DMK, producer of brands including Milram, Humana, Uniekaas and Alete, is one of the biggest suppliers to the German food retail industry.
At the ordinary owner-side representatives’ meeting (Genossenschaft Deutsches Milchkontor eG) in Hanover on Wednesday, dairy chief Ingo Müller presented total revenue in 2018 of €5.6bn ($6.3bn), down €0.2bn ($0.23bn) on the previous year, and slightly improved earnings of €30.6m/$34.6m (2017: €29.6m/$33.4m). The equity capital ratio is stable at 30.9% (2017: 31.1%).
DMK said its stable figures for the past year are in part due to the dairy company’s realignment, which started in the summer of 2017.
Müller explains changes
In order to accelerate future developments in the organization, DMK said it is planning a long-term ‘Vision 2030’ with a guiding principle covering its six business fields.
Müller said, “A key factor when it comes to change is time. We know that DMK has often asked a lot of its farmers in the past. At the same time, we know that fundamental reorganization like that which we’re currently undergoing doesn’t happen overnight.
“As well as basic organizational measures for one of the biggest food producers in Germany, the restructuring also represents a huge change in the corporate culture. We have an ambitious plan for both of these factors, which we also have to implement with due care to ensure that DMK can reach its full potential. The first phase, which was shaped by investments in the future, has almost come to a close. Now it’s about benefiting from the effects in a targeted way.”
The top goal, Müller said, is focusing on the consumer, thinking about what they want and need.
“We have formulated our new guiding principle accordingly. We will be deepening our understanding of consumers even further in future, targeting specific generations. We already have an offering in our assortment for almost everyone at each stage of life and for any need. We will continue to expand this for our key strengths and will work on it in a focused way. For me, our new Vision 2030 ‘The first choice – for an entire lifetime.’ perfectly summarizes what we will be offering with our assortment in the future: being the clear number one for consumers in the selected assortments.”
The second measure, he explained, is to focus by withdrawing from selected business areas and defining clear roles for each business area.
“Where do we invest? Where can we grow? Where can we design the business with clear measures in such a way that we can earn money even where there is no market growth per se?” he added.
Müller said The DMK Group is changing its positioning from simply being a volume player in the dairy industry, to being a provider ‘of selected natural products’.
“In doing so, milk will continue to be our number one raw material by far,” he noted.
He also wants to further refine international activities, believing the organizational restructuring over the past few years hasn’t gone far enough.
“We see Europe as our home market and will focus our expertise in the right business units here in the future.”
Beyond the borders of Europe, the ‘International’ business unit now has the capacity to clearly structure processing for the non-European business, Müller said.
“Outside Europe, we’re setting clear priorities. Regional bases in Russia, China and Nigeria with local teams are more effective for us than simply having exports from Germany. A traditional export makes sense in selected countries in which we also move big volumes. We can’t buy any of this if we only count the number of export markets,” Müller said.
Plant-based move
On DMK’s position on the growth of plant-based alternatives, he said, “If you look at global developments, you quickly realize two things. Firstly, milk alone will no longer be enough to feed the growing population. Then secondly, consumers are already looking for alternatives for a variety of reasons. Ignoring this would be negligent.
“We will take a targeted approach here - within the ‘Brand’ business unit, colleagues will look very closely at where and how we can establish ourselves in this field in the coming months.”
At the meeting, it was also announced that Dr Frank Claassen, 54, will be the new chief financial officer of the DMK Group. He succeeds Volkmar Taucher, 62, on July 1, 2019.