FrieslandCampina

Analysis FrieslandCampina

Schumacher ends up with a dream switch at a customer

30 January 2023 - Klaas van der Horst

Hein Schumacher (51) makes a dream transition. From CEO of FrieslandCampina he becomes CEO of Unilever, coincidentally or not a major customer of the dairy giant. It is also the company where he once started and where he was already a supervisory director.

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The usual pleasantries are exchanged during this transfer. Sybren Attema, chairman of FrieslandCampina, praises him for his performance at the dairy company and says he regrets seeing him leave. Chairman of the Supervisory Board of Unilever Nils Andersen says he is happy that they have landed such a big fish after a worldwide search; while he was already on the supervisory board. Schumacher himself also contributes. In a letter to the members of the FrieslandCampina cooperative, he looks back on the past years and says that it has not always been easy for him, that he considered it an honor to work for the company, but that FrieslandCampina is now in a stronger position.

FrieslandCampina stronger, or not?
Opinions differ on the latter. As a dairy company, FrieslandCampina has put on a strong performance in recent years, especially compared to other companies. In Europe compared to Arla in particular, in the Netherlands compared to smaller competitors. In recent years, hundreds of member companies, mainly larger member companies, have also left the cooperative. In addition, at a time when there is a lot of fighting over the raw material, an important part of the milk pool has been lost. The guaranteed price is also no longer as leading as it was in the first years of FrieslandCampina and its sales markets have been lost. The latter is partly inevitable, such as with child nutrition in China and partly due to the changed status of Hong Kong's transit port. Profitability is no longer what it used to be.

Reprofiling
Furthermore, there has been a lot of reorganization, as Schumacher also indicates in his farewell letter. Particularly in the last year, he has focused strongly on re-profiling FrieslandCampina as a food company rather than as a dairy company. The management may be enthusiastic about it, but the members see this happening with mixed feelings. Wasn't Schumacher appointed to maximize the value of member milk and to unleash his creativity and entrepreneurial spirit?

Complex relationship
Schumacher has always had a complicated relationship with the members. Many farmers did not see him as one of them. Too many managers, too 'corporate' and too few dairy and agricultural people. His media appearances on TV and in national magazines almost never went down well with the farmers. His departure will therefore not be regretted everywhere. Schumacher couldn't find the right tone. Especially when it came to the environment and sustainability. The story goes that this is why he had been advised against making any further media statements since Attema took office last year. In recent months, Schumacher has also hardly been visible as CEO. As chairman of a trade association NZO he also increasingly allowed himself to be replaced by the vice-chairman.

Competitive sensitive?
Schumacher is now switching, but the bond with FrieslandCampina will remain. Unilever is one of FrieslandCampina's most important customers. There could be a tricky thing there, because Schumacher knows FrieslandCampina's costs, margins and other sensitive data like the back of his hand. The question is whether any questions were asked or agreements made about this during the switch. If Schumacher had gone to Albert Heijn, that would certainly have been a point of attention.  

With the switch, Schumacher not only improves in terms of status, but also in terms of salary. Outgoing CEO Alan Jope is reportedly taking over about €5 million per year, Schumacher had to make do with a 'paltry' €2 million at FrieslandCampina.

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