Not so long ago, it was the norm to browse in the supermarket without a care and buy whatever you felt like. A trend was already emerging: a growing number of consumers was looking for products that reflected their personal values and offered the promise of enjoyment with a clear conscience. In other words, foods that were produced in harmony with animals and nature to the highest standard of quality, were also low in fat and, if possible, low in sugar. And in the best case, these foods should also suit the consumers’ individual lifestyle and fit in perfectly with their everyday routine.
At the DMK Group, we have been addressing consumers’ wants and keeping our eyes on their needs for a long time. This approach is also enshrined as part of our Vision 2030. As the biggest German dairy cooperative, we work on a daily basis to address market challenges with innovative products so as to meet consumers’ high demands on our foods. This increases customer satisfaction, but it also does more: our future-oriented thinking makes us a little less dependent on a constantly changing market – and thereby makes us more resilient in times of crisis.
COVID-19 is accelerating the change in purchasing behaviour.
In early 2020, a virus turned the world upside down and has been defining our lives since then. Nothing has stayed the way it was. Not entirely, at least. Because the demands on our foods have not changed during the crisis. People still desire products that are health-conscious, sustainable and practical.
However, purchasing behaviour has adapted to the new reality. Instead of multiple visits to the supermarket to do a small amount of shopping and buy what they fancied, people have increasingly shifted to one large weekly shopping trip since the pandemic broke out. Since then, they have been buying more on a single visit and concentrating on the foods that they need and that also give them a sense that they are doing something positive for their well-being. That has been very clearly evident in the grocery retailers’ sales figures. Demand for dairy products rose within a very short time, and were up by more than 30% at times. And because of the brief “panic buying” phase at the start of the pandemic, sales of important articles like toilet paper, pasta and flour rocketed.
Well positioned in times of crisis.
These sudden changes were just as unpredictable as the Covid crisis itself. Nevertheless, at DMK we reacted in time successfully and could be depended on to provide people with high-quality foods even in this difficult period. We owe this not least to the communal efforts of the employees and farmers of the DMK Group. They strained every nerve on behalf of the company last year and demonstrated their true solidarity. This “we” feeling was what ensured that we could implement many of the adjustments required by the coronavirus so quickly. As a result, we were in a more confident position in the crisis and were better able to absorb fluctuations – such as the collapse of our business in food service – and to divert milk volumes to other product categories which were in greater demand.
As part of the 2030 Mission Statement, we decided to adapt our product portfolio to our consumers’ new values and wishes and satisfy the increasing need for convenience, together with the demand for more sustainability and health-conscious products. That is why we invested in the DMK Group’s transformation even before the crisis and restructured the company, consolidated divisions and invested in business areas with growth potential.
The crisis demonstrated just how valuable this corporate realignment was. It did more than make us more independent of market conditions. The transformation gave us the flexibility we needed to be able to respond proactively to the changed situation. As a result, the business units implemented the goals they had set themselves in a joint effort, so that despite Covid we can look back on a stable year overall in 2020.
The business units’ work is paying off.
Last year, we drove forward our work on the brands for DMK’s own products. By grouping and expanding the protein range under the single umbrella of MILRAM, we developed a convincing brand strategy that addresses topics such as health-conscious nutrition, high-protein food and sugar-free or reduced-sugar recipes. The demand for high-protein products has grown into one of the very most dynamic dietary trends in the last few years. Previously a niche for “sports freaks”, it is now a major food trend. We are therefore focusing on solutions that offer consumers a genuine value added. Instead of basing the portfolio's development on topics like muscle-building, MILRAM has set its sights on a motif that is often the main driver of the combination of sport and good diet: looking good and showing that fact off.
We have also been emotionalising the MILRAM brand since 2018 with a long-term brand strategy. On the product level, concepts like “MILRAM Kalder Kaffee” localise the brand in northern Germany at first glance and charge it emotionally. In 2020, the business unit successfully launched two additional new varieties of the stimulating beverage on the market. At the same time, younger consumers are becoming more of a focal area. Communication on TV and in social media, cooperation with influencers and PR and online campaigns gave the brand a higher profile and transported its easy-going north German charm – successfully and far beyond northern Germany. We have succeeded in increasing our customer reach from 9% to 46% in the last four years. And brand tracking also proves that consumers are perceiving MILRAM more strongly as northern German. Between 2017 and 2019, MILRAM likewise rose here by 9%, to a total of 71%.
