{"id":11473,"date":"2023-10-19T09:51:27","date_gmt":"2023-10-19T16:51:27","guid":{"rendered":"https:\/\/www.qad.com\/blog\/?p=11473"},"modified":"2023-10-19T09:51:27","modified_gmt":"2023-10-19T16:51:27","slug":"navigating-disruptions-in-the-dairy-industry","status":"publish","type":"post","link":"https:\/\/www.qad.com\/blog\/2023\/10\/navigating-disruptions-in-the-dairy-industry","title":{"rendered":"Navigating Disruptions in the Dairy Industry"},"content":{"rendered":"

[vc_row][vc_column][vc_single_image image=”11474″ img_size=”full”][vc_column_text]My husband and I try to keep to a healthy diet full of organic, preservative free foods. I am open to ideas from academia and notable authors, friends and family about how nutrition affects our health and how to create a sustainable diet. Months ago, one of my daughters told me the oat milk we were drinking (to avoid dairy) was not healthy because it had too many processed ingredients. She recommended a three ingredient oat milk that was very expensive but due to my husband\u2019s current health condition, I didn\u2019t think twice about buying it.<\/span><\/p>\n

So what does this have to do with disruption?<\/span><\/p>\n

The Mice and the Gorillas<\/span><\/h2>\n

Disruption typically happens to established specific phase companies. These mature companies, the \u201cGorillas\u201d, have rigid processes that are very difficult to change because they involve employees, processes, suppliers, equipment and most importantly, thinking and perspective. Small fluid companies (the \u201cMice\u201d) are nimble, constantly changing as customers’ feedback molds new product(s). A new product introduced to the market by a mouse targets a new audience not the typical customers of the Gorilla. Over time the new customers help to improve the new product and it starts to invade the mature product market and sometimes it takes over and the old product is marginalized. The corollary to this is that the Gorilla is impossible to beat at their own game in their own market.<\/span><\/p>\n

How the \u201cMilks\u201d Stack Up<\/span><\/h2>\n

Califia is one of the 800 lb Gorillas in the non-dairy \u201cmilk\u201d market. Califia is the brand that my daughter said had too many non-organic ingredients and too much processing.\u00a0<\/span><\/p>\n

Oat Malk is one of the simpler, expensive oat milk brands that has just three ingredients: water, organic oats and sea salt while Califia has many more. Last week, however, I found a new Califia in our refrigerator. It was a little different, the word organic on the front and around the collar were the words, <\/span>only three ingredients<\/span><\/i>.\u00a0<\/span><\/p>\n

The 800lb gorilla had noticed the little mouse. They didn\u2019t get rid of the \u201cmany ingredient\u201d products, they just added a new option, an organic three ingredient one. And they priced it in line with their other products.<\/span>[\/vc_column_text][vc_single_image image=”11475″ img_size=”full”][vc_column_text]The little mouse doesn\u2019t have a chance! This is a great example of the power of the specific phase company when it wakes up and smells the mouse poop.\u00a0<\/span><\/p>\n

Keeping an Eye Out for Disruption<\/span><\/h2>\n

These days, more and more companies are finding ways to keep an eye on the market and figure out a way to manage potential disruption. Sometimes disruptors are the first ones to see disruption. For example, when Salesforce.com (a Gorilla that started out as an invisible mouse) introduced a low priced five license pack to address the inexpensive entry level market interlopers (new mice). Califia was one of the original non-dairy boutique brands to infiltrate the traditional milk market. So when Oat Malk and Milked Oats took aim at the burgeoning dairy free milk market with a product that was aimed at customers looking for a healthier alternative, they knew what to do. Reformulate, find a couple new suppliers and then leverage their existing supply chain, manufacturing processes, as well as their existing brand, bottles, labels and distributors!<\/span><\/p>\n

The old stories of disruption usually end in the toppling of a massive gorilla like Kodak or Digital Equipment but younger executives learned about disruption in business school and now that they are in charge they are sensitive to the little mouse and respond accordingly. But what about the mouse?<\/span><\/p>\n

How Platforms are Changing the Game<\/span><\/h2>\n

The days of mammoth barriers to entry are gone. There are sophisticated tools that can help the mouse to carve out a niche and make a nice home for himself. Platforms like cloud computing<\/a>, and distribution channels available through Amazon can help the mouse get started and the gorilla to pivot with state of the art tools, priced for one user or thousands.\u00a0<\/span><\/p>\n

Companies like QAD provide cloud based tools that enable the mouse and the gorilla to improve supplier visibility and data collaboration which can help to mitigate supply chain risks that negatively affect margin. Once the gorilla resets the price expectations in the market, the mouse needs real time updates of the effect. Not all customers are going to notice the new offering from the gorilla. And many times the gorilla will make only a half-hearted attempt at addressing the mouse (like the Big Three and electric cars vs Tesla<\/a>) the most important thing is developing a path to that price point or a new differentiator or the mouse will be trapped.<\/span><\/p>\n

The gorilla needs real time analysis to address the new product with their own potentially defecting customers. Imagine if the Big Three had embraced the sophisticated driver assist tools and electrification way back when Tesla got started? Last year my husband and I bought a new Ford Explorer and I was delighted to see the driver assist tools that were available. As a Tesla driver, I feel like driving a car without assistance is a drudgery. Our Explorer has more tools than our Range Rover at less than half the price. It is nothing like the Tesla but if you don\u2019t have a Tesla you will never know the difference. What do your customers want? What level of \u201cmouse compliance\u201d will keep them from defecting?\u00a0<\/span><\/p>\n

I have a good friend who thinks the new lane departure and super cruise tools on his new Cadillac are fantastic. He believes that Cadillac is an innovator. It is all in perspective. My Tesla (Ethel) is now using full city capable autonomous driving which means she will inch up to look both ways and then make a full left (or right) turn to take me up north to our cottage on a Friday afternoon. Lane departure and \u201csuper cruise\u201d are child’s play for her and me but I am more of an early adopter and Cadillac doesn\u2019t care about me. They make their money on the early and late majority and the laggards, not the early adopters<\/a> and innovators.\u00a0<\/span><\/p>\n

What markets do you need to keep your shareholders happy? What mice are in your space?<\/b>[\/vc_column_text][\/vc_column][\/vc_row]<\/p>\n","protected":false},"excerpt":{"rendered":"

[vc_row][vc_column][vc_single_image image=”11474″ img_size=”full”][vc_column_text]My husband and I try to keep to a healthy diet full of organic, preservative free foods. I am open to ideas from academia and notable authors, friends and family about how nutrition affects our health and how to create a sustainable diet. Months ago, one of my daughters told me the oat […]<\/p>\n","protected":false},"author":118,"featured_media":11474,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[182,197],"tags":[61,697,2618,2809,1068,2811,2812,2808,2810],"class_list":["post-11473","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured","category-innovation-and-technology","tag-cloud-computing","tag-disruption","tag-early-adopters","tag-gorilla","tag-innovators","tag-laggards","tag-milk-alternatives","tag-milk-industry","tag-mouse"],"yoast_head":"\nNavigating Disruptions in the Dairy Industry | QAD Blog<\/title>\n<meta name=\"description\" content=\"How do smaller milk companies stack up in the crowded dairy industry? 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