DMI leaders give Net Zero, ‘sustainability’ overview

By Sherry Bunting, Farmshine, September 11, 2020

CHICAGO, Ill. – A month ago, after Farmshine revealed the background of DMI’s new Vice President of Dairy Scale for Good, questions and concerns voiced by dairy farmers led DMI to announce it would have one of its monthly “open mic” calls specifically on the topic of Sustainability and Net Zero Initiative (NZI).

That was Sept. 2, but unlike previous calls, Farmshine was not included among trade media.

This is not surprising because Farmshine has obtained a copy of a communication sent to dairy checkoff board members stating in print that the DMI board has agreed not to engage with Farmshine, stating that Farmshine articles misrepresent their facts.

This position came after two well-sourced articles were published in Farmshine about Caleb Harper, of Vice President Dairy Scale for Good, who was hired by DMI to work with large farms to scale sustainability practices as part of the Net Zero Initiative. The articles revealed concerns about his background in science, funding and future of food philosophy.

Farmshine has obtained a link to the recording of the Sept. 2 open mic call on sustainability that was part of a DMI e-newsletter. However, only 35 minutes of the hour-long call were shared with farmers. The recording was cut at the end of presentations by DMI CEO Tom Gallagher, President Barb O’Brien and Vice President of Sustainability Karen Scanlon.

Thus the recording excluded the 25 minutes of questions and answers, despite Gallagher’s assertion that he would “make sure to get this information into the trade media to communicate with producers and clear up misperceptions that have been perpetrated.”

During the recorded presentations, Gallagher stated that, “The industry — as an industry — has recently made commitments to be carbon-neutral by 2050.”

While he did not get into specifics, he said he wanted dairy farmers to understand the big picture.

He said the dairy checkoff has been involved in this effort 13 years in the role of science, research, and outreach to the supply chain.

Gallagher sought to assure farmers that the first order of business is to “recognize and promote how dairy farmers have been and continue to be stewards of the environment.”

He said the next thing is to make sure consumers and thought leaders understand that sustainability must be profitable for farmers.

He said that the NZI does not mean every dairy plant or every dairy farm will achieve carbon-neutrality. “We want to say that as an industry we are carbon-neutral. That’s our perch,” said Gallagher.

Lastly, he said, “We want to avoid having farms and companies and co-ops use sustainability as a marketing advantage (in competition with each other).

“We should stick together on this, because our competition is others — cell based ag and plant-based beverages — so let’s not beat each other up on this,” said Gallagher.

(Yet DMI hired a key Net Zero employee with ties to cellular agriculture and digital agriculture and funded a new product “innovation” that is half milk and half almond or oat beverage made by DFA in pretty cardboard cartons using buzz terms like “purely perfect blend.”)

“When we went into this 12 to 13 years ago, it was still emerging what sustainability is — and it is still sometimes vague — but from a consumer standpoint, they are focused on sustainability,” said Gallagher.

Later in the call, he stressed the importance of sustainability saying 80% of consumers are focused on it, but then confirmed a bit to the contrary what various consumer surveys show for actual decision-making factors: Number One is still ‘taste,’ followed by number two ‘price,’ and even Gallagher states that nutrition and sustainability are “tied for third.”

He was vague on that nutrition and sustainability distinction and took issue with anyone claiming consumers need more education on dairy nutrition.

“We have these two great components to our story: nutrition and sustainability,” he said, “I don’t care what others are telling you, we have the data and people already do understand the nutritional value of dairy. Sure, we can remind them, but they know it.

“The piece they are not aware of is the sustainable nature of the dairy industry and dairy farming. They don’t get it, and they’ll buy into the notion that plant-based is more environmentally sound because the consumer – especially millennials and Gen-Z – have made their decision… 80% of them expect companies to invest in sustainability in the next year.”

(Or are 80% of consumers being pushed in this direction by top-down supply chain transformation?)

In fact, even though DMI’s sustainability partner World Wildlife Fund (WWF) has been scrambling to come up with new ways to tie the globalized ‘sustainability’ agenda to pandemic prevention as a hook that gets to the “health” and “economic” concerns consumers really have…. Gallagher went so far as to say: “Covid has had an interesting impact on millennials, Gen-Z and the next generation because the majority feel that Covid is an example of why we need global, big-picture solutions with companies leading the way.

“Covid is not distracting consumers, it is heightening the stakes,” said Gallagher, right out of the most recent WWF and global re-set playbook seeking to get everything back on their track.

O’Brien mentioned the dynamics that are more at play: large global companies like Nestle, Unilever, Danone and Starbucks making sustainability even more important as a priority.

