The first choice. For always - DMK Group

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The first choice. For always - DMK Group
The first choice.
        For always.
The first choice. For always - DMK Group
Resource-conserving, vegetarian, protein-rich, inspirational – food is
becoming more and more of an ideology. A healthy, balanced lifestyle is the
new norm, and morphing from a desirable state to a lifestyle. At DMK, we develop
new concepts and products that respond to consumer’s desires and help them to
lead a balanced life. As a leading food manufacture, we adopt a clear customer
and market orientation so as to offer dairy products to suit everyone.
The first choice. For always - DMK Group
OUR ROOTS. OUR VALUES. OUR FUTURE.                                                                  5

The first choice.
For always.

As a modern cooperative, we are                   on our goal of being the first choice for dairy
well positioned to offer a sustaina-              products of natural origin for consumers in
                                                  every phase of their lives.
ble and innovative product port-
folio: from the farm to the consu-                We have successful brands
                                                  Brands such as MILRAM, Oldenburger,
mer’s table.                                      Humana, Alete and Uniekaas give consumers
We are DMK                                        in Germany and abroad enormous confidence
At DMK, more than 14,000 people live pas-         in us. We are an established name in our Eu-
sionately for milk every day. We are Germa-       ropean home market and selected target mar-
ny’s largest dairy cooperative and one of         kets around the globe. We build constantly on
the most important suppliers to Germany’s         the position we have earned in the different
retail food sector. Our farmers, their families   B2C and B2B markets. With the help of our
and our employees work together to enable         own targeted trend management and a deep
us to produce top-quality food at more than       understanding of customers and consumers,
20 sites, processing around 8 billion kilos of    gained over a number of decades, we con-
milk every year. Our product portfolio ranges     stantly adapt our portfolio to changing needs
from baby food, cheese, fresh dairy products      in a highly dynamic environment. From baby
and ice cream to ingredients, and stands for      food to cheese to whey – we know how to get
quality, diversity and innovation. As a mod-      the best out of our milk and use every one of
ern food manufacturer, we look beyond the         its valuable, natural elements. We combine
raw milk alone: our top priority is to focus in   our many years of expertise with intensive re-
everything we do on what consumers need           search and development so as to manufacture
and what they expect from our products.           innovative, delicious products at our modern
This enables us not only to meet these needs      factories. We are driven by a desire to achieve
and expectations, but to keep improving fur-      the best possible value added for our custom-
ther. We therefore work together every day        ers and our company.
The first choice. For always - DMK Group
OUR ROOTS. OUR VALUES. OUR FUTURE.                                                                                                                                                                 7

We take responsibility                             We are a strong community
We are conscious of our responsibility for         We are a company owned by farmers, and
our products, from the meadow to the               the cooperative structure is deeply embed-
consumer’s shopping bag. We use nature’s           ded in our corporate core. We are a commu-
resources to optimum effect and select our         nity that stands for self-management, com-
ingredients with the greatest care. We ad-         munal spirit, mutual support and continuity
dress socially and politically relevant topics     as well as a shared readiness to be flexible
such as sugar reduction, packaging, animal         and to change. We are taking the heritage
welfare and sustainable feed and contribute        of the cooperative model into the future by
actively towards solutions. With our sustain-      developing it continuously and designing our
ability strategy and the Milkmaster Pro-           relationship with our members in a modern
gramme, we improve sustainability in dairy         way. We therefore attach great importance to
farming holistically and involve various spe-      intense dialogue within the cooperative and
cialist departments across the company in          a strong “we” feeling among dairy farmers
implementing this mission. We see sustaina-        and employees.This base enables us to act
ble business activities as the prerequisite for    as a unified whole to develop our company
a good, natural portfolio and products with        actively and go on making our vision for the
a pure, unadulterated milk flavour – and also      future a reality.
as our responsibility towards consumers,
employees and our dairy farmers.

