Tightrope Walking: Leading Dairy Executives Share How They Managed During a World Pandemic

If any lessons were learned from the COVID-19 pandemic, it was how to walk on a tightrope while juggling various obstacles. Earlier this year, leading dairy CEOs spoke in length about how they managed the challenges thrown at them throughout the last several years, including inflation, supply chain issues and labor.

Four leading dairy executives – David Ahlem, CEO and president of Hilmar Cheese, who also serves as chairman for International Dairy Foods Association (IDFA), Patrick Critesar, CEO of Tillamook County Creamery Association, Tim Doelman, CEO of Fairlife LLC, and Sheryl Meshke, co-president and CEO of Association Milk Producers Inc., all spoke at IDFA’s Dairy Forum in Palm Springs, Calif.

Juggling Challenges

Doelman says if you know anything about the history of Fairlife, you know the company has been walking a tightrope its entire existence.

“It's a unique situation because of a tremendous amount of price increase on the cost side of it, which is probably long overdue,” he says. “But you still have to pass those kinds of costs along to the customer. And you know, that takes work quite honestly, too.”

Looking at ways to increase efficiencies is something Doelman says the dairy industry has become very good at. Fairlife focuses on the people side of the business, as well.

“You do what you can to recruit the best you can and hope you have all the things that make you an attractive company for people,” he says.

Doelman notes that Fairlife has made some pretty significant pay increases and hopes it will continue to attract great talent.

For Critesar, he says it’s been one thing after another the last couple of years and shares that his entire Tillamook organization has risen above.

“I've relied so heavily on the resilience, the talent and the commitment of folks throughout our organization,” he shares.

From the volatility and uncertainty in the markets, supply chain challenges and workforce and labor issues, Critesar says Tillamook has had to adjust from every angle.

“I've been so impressed by how folks have continued to come up with new and creative solutions and find ways to work across the organization, and I think probably for all of us there's a lot that we can take from how we responded,” he shares.

Hilmar Cheese CEO, David Ahlem, says the last several years often reminded him of a statement his father used to say.

“‘There’s only one surefire way to make God laugh, and that’s telling Him your plans,’ and if you didn’t understand that reality before COVID and the supply chain challenges we have, I think most of us understand that now that we're not in control of things more than ever,” he states.

Ahlem says the dairy industry is well-positioned and proved to be strong in dealing with the various issues.

“I'm just astounded at the results of how much we have been able to succeed and fulfill customer's needs, but there's a whole lot more conversation going on,” he says. “There's more transparency. There's a whole lot of making the best decisions on the facts we have today. And being very clear and candid about that and working together to solve problems. I think that's going to be more of the recipe of the future and we've got a good foundation as an industry, but we're going to continue to build on that.”

Meshke, the co-president and CEO of Association Milk Producers Inc., says she would add an asterisk to wrap the comments from the fellow dairy leaders up with.

“That’s the overused term in our cooperative. Every stat that came out in 2021 we were comparing to 2019, and there was that asterisk on 2020,” she says. “Suddenly that’s the trend line. They weren't making sense, they didn't matter. It was to expect the unexpected. So, my words would be an asterisk. You just have to know that we're going to see many of those in the coming years. You've probably seen this where they say 2020 - too.”

2020 Too; Outlook Ahead

Focusing on the strong export market and the fact milk is in tight supply, Meshke says we must address what the consumer’s demand is going forward.

When it comes to health, Doelman shares he doesn’t know how long consumers will stay healthy because there is going to be a tremendous amount of price increase that they’re going to be faced with.

“I don't see costs solving themselves anytime soon,” he shares. “The question is, ‘what’s it going to look like in nine months, a year, [or longer?]’ and that's pretty hard to predict. So, we'll adjust accordingly.”

Critesar shares that he believes a new set of capabilities around how we collaborate with technology has emerged from the pandemic.

“We've all learned how to do that better,” he remarks. “An accelerated and renewed interest in building companies and cultures and an industry overall that attracts more talent. We're going to see some significant stronger collaboration and innovation across the supply chain because these issues, as it relates to imports, exports and domestic supply chain ,are not going to go away from my view.”

Ahlem concurs with Critesar, stating, “I'm not losing any sleep about the kind of demand and the fundamentals and the categories we're in,” he says. “It's about how to get that product to customers and how to satisfy that demand. So, it’s about thinking about people and the workforce as well as thinking about productivity and automation to create flexibility in a buffer in our system. I think it is reshaping some of that landscape as we go forward. But the fundamental underlying demand story feels like a good story and has continued to demonstrate its resilience which helps us push through it.”

As we push forward in 2022 and beyond, leaders will continue to walk on a tightrope, juggling the many obstacles that continue to face the dairy industry.