KANSAS CITY, KAN -- Dairy Farmers of America (DFA) is definitely a force to be reckoned with in the dairy industry. The national milk marketing cooperative has an unwavering commitment to its dairy farmer member-owners, sustainability, brand and product identity, as well as enriching the community in which it serves. 

With a network of production facilities across the country, DFA is divided into seven geographic areas and overseen by a 48-member board of directors. The cooperative is a global provider of a broad range of ingredients and services including food manufacturing, menu support and dairy products for foodservice, and private label cheese and other items for retail.

In 2020, DFA became an even bigger player in the industry when it acquired more than 40 Dean Foods Co. facilities and associated direct-store delivery systems, as well as other corporate assets and functions. 

What drives this farmer-owned business? Dairy Processing spoke one-on-one with Kristen Coady, senior vice president of DFA corporate affairs, about character, commitment, bridging the gap between the cooperative mindset and corporate structure.

Dairy Processing: “Your Mark, Your Brand” – explain what this means to DFA.

Kristen Coady: Our tagline is ‘This mark matters.’ And to me, DFA’s mark (logo) really symbolizes everything that matters to us — from our family farm owners, all the way to the consumers we provide dairy for each and every day.  In that mark is the character and commitment of the 13,000 farm families that own us, the employees that support those farmers, and the innovation that takes place in our facilities. Our dedication to our farmers and our commitment to the philosophy of bringing value to the people who own the cooperative, is the reason I get up in the morning.

When I think about what that mark means, it really encompasses everything DFA stands for. For us, it all starts at the farm, which is why we support and invest so much into preserving our farmers’ legacies and ensuring their futures. This is why we offer unique member services, business-enhancing programs and innovative product strategies — to give our farmers an active role in their futures and the future of dairy. 

DFA’s mark also signifies our continuous commitment to sustainability. These efforts impact our family farmers by helping them thrive for years to come. As a cooperative, we act locally and think globally. Beyond the dairy case, DFA provides opportunities for rural communities to thrive by bringing nourishment to those in need and preserving our natural resources through ongoing sustainability innovations.

Dairy Processing: How does the cooperative mindset fit into a corporate structure? Are they counterintuitive concepts, or are they synonymous identities when it comes to DFA?

Kristen Coady, senior vice president, DFA Corporate Affairs

Kristen Coady: We could deny both and say we are just a cooperative that is owned by dairy farmers, and that we just happen to have commercial businesses that consumers need at a great value to the farmer-members that own us. 

When you look at the basics of how our cooperative is structured, we are governed by a 48-member board that represents our farmers from across the country. Some businesses that are cooperatives have the farm side, and then they have the commercial side of the business that often operates within a different corporate structure. 

With us, while we have the commercial side, the business structure is very much ingrained into the cooperative fabric, and our members are heavily involved in all things commercial. They receive regular updates, they understand every aspect of the business, and they provide input and drive strategic direction. They are a part of everything we do. Our board members are involved in strategically guiding what DFA does. We are very unique in that way. This is what bridges the gap, perhaps, between the cooperative mindset and corporate structure in today’s world.

Dairy Processing: Who are your customers?

Kristen Coady: We have a very broad base of customers — individuals that we just sell raw milk to like a large cheese manufacturer, or customers that are buying ingredients from us that we partner with on the commercial side of the business. For example, a large candy manufacturer, where our ingredients go into their chocolates. Our customers are vast and broad from PepsiCo to Starbucks. We have customers, and we also produce products ourselves. Basically, any dairy product that you can think of, we can either provide the milk or ingredients for, or we can probably produce.

We sell our farmer’s raw milk to one of the world’s largest cheese manufacturers. They make the cheese and then sell it to pizza chains across the country. Or we deliver our members’ milk to one of our factories that makes provolone cheese, and then we sell that cheese to Jimmy John’s. We sell our whole milk powder to Nestlé, and then they use that ingredient in their products. 

So we’re everything — from selling raw milk to a customer who processes it on their own, to us processing and either selling it to a different customer, or producing it and selling it under one of our brands.

Dairy Processing: What was the impetus of acquiring assets of Dean Foods?

Kristen Coady: After Dean Foods suffered significant losses related to business decisions, the processor initiated Chapter 11 in November 2019. 

As Dean is the largest dairy processor in the country and a significant customer of DFA, it was important to ensure continued secure markets for our members’ milk with minimal disruption to the U.S. dairy industry. So, DFA stepped in and acquired a substantial portion of Dean’s assets and businesses to make sure that we had a long-term viable home for our members’ milk. And that’s really what drove the decision. 

Dairy Processing: Has the pandemic hindered production in any way?

Kristen Coady: I think we really saw a shift in dairy usage during COVID that we’re still seeing. At the onset, with foodservice shutting down, there was a shift to an increase in dairy at retail. And that’s a trend we’re continuing to see, that dairy purchases at retail are higher than last year. So, it really has been about demand where dairy has shifted.

It did take time for the market, and for those in the industry to make that shift, but when I say time, I mean like a week or two. I have been impressed with working in this industry. Dairy is very resilient. We have learned to adapt, overcome, and make sure the supply chains stay strong. It will be interesting to see post-COVID where everything will net out. 

At the onset of COVID, there were some uncertainties our farmer-members had to deal with, mostly with questions about how the market was going to respond. But I think, overall, they’ve handled it pretty well.

Farmers are incredibly resilient. They get up every day, they milk the cows, and the milk goes to market. So from that standpoint, I think things have remained pretty steady. No matter what is happening around the world, they get up and run their farms. 

Dairy Processing: What are the future initiatives for DFA? New products? New Innovations? How do you plan to continue to grow the success of the cooperative?

Kristen Coady: We are really looking towards innovation to drive our long-term growth.  Innovation throughout the organization, from the farm side, all the way to the product side. Sustainability is one aspect that provides a lot of opportunity. So, as I think about the things that we’re thinking about long-term, it’s about what are we doing in our communities, how we are serving them, where the innovation is coming from throughout the supply chain, and how are we doing things sustainably.

We are always analyzing the industry and where the opportunities are for growth in new product innovation. I think being in a position of being aware, and knowing where opportunities are coming from, also helps support those kinds of initiatives. We are also keeping an eye on the alt dairy market. We’re trying to get as educated as we can about this category. Dairy is where our heart is, but it’s always good to understand what’s going on around you. And maybe there’s a unique place where dairy and alt-dairy can come together.

Innovation is not just about new products. We always look at what else we are doing and what more we can do in terms of innovation and sustainability. We are always looking at ways to make the process in our production facilities more efficient — what will make things safer and easier for our employees.

Our farmers are passionate about innovation in the industry and passionate about sustainability. They are always thinking about the next sustainable thing for their farm because that means preserving the farm to be here for the next generation.  

We have set sustainable target goals to reduce our greenhouse gas emissions by 30% by 2030. On our farms, there are a lot of renewable energy projects going on, like solar panels or even wind power. And then, there’s a lot of opportunity with anaerobic digesters, which convert manure and food waste into energy. 

We also have an accelerator for innovation that focuses on AgTech and dairy products. We are even looking at block chain technology to get a better sense of our environmental footprint. 

In terms of expansion, our Ingredients Solutions business is really focused on the global market. Expansion in this market is important to our members because milk powder for instance will reach customers further from where they are today, allowing them to have more markets for their milk. We are currently exporting products to more than 50 countries and are continuing to look to expand.

This story is featured in the April 2021 issue of Dairy Processing.