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SPRING 2022 | VOLUME 1

COLLABORATING WITH CUSTOMERS: BRINGING 2022 DAIRY TRENDS TO LIFE 04

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COOPERATIVE

BRAND TALK

FARM

DFA 101: BEVERAGE AND DAIRY FOODS

MELTING MATTERS: BORDEN MELTS

LONG HOLLOW DAIRY FARM

A look at one of our commercial divisions, how teams develop products for key customers and more.

New creamy, delicious cheese melts for your next sandwich or burger, brought to you by Borden® Cheese.

The Millicans truly live out family values and milk 100 cows including the favorite, an odds-defying cow named Miracle.

COOPERATIVE

COLLABORATING WITH CUSTOMERS: BRINGING 2022 DAIRY TRENDS TO LIFE Consumer trends evolve from year to year, influenced by things happening in the world around us. The ongoing COVID-19 pandemic has hugely impacted consumers’ eating and purchasing habits: From seeking comfort in indulgent foods, to being more health-conscious or desiring more convenient foods to prepare while cooking and snacking at home, DFA teams work with customers to harness innovation that meets consumers where they’re at. While milk is a tried-and-true classic, we know the possibilities of dairy are endless — and that gives our Cooperative a unique advantage to appeal to a wide range of consumers. Here are just some of the trends our divisions are working with food manufacturers and food service customers to bring to consumers in 2022. Expectations of convenience Consumers value convenience now more than ever. Whether cooking a meal for one, family dinner or just snacking, consumers have an increased expectation of convenience when shopping for food. “According to studies led by IRI, Generation Z, Millennials and Generation X are looking for convenience when they shop,” says Sadie Carpenter, marketing director of fluid milk marketing. “It’s expected that in 2022, consumers will be seeking convenience

through anything from ready-to-eat meals to on-the-go meal replacement beverages, snacks and even nutrition shots — people are looking for more convenient ways to capture better, healthier nutrition.” Currently, our Ingredient Solutions Division is working with a national food manufacturer to deliver this convenience. The end-use category team is working to provide DFA powdered cheese for a line of quick and easy, shelf-stable microwavable pasta bowls. Another way we are bringing convenience to customers is through new forms of dairy. One example is the development of instant whole milk powder out of DFA’s plant in Fallon, Nev. Instant whole milk powder allows customers to easily reconstitute milk into various applications, such as chocolate manufacturing, without losing the rich and creamy flavor of dairy. “This increased expectation of convenience shows us how we can reapply some of our capabilities,” says Bill Hayes, director of innovation for the Ingredient Solutions Division. “For example, the instantized whole milk powder is more convenient — so now we’re looking at where else we can apply the instantizing ability and see where else it can provide value to our business-tobusiness customers, and eventually to consumers.”

It’s expected that in 2022, consumers will be seeking convenience through anything from ready-toeat meals to on-the-go meal replacement beverages, snacks and even nutrition shots — people are looking for more convenient ways to capture better, healthier nutrition. 2 thescoop | Spring 2022

Greater devotion to health and wellness through food Dairy provides 13 essential nutrients to support consumers’ health. Combine the inherent health benefits of dairy with its versatility, and it’s perfect for consumers who want nutritious, health-conscious options for beverages, meals and snacking. “By nature, milk is one of the most nutritious products — it’s also one of the most adaptable,” Sadie says. “Dairy can be processed into a variety of different forms, flavors and functions — there’s powders, liquids, solids or concentrates, to meet any health and wellness food and beverage application.” According to Euromonitor, the largest trends in health and wellness are fortified/functional products (products with added health ingredients), free from (products that minimize the usage of less healthy ingredients, such as sugar or sodium) and better for you (products with naturally occurring health benefits). Through different forms, flavors and functions, dairy has an opportunity to excel in each of these categories. As it relates to the “free from” trend, teams are working with large snack manufacturers to rethink formulations to reduce sodium without changing the taste or function of the snacks. Another area in which we are currently innovating is reduced sugar. “One of the things that we’ve begun prototyping around consumers’ concern for health and wellness is reduced sugar dairy ingredients,” Bill says. “For example, we’re asking how we can use different technologies to reduce the amount of sugar that might be in a cheese concentrate to zero or near-zero.”

