Creating added value with milk
The 1950s advertising slogan of the West German dairy industry “Milch macht müde Männer munter” (milk revitalises tired men) is just one example of how the virtues of milk as a nutritious drink full of vitamins and minerals used to be extolled around the world. Today, however, consumers expect more of milk. For an increasing number of people, consumption has become an expression of personal beliefs and convictions. Environmental protection, animal welfare and social responsibility are gaining in significance. When marketing dairy products, this can present somewhat of a challenge – as well as an opportunity. We believe that with our sustainable milk we are honouring our responsibility towards our fellow humans and the planet, as well as offering our customers and consumers added value they are prepared to pay for.
Consumption has become a way of expressing our personal beliefs and convictions. As a result, we want and expect more of our food. Manufacturers generally have a number of different options when it comes to best positioning themselves in this respect. A Swiss milk processor like Emmi – which remains staunchly Swiss despite its sizeable international business – has rather more limited options due to the cost environment. On the other hand, the Swiss dairy industry has substantial advantages to offer: a long tradition, experience, a sense of quality, strict regulation, a beneficial climate and geography, to name but a few. They all have the potential to appeal to consumers who place great importance on sustainability.
We do a lot to win over consumers looking for top quality and sustainability. As an industrial company, we are especially focused on scoring points in the area of environmental protection. Objectively, however, the sustainability of any dairy product depends on its main raw ingredient, milk, partly because the milk production process has the greatest impact on the environment; and partly because the economic situation of farmers and the welfare of animals are crucial sustainability aspects of an agricultural raw material.
Sustainability is defined by the consumer
When it comes to producing milk, dairy farmers are the experts. So some may see it as interfering if – in addition to the legislator – milk processors try to impose rules on how they should produce their milk. In fact, it is the consumer who decides what he or she considers important in connection with any given dairy product.
To get a clearer picture of what that is, Emmi has investigated consumers’ needs in several ways. The most comprehensive study was conducted by students at the Swiss Federal Institute of Technology Zurich in 2015 as part of an interdisciplinary project supported by Emmi. The consumer survey sought to establish which sustainability criteria in the production of milk participants placed the greatest importance on. The results showed that consumers rate the sustainability of milk production in general as important, and are most concerned about cows having access to pastures, followed by the avoidance of antibiotics and the provision of spacious sheds.
Since we sell our products outside Switzerland too, we obviously also want to know what international consumers think. According to our information, the number of consumers who are sensitive to sustainability in foreign markets of relevance to Emmi (USA, Europe, Canada, Asia) is also growing. There too, animal welfare – in particular husbandry and feeding – is an important concern. As are food safety, transparency, the use of hormones and antibiotics, and gene technology, although not all consumers in the US and Asia view genetic engineering in a negative light.
Given that standards are lower in many parts of the world, the average Swiss milk producer already meets the vast majority of the sustainability requirements in the export markets surveyed. Bluntly put, if it makes Swiss customers happy, it’s good enough for the rest of the world.
Broad view is essential
While many consumers focus on individual aspects of sustainability, experts from animal welfare and environmental protection organisations are calling for a much broader approach. This would normally have led us to conclude that you can never please everyone, but for us, a crystal clear picture of ideal milk production suddenly emerged: milk from location suitable cows!
To us, this approach implies robust, long-living, location suitable milk cows that need little expensive concentrated feed nor intensive, costly care (work, medication) to turn grass, indigestible to humans, into nutritious milk.
An industry stands together
Compared to other countries, Swiss milk scores very well when it comes to sustainability. Important reasons for this include strict animal welfare legislation and natural conditions, which favour gassland-based milk production. Nevertheless, we at Emmi are firm believers that there is always room for improvement. For this reason we have repeatedly pointed out over the past years that the Swiss dairy industry must set an even higher standard when it comes to sustainability if it is to remain competitive.
We are very pleased that, following extensive negotiations, the Swiss dairy industry has agreed upon a new standard for Swiss (cow’s) milk. The new “swissmilk green” label designates Swiss dairy products that meet stricter requirements with regard to animal welfare and environmental protection. We consider it to be crucial for “swissmilk green” to be compulsory for all dairy farmers from 2025, as exceptions undermine clear and credible communication.
Emmi believes that “swissmilk green” represents a step in the right direction. Now it is a question of pursuing this path consistently, developing it and discussing a higher standard for the keeping of other milk-producing animal breeds, for example.
How much can sustainability cost?
When discussing the milk production process, it is impossible to ignore the milk price issue. The economic situation is less than rosy for a lot of dairy farmers in many different places, for varied reasons.
For us, sustainability offers an opportunity to create a dairy product with added value – added value for consumers, who are happy to pay a higher price for it. This could and should result in higher milk prices. For this reason, we are happy to pay our milk suppliers the surcharge of 3 Swiss centimes per kilogram of sustainable milk.
For the majority of our standard Swiss dairy products it will take some work to convince our consumers that the Emmi logo in itself stands for sustainability. If we succeed, this will unlock further potential for value creation.
What happens abroad?
Now, you could be forgiven for thinking Emmi only cares about Swiss cow’s milk. You would be wrong, though. Our Swiss facilities process goat’s milk and even a little sheep’s milk as well as cow’s milk. Moreover, an impressive number of production facilities based abroad have joined the Emmi family in recent years, which also process substantial volumes of cow’s and goat’s milk. Nevertheless, we decided to disregard this for the moment, as Swiss cow’s milk is our primary raw material. We are already looking ahead, however, with the aim of presenting the targets for our foreign operations in 2020.