Vision                                                                                                Mission                                                                      Values
The first choice for dairy products of natural origins – for always. We use nature’s resources to     We see ourselves as a preferred partner with a       Our three core values continue to apply:
optimum effect and select ingredients with the greatest care. Dairy products comprise the major       deep understanding of customers and consum-      we are fair, innovative - and entrepreneurial
share of our portfolio and form the basis of our product range. Our goal is to be with consumers in   ers. In this context, we create maximum value                                   in our actions.
every phase of their lives. Our mission is to fulfil the wishes of customers and consumers.           and embrace our sustainable responsibility.
The first choice. For always - DMK Group
9

“Focus on the
consumer”

CEO Ingo Müller talks about the                     The rapid movements in the market are a
                                                    major challenge for our entire industry and
past fiscal year – and about the                    determine around two thirds of our perfor-
DMK Group's future course.                          mance. That will not change. As an enterprise,
                                                    we therefore concentrate mainly on the remain-
Looking at this combined annual report and          ing third, so as to earn a profit that allows us to
sustainability report – how satisfied can you       pay our dairy farmers competitive milk prices
be with the year 2018?                              and to make essential investments. And that's
We’ve mastered major internal challenges in         not a one-off task, we have to make permanent
a difficult market environment and earned a         efforts to move forward.
solid profit at the previous year’s level. Today,
DMK is in a stable position, well financed          We also mastered the demands on us well in the
and in a position for targeted growth, mov-         year under review - constantly rising require-
ing forward in accordance with the strategy.        ments, particularly in sustainability issues, such
This indicates to me that we've taken the right     as sugar reduction, packaging, animal welfare
course and that the combined efforts of our         and sustainable feedstuffs. In this regard, we’re
14,000-plus employees and dairy farmers are         positioned to help transform the industry even
worthwhile.                                         beyond our own corporate boundaries with our
                                                    DMK 2020 sustainability strategy, the prelimi-
After a favourable prior year for the dairy         nary work on the realignment of our Milkmas-
industry, the market took a more difficult          ter Programme and a wide range of initiatives.
turn in 2018...                                     We also took the initiative in 2018 at the higher,
The first choice. For always - DMK Group
INTERVIEW WITH THE CEO                                                                                                                                                                                     11

                                                                                                        “We are
sectoral level for that purpose, and suggested       That’s correct, and these resignations tendered                                                       process. However, our corporate culture also
the idea of a joint sector strategy for the entire   in the year 2016 were a clear sign of discon-                                                         needs to change in order to achieve this goal.
dairy industry. Politicians and professional asso-   tent, which we took on board. Since then, we                                                          In concrete terms, we have to learn to change
ciations welcomed this thought.                      have successfully redesigned our company and
                                                     the remaining dairy farmers are also benefit-
                                                                                                        positioning                                        our way of thinking, cast off former blinkers,
                                                                                                                                                           go new ways and, above all, pull together in
When we look at our own performance, it is
also true to say that we are not happy with the
                                                     ing from the progress made to date. In other
                                                     words: if resignations are an expression of dis-   ourselves as                                       the same direction.

milk price paid to our farmers in connection         satisfaction, the fact that we’re welcoming new                                                       That sounds good in abstract terms, but what
with our business results in 2018. The level of
the payments was lower across the industry as
                                                     farmers to DMK again now can be counted as
                                                     approbation.
                                                                                                        a modern food                                      exactly do you mean by setting a trend?
                                                                                                                                                           When we take it easy in times of rapid change,
a whole in 2018 than in the prior year because
of the market situation. In this environment,        For us as an enterprise, these resignations        manufacturer”                                      we stand still. Whether it’s the impact of dig-
                                                                                                                                                           itisation, which is bringing new players onto
we only achieved a farm-gate milk price in the       were also an opportunity, which we mas-                                                               the food market, or consumers’ changing
mid-range for Germany - this is not what we          tered well operationally and will continue                                                            demands, which are shifting towards conven-
aspire to. We continue to see our tasks here as      to use to our advantage in the near future:                                                           ience, sustainability or functional food – we
follows: we are engaged in a complex change          the portfolio that we streamlined for some         If I say “everything”, it’ll sound like an exag-   have to consider consumers’ wishes deeply all
process and the investments we have made in          countries, customers and factories comes           geration. However, it’s a perfectly accurate       the time and work today on the products they
the market have not yet led to the expected          mainly from the not-so-profitable commodity        description of the impression I have when          will want to buy tomorrow.
results at all points. However, we’re already        segment and, what’s more, would have made          I consider today a company that has had a
seeing significant progress. For this reason,        little contribution to our value added in the      radical makeover in the last two years: we’ve      We managed to do that well in many areas last
                                                                                                        established a new organisational structure,        year: not least, our structured, DMK-specific
                                                                                                        we’re overhauling our portfolio, setting up        trend management with external and inter-
                                                                                                        new processes, implementing a new corporate        nal trend scouts is demonstrating attractive