Desire to indulge Consumers have turned to more indulgent snacks and comfort foods throughout the COVID-19 pandemic, according to studies conducted by IRI. Butter and butterfat are being embraced as part of a well-rounded diet when enjoyed in moderation — and retail butter sales continue to surge as a result. “Naturally-occurring butterfat can be utilized in a wide variety of forms, flavors and functions to capture the demand of consumers in any end use category,” Sadie says. “Or just through retail butter itself, which is still selling at elevated levels compared to before the pandemic.” Ingredient Solutions’ food service team is working with a national restaurant chain to formulate innovative butter flavors as part of a limited-time offering of burgers on its menu. The desire for rich, indulgent foods extends beyond butter, but into all the forms and functions of dairy, including our innovative milk powders. “Flavor tends to be king, as consumers often decide,” Bill says. “On the specialty side of our powders and concentrates, we don’t tend to focus on the sweet realm of food, but we just developed a caramelized milk powder that is being used by a confectionary customer. We’re starting to work on a chocolate version of that as well.”

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COOPERATIVE

BEVERAGE AND DAIRY FOODS DIVISION FINDS MORE HOMES FOR MEMBERS’ MILK Our Beverage and Dairy Foods Division works as a contract manufacturer with world-class external customers to develop, manufacture and package their products. Most notably, the division works with the North American Coffee Partnership, through which we manufacture Starbucks® products, and Frito-Lay®, which has its own line of chip dips and salsas. The development and manufacturing process can look very different for each customer, depending on what they have already prepared. Sometimes, the formula for a new product is already finished and ready to go, but other times a customer has an idea for a product but needs our help to make a formula — that’s where the Beverage and Dairy Foods Division embraces collaboration across teams. “Our innovation and business development groups work hand in hand,” Dana Lowe, vice president of manufacturing operations, says. “It really provides an opportunity to provide a home for our members’ milk all the way through the innovation and commercialization process, the manufacturing, and ultimately to a consumer. It presents us with an opportunity to provide profitability to DFA.”

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Because of DFA’s manufacturing capabilities, particularly with shelf-stable products, companies contract with DFA to produce their products. DFA does not own the brand, labels or trademarks of the companies that it manufactures products for, which presents a unique opportunity for the Cooperative to harness innovation and use our members’ milk in new ways, all while reducing waste. “We’re highly engaged in continuous improvement activities,” Dana says. “We really try to optimize anything that would produce waste, whether it’s time, materials or resources, that would negatively impact our value stream.” The Beverage and Dairy Foods Division has found ways to reduce waste when manufacturing products by improving formulation work, enhancing equipment performance and reducing production line downtimes — something Dana says happens through collaborative efforts and continuous improvement. Next time you enjoy a bottled Starbucks Frappuccino®, or some delicious Frito-Lay chip dip, you can thank the DFA Beverage and Dairy Foods Division for making that partnership happen.

COMMERCIAL

MELTING MATTERS: INTRODUCING BORDEN MELTS Borden® Cheese, made with milk from our family farm-owners, understands that when it comes to a hot sandwich or the perfect cheeseburger, meltability is a quality everyone is looking for. This spring, Borden is introducing a new product to make sure you can find the flavor you’re looking for and just the right creamy, delicious cheese. Borden first introduced Grilled Cheese Melts several years ago as individually wrapped cheese slices to enhance the delicious grilled cheese experience with a cheese that is extra gooey and melty. As a result of further consumer research and exploration, the brand team decided that this melty occasion is desired for other sandwiches as well. Now, Grilled Cheese Melts will simply become Borden Melts with a whole new lineup of flavors.

will also tingle taste buds with new flavors: extra sharp cheddar, pepper jack, Swiss and American. The new Borden Melts are expected to appeal to millennials who are searching for a variety of flavors for the whole family to enjoy. The products appeared on shelves in February and are available throughout the country, including in Dollar General stores and in some Wal-mart stores. The new flavors can be found at retailers such as Stop & Shop, Food Lion, Ingles, Giant Eagle, Winn-Dixie and more grocers in Texas and the southeast. More and more retailers are expected to carry Borden Melts. To find a location near you, go to the Borden Cheese website at bordencheese.com and search for products by your zip code.

