“The demand side is buzzing. There’s no longer just one type of consumer! The importance of topics like sustainability is rocketing.”
Ingo Müller, CEO of the DMK Group
Sustainability is increasing becoming a critical factor in consumer purchasing behavior. Dairy companies like Arla, DMK, Danone and Ehrmann are leading the way in building sustainable capabilities throughout their supply chains—from farm management to packaging to distribution.
Good Grass, good air, good water: Arla is aiming to keep cycles of nitrogen and phosphorus in balance with careful farm management and increased grass production and grazing.
Climate protection on the farms: More and more farmers are using renewable energy from solar power or biogas and optimizing their farm's energy consumption with heat recovery plants. Many farms use energy-saving cooling systems on their farm as well.
Housing environment and feeding: Keeping a loose housing environment and focusing feeding with no soya, as well as using sustainable feed in milk production, secure a more sustainable environment. This transparency provides strong value to the consumer mind.
Arla is building one of the largest animal-welfare databases in the world, using a farm-quality management program called Arlagården®, to help track the cows' welfare -- from their hygiene to the composition of their milk.
Milk Bonus triggers Farming behavior: At DMK, guidelines for more sustainability on the dairy farms are shifting focus to important topics such as economical and ecologically responsible milk production. In addition, social and animal welfare aspects are primary considerations.
When you see a truck in Sweden with Arla’s logo on it, you can be sure it’s running on fossil-free fuel. Transport is naturally one of Arla’s major focus areas when it comes to reducing greenhouse gas emissions. Arla is also optimizing logistic routes, educating drivers in eco-driving and investing in larger milk collection tankers to reduce the amount of fuel per ton of milk transported.
Water consumption in the dairy industry: DMK will launch a new project in 2020 in which exhaust vapor, like from evaporating milk, will be purified as a substitute for drinking water in the food industry for the first time ever.
At Danone’s Belgian Rotselaar dairy factory, the Waterless Project is part of the Zero Impact Operations program. Through 2-step filtration technologies, wastewater is treated and directly reclaimed as clean water, then re-used in factory processes. This helps close the factory’s water loop, allowing it to reintegrate and reuse 75% of its water in operations.
DMK has applied their knowledge of “SynErgie” in practice, at their Edewecht site. For the first time ever, DMK successfully marketed energy self-generated by the factory’s own gas and steam turbine facility. In addition, a cold store was installed which hedges the investment when energy prices are low.
Arla has constructed the first carbon net-zero dairy in the world when building Aylesbury in the UK. Coupled with biogas from an external provider and biogas generated from its own effluent stream, the dairy is able to run on 100% renewable sources.
Reduce plastic and packaging waste: Manufacturers are seeking new approaches to use environmentally-friendly materials such as paper. Sensitive products like dairy, call for innovative technologies that meet these high demands. Danone and Arla each have three-component plans to help them achieve sustainable packaging goals.
The summary of these goals are the request mantra of "reduce, recycle, refuse and reuse," but they both collaborating to enable new business models for the circular economy and innovation of packaging for the high demands of dairy.
The challenge for sustainable transportation is how to evaluate two opposed dairy distribution systems - local and cross-country.
The proposed model includes four criteria: resource depletion, climate impact, economy and society with a total of 13 indicators into one transportation sustainability index. The model was validated for two dairy products from data presented by four dairy plants representing 32% of total raw milk processed annually in Serbia.
As more consumers make value-based choices with their food, proving the health and sustainability of dairy products will become vital not just to have a competitive edge, but for some retail channels it may become table-stakes. Transparency is key to be a trusted source.
Digitalization enables transparency and enforces strong sustainability behavior of each involved part of the dairy products. It enables each company to strengthen their market position and provides a trustful environment for the choice of the consumer.
Uwe brings over 25 years of experience helping clients realize goals in manufacturing and supply chain. He has deep expertise in deploying manufacturing and information software across the digital thread and understands the challenges and complexities of managing enterprise change.