FrieslandCampina gets more out of private label cheese

To illustrate the progress, he refers to the recent report from FrieslandCampina about the significantly increased allowances for sustainability that the company can pay to its members. Özgüner: "This is mainly because we as a company can show our customers that we are doing much better in terms of sustainability than other cheese makers in the EU."

How does that translate into money; For example, do you receive 10 or 20 cents more per kilo of cheese?
"We ask fixed additional prices from our customers, but do not mention any amounts here. With our data flows, via Foqus planet and On the way to PlanetProof, among others, we have a fantastic advantage over our competitors, because we can very well demonstrate what is happening. happens in areas of sustainability." 

You have that ahead of the Arlas, DMKs and others.
"We never make statements about individual companies. We look at the field as a whole, the benchmark. Compared to this, when it comes to sustainability in cheese, we are doing 30% better than other producers in the EU and 60% better than others outside the EU, and this is reflected in the commercial results. The competition is of course not sleeping and is also taking action, but we have made further progress."

In the Netherlands and neighboring countries, your customers are familiar with FrieslandCampina's sustainability systems, but what about further afield, can a sustainability bonus also be obtained in other markets?
"That sometimes varies, but it is increasing. In retail you often deal with large international players. Ahold, for example, achieves 60% of its turnover in the US. This means you have more large parties. For example, Walmart and Costco. They see trends in Europe and often take something of it with them elsewhere."

When it comes to sustainability, the emphasis is increasingly on CO2. Products must above all have a low CO2 footprint. This seems to be becoming increasingly important compared to other matters, such as grazing.
"That has to do with political choice, but also with clarity. Retailers and consumers understand CO2 reduction better than many other measures. It is otherwise so confusing. But grazing also remains important. That will not go away, but the goals for it will have also largely been achieved. The decline has stopped, but if things were to change, we could make adjustments with the help of Foqus planet.

"We have no problem with the fact that we have different types of entrepreneurs. In the past, you often heard that people were not happy with it. I think the variety of groups of entrepreneurs is actually a blessing. You can cluster them, provided you have sufficient mass, and offering different types of products."

The cheese market has become quite complex, due to a changing society, changing eating moments and ways of consumption and also due to the presence in more and more markets.
"That's right. We therefore need to have a very good insight into the food culture per country: when and how cheese is eaten and by whom. In some countries they eat a block of cheese in the afternoon just before dinner, while we don't do that. We also discovered that tasty Dutch cheese was often missed at drinks. That's why we came up with De Rotterdamsche Oude. With our Parrano cheese we could offer a range of cheeses is almost equivalent to Italian cheeses such as Grana Pardano, but at a lower price. It is about knowing the market, habits and patterns. For example: the later in the day, the older cheese is consumed, or: the younger you are younger the cheese you eat."

You are president of Retail & Americas, chief executive of one of FrieslandCampina's seven business groups. What percentage of its turnover is due to cheese?
"It concerns 70%, or perhaps 80% of turnover. At FrieslandCampina, about 50% of all milk goes to cheese. Our business group accounts for 25% of all milk (the remaining 25% is with Trading red .). The activities of the different groups partly overlap, but we are jointly responsible for the result. It is therefore not the case that we compete with each other internally."

How much cheese does FrieslandCampina make?
"Roughly 600 million kilos. You can broadly divide this cheese into three types: 1. mozzarella, which is mainly used in industrial applications, 2. foil cheese, a type of Gouda cheese and 3. natural cheese, also usually Gouda. What we do with the latter two types are doing is the heritage claim for natural cheese. Gouda cheese is originally a Dutch product and we want to promote that more, even though we can no longer claim the generic name. The whole world makes Gouda. That claim of the heritage We do this with brands such as De Rotterdamsche Oude and Lutjewinkel 1916. We also have many brands that are mainly known abroad, for example Frico and El Gallo Azul (on the Mexican market). In the Netherlands we also have Milner. Within the foil cheese we are taking steps towards uptrading. This means that we place this cheese higher in the market based on, among other things, sustainability characteristics."

In recent years, vegan cheese has also become more popular. How do you view this and what do you expect from that segment?
"It is a very small segment and it may remain so. Cheese is made for its nutritional value and it must be tasty. Vegan cheese lags behind on both counts. At Velder, which I previously managed, we also had vegan cheese in our range, but on average vegan is not the tastiest cheese. This is also because cheese is a much more complicated product than a milk alternative. It is about craftsmanship, texture and ripening really a challenge. They don't even know how to imitate foil cheese, let alone natural cheese that has been ripening in the warehouse for two years."

Cheese marketing has changed. The customer approach remains the same?
"No, another way to increase the profitability of our cheese production is to use a different approach. In the past we were quite heavily in the tender business, where we tendered for three or four month supply contracts. Then another new round. Instead, we want to move towards longer-term strategic partnerships. We offer the retail sector a 'premium private label' product, with an accompanying product portfolio therefore yield a plus."

"In this way we try to empty the Trading container, where the products not sold by other business groups end up. It is our challenge to do it this way. Consumers are increasingly switching from brand to private label (house brand ed.) and retail is increasingly pooling purchasing power. You can see that as a risk. I see it as an opportunity, but you have to play the game very well. The game has become more vicious than it was."