In this way, the dairy industry remains the showpiece in the economy

The Dutch dairy industry will have to develop new business models in the coming years due to increased internationalization. This will create new dairy clusters that will bring us new prosperity by focusing on the export of knowledge and technology related to sustainability and health.

That perspective does create tension for current dairy cooperatives, because how do you choose between quantity, number of members and milk volume on the one hand and value and high-quality activities on the other? The new revenue model is also a dilemma for directors. The question is whether the current 'supply-driven' model on which cooperatives are based is still sustainable in the future. But something has to be done.

The Dutch dairy cluster is in a new phase, namely that of shrinkage. Despite this threat, we see that most of the sector is not changing its strategy. That strategy is still based on a growth model. Against international trends and therefore a considerable risk. Together with the Dutch knowledge centres, the Dutch dairy multinationals are already busy with the necessary transition. Alternatives to the dairy industry are desperately needed. Skimmed and whole milk powder and cheese in particular, which now contain most of the Dutch milk, are in the danger zone.

Fortunately, the Dutch dairy cluster is a leader in efficiency and sustainability, so why don't we benefit from that? And help other countries. Exporting knowledge and technology fits in well with the political and economic ambitions of emerging countries. This is a unique opportunity for our dairy sector. Many parties are already working to make the current system more sustainable step by step without adjusting the revenue model. But this is going too slowly. There are challenges surrounding soil quality, water quality and nitrogen that require all our attention. Yet rapid systemic change is needed to advance the sector economically. 

A promising current innovation development is the movement towards making lifestyles healthier. Nutrition plays an important role in this and the health sector is rapidly developing new programs based on the idea 'Food is medicine'. Looking at new knowledge development in this way fits the challenges of the 21st century and is promising. The government, 'Wageningen' and various leaders who are active with vegetable proteins and circular agriculture are also developing in that direction. An additional advantage is that less land is occupied and fewer dairy cattle are needed. Although this is of course a hard blow for some.

Cooperatives and family businesses in particular think about the long term and are good stewards. I trust that cheese and milk powder producers and traders will continue to be the showpieces of a high-quality and sustainable economy in the future.

Richard Janssen is an associate professor at Nyenrode Business University. Agri-food chains, including dairy, fall within his area of ​​interest. No client was involved in this research and (external) financing played no role.

© DCA Market Intelligence. This market information is subject to copyright. It is not permitted to reproduce, distribute, disseminate or make the content available to third parties for compensation, in any form, without the express written permission of DCA Market Intelligence.