“We're working today on the
                                                                                                        culture and, above all, we’ve shed our under-      new product opportunities. With MILRAM,
                                                                                                        standing of ourselves as raw milk processors.      we’re developing better than the market in
                                                                                                        And that is the most important thing: if we        almost every area. The newly opened baby

products of tomorrow”                                                                                   still want to earn a competitive milk price for
                                                                                                        our dairy farmers tomorrow, we have to posi-
                                                                                                                                                           food factory in Strückhausen forms the basis
                                                                                                                                                           for the major growth opportunities we see for
                                                                                                        tion ourselves as the company we are after         the Humana brand. In the past two years, we
                                                                                                        the realignment: a modern food manufac-            have already started expanding our market
                                                                                                        turer. That means we have to think from the        share in many countries with a more honed
we will continue to work hard on concrete            current year and beyond. We can also fully         point of view of markets and customers, not of     profile directed at mothers as a target group.
measures with which we aim to achieve a fur-         utilise our factories’ capacity with our pres-     raw materials. This also means putting value       In the ice cream segment, our colleagues have
ther marked increase in value added in the           ent volume of milk. We’ve also opted for toll      added before growth – it’s not primarily about     entered successfully into partnerships with
different business units and therefore also a        production contracts, which present no cost        how much milk we process, but how much             famous brands such as Baileys or MILRAM and
steady, competitive milk price.                      disadvantages compared to processing our           the processing brings in for us and our dairy      are expanding these partnerships profitably.
                                                     own milk.                                          farmers. For this reason, we have to focus
For the members of the cooperative, resign-                                                             closely on our customers and consumers in          In that case, after two stressful years DMK
ing is the clearest way of expressing their          Saying that DMK has “redesigned” itself            all we do and, in the best case, set trends with   will have a more peaceful existence?
dissatisfaction. At the end of the year, dairy       sounds pretty comprehensive – exactly              our products rather than running after them.       Yes and no: we’ve completed the phase of inten-
farmers left DMK and with them almost one            what is different now because of the change        We’ve already aligned our team organisation-       sive reconstruction and organisational realign-
billion kilos of milk.                               process?                                           ally to this purpose within the transformation     ment to a large extent, and our company’s DNA
The first choice. For always - DMK Group
INTERVIEW WITH THE CEO                                                                                                                                                        13

“If we don't take
                                                                           What does the target image mean for the            To sum up: what challenges does the DMK
                                                                           company?                                           Group have to address?
                                                                           New organisational structures and processes        With our chosen path, we’ve created the foun-
                                                                           can be implemented with relative ease. But that    dation from which we can look to the future

care of our future
                                                                           alone won't get us very far. Rather, we have to    with an open mind for further developments
                                                                           change our company’s culture to allow us to        and adjustments. What will our environment
                                                                           achieve our long-term goals. And this change       look like in the future, what will shopping look
                                                                           starts in the mind. With our target image 2030,    like in the year 2030, what will consumers

direction today, we                                                        we want to motivate every single employee to
                                                                           use their new, added scope, contribute new
                                                                           ideas and part with the notion that all we do
                                                                                                                              want, who will our competitors be, how will
                                                                                                                              digitisation affect our business? We have to find
                                                                                                                              answers to these questions so that we know

needn't bother to
                                                                           is process our raw milk. However, there’s no       how to develop our business and set it up com-
                                                                           magic formula for that. We’re therefore creating   petitively for the long term in a highly compet-
                                                                           new formats and measures all the time so that      itive environment. Let’s take the smartphone
                                                                           we can take this direction. Because there’s no     as an example. The technology in the devices

