Innovation

Land O’Lakes has several different innovations within each of its business units. In 2016, the firm created a new business unit, called Sustain, which would focus wholly on aligning environmental sustainability efforts among the company’s three business unit operations. They also maintain partnerships with other external entities such as Walmart, Kellogg’s, and the government in order to increase efficiency and collaborate on larger sustainability programs.

Our interviewee, Ms. Dowda, also mentioned that the company was not always so heavily focused on sustainability. Under previous leadership, the efforts on sustainability were fragmented and considered separate from core business operations. For example, the “Sustain team” was a rotational role in which an external person came in every few years and attempt to make parts of the business more sustainable. As Tonya put it, “At first, especially in SC&O, sustainability was an afterthought. In operations, everything is about cost cutting and finding the cheapest way to do things, which was never the most eco friendly or sustainable option.”

The true innovation began when Chris Policinski became CEO in 2005. Policinski made it clear that sustainability was a core part of Land O’Lakes mission to feed human progress. Human progress includes any step towards creating positive change in the community and environment. Under this model, it is impossible to make business decisions without considerations for environmental impact.

Inspiration

Land O’Lakes was founded on the basis of collaboration when 320 dairy farmers came together in 1921 to form the Minnesota Cooperative Creameries Association in St. Paul, Minnesota. The company, in alignment with its ‘farm-to-fork’ view of agriculture, expanded its scope to an international front in order to have an advantageous impact on agriculture in developing countries. Its commitment to sustainability and passion for the world has transcended and fueled its societal impact. Whether domestically or internationally, Land O’Lakes makes decisions and promotes actions, in accordance with its steadfast core values.

Land O’Lakes’ sustainable programs arose to exemplify this pledge and to demonstrate its motivation to benefit the greater good. The company conducted studies that showed that “80% of consumers are interested in knowing more about the food systems and that [only] 53% of dairy food sales engage on sustainability needs.” Taking these factors and the core values of the company, into account, Land O’Lakes decided to implement sustainable programs to rectify these numbers. It takes a broad approach towards sustainability and attempts to be as comprehensive as possible, including everything from seeds to Branded Goods Marketing & Sales. Through the sustainable programs, they not only focus on improving the air, soil, and water of the environment, but they also empower farmers and give them a voice.

Overall impact

The emergence of the Land O’Lakes Sustain business unit has had significant positive impact on the business, society, and the environment. Prior to the formalization of the Sustain group, environmentally friendly and innovative sustainable practices were more of an afterthought; however, the Sustain unit has changed the way Land O’Lakes leadership and employees think about the business. Tonya explained, “operations are all about finding the cheapest way to do something and cutting out unnecessary costs. Typically, the cheapest way to do something is never the most sustainable or eco friendly so those options were dismissed. However with the new leadership team, and a greater emphasis on sustainability, operation employees are encouraged to propose eco friendly and sustainable ideas even if they are more costly than the current system. More and more I see our supply-chain becoming more eco friendly and sustainable.”

Business benefit

The emphasis on sustainability has also led Land O’Lakes to several mutually beneficial partnerships with large food packaging companies such as Wal-Mart, Campbell’s, and Kellogg’s. These partnerships allow the business to learn and share with other companies to figure out the most sustainable packaging options. Although some of these innovations can be more expensive, they can also help attract new customers by differentiating Land O’Lakes from the competition. While some Sustain projects do cost the company more money in the short term, they also have proven to save money in the long run. The primary goal of Land O’Lakes as a dairy co-operative is to serve its members and Sustain helps them do this though a number of projects. The most recent Sustain overview found over $375,000 in cost savings for Land O’Lakes members.

Social and environmental benefit

The Land O’Lakes Sustain group has also made an impact on society by producing more, safe food. By 2050, the world’s estimated population is expected to reach 9.6 billion and to feed these people we need to increase yield by 70%. This is incredibly difficult because we are confined by planetary boundaries. Only 12% of additional arable land is available globally and water demand will outstrip supply by 40% in 2030. This is a huge societal issue that the Land O’Lakes Sustain group is helping to address. Sustain does farm assessments for 50% of harvested acres nationally, teaching farmers how to use less water and grow more with less. These efforts will hopefully help some food and water shortages that parts of our society face.

Interview

Tonya Dowda, SC&O Director of sourcing and business alignment