News FrieslandCampina
'It's about more than getting milk and paying'
Milk volumes are falling faster than ever, yet dairy company FrieslandCampina intervenes. A new phase is approaching: no longer from grass to glass, but from glass to grass. It is the consumer's turn. "It's about more than getting milk and paying." Entrepreneurship is the key word here.
FrieslandCampina introduced in April the growth agreement and then a balloon was also released about the extra demands that could be made of milk. It aroused the necessary emotions. At the end of September it became clear that the proposed changes are largely going ahead. However, Frans Keurentjes, the chairman of the cooperative, emphasized that the majority agree with it.
"You have to repair the roof when the sun is shining," says Keurentjes. However, that did not work. "It was already raining." With the new proposals, the dairy cooperative hopes to lay the foundation for its next success. Two questions are important here: are you willing to make agreements, and is there a shared interest?
From glass to grass
However, repairing the roof is not easy. Keurentjes says that it is not about 'grass to glass', but about 'glass to grass'. "It starts with the consumer and you have to respond to the changes." Changes in the chain are therefore seen as entrepreneurship. "It's about more than getting milk and paying for it," says Jeroen Elfers, director of cooperative affairs at FrieslandCampina. "It's also about how the milk is produced."
- French labels
With the hallmark Planet proof the processor hopes to hold an trump card. This will soon also apply to the Topline Dairy† It is the milk for which €1 is initially paid extra. In 2020, that amount will go to €2. About 10% is eligible for this, whereby the location of the company (relative to the factory) is an important requirement. We also look at how we deal with animals, nature and climate.
By making this quality mark also available to other processors, FrieslandCampina hopes to make a difference in the market. "The Tesco model", explains Keurentjes. "In the United States, the retail sector owns the concepts and they look for the dairy farmers." In the Netherlands, the dairy cooperative wants to prevent this. "You can compare it to what happened at the free-range egg."
Too big volume for bulk
Despite the intended milk flow, there remains sufficient milk that will have to find its way through the bulk products. To prevent this volume from becoming too large, a discount of €0,10 will be applied if the volume growth in the entire milk lake is too great. This discount only applies to dairy farmers who produced too much.
"We want a more spacious jacket", says Keurentjes. "We invest in flexibility." A lot has already been invested in recent years, it sounds like from the audience. "What about the rumors about the factories not starting up?" The chairman classifies it as conversion problems. Market demand, capacity and investments have also been miscalculated. "An example is the demand for condensation. It has not grown as fast as we thought." The result is overcapacity in the production of condensate.
Trump card in hand?
Conversion problems, overcapacity in the wrong products, losses in China and Pakistan is not even mentioned. Add to that the turnaround in the market and a major challenge arises. This creates the feeling that the Toplijn Dairy has to turn the tide. Is this the asset that will make the difference?
Herman van den Pol
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