United Dairymen of Arizona tailors its products to meet export needs
With the border only a three-hour drive from its Tempe headquarters, it’s no surprise that United Dairymen of Arizona (UDA) counts Mexico as a major export customer.
Increasingly, however, the milk marketing cooperative is building its customer base in more distant countries, with Vietnam leading its export sales of skim milk powder. UDA is also developing markets in Egypt, Brazil, North Africa and at least 14 other countries.
The beckoning export market not only means opportunity for UDA but changes in the kinds of products it makes. It must focus on "keeping in touch with export customers, providing the quality of material they expect and being responsive to their needs," says Jimco Hrusovszky, UDA’s vice president of business development.
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Customer service is key to satisfying emerging markets like Vietnam, he says. Face-to-face meetings help smooth out some of the hurdles that accompany foreign market development.
"Many foreign customers have never bought directly from the company producing the product," Hrusovszky says. "We’ve formed relationships and partnerships to show how to use our products and make sure they’re buying the right products."
Another obstacle is correcting misunderstandings about American product quality. "That’s been a barrier for years," Hrusovszky says. "U.S. quality is very high, but we haven’t always manufactured the products that other countries need for their specific applications."
Foreign buyers often have needs that are not common among U.S. customers. To produce fresh fluid milk, for example, export clients may require dried milk powder with specifications and parameters involving low spores, nitrates and nitrites. "It’s a matter of understanding their needs so we know what to manufacture," Hrusovszky says.
UDA, which represents 90% of Arizona’s milk production, began selling to Vietnam four years ago through its membership in DairyAmerica. The federated marketing association markets milk powders nationally and internationally. UDA CEO Keith Murfield is DairyAmerica’s chairman.
"We took on an order needing to be fulfilled," Hrusovszky says. "Our product was well-received. We continue to supply Vietnam, with volumes growing."
Vietnam has one of the world’s fastest-growing economies, and its dairy demand is rising steadily. The U.S. Dairy Export Council calls it "a shining long-term prospect for U.S. dairy ingredients suppliers." In fact, the U.S. is the No. 1 overall dairy supplier to Vietnam, despite the nation’s proximity to Oceania.
Exports comprise 15% to 20% of UDA’s overall business. "We’re just tapping into Brazil with our milk protein concentrates [MPCs]," Hrusovszky says. "We’ve been providing MPCs, skim milk powder and butter to Egypt for the past few years."
Mexico, with its milk deficit, still remains UDA’s largest export market. "We have been doing business in Mexico for many, many years in both liquid and dry products," Hrusovszky says. "Recently, UDA became vested in one-third ownership of AMP Mexico, allowing us now to have our own company representatives on the ground managing sales of many of our products."