turn up tomorrow”
                                                                           such thing as an assembly kit for a new corpo-     only changes incrementally year on year. How-
                                                                           rate culture. Employees meet at our “Brainfood”    ever, when you look back over 10, 15 years, our
                                                                           events to discuss the topics of tomorrow with      everyday lives, the way we get information and
                                                                           trend researchers, for example. Our “different     consume media have been completely turned
                                                                           thinking” space, in turn, provides space for a     upside down. That’s why we have to keep our
                                                                           new meetings culture and therefore encourages      eyes constantly on the future, so that we can
                                                                           cross-departmental, open and creative shar-        use these processes for the DMK Group’s devel-
is set and will define our actions in the future.                          ing. And our new vision “The first choice. For     opment.
However, we can never allow ourselves to think                             always.” will support the direction we've taken
that the hard work on our further development                              by summing up our vision, mission and values
is done. To stand still would be a failure for a                           succinctly and clearly.
company of our size and in view of the breadth
of our customer and product portfolio. Even if                             A new strategy, then?
our day-to-day business is challenging, we have                            No. The focus on 2030 is not a new strategy or
to look over our own garden fence and think                                a new restructuring programme, but rather               WHY IS THE 2030 TARGET
along new lines. That will protect the day-to-day                          an evolution of the course we’ve taken in the           IMAGE IMPORTANT?
business of the future.                                                    last two years. We will stick to that course in
                                                                           the future and not change it because of short-
Stating it rather over-bluntly, if we don't take                           term market movements. If we want to improve            ▶ It focuses the total organisation on
care of our future direction today, we needn't                             and save costs at this point, we have to decide         a consistent goal with clear priorities
bother to turn up tomorrow. That’s why, in the                             where we want to get to. Otherwise, we’re
                                                                                                                                   ▶ It ensures sustainable competitive-
year under review, we’ve given intensive consid-                           making short-term decisions that will bar our
eration to what we have to prepare for in future                           way in the future and lead to double work. The          ness and a successful future
and developed a target image of DMK 2030 from                              business is and will remain challenging, that’s         ▶ It sets our direction early and aligns
that. The concrete detailing of the associated                             clear. However, if we look beyond our own gar-
                                                    On-trend, up-to-the-                                                           us with growth areas in good time
actions in all business units is one of the main    minute innovations:    den fence we’ll be securing the day-to-day busi-
strategic topics in the current fiscal year.        MILRAM Kalder Kaffee   ness of the future.
The first choice. For always - DMK Group
OUR KEY CONCERNS                                                                                                        15

                   We're aware of our
                   responsibility

                   When you think milk, you think                     stopped using the plastics that will have to be
                                                                      reduced in future under new regulations, and
                   nature – that's certainly what we
                                                                      have initiated a wide range of improvements,
                   do. Manufacturing our high-quality,                not only through projects on climate protection

                   natural dairy products in harmo-                   in the supply chain, but also by internal meas-
                                                                      ures such as a waste management database.
                   ny with mankind and nature is of                   We also want to develop collaboration with
                   central importance to us. That's                   customers and other key players further on a
                                                                      basis of partnership in the future. We target
                   why we use our sustainability                      cost-efficient entrepreneurship that harmo-
                   strategy and the Milkmaster                        nises the requirements of customers and con-

                   Programme to work systemati-                       sumers with the business needs of the dairy
                                                                      farmers. Our strategy therefore concentrates
                   cally on embedding sustainabili-                   not only on individual aspects, but on the
                   ty in our supply chain from grass                  comprehensive and multi-layered integration
                                                                      of aspects like animal welfare, environmental
                   to glass.                                          protection and the dairy farmers’ economic
                                                                      prospects.
                   Holistic thinking
                   We take a holistic approach which addresses        Spotting trends
                   the key topics in the supply chain, such as ani-   Sustainability in food is one of the global
                   mal welfare, climate protection, sustainable       megatrends: where does the food come from,
                   feed and basic raw materials. The approach         how is it produced? The aspects of animal
                   has proved successful: Not only do we have         welfare, regionality, sustainability and social
                   a leading position in GMO-free milk in Ger-        engagement are gaining in importance. In a
                   many, with 2.5 billion kilos - we also work on     study conducted in 17 countries, 43 percent
                   recyclable packaging for cheeses, long since       of respondents favoured GMO-free products
The first choice. For always - DMK Group
OUR KEY CONCERNS                                                                                                        17