Much like the Borden American singles, Melts are made with real cheese. What sets Melts apart is that they are also made with real cream for an even better melting experience. Borden Melts thescoop | Spring 2022 5

EMPLOYEE SPOTLIGHT

BRENT ROTTINGHAUS In 1984, Brent Rottinghaus took a job at a Mid-America Dairymen plant, in Sabetha, Kan., as a bagger operator and spray dry operator to help pay for his classes at Kansas State University (KSU). Little did he know that was one of the four cooperatives that would merge to form DFA in 1998, and it was the starting point for his long career in the dairy industry. “I worked part-time during summers and some Christmas breaks at a plant close to where I grew up in northeast Kansas,” Brent says. “That’s really how I got interested in the food industry. I grew up on a farm, but I had no knowledge or interest in dairy manufacturing and processing. It was coincidental — because of that exposure during my summer job, that’s the route I decided to take in college.” Brent earned a bachelor’s degree in food science and industry with an emphasis on dairy. After college, Brent took another job at a different Mid-America Dairymen plant in Wamego, Kan. Fast forward 38 years, and Brent has stayed with DFA to work in many different roles and facilities, and he says he’s enjoyed his time with the Cooperative along the way. “I’ve never looked for another job,” Brent says. “I’ve had no reason to. I very much admire DFA’s principles and ethics — they’ve treated me really well.” Two years ago, Brent became the technical director of powders and specialty ingredients in the Assets and Technology Department of the Ingredient Solutions Division at our headquarters in Kansas City, Kan. He oversees project work, and he’s currently working on a more efficient, alternative method to energy-intensive spray drying. Spray drying extends the shelf life of powdered dairy products, like infant formula and cheese powders, and preserves their flavor. Once developed, it’ll use less energy and capital than traditional spray drying. He and his team are seeking a patent for this method. Brent has gotten to travel all over the world as part of his job to see different types of equipment and learn more about customer interests that he could bring back and implement at DFA. He recalls visiting facilities in Scandinavia, Southeast Asia, Europe and New Zealand. At work, Brent is known as a little bit of a DFA historian — his co-workers often come to him with problems, and he can advise them based on his knowledge after 38 years with the Cooperative. Outside of work, Brent enjoys flying as a private pilot, camping and spending time with his wife and two children.

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COOPERATIVE

YOUR NEXT BIG IDEA BECOMES A REALITY Last fall, the DFA innovation team asked employees: What is the next big product, process, service, improvement or idea for DFA? The team received more than 135 responses through CoLAB Connect, our idea submission platform available yearround at colab.dfamilk.com. Since the contest closed, the innovation team has begun collaborating with experts across the Cooperative to explore ways we can take employees’ suggestions and ideas to the next level. Four themes rose to the surface among the submissions: • Ideas for ways employees can engage and connect across the Cooperative •

New dairy product suggestions or enhancements

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Ways to connect with consumers

• Connecting with the communities where we live and work

“The success of our CoLAB Connect contest goes to show how creative and innovative our DFA community is,” says Doug Dresslaer, director of cultural innovation. “Fostering our culture of innovation at DFA starts with thinking differently, and I’m excited to see how our employees’ ideas and suggestions can be implemented into our business practices and everyday operations.” While the contest may have ended, keep the ideas coming. You can submit an idea on CoLAB Connect anytime. Just go to colab.dfamilk.com and scroll down to the Submit Your Idea button. In addition to CoLAB Connect, the innovation team also hosts Talk Dairy to Me, our podcast about all things innovation, and Milk Bar Sessions, virtual gatherings for employees across DFA to connect and learn more about DFA and industry news. If you have an idea for a podcast or Milk Bar Session topic, send it to colab@dfamilk.com.

From milk packaging to on-site anaerobic digesters and carrot cake ice cream to more collaborative workspace for employees — the possibilities are endless for our Cooperative, and our culture of innovation starts with you.

