“We’ve reinvented ourselves"

Absolutely everything has changed at BU Baby. No stone has been left unturned in the change process the unit began in January 2021. It was time. Change was sorely needed, in the form of countless measures and far-reaching transformation. Those changes succeeded thanks to the e›orts, courage and motivation of employees working tirelessly, from the plants to the offices, at home and with customers. Their work means now, the unit is more profitable and has the potential to grow further.

What changed? A lot: Structural and material costs have been greatly reduced in all Baby BU plants in Germany and abroad. Production costs for dairy foods and supplementary foods have been improved and the focus is now firmly on profitable markets and products. “We have almost halved the losses from 2020 in 2021, without jeopardizing product quality or supply capability,” says Dr. Marc Mahl, the COO responsible for the restructuring. “That was not an easy process, given the pandemic conditions and after one of our most important packaging suppliers had a cyber attack. That is all the more reason for the team to be proud of the fact that we even exceeded our targets.” That applies not only to the plants in Germany, but also far beyond.

The team expanded its market position in Italy, Spain and Portugal despite difficult conditions, making significantly more profit than originally expected in the budget. In Spain, the unit is a leader in nutritional supplements for babies, children and mothers. “I am so proud of my team,” says Mariola Matuszek, Head of Global Branded Sales. “In Spain, we dominate the market in the youngsters’ sleep segment with a market share of 80 percent – in Italy, we are number one in the milk formula market as well as in the nutritional supplements segments for breastfeeding, vitamin D and colic products.”

The transformation of BU Baby has also benefited the plant in Strückhausen, where nearly 40 percent more volumes were shipped per month in the fourth quarter compared to the monthly average for the first half of the year. “Strückhausen is a raw diamond in our portfolio and we can see that the areas we have polished are gradually starting to sparkle,” says Patrick Weber, Manage ment Director, DMK Baby Strückhausen. “We are well positioned to achieve our budget targets.” For him, that success is clearly due to the team. “Our colleagues do an excellent job every day, turning our farmers’ raw milk into baby milk products that parents trust around the world.”

Trust also played a major role for the team in Waghäusel, especially against the backdrop of the pandemic. After a few months of short-time work, the team members rolled up their sleeves last year and started operating a new, more efficient filling line. They also began a growth project at the same time, enabling the plant to increase its output by almost 80 percent, significantly improving unit costs. In turn, that helped offset the dramatic increase in the price of Demeter, Bioland and organic ingredients. “Our customers in the food retail and discount sectors are becoming increasingly demanding with their private label products, which is why we offer food that is certified organic quality,” says Peter Hüttmann, Managing Director Sunval Baby Food. “Our team helps enormously to maintain this high standard and to guarantee it afresh every day.”

Things did not always run perfectly smoothly during the extensive transformation process however, says Marc Mahl. “We took too long to tell the team about the measures. And in crisis mode, it wasn’t possible to implement the improvement measures as quickly as I had announced,” says the COO. “I am sorry that meant employees suffered here and many ultimately decided to leave BU Baby. We have to do better in this area.”

Learning from mistakes is one of the principles of Strate¡y 2030 and that goes beyond just lip service. The principle applies at BU Baby, too. Mahl and his team value a stable team that works together towards a shared goal, with each person bringing their own valuable expertise that is vitally important to DMK. Looking to the year ahead, the remaining losses are to be reduced to around one third of last year’s level. Plus, t the plan is to implement all the projects that are under way. “The baby food business is a great field that has a solid future and it is a place where people can develop professionally and really make their mark,” says Mahl. “We have have reinvented ourselves.” Brands like Humana, Alete bewusst and Milasan are now significantly more visible thanks to innovative products and marketing concepts and have far more growth potential, also on the German market. Right now, Alete bewusst’s Obsties & Gemüsies – fruit and vegetable snacks– are being launched in the growing snacks segment, supported by a broad digital campaign. “The initial customer feedback on our Obsties and Gemüsies is promising,” says Iris Behrens, Head of Global Marketing. “We worked on a lot of exciting projects last year. A big thank you to my team for all of your ideas and commitment in such a challenging situation.”

For Marc Mahl, one thing is clear: there is still a great deal of potential in the Baby business. The extensive portfolio of baby milk, supplementary food and nutritional supplements is well positioned among European rivals. Now, the aim is to further raise the profile of these appealing products among mothers, fathers and children. He also expresses a special thanks to the cooperative’s farmers. “They showed incredible loyalty, carrying us through difficult times,” Mahl says. “Now, the stage is set for us to be able to thank them.”