                   and 37 percent preferred food from their own       not achieve what we do. We therefore set the
                   region. The focus is also increasingly on pack-    greatest priority as an employer on developing
                   aging. With our “Future of Packaging” inno-        and challenging all employees. Our employees
                   vation initiative, we are taking up this trend,    have certainly faced major challenges in the
                   which is primarily about the avoidance, recy-      past two years: we have redesigned the com-
                   cling and circular economy of plastics. In this    pany and undergone an organisational trans-
                   context, we are participating in research pro-     formation in which one in five of the current
                   jects, commissioning studies and setting up        7,700 employees took on a new role. We want
                   workshops and pilot projects. The goals here       to develop our employees with the best pos-
                   are to reduce plastics, improve recyclability      sible opportunities for training and continu-
                   and use renewable and compostable materials.       ing professional development, but also with
                   Our targeted trend management, with which          our culture change based on transparency,
                   we identify trends early and integrate them        respect, leadership competence and a strong
                   into our product portfolio, shows in particular    community.
                   how right we are to take this approach. With
                   trend management, we put our faith in explor-      In addition, however, the company is also also
                   ing and analysing longer-term mega-trends          responding to the constantly changing needs
                   and in a structured trend and innovation pro-      of a new generation, such as the home office or
                   cess. Since trends arise all over the world, not   job rotation. Because ultimately, the interaction
                   only internal but also external trend scouts       of the “we” feeling, individual development
                   collect them in the global metropolises and        and flexibility in working life is what makes a
                   help us to detect customers’ wants even before     modern employee. So that every employer can
                   they formulate them.                               perceive the meaning of his or her job and per-
                                                                      sonal impact on the company’s profitability,
                   Culture of respect                                 we are actively breathing a new spirit into our
                   When we talk about the harmony of man-             newly restructured domain. For this purpose,
                   kind and nature, we focus on the people side       we have developed a harmonised set of HR
                   not only on our farmers, but in particular         tools that is based on the company’s core values
                   also on our employees – without their daily        “entrepreneurial”, “fair” and “innovative” and
                   work, competence and engagement, we could          on a new competence model.

                                    More than

                       14,000
                            farmers & employees
                                work for DMK
The first choice. For always - DMK Group
OUR PRODUCT ASSORTMENT                                    19

Our products
bring generations
together

                         Fresh dairy products   Page 20
                         Cheese                 Page 22
                         Baby food		            Page 24
                         Ice Cream		            Page 26
                         Ingredients		          Page 28
FRESH DAIRY PRODUCTS                                                                                                                21

                               We set standards

                               Our passion is devoted to the milk that we pro-     Niche yesterday, mainstream today
                               cess, to create high-quality fresh dairy products   Health-conscious nutrition has also emerged
                               such as cream and curd as well as convenience       from a niche to become mainstream. Alternative
                               solutions for use in the gastronomy and hospi-      sweetening and the more sparing use of sugar
                               tality sector. We set standards with our branded    are also seeing a similar trend. We are respond-
                               and private label products in German food           ing to this with a major innovation initiative. In
                               retailing - and far beyond, with our Oldenburger    the first step, we are reducing the sugar content
                               and Rose export brands.                             in the existing MILRAM portfolio step by step
                                                                                   so that our products will convince consumers
                               MILRAM wins awards                                  who are accustomed to sugar. We are deliber-
                               The presence in a company’s portfolio of a          ately ruling out artificial sweeteners and sweet-
                               product that was recently awarded “Brand            ener-based flavours. Our second approach is to
                               of the Century” does not come about by              have new products which we will produce from
                               chance. Why did we receive this honour for          the start without sugar or sweeteners or with a
                               our heritage product MILRAM FrühlingsQuark?         low sugar content. MILRAM Kalder Kaffee needs
                               Because we constantly reinvented it. MILRAM         no added sugar or sweeteners and the MILRAM
                               is very popular with consumers: it was voted        buttermilk drink Sorte des Jahres (“variety of
                               one of the “Top Brands 2018” on the basis of        the year”), the new varieties of MILRAM Feine
                               surveys of 70,000 households and individual         Quark Creme curd cream, MILRAM Skyr Drinks
                               shoppers.                                           and the MILRAM Food Service Skyr Dessert are
                                                                                   being produced with reduced sugar.
                               Emotions win loyalty
                               Always smarter, more exotic, more individu-
                               al - in times when food becomes fashion, we
                               favour early adaptation of current and future
                               trends. Nutrition is becoming more and more
                               of an expression of personal lifestyle. Consum-
                               ers want products they can trust. With new,
                               cheeky MILRAM products and campaigns, we

          252
                               are therefore increasing the emotionalisation
                               of our brand and creating a closeness to our
                               north German “Heimat der Frische” (“Home
                               of Freshness”) with new products such as
                               MILRAM Kalder Kaffee, Friesen Drink and
     awards for DMK products                                                       Awarded Brand of the Century:
                               Moin cocoa.                                         MILRAM FrühlingsQuark
CHEESE                                                                                                                                       23