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SHARE YOUR THOUGHTS If you want to share feedback, ideas or your story related to DEI with the DEI team and council, email inclusion@dfamilk.com.

IT TAKES ALL OF US Since the formation of the Diversity, Equity and Inclusion (DEI) Advisory Council in August 2020, DEI has evolved to become a conscious part of everything we do and believe at DFA. It takes all of us to embrace diversity, ensure equity and foster inclusion across the Cooperative — everyone has a role. As we continue to work to strengthen our culture of DEI we have three key groups that partner together to develop and execute DEI priorities. DEI TEAM Our DEI team has been created to drive DEI efforts and strategy across the organization in collaboration with functional leaders from the human resources and communications teams.

DEI ADVISORY COUNCIL The council chair and 24 council members guide and set priorities as representatives of employees across the Cooperative. DEI AMBASSADORS Ambassadors execute initiatives and outreach at the local level to engage their locations and teams in DEI activities, community events and learning and development.

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We made great progress with our DEI efforts in 2021, but there is still much more to do. From participating in local community giveback events to implementing inclusive language in your everyday conversations, I know each of us can do better this year to welcome diversity and encourage inclusion. I’m looking forward to helping strengthen an atmosphere where, each day, everyone can be the best version of themselves when they walk through the doors of DFA. — Joan Baucum-Robinson, 2022 DEI Advisory Council Chair

ENHANCE YOUR DEI KNOWLEDGE AND CONFIDENCE WITH DAIRYU Fostering a culture of DEI at DFA begins with each of us becoming more educated and aware of common obstacles like unconscious bias, microaggressions, exclusive language and more. When we boost our cultural confidence with new learnings, we contribute to positive change in our workplace culture. You can take the next step in learning more about our four DEI pillars — diversity, equity, inclusion and community engagement — by completing one or all of our DairyU curriculums. Logging into DairyU using The Parlor 1. Access The Parlor and log in 2. Scroll to the Useful Links section, and click on the Performance and Development Portal link 3. The Performance and Development Portal (DairyU homepage) will display 4. From the DEI highlight message, Click to View our DEI curriculums

Logging into DairyU using myADP 1. Access myADP (type my.adp.com in your web browser) and log in 2. Under the Recommended Links tile, click Performance and Development Portal 3. The Performance and Development Portal (DairyU homepage) will display 4. From the DEI highlight message, Click to View our DEI curriculums

HOLIDAYS WE’RE RECOGNIZING THIS SPRING March — Women’s History Month A time to recognize the vital role of women and their contributions to American history, including celebrating International Women’s Day on March 8.

May — Asian American and Pacific Islander Heritage Month A month-long celebration of the impact Asian Americans and Pacific Islanders have to the history, culture and achievements of the United States.

April — Diversity Month A time to celebrate the unique cultures, backgrounds and traditions that make up our DFA community and world.

Watch for more information about these holidays and more in the coming months. thescoop | Spring 2022 9

COOPERATIVE

MARK YOUR CALENDARS Employee Appreciation Day | Friday, March 4 A day to thank employees for their hard work and effort throughout the year. Annual Meeting | March 21–23 Farmer-owners will hear updates on the Cooperative and take part in the culmination of our grassroots resolutions process. Elected delegates will vote on proposed updates to resolutions and elected nominees to the Board of Directors. Goal setting | Complete by Thursday, March 31 As part of the performance cycle, goal-eligible employees should enter their goals in the Performance and Development Portal. Earth Day | Friday, April 22 A day to demonstrate support for environmental protection. Employee Engagement Survey | Late April As part of DFA’s commitment to building a culture of engagement at all levels, employees will be asked to participate in an engagement survey. World Milk Day | Wednesday, June 1 Established by the Food and Agriculture Organization of the United Nations, we will celebrate the importance of milk as a global food. June Dairy Month | June 1–30 All month long, we will celebrate dairy and the contributions our family farm-owners have made to the world by providing nutritious dairy products.

