'Cheese is a healthy product that will remain popular in the future'

We meet for an interview in Hoogeveen, where Kaas-Pack has its production location a stone's throw from the DMK factory. The company is celebrating its golden anniversary this year, which is a great opportunity for a conversation. Processors such as Kaas-Pack often operate less in the spotlight than the producers, but nevertheless play an important role in the dairy chain.

Henk Koekoek, the brothers' father (right in the photo, with Albert on the far left and Erik in the middle), started five decades ago with a market stall and expanded it to three market routes in a number of years. In the 90s, the focus was entirely on grating and packaging cheese. "That was quite a leap of faith for our father, because market sales were still a strong pillar of the company at the time. But he felt it was necessary to make a clear choice. He saw many opportunities to leave the processing branch grow, but did not want sales at the market, which he worked on for twenty years, to suffer. The markets were sold within the family and still exist today.

Add ExpertCheese
The cheese company was first located in an existing building in Hoogeveen, which was given a major makeover and a new interior for its new purpose. In 2004, a new building was built at Buitenvaart, near the Dairy Park outside the city. There the wings were spread further. In 2011, 'cheese cleaner' Kruiveem in Tolbert was taken over, which kept control over various raw material flows. The company was transferred to Hoogeveen in 2016, where it continued under the name ExpertCheese. It was located in a building specially purchased for this purpose.  

'Pa' Koekoek – as the brothers call him with some respect – had already been out of the company for a while. He formally left in 2006, but still likes to follow developments and his car stops at one of the two companies several times a week. Every Friday they discuss the world over a cup of coffee together in their parents' private home. In the meantime, the third generation is cautiously joining the ranks. Preferably after they have first gained experience outside the home, preferably in the dairy sector.

Albert and Erik keep their tasks well separated. That works fine too, because they are quite different. "We complement each other," says Erik. Albert nods. It works well and they can often read each other's thoughts from a distance. Albert focuses on sales, HR, finance and quality. Erik is involved in purchasing, production and logistics.

Flying start in retail
Traditionally, Kaas-Pack mainly does business with industrial customers, but in 2020 the focus was also placed on retail. This was a strategic choice, because today the company's growth is mainly in that segment of the market. Moreover, customers often ask for large volumes and that makes it interesting. The decision turned out unexpectedly well. "The corona crisis occurred and retail demand increased sharply. Industrial cheese sales at that time fell sharply due to the lockdowns in many countries," Albert recalls the initial phase of this new discount. The crisis is now behind us.

How are the company's retail sales now? "The nice thing about retail is the many product innovations, where we add value with our knowledge. But supermarkets are critical customers and margins can be low," says Albert. “Mistakes are expensive,” Erik adds. "In the beginning we had to step up our game to meet the quality requirements of retail, but we now have the process well organized and we do business with retailers in various countries."

Don't dare to sell
Viewed from a distance, Kaas-Pack's business model is characterized by Drenthe solidity with a touch of stubbornness. For example, the company is not very keen on contract production for third parties. However, we strive for good long-term relationships. They call them 'partnerships' internally. "We do business with a wide variety of cheese producers in the Netherlands and Germany, from which we purchase the raw material. Both privately and cooperatively, without disclosing names."

When asked what makes the company an attractive processor for these companies, we remain silent for a moment. Then Albert says: "I think it has to do with our level-headedness, which characterizes more people from this region. An agreement is an agreement with us. That sounds simple, but does not always have an effect in practice. It helps that we as brothers have been running the company for many years. This is in contrast to other companies where there are sometimes many changes in management. We also sometimes dare to say no if there is reason to do so." Erik adds that both their hearts beat faster when they see customized solutions, with packaging for example. "We try to distinguish ourselves from the crowd with this. And if we believe in something together with a partner, then we go for it. For example, we have been working with such a partner for some time on the market launch of cheese with a high protein content. Not necessarily the easiest process, but this could be something to do given the success of milk powder shakes as sports nutrition."

In the meantime, the search for alternative, renewable packaging is causing some headaches. Everyone thinks things should be different than they are now, but a good alternative to what is currently on the market, with the same properties, is not easy to find. Cheese-Pack is not alone in that quest, but it is difficult. Erik thinks that the company is very close to a solution.

Ambitious growth plans
Kaas-Pack keeps a close eye on developments in Dutch dairy farming, despite the fact that there is no direct link with farmers. The shrinkage scenarios of perhaps 20%, as Rabobank recently outlined, will not stop the company from scaling up significantly. Plans have been made to double production from 22.000 tons within a number of years.

The current production location is full and the brothers still see enough demand in the market to want to grow. Moreover, extra scale also offers the opportunity to improve margins, they think. That is why two plots of land next to the current location were recently purchased. "The neighbor's land may often be too expensive, but this offers us a unique opportunity to grow significantly in the same location," says Erik.

Despite less milk, there is confidence that there are various market opportunities to be exploited. "In addition to the idea that cheese will be less vulnerable, 40.000 tons is still not a world volume, if you compare this to the total cheese production in Northwestern Europe. Cheese is a healthy product that will remain popular with many consumers in the future, despite the rise of vegan." According to the brothers, it is important to distinguish yourself in the market. That is why they will focus even more on projects with added value.

Anticipate
The shrinkage of the milk pool will nevertheless have consequences. In the sense that cheese prices may fluctuate even more in the coming years than they already do. They did not immediately expect the rapid increase in cheese prices in mid-May. According to the brothers, this makes it important to properly assess the risks and anticipate them sensibly in trading positions. "Sometimes you just have to dare to take risks," they conclude with a smile.