A focus on the consumer and an eye on trends — that pretty much sums up DMK’s new strategy in brief. It sounds easy but it is actually a complex and extensive task and will change the entire company. Vision 2030 is a mammoth project that affects every part of the business. It might not be visible from the outside but many measures are already well on their way to being implemented. This would be impossible without the employees and experts who are working on our vision for tomorrow with enormous creative drive.
The Vision for 2030 is to be “The first choice — for always.” DMK wants to better understand consumers’ wishes and needs. The company’s product range already includes something for almost every person at every stage of life. But the strategy includes much more: nutritional trends, sustainability, animal welfare, environmental protection — a change process within the company.
In the following pages you can meet some of the people who are helping to give DMK a new face: Experts such as Food Service boss Sven Kreitz, for example, who describes how new products take shape. There’s fleet manager Thorsten Kühn, who wants to improve milk collecting technology. And then there are the experts who know just how much sensitivity it takes to capture tastes in different countries.
Sven Kreitz is head of marketing at DMK Food Service. He and his team of experts track down the gastronomic and food trends of the future. His customers are chefs and bakers in catering establishments along with all external catering.
Do you yourself cook for DMK?
“No, but I am a trained chef and I have cooked in small restaurants, in star restaurants, in canteens and on ships. I’m familiar with all the kinds of kitchens that are out there. What’s important is to be able to speak the language of chefs if you’re going to work together with them.”
How do you know what chefs want?
“We work very closely together with our teams of chefs and we also have our own national panel with about 100 chefs on it. We give them products and recipes and they provide feedback about what works and whether the consistency is right or what we should change.”
Who develops the products?
“There’s a Research and Development (R&D) team in Zeven and the real specialists are there, they have many years of experience. R&D also regularly takes part in our workshops with chefs and then they can exchange views directly.”
How quickly do new products come to market?
“Sometimes that takes a while, for example with our vegetarian sour cream. We spent a long time looking for an alternative to gelatine that would work just as well. It was difficult but now we have a solution that can’t be copied very easily.”
What will future products be like, what do customers want?
“We see that lunch is losing its importance in favor of breakfast but that first meal of the day is changing and becoming more modern. Around the world, the takeaway market is growing as people want to grab something, and have a healthy snack while they are out and about. Pizza is still really important. We are the biggest suppliers of cheese for pizza. But we’re changing that too, now we have white pizza with sour cream instead of tomato sauce, and green pizza with pesto and cottage cheese. It’s good to keep creating new interpretations of familiar products.”
How are you finding the change process?
“DMK is on the right path and will manage the challenges, thanks to its employees. I am absolutely sure of that. The key, business- wise, is staying absolutely focused on the market and providing solutions for our customers.”
What is your favorite DMK product?
“That just changed to our new porridge that we are launching onto the market next year. Porridge is extremely fashionable right now, in line with the greater focus on breakfast. Ours is made only of milk, oats and starch, it’s sugar-free and it tastes really good! R&D and the plant in Erfurt have done a really good job.”
“DMK is on the right path and will manage the challenges, thanks to its employees. I am absolutely sure of that."
He never thought that he would end up running a fleet. A trained lawyer, Thorsten Kühn worked in the past for international companies in the legal and compliance departments and in supply chain management. Most recently, he worked in England, managing imports of NZ butter to the European Union. Then, in 2018, he stumbled across a job offer at DMK. “The post was really interesting,” he said. “It provided a huge amount of space for creativity.”
Kühn is a bit like a puppet master, charged with transporting milk from the cow to the plant. His team handles the deliveries, purchasing and sale of milk. Kühn oversees more than 96 DMK vehicles and 80 additional ones, and he relies heavily on his experience in logistics as well as his legal knowledge when he deals with business partners.
Every day, he and his team work to make sure that his department is fit for the challenges that the future holds.
He and his team specialists want to implement route optimization programs into the fleet logistics. In his view, upgrades of the milk collection technology are also urgently needed. The current technology is the same standard as it was 12 years ago. “In 2022, we will have developed an entirely new vehicle,” Kühn says. In the future, it could be possible to measure exactly how much milk there is in a tank, to a very precise degree. A new, lighter technology would still allow milk quantities to be measured, calibrated to a high degree of accuracy. “That would save a lot of weight in milk collection vehicles, and that’s important when it comes to collecting milk.” This new technology is a quantum leap when it comes to milk collection, he explains, and it would put DMK ahead of the pack in Europe.
Optimization is important but the main thing is always to be sure to keep the team of people working for DMK in the picture by communicating decisions in a way that is clear and logical. That can be a tough balancing act. Recently, most drivers signaled their approval of DMK’s decision to buy 30 new DAF trucks. They are two to three liters cheaper than the previous vehicles per 100 kilometers, which, over the life of 30 vehicles, saves around €1 million. Making things work better than they did is what makes Kühn’s job so much fun. He loves the challenges involved: “There’s always room for improvements.”
The idea was born in 2016 and was developed with Arla inNordhackstedt,” says Alexander Godow. “It’s a simple principle: Partners deliver milk to the plant and we produce the products we have agreed on, then the partner picks them up again and markets them.”
The advantage for us: The plants work to full capacity, can produce more efficiently and that reduces the price of our own products. Now, DMK even processes raw materials to produce vegan burger patties for MacDonald’s and Burger King using the wage procedure. The COO describes how that came about. “There is a very large market for these patties and at the dairies, we have the necessary drying facilities. We developed a special process at DP Supply and that was transferred to Hohenwestedt in order to facilitate growth in this area. We process masses of mung beans using our powder platform and produce thousands of tons of patties.”
