5 questions for Johan Schuttert
'VLOG feed more difficult than it seems'
AgruniekRijnvallei (AR) achieved a record feed turnover of 2017 tons in 630.000. Johan Schuttert, commercial director of AR, talks about the growth the company has experienced. The cooperative grew strongly, especially in the organic segment. He also discusses the growth potential of GMO-free feed with a VLOG certificate.
AR achieved record sales in 2017. Are you satisfied with this result and where does this growth come from?
''We are certainly satisfied with the volume growth that we have achieved in the various sectors (cattle, pigs and poultry) over the past year. Especially given the turbulent year; take, for example, the fipronil affair and the phosphate reduction plan. A relatively large number of our poultry customers were affected by the fipronil affair, which cost a few percent of turnover. In retrospect, the past year could have turned out very differently. From a financial point of view, 2017 also looks good, although the annual figures are not yet final. The Welkoop shops, which AR operates itself, have scored above average this year. We monitor where our organic growth comes from and no specific party stands out this year. As far as the various animal sectors are concerned, we see the strongest autonomous increase in the poultry sector."
Did the strong growth in the organic segment surprise you?
“At the beginning of 2017, we did not expect sales of organic feed to grow by 30%. About 10% of the volume we sell is now organic. So it starts to count nicely; in the poultry sector in particular, we see many switches to organic. We expect the organic feed segment to grow further in the coming years. That is why we have converted 2 factories (Barneveld and Wichmond) into an organic production location. By identifying such trends at an early stage, we can now properly facilitate switchovers and supply them with organic feed.”
Does AR suffer from low-cost competitors in the compound feed industry and how do you distinguish yourself?
''Because we are a cooperative, we mainly have regular customers. We have little trouble with platforms such as MijnVoer.nl. This happens more in the south of the Netherlands. We see that the production of standard feed is increasingly turning into specific feed compositions. With knowledge and expertise we try to assist livestock farmers in the increasingly complex rations. In this area we try to distinguish ourselves; we do this with our 'Pure Food philosophy'. We strive for better (intestinal) health and digestibility with specially selected raw materials and production techniques. Ultimately, this also leads to a better feed conversion.”
VLOG food is an emerging trend. How will this develop in the coming years?
''The rise of VLOG feed has been going on for some time in the poultry sector. More than 50% of the laying poultry that we sell is VLOG certified. The demand for VLOG feed is also increasing in the cattle sector. About 40% of the cattle feed in Germany is VLOG. The share of VLOG feed is probably also increasing in the Dutch cattle sector. German buyers increasingly demand GMO-free dairy products and the Netherlands exports a lot to Germany. Producing VLOG food also seems easier than it is. First of all, the recognized raw materials must be available. The composition quickly becomes too expensive. It also does not always score well with regard to the feed track. GMO-free soybean meal is often expensive and is therefore exchanged for the more phosphorus-rich rapeseed meal. VLOG feed and phosphate reduction are therefore sometimes at odds with each other."
What are your plans in 2018 and how will the compound feed industry develop?
“We want to increase our market share autonomously across the various sectors. I do not exclude any acquisitions or mergers. Some scale is required for the production of more complex rations, such as VLOG feed. In this context, I expect feed companies to collaborate more often. I also expect further consolidation in the compound feed industry. The availability of animal rights is likely to continue to determine livestock size (market size).
Wouter Job
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