The U.S. Dairy Exporter Blog: Market Analysis, Research & News

  • Editor's Advice to U.S. Dairy Exporters: "Be There"

    By Mark O'Keefe August 6, 2015

    Corey Geiger says USDEC missions have shown him the importance of building personal, global relationships for the U.S. dairy industry. 

    Corey501Hoard’s Dairyman managing editor Corey Geiger had just landed at the airport in Ho Chi Minh City, a place most locals still call Saigon, despite the official name change after the Vietnam War. 

    It was 11 a.m. on a Sunday and the temperature was already 91 degrees, on its way to a high of 95, with tropical humidity.

    As Geiger and others on a U.S. Dairy Export Council mission to Southeast Asia waited for a van to take them to the relative comfort of an air-conditioned hotel, John Brubaker, an Idaho dairy farmer, wiped sweat from his brow and said, “This isn’t a place for cows.”

     “I agree with you,” said Geiger. “But it is a place for dairy products.”

    Vietnam is a top-10 destination by value for U.S. dairy exports and in 2014 Southeast Asia became our second $1 billion market, behind Mexico. 

    Despite weakened dairy markets worldwide in 2015, there is sufficient evidence to suggest further growth awaits in Southeast Asia.
    • U.S. suppliers are pursuing the business more aggressively than ever—making the effort needed to be a regional player, including getting their products Halal-certified (a prerequisite in most of Southeast Asia) and tightening ingredient specifications to meet the stringent needs of Southeast Asian food and beverage manufacturers.
    • The Organization for Economic Cooperation and Development projects strong 5.4 percent annual economic growth in the region through 2018. And despite recent social unrest in Thailand, regional politics are generally stable, laying a strong economic foundation.
    • Domestic and foreign food and beverage firms (i.e., dairy ingredient buyers) continue to invest in capacity, oftentimes building hubs in one Southeast Asian nation to serve the broader geography.
    • A U.S. free trade agreement with Singapore helped lift U.S. dairy exports to the nation more than 10-fold since it went into effect in 2004. Now, the United States is getting closer to finalizing free trade deals with Malaysia and Vietnam through the Trans-Pacific Partnership. 
    • The United States has just begun to tap cheese potential. Foodservice development varies by country but on the whole is fledgling, particularly in Vietnam, which just opened its first McDonald’s last year. In addition, Indonesia and Vietnam are budding producers of processed cheese, requiring rising imports of natural cheese ingredients.

    Corey4

    Geiger, far right, was part of this USDEC mission to Southeast Asia in April.
     

    USDEC_delegation_to_Dubai

    Geiger, back row, center, was in Dubai with this 2013 USDEC trade mission delegation

    Geiger is aware of and impressed with these facts and figures. But after meeting with overseas dairy customers and consumers on this spring’s USDEC mission trip, as well as making a similar USDEC mission trip to the Middle East in 2013, Geiger sees a vital ingredient to success U.S. exporters would be remiss to overlook.

    Geiger sums it up in two words: "Be there."

    Not only before the sale, but after it. 

    “Marketing products is about relationships,” said Geiger, the lead editor for a magazine that is published in English, Spanish and Japanese with copies circulating in over 80 countries. “People want to know the people behind the product and that the product is good. They also want support. It just isn’t a sale for us as we develop these markets in international countries. We need to remember that if something goes awry, our customers want someone they know and have met to contact.”

    Geiger said his point is not to minimize other aspects of a successful U.S. dairy export industry, such as having market access or a level competitive playing field, often the result of negotiating free trade agreements.

    “If the market access isn’t there, all this is a mute point,” said Geiger. “But once market access is available, having people behind the products makes people believe."

    Southeast Asian buyers, as well as buyers in other parts of the world, value ongoing, face-to-face relationships with sellers. It shows commitment on the sellers’ part; it shows that they are in it for the long-haul, he added.

    Geiger, part owner of a dairy farm that has been in his family for six generations, saw the impact of a highly personalized approach in the reaction regional dairy buyers had to a presentation four of the mission's dairy farmers made in Singapore during the U.S. Dairy Business Conference.

    In a survey, attendees ranked it the best presentation of the conference. One buyer from Indonesia was so persuaded she asked if she could purchase products made exclusively with milk from the farmers who presented a photo slideshow of their farms and families. 

     “In this era of electronic communications, people still buy from people,” Geiger said. 

    Corey_Geiger_at_Vinamilk-037178-edited

    Geiger wrote that this Vinamilk milk plant in Vietnam is "the world’s most modern."

    Other takeaways Geiger had from the Southeast Asia trip include:

    • Southeast Asia is already a vital customer, purchasing $1.32 billion in dairy products and ingredients from the U.S. last year―second only to Mexico, which had $1.64 billion in purchases. Third place belonged to China with purchases totaling $697 million.  
    • Dairy producers, cooperatives and processors can further strengthen the bond with Southeast Asia by doing additional customer service and producing tailor-made products.
    • Milk is a valued treasure in Southeast Asia because of its wholesome nutrition. Vietnamese consumers are willing to pay 12 to 15 percent of their monthly income for one can of powdered milk that could nourish a son or daughter for 10 days or fortify the diet of an expectant mother for 10 to 20 days.

    Since returning, Geiger has written extensively for Hoard’s Dairyman about U.S. dairy exports, including these stories:

    Hoard's Dairyman's primary audience is farmers. Geiger said they are keenly interested in exports, even in a year in which their milk prices have fallen. 

    "I believe dairy farmers are looking at exports as a long-term situation," said Geiger. "There will be ups and downs. But the simple fact is that today every cow in America, one day a week, has her milk goes to an international customer. Exports are important to dairy farmers and this trip reinforced my view that our dairy products are important to international customers.”

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    The U.S. Dairy Export Council is primarily supported by Dairy Management Inc. through the dairy farmer checkoff that builds on collaborative industry partnerships with processors, trading companies and others to build global demand for U.S. dairy products. 

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    Southeast Asia Global Marketing
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