The team & the times
We’ve just brought another year to close. A year crammed with decisions, transitions and changes. However, for us it was above all a year of progress: although the challenges are many, we faced up to them – with a firm direction, courage and bags of team spirit. Because the sense of community within the DMK Group has also proved to be our greatest strength in the second year of the coronavirus pandemic. On the farms, in the factories, in the company. And even beyond.
We can face the future with confidence
Our 2030 strategy is paying off
In all changes, we are led by our „DMK 2030“ Vision and the corporate strategy which flows from it. Since 2019, it has dictated a clear course by which the DMK Group aims to steer the company through stormy times and make it fit for the challenges of the future. And, step by step, that course is demonstrating impact.
This was also the case in 2021. However, following some years dominated by restructuring, in this reporting period we were able to consolidate our forces further and to initiate and drive forward important projects which will secure the innovativeness and future viability of the DMK Group - including focusing the business units and developing new products in response to consumers’ changing needs and expectations.
Non-dairy alternatives are gaining significance
As a large food manufacturer with decades of experience we know what good products have to taste like. We are now also using this knowledge to supply top-quality non-dairy alternatives. Vegan products have recently become a significant part of many consumers’ diet, and are therefore a quite natural and meaningful addition to our company’s range. As a future-oriented business, we want to and have to take account of consumers’ needs, this is the only way for us to develop new target groups and remain competitive in the long term. Yet however much things may change, milk will remain our core business. There is a good reason why the “M” in “DMK” stands for “milk”.
“However much things may change, milk is and will remain our core product. No other food offers so much variety and ensures such a balanced diet. It’s the first choice for me. Throughout my life.”
Ingo Müller - CEO DMK Group
DMK’s restructuring is finished.
New product development is an important component of the company’s realignment. However, the central element, now and in the future, remains DMK’s concentration on its core business, focusing primarily on the production of excellent dairy and cheese products. For even more unambiguous positioning in this area in the future, the company has moved out of other business areas in past years and reduced its holdings in specialist companies. This included the full integration of DV Nutrition into the DMK Group in 2021. Added to this is the reduction of our majority shareholding in Fude + Serrahn , which was decided on 30 September 2021. These strategic decisions will make the corporate profile leaner, reduce complexity and at the same time give us the opportunity to increase our innovativeness in our core areas even further.
A good example is the development in the infant formula business unit (Baby). After building a new factory in Strückhausen and acquiring the Alete brand, we were able to take clear steps forward in this area in 2021. „Alete bewusst“ stands for the traditional brand’s relaunch, featuring not only rebranding but also optimised ingredients and manufacturing processes.
This progress gives us confidence and shows that we are on the right track. The comprehensive structural change throughout the DMK Group has enabled us to gain agility and flexibility in all areas - two important characteristics for the company's competitiveness, because it is already evident that the future will be full of challenges. Nevertheless, we know now that we are capable of handling fast-moving changes, adapting to new situations and still remaining true to ourselves as a company.
We are our greatest strength
The coronavirus pandemic continued to be a challenge for people, politicians and industry in 2021. The DMK Group was no exception. Our coronavirus taskforce continued to keep watch on the dynamic process last year and far-sightedly implemented measures to protect employees and supply chains. However, we have one thing above all to thank for the success of these measures: the strong we feeling in the DMK Group. Our cohesiveness was what gave us the strength to respond quickly to changes and adjust to unaccustomed situations.
We already initiated many activities in 2021 that can help us in this endeavour: for example, the construction of our new premises in Bremen was launched, in which many aspects of contemporary, modern ways of working have been taken into consideration. The areas of human resources and training have also witnessed further progress. The “Grow“ and „Passion“ programmes are devoted to promoting the DMK team across all departments and saw major further development in the past year. For more details, please see the Chapter “Our DMK”. You can find out more there about the exact progress that has been made in human resources development and how we support apprentices and students.
Sustainability remains a priority
This topic still excites us and is now a key pillar of our work. Because sustainability is another area where we, as a responsible company, see it as a duty to develop feasible solutions for the future. These include tools like the Milkmaster programme and the mymilk online platform, which support the farmers in their work and enable more sustainability on the farms.
However, these are not the only measures which the DMK Group has envisaged. For us, sustainability is a holistic task which touches every area of the company, from milk production to manufacturing. Not least thanks to the commitment of the farmers and employees, we made fresh progress here in 2021.