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COMMUNITY

SUPPORTING COMMUNITIES THROUGH THE DFA CARES FOUNDATION The past two years of the COVID-19 pandemic have highlighted opportunities for giving back within the communities where DFA employees live and work. As a leading dairy Cooperative with a core value of community, when families are struggling to put food on the table, we notice. The DFA Cares Foundation launched the Farmers Feeding Families Fund (FFFF) in April 2020 as a response to food insecurity caused by the pandemic. Since then, FFFF has raised almost $850,000 and continues to provide fresh dairy products and refrigeration units to food pantries across the country. In addition, the efforts through DFA Cares also support disaster relief and education through scholarships. This year, we implemented a new way for employees to sign up for automatic payroll deductions of any amount toward DFA Cares. To donate to DFA Cares via a payroll deduction, visit dfacaresdeduction.com.

COMMUNITY

THE GIVING COW: THE GALLON THAT GIVES As the COVID-19 pandemic continues to impact families across the country, it has left many families hungry in our own communities. Food banks face increased demand for food assistance and also struggle with accommodating the need for cold storage. In fact, Feeding America®, DFA’s partner for supplying food banks across the country with dairy products, projects that 42 million people, including 1 in 6 children, may have experienced food insecurity in 2021.

serving of delicious and nutritious 2% reduced fat milk, are being donated in our brands’ communities.

While our Farmers Feeding Families Fund (FFFF), through the DFA Cares Foundation, provides monetary assistance to food banks across the country, helping them purchase dairy products and secure cold storage they need to keep dairy on hand, we decided we could do more.

To further connect our brands with their communities, starting in November, those who lived in the area of the brands were encouraged to “Grab that gallon that gives.” Consumers were able to sign up for text messages and visit websites to learn more about how their favorite brands were giving back by scanning the QR code of gallons and half-gallons in stores. As shoppers grabbed their favorite brands off store shelves, they also joined our efforts to fight hunger right in their own backyards.

It started with Kemps, in 2019, when The Giving CowTM was launched to provide shelf-stable milk to food banks in Minnesota, Wisconsin, Iowa and Illinois. Then, during this past holiday season, 17 of our regional brands stepped up to more broadly serve those in need. These Giving Cow milk containers, which are specially designed, shelf-stable packages that provide a full 8-ounce

“Millions of kids are missing out on nutrient-rich milk, which is a childhood essential, and we decided we could be a part of the solution,” says Ashley Karlstrom, director of marketing for Dairy Brands. “The Giving Cow packs provide valuable nutrition and don’t require cold storage, which can be limited at smaller pantries.”

By the end of March, the brands will have donated a total of 2.2. million Giving Cow containers to food banks in their communities. thescoop | Spring 2022 11

FARM

LONG HOLLOW DAIRY FARM Nestled in the Northwest corner of Georgia, south of Chickamauga, sits Long Hollow Dairy Farm, owned and operated by the Millican family. Alex, and his brother Kim, are the second generation to be dairying at Long Hollow Dairy Farm, taking over from their father, who started the dairy in 1958. Alex, and his daughter Rachel, share equally in the day-to-day farm operations. The family milks 100 Holstein cows, with some jerseys mixed in the herd. One of their cows, named Miracle, is truly a living miracle — surviving a snowstorm that passed through toward the beginning of her life. Rachel can often be found snapping pictures with Miracle, and she’s a farm favorite with visitors, too, when the family hosts local school classes, business-type groups, neighbors and extended family who make a visit to the farm. On the weekends or in busy times of the year, Rachel’s husband, Matt, and son, Jake, help with milking or field work. Other extended family members also help with silage, and milking if needed — embodying what it means to be a true family farm. Alex says, “I’ve lived on this farm my entire life and never wanted to do anything else. Rachel felt the same way, and I think it’s great that we can all work together as a family. Right now, there’s a fifth generation that’s showing interest in all things farming. I love that we can produce a wholesome product and enjoy ourselves, too.”

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Right now, there’s a fifth generation that’s showing interest in all things farming. I love that we can produce a wholesome product and enjoy ourselves, too.

dfamilk.com | EMNL22001

Submitted by Long Hollow Dairy Farm