When Land O’ Lakes redesigned its packaging last year to remove a decades-old illustration of a Native America woman, it seemed like just another dust-up in the culture wars. Liberal activists and politicians praised the company for abandoning stereotypical imagery. The conservative National Review ran a story titled “Land O’Lakes Cancels Its Century-Old Native American ‘Butter Maiden.’” Some customers boycotted the company for its “virtue signaling.”
But according to the Land O’ Lakes chief executive, Beth Ford, the decision had nothing to do with any of that. Rather, the decision to replace the “butter maiden” with images of fields, lakes and farmers was an attempt to play up the company’s distinguishing feature: that Land O’ Lakes is a cooperative, owned not by public market shareholders but by the farmers who make its butter, animal feed and more.
It’s a rare model in today’s economy, but it is working for the company and its members. Last year, sales were nearly $14 billion and net earnings about $266 million, most of which flowed back to real farmers on real farms.
Ms. Ford, who grew up in the Midwest, worked at a variety of companies, often looking after supply chains, before joining Land O’ Lakes. That experience paid off when the pandemic hit, and Land O’ Lakes, like most companies around the globe, was forced to reset. After the initial disruptions — not enough milk for supermarket shoppers, too much for commercial customers that abruptly shut down — the company stabilized, and went on to have one of its best years.
This interview was condensed and edited for clarity.
What was it like for you growing up in Iowa?
I’m the fifth of a family of eight children. My dad was a truck driver growing up, and my mom was a nurse, and then she went back and got her master’s and became a psychologist. We were Catholic, and we went to Catholic school, Catholic high school, and we were a working-class family. You had to work for what you got. If you wanted to go to college, you have to figure out a way to pay your way.
My first job was detasseling corn. I didn’t come from a farm, but I came from farm country. And then in college, I had to work my way through college, so I had a number of jobs, including as a janitor. I cleaned toilets. I painted houses. I was a cashier at a convenience store. When you’re in that, you don’t think, “Oh, this is great.” But now I reflect back on that and say: “What a blessing. How wonderful is that?”
You spent much of your career working on supply chain issues. Between the pandemic and the Suez Canal, it seems like the whole world has been thinking about the supply chain more than ever before. What has the last year taught us?
There was a time where you were like: “Oh, we can get some leverage. There’s labor cost differential and lower cost dynamics if we globalize.” But that can be disrupted. It’s very difficult right now to get products in from Asia, and to export. We’ve got a shortage of containers, and then there are philosophical, political and strategic issues in different countries. So I think that there’s going to be more reshoring.
The “just in time” supply chain means you have this tight value chain that makes sense when everything makes sense. And then when there’s a disruption, there’s not a lot of wiggle room to address that.
How did the early days of the pandemic play out for the company?
Initially our members — the farmers — were uncertain. Food service is shutting down, so you had 30 or 40 percent of milk supply — where does it go now? On the one hand, folks at retail were trying to buy two gallons of milk, and there were restrictions. On the other hand, they were dumping at the farm level, because that milk supply and the manufacturing processing capacity are meant for food service.
There was quite a bit of money that was put into the farm economy over the last two to three years because of trade disruption and then Covid disruption, so I think the farmers overall had an OK outcome. But it was very, very disruptive.
How does running a co-op, rather than a traditional public company, change the way you make decisions about strategy, resource allocation, and optimizing short-term and long-term goals?
The incentives can be different. We can definitively hold profit or hold benefit at the farm level to try to offset at the corporate level, so that we are trying to make sure that the farmer — the member, the shareholder — remains robust in this dynamic. And I may make decisions that definitively try to advantage the farmer, over taking that profit at the corporate level or the enterprise level and cooperative.
There’s an intimacy to this model. I know the families. I’m out on their farms. I’m with them constantly. I see the pressure. I see their stress at the same time. I see their communities that are challenged.
Are there things that public companies could learn from the cooperative model?
I’m also on the Business Roundtable board. And its focus on the new purpose of the corporation — that was an easy signature for me. Why? Because it is to me very directly on target for what the cooperative does, which cares about the community, the shareholders and the employees. So what is the lesson? Whether it’s a cooperative or not, it is about understanding the impact more broadly than the company.
And I see a lot of companies that work to do this. I see a lot of C.E.O.s put a premium on their employees. What is different and unique about the cooperative model is the intimacy of it, the understanding of those families, of knowing these communities. I don’t know that a business can be successful if employees are worried about their kids’ school or that their mom can’t go to the doctor. More of that understanding will help everybody.
Americans are drinking less milk. Is that having an effect on how your farmers produce?
People say, “Look at this amazing growth in plant-based!” That’s terrific. It’s off a small base. Because you know what else is also growing? Animal agriculture and dairy. So do I see a change in consumption? I do. I see more willingness to innovate, and I see more of a willingness to try other things. I hope and I believe that the consumer should do those things.
What was behind the decision to change the logo last year?
I think people have a misunderstanding. Was I being pressured? Are we being P.C.? What is the message? When I stepped in as C.E.O., I started hearing really loudly that our best asset was that we were a cooperative, and farmer owned. People were like, “If I had known that, I’d have more of your products.” So we did the research, and what we said is we want to promote the farmer first.
My responsibility is to say what is most relevant to consumers. And I tell you, we added eight million new households to our butter franchise, and they were right in the target of what I think is important — millennials, new consumers, consumers who are unfamiliar with Land O’Lakes. So it wasn’t pressure. It was a forward-looking marketing move tied to what we thought were our best advantaged positions. And that is the farmer and the cooperative model.
Was there also a sense that the previous imagery was outdated or inappropriate or even racist?
We didn’t talk about it like that. What we saw in the consumer research is it was confusing to customers — just the Indian maiden and no cows? I mean, what is that? It was a message that was unclear to a consumer.
Given the company’s headquarters are near Minneapolis, how have you responded to the killing of George Floyd and the aftermath?
First of all, it was unbelievably tragic. We spent time with our with our employees, listening. Because this is just painful. And what came of that was that there was a feeling of connection, a feeling of “I don’t have the lived experience of an African American, but I do want to understand that pain, that fear when somebody tells me they can’t have their 12-year-old son go out and ride his bike.” Or you hear stories of Black executives of major companies being stopped on their way to work. I mean, this is just unacceptable.
When you hire, you hire the whole person, and then you hire their family, too. You can say, “You’re safe here at work,” and we’re doing the right things. And I’m like: “Look at the diversity! We’ve got women and minorities.” But when employees leave the building, they’re in the community. They have to feel safe. Their family has to feel part of the community.
We have to invest broadly within communities, and then we have to be listening to our Black employees and understand what their challenges are. It’s a journey. It’s imperfect. And sometimes I feel like my words are inadequate.
Prices are rising everywhere. What is the outlook just for your farmers and your sales going forward?
This is the strongest price for corn and beans that we’ve had since 2013 or 2014. Stocks of available inventory are low. Export demand is dramatically strong. So what’s the outlook? Well, the outlook is strong, and you see that coupled with a reopening of the economy. There’s a question of whether this is the start of a new super cycle, where commodities strengthen for a period of time because inventory levels are low, and there’s a big demand because the economies are reopening. If so, we’re very well positioned. We have a unique platform starting at the farm level, going all the way to retail. We have animal agriculture, we have agricultural growers, producers, and we have retail businesses. We’re well positioned with our innovation and with our tools and our technology to take advantage of the opportunity.
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