“We at checkoff are positioning U.S. Dairy as a solution to drive a unified approach,” she said. “The good news is we know dairy is and can be a solution with the growing body of research and practice-based proof and an industry-wide plan. We are ready to re-set what people think they know about dairy.”

O’Brien painted a picture of the global landscape in which U.S. dairy will have less access if it is not unified to show industry-wide measurements of sustainable impacts.

Then it became clear. O’Brien said “This is not just about consumers, but also investor groups. They are setting the criteria for measuring sustainable impacts, and they expect companies to more fully disclose impacts that are tied to their businesses.”

She said trillions of dollars are being invested in businesses that can do that, and she said many countries are making legally-binding country-wide commitments to accelerate, and they emphasize the need for the U.S. to voluntarily report its impacts.

“We see our dairy customers like Unilever, Danone, Nestle and Starbucks working to meet these global goals on carbon neutrality, water use, zero waste and hunger initiatives,” said O’Brien. “They need to know where we are at to help them meet their goals against these sustainability metrics.”

(The World Resources Institute, which is inextricably linked to WWF, along with UN benchmarks, are formulating these metrics – a work in progress since 2009 when DMI’s Innovation Center for U.S. Dairy first established its sustainability partnership with WWF, according to the WWF website.)

Gallagher said farmers have been at the table on this, and he presented an overview of the “the plan.” He took issue with dairy farmers who are “against globalization” and with strong words, stated: “My answer to that is we did not create globalization, but those are the rules, and it’s the world we are living in… with very powerful forces that are very much against dairy at play here in the U.S.”

(There is a difference between international trade and ‘globalization.’ Globalization is a more centralized order of things affecting aspects of life, health, resources and economies at an international scale.)

Gallagher confirmed that companies will drive this, and he said that consumers want corporations to drive this. He and O’Brien both talked about DMI’s sustainability partnerships began with Walmart in 2007.

Where the plan meets the farm, Gallagher said the Net Zero Initiative has three categories: Large farms, medium sized farms, and small farms.

“We’re doing something for each of those. Some staff (Caleb Harper) are focused solely on large farms looking at technologies to see if they are financially sustainable,” said Gallagher. “And we have folks working on mid-sized and small farms too. Our focus is the research, and some of our efforts will be foundational to support all farms.”

He introduced Karen Scanlon, DMI’s vice president of sustainability who said dairy’s diversity is a key in the Net Zero Initiative.

“There is no one right way, no prescription on how to achieve our environmental outcomes along with profitability,” said Scanlon. “We are focusing right now on learning what farmers are already doing, and helping to share that with more farmers, so farmers can learn from each other.

“We also want to work with farmers and supply chain partners on demonstration projects to highlight successful technologies, practices and approaches,” said Scanlon.

She mentioned two examples – one in Wisconsin and one in southeastern Pennsylvania as well as talks with producer organizations in Idaho and the Pacific Northwest – where farmers and their cooperatives and other supply chain partners are already doing things that DMI can come in and be part of to find ways to cost-share the ideas to increase adoption among more farms.

“Founded by dairy farmers 12 years ago through checkoff, the Innovation Center for U.S. Dairy put us at the table and we find common ground and set a common set of principles that is a difference maker in the supply chain,” said O’Brien.

She went back to a summit with Walmart in 2007, which led to a deepening of the relationship over time. More recently, in 2018, DMI had a similar ‘summit’ with Amazon and that partnership is underway with DMI as category captain.

“Today Walmart proactively uses the FARM program’s animal care and environmental modules. They are using our programs with farms they contract directly,” said O’Brien, adding that DMI starts with relationships and brings in other companies to align with that. She and Gallagher stressed that dairy checkoff now has a “unified Net Zero plan in place and is coordinating with other industry organizations.”

“There is one plan marching forward with each industry organization playing their own unique role,” said O’Brien. She explained that DMI is engaged in science and outreach to the supply chain and telling the dairy story; NMPF is focused on legislative and regulatory as well as on-farm environmental stewardship; Newtrient is focused on viable technologies and practices to produce new revenue streams; and US Dairy Export Council is focused on export markets and aligning targets with DMI’s thinking on measurement and progress.

“What we have created for dairy farmers over the last decade is ready as sustainability increasingly becomes a requirement for doing business,” said O’Brien. “We must continue to lead in this.”

Before opening it up to questions for the last 25 minutes of the call – which were not shared in the DMI newsletter recording – Gallagher told everyone on the open mic call that this was a 30,000-foot view and if they want more details, DMI could do another open mic call on the topic or find other ways to communicate.