At the same time, the communication offering in the food service sector was digitalised and the first DMK “trend trip” was held. This was based on the DMK Trendscouting app: trend scouts continuously bring together innovations from the international food scene here, while local food experts deliver new inspiration daily. However, the app can do a lot more. Since the community is the main foreground element, any user can become a trend scout. Anyone who discovers something interesting at a trade fair, on holiday or in-store can share it through the app and discuss it with other users.
A similar concept proved highly successful with Oldenburger Professional. Together with the presentation of its new image, we also showcase our brand communication for the international food service market. Via www.oldenburger-professional.com, recipes specifically developed by chefs for chefs from a very wide range of cultures are provided, Q&As about products, trends and raw materials and ingredients are published, and Oldenburger's broad portfolio is presented.
The BU Ice Cream also worked on high-protein, reduced-sugar products, because it also wants to meet consumers’ high demands with innovative new creations. In addition to new varieties for the MILRAM portfolio, the team further expanded its strategic partnerships in 2020 and developed new and successful ice creams for brands such as Ahoj-Brause, Ehrmann and liqueur classic Baileys. Two strong brands - the fizzy ice cream tub from Ahoj-Brause and Ehrmann High Protein Ice Cream – made it into the top ten of new products in the ice cream segment with multi-packs as soon as they went on sale.
The BU Baby plays an important role in the DMK Group’s Strategy 2030, because the market features enormous growth potential, which we aim to develop for the company in the next few years. The first steps have already been taken. In addition to the successful commissioning of the Strückhausen factory in 2019 and the Humana brand’s facelift, the heritage brand Alete was acquired in 2020. This was followed by the brand relaunch in September 2020, with new products and recipes as well as a new design and contemporary communication.
The BU Private Label positions itself as a strong partner for the whole of the retail grocery sector. With the deep understanding of the markets and consumers’ needs that is concentrated in this department, the business unit can advise both discounters and full-line players holistically on new product concepts and support them in the production of their merchandise. Even today, there are around 1,500 employees working at seven DMK factories to manufacture more than 800 products of all kinds for retailers every day.
However, the BU Private Label is not solely about production. On request, its 360° service can also create innovative sales and service approaches. One of the issues addressed is category management, because many retailers are faced with the question of which products they should carry and how these products should ideally be arranged to give consumers the best possible guidance. Together with partners from retailing, industry and the bulk consumer sector, we analyse a logical structure of categories and subcategories, brands, private labels and the products that fit best. We gather and analyse data on trends and market developments to derive solutions that are logical and practical.
This makes the business unit a good example of the transformation of the DMK Group as a whole: it is no longer a pure producer of standard merchandise, but a competent partner which knows how to market successful concepts across all product segments.
The pandemic is in many cases a catalyst that is accelerating existing trends and developments at enormous speed. Because consumers’ demands on foods and product concepts are rising continuously, and this is clearly reflected in buying behaviour. For example, there is a steadily rising demand for innovative packagings and trend products, including retailers’ premium private labels. In addition, the European market is continuing a process of closer integration. People are noticeably taking a new direction and trusting that we, as DMK, will score with expertise and quality Europe-wide. For this reason, the BU Private Label always considers customer needs across countries and has bundled its capabilities in the past year.
Den gleichen Weg hat auch die BU Industry eingeschlagen. Wichtigster Meilenstein für den Geschäftsbereich war in 2020 unter anderem die erfolgreiche Integration der DV Nutrition in die wheyco Netherlands V.O.F. Unter dem Dach der DMK entstand so im September 2020 einer der weltweit größten Hersteller für Molkenderivate.
The BU Industry has pursued the same route. One of the most important milestones for the business unit in 2020 was the successful integration of DV Nutrition into wheyco Netherlands V.O.F. This created one of the largest manufacturers of whey derivatives in the world under the DMK umbrella in September 2020.