“Dairy sector must define a clear mission and adapt its business model to the coming global constraints”

6 November 2012

Cees ‘t Hart, CEO of Royal FrieslandCampina N.V. gave the key note address at the World Dairy Summit of the International Dairy Federation (IDF) in Cape Town, South Africa on 5 November.

In his speech, Cees ‘t Hart asked his audience to reflect on three fundamental questions concerning the role and direction of the dairy sector against the background of a dynamic market environment and the global challenges concerning food security, sustainability and rural development.

“Providing the answers will help to keep ‘the big picture’ in focus as true leadership requires,” said Cees ‘t Hart. “Not an easy task because for good reason, we business leaders tend to get all too caught up in daily corporate issues and decision-making.”

  • The first question, Mr. ‘t Hart explained, concerns sustainability and the robustness of our dairy chain. Are we protecting our business and earning models sufficiently – by investing in more sustainable supply chains – against pressing constraints such as scarce raw materials and other natural resources, high fossil fuel prices and extreme weather conditions due to global warming?
  • The second question relates to the mission or the social purpose of the dairy sector, beyond the balance sheet. “What do we, as a sector, have to offer our stakeholders and the societies where we operate? And do we communicate this clearly enough? We do not sell foods with empty calories. Thanks to the proteins, vitamins and minerals in tasty dairy products, we can contribute to the food security – or better yet the nutrient security – of billions of consumers. Feeding the world nutritious foods and helping dairy farmers and their families to maintain vibrant rural communities, means that we can build a strong, compelling and appealing social purpose. Our strong commitment to bringing this purpose to life must be accompanied by our continuous efforts to reduce the environmental footprint of our sector from year to year. Social responsibility and environmental stewardship go hand in hand.
  • “Thirdly, says Cees ‘t Hart, we must continually ask ourselves how we  maintain broad public and political support in the societies where the bulk of our farming and processing operations are located. Meeting our stakeholders’ expectations and demands will help secure the continuity of our organisations. In our case FrieslandCampina, a dairy cooperative with a history spanning 140 years. But we must adopt an external mind set and out-of-the-box thinking and capabilities in order to put ourselves in the other’s shoes.”         

 

Added value of the dairy sector
Mr. ‘t Hart stresses that when the dairy sector manages to realise a shared vision of the benefits and added value it contributes as a business, it will maintain its license to operate, which is the prerequisite for trust, approval and public sympathy. “With this backing in our market environment, dairy farmers and businesses can thrive.” 

Global chanellenges
“In summary, food is a hot topic in the sense that providing food or nutrient security for a fast growing world population with scarce natural resources will be a major challenge. And in my opinion, dairy can provide solutions for the global challenges we are facing. We supply nutritious foods for billions of consumers backed by the advice of food and health authorities around the globe; we support dairy farming communities in developed and emerging economies; we continuously invest in methods and procedures that will help to raise the bar when it comes to quality, sustainability, productivity and efficiency in dairy farming as well as processing.”

“Finally,” says Cees ‘t Hart, “The ‘Creating Shared Value’ concept developed by Harvard gurus Michael Porter and Mark Kramer is in my opinion one of the keys to business success in the near future. In view of this, we had better be prepared and start adapting ourselves to this value creation model for business and also for society. 

Download the key note speech
The key note speech can be downloaded via this link (PDF).