security. Likely no positive upside for 2023.
- “Margin expanded prices” beyond actual input cost factors do not abate and consumers will continue to “morph” to lower cost goods i.e. Private Label, and “Alternatives” to brands and/or legacy SOI products as recession fears are top of mind.
Wow, a lot to consider no question! If it were easy, anybody could do it, and our industry organizations will develop and execute Business Plans. Some will deliver, some will fall short but all will “give their best effort” as that is the intrinsic DNA of “real dairy” industry makers, sellers and marketers.
The common denominator has been and will continue to be, that pre and procompetitive collaboration by members of our industry related to issues and opportunities will enable us to survive and thrive over time.
“Carpe Futura and Onward Together!”