Economical use of resources is essential
We don't see our duty to act responsibly as ending at our factory gates. The supply chain also plays a key role in issues such as sustainability and future viability. Despite the special challenges and upheavals which arose last year due to the coronavirus pandemic, we continue to focus on our future path. You can find out in the “Sustainability“ chapter what we did in the past year to procure resources from sustainable sources, use them economically and make supply chains more sustainable, step by step.
We demonstrate courage in turbulent times
Farmers faced the biggest challenges
The ongoing social changes are also making their presence clearly felt on the farms. Not much changed in 2021 in that respect. Increasing restrictions combined with a wide spectrum of demands from consumers are putting a strain on the farms. We report on what this means to the farmers’ businesses in the chapter on “Our DMK“.
However, let us say one thing at this point: the farmers’ challenging work and commitment has to be reflected in adequate farm gate prices for milk. This includes rewarding extra services accordingly so that the added effort is worthwhile. The DMK Group once more championed this cause in 2021, and we will continue to do so. Because milk is and will remain a valuable raw material.
“What we need more than anything else is a we feeling: we can and will only comply adequately with the restrictions if milk processors and farmers pull together.”
Peter Netjes, farmer on Kampereiland
“The way to a diet of the future depends on our all listening to the other side, showing understanding and regaining our respect for agriculture.“
Josh Griemsmann, farmer from Bülkau
Higher final milk prices in 2021
Global demand for milk and milk-based products has been rising continuously for years. At the same time, more and more stringent regulations have been imposed on their production. A transformation that combines quality, security of the food supply and the high goals for sustainability and climate protection cannot take place overnight or without significant investments. This task is made all the more difficult when events such as the coronavirus pandemic bring additional challenges. We have felt that keenly ourselves in the past years.
We are therefore particularly delighted that we were able to increase the average final price paid to our farmers in 2021 to 35.88 cents per kilo of milk. Compared to 2020, this means an improvement of around four cents on average for the year. This price places us around 0.14 cents above the average of our peer group of German dairy companies (average of 11) and of the official comparison made by the BLE, the Federal Institute for Agriculture and Nutrition. In the future, our company will have to stand up to comparison by the BLE standard in particular.
Above all, however, with this high milk price we have met the goals we set ourselves. Because we see our milk price as the essential reward for the hard work of the farmers, who give their best efforts every day to ensure the supply of the valuable raw material that is milk. We are determined to stay on this positive course in 2022 and will continue to do everything in our power to ensure that the dairy farms receive fair payment.
Combined forces make us strong
The dairy industry is closing ranks
The DMK Group is not alone in seeking answers to the pressing questions of our time. Sustainability, security of supply and future viability are topics of vital concern to the entire dairy industry. A strong voice is needed in the dialogue with politicians and the public to reach solutions that satisfy everyone. And more than that: a shared communication strategy should help to present the work of modern farms as it really is.
We are therefore all the more pleased that it has indeed proved possible to implement the plans for joint industry communication, through the World Milk Day in 2021, for example. During this special one-day campaign, the newly formed “Initiative Milch” demonstrated that although high-quality dairy products are used every day, their production is by no means an everyday matter. The DMK Group is pleased by the resonance created by this campaign, and we will continue to back the idea of a shared voice for the entire dairy industry.
The transformation continues
Despite all the progress in the past year, one thing is indisputable: we are living in turbulent times. We proved once again in 2021 that we can handle the transformation, in no small measure due to the fact that we have worked hard on ourselves and fundamentally transformed the company. We can therefore be all the prouder of the fact that this work has paid off – in the truest sense of the word.
However, we will not sit back and rest because of this success. By no means. The demands on agriculture and the food industry will keep growing. People’s dietary habits will keep changing. As one of the largest German food manufacturers, we will keep working on living up to our own aspirations.
We report on how we plan to achieve this in the following chapters. In “Our DMK“ we will tell you more about the developments and achievements in the company, in the factories and on the farms. Join us in the chapter on “Market & Trends” for a glimpse of the future. We will examine current dietary trends in more detail and demonstrate how we are responding and even helping to shape them. And finally, we will take a look at our work in the field of “Sustainability”: a great deal is also being accomplished here, with the farms taking the lead.