Godow is open for new ideas and has his eye on the future. He handles several processes at the same time, as his business unit has 15 plants and 1,800 employees. He is enjoying the change process: “An enormous amount has happened. Each day we feel the energy and the desire to change things, even though times have not gotten any easier. There are already signs of lasting success in some areas of business although we are behind the targets we were set. In the last few months, we really focused on aiming for a better milk price.
It is a fast-paced business. In Nordhackstedt, production has started at the new mozzarella cheese factory and DMK took over DVN. Now, project “Beatrix” is underway. Godow explains, “That’s what we call integrating DVN into Wheyco. That doubles our whey business in only six months.”
DMK is focusing clearly on the customer. There’s more demand for high-protein products, for new kinds of cheese, for foods for markets in Asia and sustainable packaging. BU Industry will keep investing in the market for alternative milk products and is developing a cheese made of plant raw materials. New approaches like these are all part of Vision 2030. DOC Kaas has just created a cheese that tastes like liquorice. Alexander Godow tried the wasabi and pesto cheese made by BU International in Russia and says, “at first that seems pretty unusual for European cheese fans but the market is changing fast.” The creativity of an Asian company surprised even the product experts at DMK. “A Korean business has bought a curd cheese that we actually add to mozzarella,” Godow said, and smiled. “After a while, this simple cheese came back to us in little packets — the Koreans had used the extrusion process to make paprika-flavor cheese chips … .”
"It’s a simple principle: Partners deliver milk to the plant and we produce the products we have agreed on, then the partner picks them up again and markets them.”
Europe is our home market, and business here will be better organized thanks to transfers between the Business Units. These are new times for the specialists in the Private Label and Brand Business Units: In the future, they will also open up European markets, a development that is already underway in retail. That means DMK will be able to respond more effectively to customer needs in European countries
We have to be far more involved in marketing and sales when it comes to products and ranges in the private label business.” The Private Label Business Unit was responsible for the German private label business and partly for the European business of our German customers, but in the future, the unit will expand its focus to include all of Europe. The transition phase is currently underway. That requires a sense of what customers in different countries want. What do consumers, shoppers and thus our customers want, in this country and abroad? Are synergies possible? How can trends be spotted early and acted upon as quickly as possible? Are there any sensible opportunities to bundle products in the range? With which customers could we work together to succeed in the different markets? What can Category Management do for our customers? We already support many German discount retailers without our knowledge as they expand throughout Europe or plan their next steps. And there are products that work well in particular countries and others that do not really work. That means that some products work across borders, though it is also important to consider those products that are specific to a particular market. Among all these considerations, it is key to work together with our customers. We integrate them into our management processes: First we look at the trends in the different countries and develop a product together with the customer, or a whole product range. As a second step, we consider: Where should this sit on the shelf so that shoppers can find it as easily as possible? And finally, the product is shared on social media or we run an advertising campaign. That is how we bring shoppers to the product. In this context, from professional product categorization we have also developed the “Perfect Shelf” offer.
The product, or product category of dairy products is perfectly integrated into the overall cooling area with other categories, such as the red line (sausages etc) or the convenience area (tapas etc). That guarantees retailers can make an increase in sales in the very same area — for the whole positive temperature zone. For dairy products, the proportion is 70 percent in German food retailing. It is important to understand all of the impulses at play in the market and react to the right ones. Many people opt for regional products and value sustainability and want non-GMO food. DMK already offers a wide range of products that are GMO free and that really underlines how much the company is acting in line with the times.
“It is important to react to all of the impulses in the market.”
I have been working for DMK for 20 years and have lived through all the changes that have taken place at the company. You really can’t see anything of the dairies that preceded DMK anymore, Nordmilch and Humana. The DMK Group is much more professional and is far more focused on shoppers and consumer behavior. These days, we let the customer decide if they want to have a product that we already offer or how a new one should look. As Sales Director Brand Retail, German Food Retailing, I am responsible for the sales and promotion of the MILRAM and Osterland brands. Up until the present, my Business Unit was only responsible for the German language region. In 2020, parts of the European business, which Business Unit International currently manages, will move into our unit.
That will create important synergies for cross border business, because once that is integrated, we will work more closely with the Private Label Business Unit. They cooperate with retail partners and offer a full service that runs from the product idea through to packaging. With that kind of expertise we will be able to target the needs of our customers in a much more tailored way, here and in other countries too. We are continuously developing our portfolio. Shoppers want variety and that is what we offer. For years we have been seeing double-digit growth in our self-service cheese product range. I am always really glad when an idea is well received, especially if I had my doubts about it at first. It was like that with “Kalder Kaffee” for example. It tastes great but unlike its rivals, it is completely sugar free. Nonetheless it is doing really well on the market, so well that we are considering new flavors. The market is changing and retailers have to react.
They put their faith in DMK as a traditional brand. We work together with them to develop products and to optimize them. In the past, that was something the boss decided but nowadays people organize workshops and discuss these things as a team. That is not always easy but the results fulfill a purpose that has always been of central importance: that the product tastes good to the customer.
“Private Label is essential for successful retailers and we at DMK are the experts.”
left: Stefan Keller (45) is Commercial Director, BU Private Label. As Commercial Director he leads sales, marketing, sales management and application development, which is BU Private Label’s development department.
right: Carsten Habermann (42), Sales Director Brand Retail, German Food Retail, working at DMK since 1998.