We have been especially proud of one thing since time immemorial: the way people stand together within the DMK Group. Our team spirit has always been our greatest strength in turbulent times. Particularly because of our unique WE feeling, we have achieved important milestones together in the past year, in every area.
The coronavirus has continued to be a concern.
In its second year, the pandemic still largely dictated our actions. Our Coronavirus TaskForce, which commenced operations in 2020, kept a constant watch on the situation last year and initiated important measures where necessary. It guided the entire DMK team successfully through the many changes resulting from the coronavirus measures and the new demands on the delivery chains.
In parallel, new work models for employees and apprentices were implemented or their application in the teams further expanded. However, this is not a mere transitional solution. Everyone in the company will continue to be given the chance of more consultation and autonomy in the future. A great deal has also happened in the training programmes for our 15 apprenticeship professions, because this was one particular area where Covid 19 presented us with totally new challenges. We are therefore all the more pleased that we were able to guarantee the apprentices’ safety and to continue their training at the usual high standard.
We were also able to demonstrate once more that we can provide an agile response to changes and shape them actively. One reason for this is the DMK Group’s strategic realignment, in which the company underwent a sweeping transformation and became lean and rejuvenated. This meant that we were able to react very swiftly and flexibly to changes. However, the untiring commitment of the employees and farmers has also once more proved to be a great strength. This was a major reason for the DMK Group making further adjustments in many areas in 2021 in order to support and promote them in their work.
We are constantly developing
The world is changing, and we are changing with it.
Change is the great topic of our times. It is evident in changing values, our customers’ altered eating habits and also in our world of work. New solutions are needed so that we can work successfully now and in the future. These include digital solutions which make it possible to work flexibly from any location, and also new processes which reduce or even prevent unnecessary extra work.
In the latter case, one of the tools we apply is the 4S model, which was also used systematically last year. It helps us to optimise the organisational structure so that everyone in the company can concentrate on essentials and drive forward important projects. However, this is only one of many projects which make our work even more efficient and flexible. New Work has also become more than an idea. The concept arrived in real life a long time ago, and we are also opting for New Work at the DMK Group.
The new world of work offers many opportunities.
New Work. Behind these two words is nothing less than a revolution in the working world. However, it is about a lot more than digitalisation. The focus is on flexibility, autonomy and mutual respect in our work.
For this reason, the DMK Group has introduced new work models which employees can use to make their working hours more flexible. And the new corporate headquarters - building commenced in 2021 – has been designed with new work in mind. In future, employees will have a flexible workplace in the new building. This will enable more autonomy within the teams for one thing, and also lead to a more efficient use of resources such as energy and space. This is another way for us to get a little closer to our goal of being a sustainable company.
"Work is becoming more flexible, communication with colleagues in other countries is getting easier, the boundaries are more blurred. As a food manufacturer, we have to change our workplaces so that employees can develop further in such an environment."
Ines Krummacker, CHRO
Passion boosts personal development
Motivation also plays a major role in New Work. It doesn’t just happen of its own accord. We only start to catch fire about an issue if we develop and expand skills and have a sense that our work is meaningful.
We would like more employees to discover this passion for themselves in the future, and therefore launched the “Passion” development programme in 2021. It is intended to give as many team members as possible the opportunity to discover their own strengths and to develop further within the company accordingly. Ideally, they will acquire the knowledge they need for a specialist or managerial role. That is a real-life transformation which benefits everyone. Because when employees develop their own strengths properly, they allow us to share in their enthusiasm and expertise. This strengthens not only the individual, but the entire company.
The GROW programme also continues
Our apprentices are also to be given the opportunity to get more involved and contribute ideas for their vocational training. To make this a success, the GROW programme was set up in 2020. Work on this important development programme continued in 2021 and already ensures a closer interaction of apprentices and trainers.
The DMK Group is setting a clear signal with this initiative: training is anything but a minor issue for the company. On the contrary, we regard a thorough training which is also compatible with new life and work models as a key issue for the future. People who acquire a high skill level and are motivated in their work grow into genuine professionals or managers.
We look closely
Increased clarity and efficiency in costs
The DMK Group’s focus was on progress in 2021. This is partly due to the positive development in the Finance sector. Using programmes such as One Finance and Pacesetter, we scrutinised our expenses in detail and discovered savings potential in virtually every area. Projects launched in 2021 to tap this potential included electronic auctions in purchasing. These auctions are held on a specialised internet platform which employs a simple principle: precertified suppliers submit their bids for prices and scopes of performance within a time window. The best offer is then accepted. This ensures transparency and taps additional savings potential.
This enabled us to make smarter decisions, avoid unnecessary expenses and achieve our set goals in 2021. We see this upward trend as an important signal for the development of the entire DMK Group: following the investments made in the last years, we have recently been able to optimise costs and therefore use available funds in an even more targeted way. We want to carry this trend further and build on the good results in 2022.
Our progress continues
Improvements at all sites
Progress was also made at the DMK factories in 2021. By focusing strategically on our core competences in milk, fresh dairy and cheese products we were able to develop a particularly high level of effectiveness at all sites and at the same time secure the supply of food throughout the year.
The production process was not the only focus. Around 50 climate-friendly measures were carried out at all sites which will allow raw materials including energy and water to be used more efficiently. In addition, the teams on site closely examined possible savings and optimisation potentials. In this way, all the factories are making effective preparations for the future, so that DMK can continue to produce food to leading-edge quality and sustainability standards.
