Milk price is a hot topic but Dairy Crest is showing how a little focus can yield great returns for all, says Mark Taylor
Ask any dairy farmer to name three things important to them and they would say, milk price, milk price and milk price.
But security and stability also rank highly, as does the market their milk ends up in. Farmers also want to be valued and want a trusting relationship with milk buyers.
It's a similar situation for Dairy Crest. We have to balance the needs of consumers, customers, employees and financial stakeholders, to name but a few, and none of them are finding life too easy at present.
So as well as striving for better returns from the marketplace and passing these on to our supplying dairy farmers, what can Dairy Crest do to strengthen our relationship with existing suppliers and recruit new ones? This was the challenge facing me nearly two years ago.
I started from a relatively strong position. DCD (Dairy Crest Direct), the independent group to which all our farmers belong, has a democratic structure with well-informed representatives. We already had direct supply managers acting as liaison officers with our farmers.
I made it my first priority to meet as many of our farmers as possible, and I listened to the challenges and opportunities. It became clear that we needed a fresh look at our supply contracts and so, with DCD, we now offer choice and flexibility with a wider range of contracts.
Our stated strategy is to align our farmers to added-value 'pools' examples include Waitrose, M&S and Davidstow. As well as security, confidence and potentially a price premium, this addresses the important element of 'being valued'.
We also saw opportunities to add value by taking costs out of the supply chain and doing things jointly that would benefit consumers and ourselves, such as on-farm carbon footprinting. These initiatives are developed through our joint-venture business Agri Assist, in which our farmers have the majority stake. We changed the role of our liaison team to spend more time with farmers. They are now focused on business planning and development, using an IT system Country Life Farm Connect we have invested in.
So, is it working? An outsider could be sceptical with all the noise around milk price. But comments from farmers have been positive about the flexibility, high level of engagement and the better value they are now receiving for milk.
Looking forward, there is more to do. We aim to have all our farmers aligned to a specific customer or Dairy Crest brand, such as Cathedral City or Country Life. We are working with DCD on a range of plans that include a new contract for farmers who wish to grow their business, and another contract giving suppliers price certainty for the milk they supply, aligned with our doorstep delivery service Milk&more.
Greater efficiency and more focus on the consumer are our key drivers. Agri Assist has a valuable role to play by highlighting new opportunities for revenue and making sure the benefits are shared equitably. White Gold continues its unique advisory support service, and we plan to encompass things such as higher welfare standards.
As well as striving for higher returns for our suppliers there is a lot we can do to add value for the dairy farmers that supply us. I'm confident Dairy Crest can lead the way to help generate a sustainable milk supply chain for all parties.
Mark Taylor is group milk procurement director at Dairy Crest
Ask any dairy farmer to name three things important to them and they would say, milk price, milk price and milk price.
But security and stability also rank highly, as does the market their milk ends up in. Farmers also want to be valued and want a trusting relationship with milk buyers.
It's a similar situation for Dairy Crest. We have to balance the needs of consumers, customers, employees and financial stakeholders, to name but a few, and none of them are finding life too easy at present.
So as well as striving for better returns from the marketplace and passing these on to our supplying dairy farmers, what can Dairy Crest do to strengthen our relationship with existing suppliers and recruit new ones? This was the challenge facing me nearly two years ago.
I started from a relatively strong position. DCD (Dairy Crest Direct), the independent group to which all our farmers belong, has a democratic structure with well-informed representatives. We already had direct supply managers acting as liaison officers with our farmers.
I made it my first priority to meet as many of our farmers as possible, and I listened to the challenges and opportunities. It became clear that we needed a fresh look at our supply contracts and so, with DCD, we now offer choice and flexibility with a wider range of contracts.
Our stated strategy is to align our farmers to added-value 'pools' examples include Waitrose, M&S and Davidstow. As well as security, confidence and potentially a price premium, this addresses the important element of 'being valued'.
We also saw opportunities to add value by taking costs out of the supply chain and doing things jointly that would benefit consumers and ourselves, such as on-farm carbon footprinting. These initiatives are developed through our joint-venture business Agri Assist, in which our farmers have the majority stake. We changed the role of our liaison team to spend more time with farmers. They are now focused on business planning and development, using an IT system Country Life Farm Connect we have invested in.
So, is it working? An outsider could be sceptical with all the noise around milk price. But comments from farmers have been positive about the flexibility, high level of engagement and the better value they are now receiving for milk.
Looking forward, there is more to do. We aim to have all our farmers aligned to a specific customer or Dairy Crest brand, such as Cathedral City or Country Life. We are working with DCD on a range of plans that include a new contract for farmers who wish to grow their business, and another contract giving suppliers price certainty for the milk they supply, aligned with our doorstep delivery service Milk&more.
Greater efficiency and more focus on the consumer are our key drivers. Agri Assist has a valuable role to play by highlighting new opportunities for revenue and making sure the benefits are shared equitably. White Gold continues its unique advisory support service, and we plan to encompass things such as higher welfare standards.
As well as striving for higher returns for our suppliers there is a lot we can do to add value for the dairy farmers that supply us. I'm confident Dairy Crest can lead the way to help generate a sustainable milk supply chain for all parties.
Mark Taylor is group milk procurement director at Dairy Crest
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