                                    Cheese – regional, natural
                                    & convenient

                                    Whereas people once came to work carrying              the MILRAM range, we take the best of our north
                                    tin cans with handles or lunch boxes, they now         German home to consumers all over Germany.
                                    prefer to grab a quick pizza or made-up sand-          We also stand for high product competence and
                                    wich. Restaurants and take-away chains are the         regional cheese specialities in selected foreign
                                    norm in our cities and define our new eating           markets, thanks to the range of cheeses produced
                                    habits. Convenient food consumption on the go          from regional milk by our Russian subsidiary
                                    is among the megatrends, and is one of the rea-        RichArt and Uniekaas, which has been the
                                    sons why the total market for cheese worldwide         leading Dutch Gouda brand for the past 50 years.
                                    is growing by around 1.8 percent every year. The       The authentic Uniekaas products are based on
                                    trends towards regionality and naturalness are         traditional recipes and are produced from 100
                                    also adding to the rise of cheese: more and more       percent fresh meadow milk at our two sites in
                                    people prefer natural products from their local        the Netherlands. To boost the positive develop-
                                    region. We are aligning our diverse portfolio          ment further, we have revitalised the brand with
                                    with these three trends.                               a fresh and yet traditionally Dutch design, new
                                                                                           recipes and innovative cheese concepts.
                                    Mozzarella is booming
                                    Pizza Margherita, Caprese sandwiches, pasta
                                    dishes and salads with tomato and mozzarel-
                                    la - the little round Italian is a big hit in of the
                                    convenience food trend. The market for mozza-
                                    rella is growing annually by five to eight percent.
                                    It delivers a lot of protein and calcium and even

     1.8
   The total market for cheese is   more flavour to modern menus. We have there-
      growing worldwide by          fore invested in the expansion of mozzarella
                                    production at two sites. The cheese is kneaded,
                                    stirred and pulled there in the typical produc-
                                    tion process.

                                    A piece of home in the chilled cabinet
                                    As a cooperative of dairy farmers, we operate
                                    in ten federal regions throughout Germany and
                                    therefore have strong regional roots. With prod-       Our flagship in
         percent every year         ucts such as Müritzer, Sylter and Küstenkäse in        Dutch Gouda
BABY FOOD                                                                                                                                    25

                                    Baby food with a past
                                    and a future
                                    Children are our future - day after day, parents       New home for baby food
                                    in more than 50 countries all over the world           Over the past years we have successfully set a
                                    entrust their greatest treasures to our heritage       course for significant growth with the Humana
                                    brand Humana. With milk formulae and special           brand and have already positioned ourselves as
                                    formulae for infants and toddlers, we are a reli-      the market leader in special formulae and infant
                                    able partner to parents for high-quality, inno-        formulae in Italy, which is an extremely com-
                                    vative baby food. The Humana range includes            petitive European market. Our new production
                                    cereals, jarred foods, desserts, teas, juices &        site for baby food in Strückhausen is a system-
                                    water and food supplements for babies and nurs-        atic continuation of our strategy of increasing
                                    ing mothers. Subsidiary Sunval specialises in          value added and driving forward the branded
                                    organic baby foods for Private Label customers.        products business. We have invested 145 mil-
                                                                                           lion euros here in state-of-the-art technology, a
                                    Everyone's heard of Alete                              high-quality infrastructure and low-energy pro-
                                    The baby food market promises further profit-          cesses and equipment. The result is one of the
                                    able growth in the years to come. By the acqui-        most modern baby food factories in Germany.
                                    sition of the brands and distribution of Alete         We are now in a position to make up to 40 mil-
                                    GmbH and German Babyfood GmbH, we have                 lion kilos of milk from regional, GMO-free dairy
                                    opened up potentials in new segments beyond            farming into the highest quality of powdered
                                    the classic milk formulae. Jars of solid baby food     baby milk formula for the global market.
                                    from Alete have been a fixture in the lives of
                                    many young families since the 1950s. The Alete
                                    and Milasan brands are a logical addition to our
                                    baby food portfolio, and at the same time extend
                                    our distribution radius significantly.

                                    By mothers for mothers
                In

     1950,
                                    A milestone and a visible signal of the Humana
                                    concept “by mothers for mothers” is the innova-
                                    tive myHumana pack. This packaging, tailored to
                                    mothers’ needs, is the result of a survey of around
                                    6700 mothers around the globe. On the basis of
   Humana developed the first       their answers, we developed the optimum solution
 ever infant formula that closely   for the core category of milk formulae in respect of
                                    safety, ease of handling, attractive design, perfect
     resembled breast milk.                                                                Developed to satisfy what
                                    portioning and anti-bacterial properties.              mothers want: the myHumana Pack
ICE CREAM                                                                                                                           27

