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Coronavirus year

A year like no other.

Message from the Elected Officers
Our DMK

When we look back over the recent past, one thing is certain beyond a doubt: the year 2020 will go down in history. Within a few short weeks, the coronavirus changed our lives more fundamentally than we would ever have imagined possible, with sweeping consequences for people and the economy. The DMK Group is no exception. We, too, were confronted with challenges at extremely short notice. Mastering them took quite a lot out of us – not least because as the largest dairy cooperative in Germany we bear a great responsibility for providing people with supplies.

In this challenging time, we were able to count on one thing: our “we” feeling. As a cooperative company, solidarity and communal action is in our blood by nature. WE surpassed ourselves yet again in 2020 and made history in our own way. Together, we succeeded in growing even closer together, reinventing ourselves and at the same time continuing to supply people with high-quality foods. We can therefore quite justifiably lay claim to having achieved a superb communal performance.

“The DMK Group lives off its “we” feeling. Last year, everyone proved that that’s more than just a truism.”

Ingo Müller, CEO of the DMK Group

Our thanks therefore go to all those who put in so much effort last year for the company and for each other. The farmers, who made sure we received our raw material under even tighter hygiene rules. The employees, who worked closely and reliably together despite social distancing, family challenges and in some cases radical changes in the way they worked. And also our business partners in logistics and retailing, who supported us in 2020. They all demonstrated solidarity, stepped out boldly and shared the communal burden of the rapid changes within DMK during the crisis.

This phenomenal collaboration achieved a lot. Despite all obstacles and imponderables. More than that: 2020 bore witness to the value of DMK's restructuring in past years, and to the great benefits we reap from it today. Even before the start of the pandemic, we had positioned ourselves for the fast-changing conditions in the dairy industry. A process that has now been significantly accelerated by the coronavirus crisis. Thanks to our agile structure, we succeeded in reacting fast in the crisis, going new ways and, despite everything, never losing sight of the great goal – the implementation of our Vision 2030.

„Above all, we have the people in the DMK Group to thank for the success of our measures.“
Hermann Köster, COO Supply Chain Management

Fast action was called for.

When the start of the coronavirus crisis loomed large in March 2020, we immediately formed a Coronavirus TaskForce. This task force has kept a watch on current developments in the pandemic since then and delivers important ideas for steering the company. However, Hermann Köster’s 30-strong team does even more. In addition to initiating and constantly further developing a large catalogue of coronavirus measures which contains rules of conduct for all the DMK Group’s stakeholders, it supported employees in the switch to the home office, organised and structured the introduction of additional hygiene measures in the factories, got together with our logistics and retail partners to ensure that the supply would go through despite closed borders and supports the farmers in making sure that the milk can be collected despite coronavirus rules.

Nothing stayed the way it was. Almost nothing.

However, DMK was not alone in experiencing this sudden transformation. We all felt the impact of the coronavirus crisis on society. In addition to the restrictions on personal contacts, public life was also shut down from one day to the next. Hotels and restaurants were particularly affected by the crisis – which also had consequences for the DMK Group.  Sales from the food service sector collapsed as soon as the first lockdown occurred in March 2020 because canteens and hospitality venues had to stay closed. Our customers and the wholesalers had to reduce their orders drastically. Close consultation was needed at a lot of points within the company to achieve efficient stock control. We succeeded thanks to flexible planning. After this phase, the food service business ran on a relatively even keel until October. Because of the experience gained from the previous months, we were able to adjust much better to the subsequent second lockdown and post stable turnover.

 

At the same time, the picture in the retail grocery sector during the first lockdown was entirely different: before the government restrictions came into force, people panic-bought food and other articles, such as pasta, flour and toilet paper. Sales of toilet paper increased four-fold at times, and DMK’s milk and fresh dairy products also recorded a sharp upturn, sometimes up to 30%. Catering to this rapid jump was an enormous responsibility. Because consumers’ standards for our foods continued to be high. This challenge is one that our business units address every day. They examine the question of how we can supply people with foods that support them in their everyday routine and individual eating habits, and also take account of aspects such as convenience and health.

 

Farmers on the farthest front.

The farmers play a special role in respect to last year’s major changes. They have always taken care of the consumers’ needs by delivering milk of the very highest quality. Without their prudent and cautious actions during the coronavirus crisis, many supermarket shelves would undoubtedly have been empty last year, although many farms were already under enormous pressure. In addition to society's demands on modern milk production, the coronavirus crisis as well as the new Fertilisers Regulations, which came into force on 1 July 2020, made their work even more difficult.

As a company and a cooperative owned by farmers, it is therefore a major concern for the DMK Group to support the farmers. We reached one important goal in this respect in 2020: a competitive milk price at the level of our peers. Moreover, the new fixed price model was presented, with which the farmers will be able to have up to 30% of their milk volume hedged on the milk futures exchange through the DMK Group. This ensures greater planning certainty and a lower liquidity risk.

However happy we are about the milestones we have reached, we have no intention of stopping there.

„Basically, we farmers want the same as consumers: healthy products from healthy animals.“
Thomas Andresen, farmer

The dairy industry needs a voice.

At DMK we know that the transformation did not start yesterday. It has been on the horizon for years and is changing every area of our society. We have therefore driven forward the restructuring of the DMK Group in the past few years and developed the “Vision 2030” with the help of which we can cope with these changes. We want to address the consumers’ needs actively and at the same time ensure that we protect animals, the environment and the climate on the basis of our own responsibility for greater sustainability. This is in our own interest. Because we are very well aware of the importance of healthy animals, high-quality raw materials and efficient production.

 

Shared communication within the industry is also all the more important to us in this context. We not only create transparency in communication with consumers by this means. We give the dairy industry a voice, and the essential impact vis-à-vis partners in politics and retailing to justify fair prices for valuable work. Because it will take joint forces to master all the challenges of the future–not just the ones which arose from the coronavirus crisis.

This is just a small glimpse.

The past year was very eventful for the DMK Group – even aside from the coronavirus crisis. The “Our DMK” chapter showcases all the things the people in the company have done and how we are repositioning ourselves internally and externally. In “Market & Trends” we give insights into our consumers’ needs and buying behaviour and information about how we want to address them. In addition, we reveal in the chapter “Sustainability & Responsibility“ the measures with which we want to ensure greater animal welfare, biodiversity, ecology and climate protection.

 

All in all, we as the DMK Group look back positively on 2020 despite all hurdles and challenges. The successes of the last year and the indomitable team spirit have demonstrated all the things we can achieve if we step out boldly and tackle the great tasks of our time. With this at our backs, we feel optimistic about the coming years.

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Integrated Annual Report 2020