'Arla's milk price contains enormous potential'

Arla's annual figures show that you have grown by almost 8% in the Netherlands to €272 million. Can you explain this success?
"The growth is mainly a result of our strategy in branded dairy, such as the Arla brand and Melkunie. Various products such as Arla Skyr, Arla Lactofree and Melkunie Versfilter have been introduced around this. We are a relatively new player in the Netherlands, we have only been around for 10 years. active. When the factory in Nijkerk was taken over (after the merger between Friesland Foods and Campina), Arla came here. Before that, we were purely active in the dairy trade. In recent years we have grown into an established player, with the second largest market share in terms of conventional dairy in retail. We are the market leader in the organic segment."

"We focus on products with added value, with which we try to distinguish ourselves and grow. We profile our dairy brands on 3 points: easy, healthy and good. Easy here also means easily available. People are increasingly consuming on the go and less and less. at home. Smart packaging, for example, must be developed for this."

Arla's roots lie in Scandinavia. To what extent is the policy made in the Netherlands?
"Arla is indeed a Scandinavian company and large in Denmark and Sweden. The company is managed from Denmark, but there is a lot of room for national influences. A good example of this is the differences in food cultures. For example, Arla Skyr was introduced in the Netherlands as a breakfast product , while in Germany it is promoted as a snack. Melkunie is a traditional Dutch brand that we develop and market from the Netherlands. The milk price is the same in all 7 countries in which Arla is active. This fits with our cooperative method."

Speaking of the milk price; Arla's payout price sometimes seems to lag behind. Can you explain this?
"We compare our milk price with the payment prices of other European dairy cooperatives; this shows that we are competitive from a European perspective. The payment prices at Dutch dairy cooperatives are higher than elsewhere in Europe, which means there is still room for development in the Netherlands."

Relatively many Dutch dairy farmers have changed dairy processors in recent years. What does Arla have to offer a dairy farmer?
"Arla is a farmers' cooperative, which means that the dairy farmer has a real say with us. We also feel responsible for our members in the long term. A good example of this is that Arla has decided to full profit to be paid out for 2018 (€290 million) to the more than 11.000 members of the cooperative. This is to compensate for the higher feed costs due to the dry summer."

"In addition, our milk price has enormous potential. I am truly convinced of this, given that we are growing rapidly in branded dairy and that is where the future lies. At Arla we are also working on a cost savings program that should save €300 million annually. In the past Arla has done quite a few mergers over the years and we are trying to bring them into one company. This will undoubtedly lead to synergy benefits. In the longer term, this will also affect the milk price."

Have you grown the number of dairy farmers in recent years?
"In recent years we have not experienced spectacular growth in the size of the milk pool, but we have experienced steady growth. In the Netherlands, approximately 75 dairy farmers are affiliated with Arla and in Belgium there are 500. We prefer to grow well in a measured manner, rather than irresponsibly fast. As a cooperative, Arla has a major responsibility to properly valorize the milk pool."

There are more and more milk flows in Europe. Are you also working on that?
"Yes, we are also working on that. New milk flows are emerging in the context of sustainability in dairy farming. We embrace this and try to take the right steps. A dairy farmer who takes concrete steps towards sustainability should be rewarded. As an incentive to sustainability, but also to compensate for the higher costs. If you look at the cost price of producing milk, a supermarket price of approximately €0,85 per liter is far too low. That price must be increased and sustainability aspects, such as Applying pasture and GMO-free feed, certainly helps."

The number of dairy farmers is decreasing and the farms are getting larger. In the Netherlands there is probably less rather than more milk. What does this mean for the position of dairy farmers?
"The position of 1 individual dairy farmer will probably become stronger, because the milk pool is expected to become smaller. At the same time, dairy farmers are expected to take concrete sustainability steps. This in order to contribute as a sector to the objectives of the Paris Climate Agreement. About I am positive about the future of the sector. A day without dairy is unimaginable for many; milk (products) have numerous health benefits. There is plenty of future for a sustainable dairy farmer."