                             Our feeling for ice cream

                             Ice-cold, and a hot favourite for millennia: ice   ness pack to MILRAM Lemon Buttermilk ice
                             cream has added variety to our diets since         cream. Bahlsen now opens a new chapter in
                             antiquity, and not only in warm weather.           our successful brand cooperations, adding
                             But even though the love of ice cream has          fresh inspiration with various ice cream varie-
                             remained unchanged across the ages, we have        ties of the well-known classic biscuits Bahlsen
                             not stood still in matters of ingredients and      Ohne Gleichen and Messino.
                             flavours. We have revolutionised our portfolio
                             over the last few years with innovations such      Guilt-free enjoyment
                             as buttermilk ice cream and skyr ice cream,        Less fat, less sugar, fewer calories – we are also
                             and have added inspiration to our ice cream        responding to the trend to more health-con-
                             business since the realignment with new var-       scious nutrition with new varieties of ice cream.
                             iations on well-known branded products. We         We are introducing our popular MILRAM Skyr
                             have expanded our portfolio with a great deal      as a fruity, high-protein, low-fat alternative to
                             of sensitivity to trends, achieving a position     conventional ice cream: made with skyr and a
                             in the European industry’s top five in the         lot of milk. Skyr comes originally from Iceland
                             shortest possible time. The additions include      and is comparable to low-fat curd or yoghurt.
                             new inventions such as Baileys ice cream in        We have extended the range by a fruity blueber-
                             wafers, high-quality MILRAM Moin dairy ice         ry-elderberry combination as a follow-up to the
                             cream with a 70 percent milk content and pro-      raspberry-cranberry and apricot-sea buckthorn
                             tein-rich MILRAM Skyr ice cream.                   varieties.

                             Successful cooperative ventures
                             Baileys, MILRAM and most recently Bahlsen
                             as well: we are introducing highlights with

124
 Every German citizen eats   our ice cream creations for special brands,
                             and creating new touch points with their
                             fans. Following the major success of our
                             Baileys ice cream in tub and lolly form, we
                             are now extending this assortment into the
                             second-largest market segment - the wafer
                             cone - with “Vanilla Chocolate Desire” and
                             “Double Chocolate Luxury”. Our MILRAM
    scoops of ice cream      brand is also the “Home of Freshness” for ice
                                                                                                                 DMK takes the
         per year.           cream, and offers ices to suit all tastes from                                      classic biscuit to
                             our classic MILRAM Moin in the 500ml fresh-                                         the freezer
INGREDIENTS                                                                                                                               29

                                     DMK is on everyone's lips

                                     Pizza, cake, chocolate, vegan steaks, energy        Focusing on essentials
                                     bars – at first glance, such products have little   Such trends are central factors of our value
                                     to do with Germany’s largest dairy cooper-          added-based whey strategy. We concentrate on
                                     ative. And yet, when you look more closely,         high-potential segments both in the devel-
                                     there is often quite a lot of DMK in these foods.   opment of our ingredients portfolio and the
                                     Our valuable natural resource is incorporated       markets in which we operate. This is leading
                                     into a broad portfolio of B2B solutions for the     to a shift in the weighting towards clinical,
                                     manufacturing industry, tailored to individual      infant and sports nutrition as opposed to skim
                                     needs. Food manufacturers use DMK ingredi-          milk powder and to the targeted expansion
                                     ents such as evaporated milk, cream, butter,        of our existing successful activities in certain
                                     powder and cheese, particularly for confec-         target regions.
                                     tionery and baked goods, convenience food,
                                     sports nutrition and baby food.                     Highly regarded in China
                                                                                         Alongside Japan, China is one of our important
                                     There’s passion in it                               target markets on the continent of Asia. We
                                     Our subsidiaries wheyco and DP Supply round         position ourselves there as a manufacturer of
                                     off the portfolio with versatile applications.      high-quality products “Made in Germany”, with
                                     DP Supply products are to be found in baked         products that are tailored to customer needs