There's still a lot to do. And we're doing it.
The changes in the factories have once more brought us a good bit closer to realising our “DMK 2030” vision. However, we have not yet reached journey’s end. Additional far-reaching optimisations are needed at all locations for us to achieve the goals we have set ourselves for the future. These are already under way, thanks partly to the commitment of the employees in the factories.
In 2021, the teams continued to put forward important ideas for the future in the “TIGER – Continuous Improvement“ programme. They made a close examination of the current situation at their sites and identified a wide range of improvement opportunities. Concrete actions are now gradually being developed from these important insights which will help all the sites to work more efficiently, innovatively and sustainably.
As of last year, this initiative has been supported by another important project. Under the banner of “Quality 2030”, products, processes and operations are being scrutinised. There is a clear focus here on cross-functional quality assurance which will meet the demands of the future. Potential will be identified both in the factories and along the supply chain and then realised step by step. This way, we will perform better and better and fulfil our promise to produce foods of the highest quality to the most up-to-date standards.
We have a product assortment with a future.
Milk is and will remain a valuable raw material. More than 80% of households buy dairy products every week. Nevertheless, dietary habits are being transformed in Europe and all over the world. With the increased consumption of non-dairy foods, a new market has arisen which has been chalking up significant growth rates for years.
As a food manufacturer, we want to be part of this transformation and play a role in shaping the diet of the future in this business as well, since we have a very significant level of know-how in this area. We therefore already presented our vegan product portfolio with our MILRAM brand at ANUGA 2021. At the same time, with our factory in Erfurt we created capacity so as to be able to make the products in house. Preparations are also being made with all speed at our cheese factory in Edewecht: we will manufacture our first vegan cheese for the food manufacturing industry some time in 2022.
“Ten to 15 years ago I would never have imagined a lot of the changes that have now happened in my day-to-day life. We should address changes that lie before us with a healthy portion of confidence and trust!”
Ingo Müller, CEO
There is a clear strategic decision behind the expansion of our product range. On the one hand, we can use our long experience and competence with dairy and cheese products here and keep our promise to supply consumers with foods which fit perfectly with them and with their lives. On the other, new segments with enormous growth potential will open up for the DMK Group. For example, sales of non-dairy desserts alone rose by 78% in the second half of 2021. Vegan alternatives are thus far more than just a fashion trend. If the DMK Group adapts to this new consumer behaviour, we therefore also safeguard the company’s competitiveness at the same time.
We will be pleased to tell you about how we plan to succeed and what potential we see in the market for vegan products in the “Market & Trends“ section.
“We also see advantages for the company in the new trends. Vegan alternatives are in great demand, and as a dairy cooperative we have the opportunity to play in this market with our own products.”
Dr. Frank Claassen, CFO
We will go forward together
DMK stands by the farmers
The great transformation in society is also reflected in agriculture. There have been major changes here in the last few years which have significantly affected farms. Climate protection, biodiversity, improved conditions for cattle, regionally produced feed –every modern dairy farm has to deal with these topics nowadays. Added to these are the current shortage of raw materials and the associated price rises. The farmers put forward their best efforts every day to secure supply in this country and at the same time to make their farms sustainable and future-proof.
The pressure does not come solely from strict regulations and very detailed rules from the political side. The farmers already actively champion more sustainability, animal welfare and environmental protection. To achieve these goals, keep food affordable for consumers and still make a living that reflects the required investments and efforts is the real challenge for many farms. DMK definitely wants to pull together with the farmers here.
Support that pays off
Although milk as a raw material is still held in high regard, the conditions which farmers have to meet in production are observably becoming tougher and tougher. The DMK Group therefore wants to do its best to support the dairy farmers in their work. Because that work deserves more than recognition. It deserves fair recompense. With a milk price of 35.88 cents per kilo of milk, we succeeded in increasing our final milk price again and moving above the average of our peer group of dairy companies. In the light of the past years’ rapid changes, we view this as a positive signal. However, in our eyes a good milk price is just the start.
We expanded our offers of support for our farmers further in 2021 to enable more sustainability and efficient management on the farms. These offers included our Fixed Price model, the mymilk online platform and, of course, the Milkmaster Programme.
For more about our commitment in this area, see the chapter on “Sustainability”. We present details there about the support we can offer to the farmers and about our measures to save energy and water and to reduce waste in the factories.
The conversation continues
Personal dialogue at the Annual Assembly
A cooperative thrives on cohesiveness. The DMK Group is no exception. Our team spirit has made a substantial contribution to our ability to pursue and, step by step, further our strategic goals despite the coronavirus pandemic’s constrains. We never gave in and never ceased to be in dialogue despite the remote conditions.
The DMK Group’s Annual Assembly of Representatives was held on physical premises again in 2021 after a two-year gap. At the meeting in the Hannover Congress Centre, Ingo Müller, CEO of the DMK Group, Dr Frank Claassen, CFO, and others spoke on the subject of the company’s strategy and status quo. The speeches also addressed important topics such as the rising cost of procurement, challenges in the supply chain, changing consumer behaviour and the increasing sales of non-dairy alternatives. This direct contact brought the We feeling in the DMK Group immediately to life and once more gave it added strength.