  43
                                     goods, soups, sauces and snacks, hot and            in terms of both composition and functional-
                                     cold beverages, meat products and ice cream.        ity. We have been a recognised high-quality
                                     Wheyco focuses on the development and               supplier in China for ten years now and are
                                     production of high-quality, highly concen-          therefore well placed to take a share in market
                                     trated whey proteins as well as lactose and         growth with our product portfolio of milk- and
                                     permeate, which are used mainly for baby            whey-based ingredients for groceries and baby
                                     food and sports nutrition, as well as in the        food, clinical nutrition and sports nutrition.
                                     beverages, baked goods, meat and dairy              And pundits consider that this sector shows
                                     industries. The area of health and sports           great promise: according to the experts, the
                                     nutrition is an important market segment for        Middle Kingdom is likely to see significant
                                     us at present, and will remain so in the future.    growth rates in such areas as clinical nutrition
                                     So-called “healthy hedonism” is one of the          and sports nutrition in the near future.
                                     five major food trends alongside convenience,
percent of Germans who do sports
                                     and is boosting bars and powders as a food
regularly buy sports-specific food   supplement for athletes and health-conscious
     several times a month           individuals. An ingredient in virtually every
                                     one of them: whey proteins.
About the DMK Group                                                                                           OUR SITES IN GERMANY AND THE NETHERLANDS

                                                                                                                                                                              Nord-
                                                                                                              As of June 2019
                                                                                                                                                                              hackstedt                  Dargun
                                                                                                                                                    Strück-
                                                                                                                                                    hausen
                                                                                                                                                                                                                         Bergen
Germany's largest dairy                OUR MILK                 ORGANISED IN SIX BUSINESS UNITS
                                                                                                                                    Neubörger
cooperative makes milk into                                                                                                                                                          Hohen-
                                                                                                                                                                                     westedt
foods of the highest quality
with around 7,700 employ-                                                                                                                                                             Hohen-             Waren

                                          8
ees at more than 20 sites in                                                                                                                                             Zeven
                                                                                                                                              Edewecht                   Headquar-
Germany, the Netherlands and                               Private Label     Industry        Ice Cream                   Hoogeveen                                       ters                                         Alten-
other international hubs. The                                                                                                                                                                                         treptow
product portfolio ranges from                                                                               Beesten                                                                            Holdorf
cheese, fresh dairy products             billion kilos                                                                                                   Bremen                                                                 u
                                            of milk                                                                                                      Adminis-                Georgs­
and ingredients to baby food,                                                                                                                             tration                marien-
                                                                                                                                                                                                                                Prenzlau
                                          processed
ice cream and health prod-                                      Brand          Baby         International                           Münster                                      hütte
ucts. MILRAM, Oldenburger,
Uniekaas, Alete and Humana
                                       SUSTAINABILITY                      PARTNERS
are brands that enjoy the full                                                                                                                  r

                                       2.9
                                                                                                                   Wald-
confidence of consumers at                                                                                        feucht-
                                                                                                                  Haaren                Evers-
home and abroad and make
                                                                                                                                        winkel
the company an established
                                                                                                                                                        Bad
name, both in its home                                                                                                                              Homburg
markets and selected target
                                       2.9 billion kilos                   DMK is one of the most import-
markets around the globe. As                                                                                                                                                                      Erfurt
                                       of GMO-free milk,                   ant suppliers to German food
one of the largest suppliers to        as of May 2019                      retailers
Germany's grocery retailers
and with a turnover of 5.6 bil-        OUR MARKETS
                                                                                                                                                 Wag-
lion euros, the DMK Group is                                                                                                                    häusel
                                       Focus on Europe and
also one of the leaders of the         selected global target
European dairy industry.               markets

                                                                                                                      Fresh dairy products
                                                                                                                      Cheese
                                                                                                                      Ice cream
                                                                                                                      Baby food
OUR VALUE ADDED
                                                                                                                      Health

                    5.6
                                       billion euros                                                                  Animal feed
                                       of turnover
                                       in 2018

                                                                                                                PEOPLE BEHIND THE DMK GROUP
                                       Farm gate milk
  27.57             36.29     33.57    price per kilo                                                                                                               More than

                                                                                                                                                                    55
           25.20    cents/    cents/
  cents/   cents/    kilo      kilo                                                                                                                                                                         Over

                                                                                                                               200
   kilo

                                                                                                                                                                                                            14,000
            kilo

  2015     2016     2017      2018                                                                                             apprentices                          nations                                 farmers & employees
For further information see the digital
Annual Report and Sustainability Report
2018 at www.dmk.de.
DMK Deutsches Milchkontor GmbH – Industriestraße 27, 27404 Zeven, Germany – TEL.: +49 4281 72-0
  info@dmk.de
FAX: +49 4281 72-58297
                 –   www.dmk.de
                       – E-MAIL: info@dmk.de
                                     – @DMK_Milch
                                             – WEB: www.dmk.de
                                                    –          – TWITTER:
                                                       DMK Deutsches      @DMK_Milch
                                                                     Milchkontor  GmbH
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