SUS-CHAIN: Case Studies
G: Upländer Bauernmolkerei – organic dairy co-operativeThe Uplaender dairy is considered to be an outstanding example which built up a successful strategy in producing and marketing of regional dairy products. The dairy was founded in 1996 when a co-operative of 18 organic dairy farmers (dairy farmers’ co-operative Hessen w.V.) searched for a suitable processing site for their milk. At this time, only a small part of their premium organic milk was processed and could be sold as organic. Firstly, the farmers worked with a small private dairy that took over the processing of the organic milk, whilst the marketing of products was done by the farmers’ co-operative itself. However, the product quality deviations and deficiencies led the farmers to think about new processing alternatives, coinciding with the occasion to buy the local Uplaender dairy, which was closed down by its mother-company ‘Wuppertal/Koeln e.G.’ in 1996. The Uplaender dairy was idle but fully equipped at that time. Several governmental and non-governmental organisations were activated and committed in the implementation of the project.
After successful take-over and start-up, the dairy could increase continuously the processing bulk of organic milk. Due to the increase of the distribution of dairy products through organic food wholesalers and supermarket chains the dairy’s organic production grew from 1 million (in 1996) to 14 million kilograms in 2004. Meanwhile, 80 regional farmers supply organic milk. Nevertheless, the Uplaender dairy still buys conventional milk in order to reach the full plant utilisation (in 2004: processing of 5 million kg conventional milk per year). The amount of conventional milk has decreased since 1997 – one aim of the dairy is to continuously decrease the processing of conventional milk and to increase the amount of organic milk.
The company built up a remarkable regional alignment and regional ‘affiliation’, establishing a high quality, regional and organic assortment in the market, the regional origin of the products is clearly communicated to the consumers. Through a continuous product innovation the dairy became able to distinguish from competitors.
There are also many efforts in marketing the organic assortment. Besides, the company sets value on a continuous consumer’s information a bout the product quality, origin and transparency. In business processes the company wants to co-operate as good as possible within the company and with other organisations.
The dairy is an unusual example of success in Germany, which has objectives orientated according to the sustainable basic principle. In this context, the relevant aspects are the promotion of sustainable production of food, the rural development, but also the development of an efficient organisation structure and consolidation of network, which had contributed to the economic success of the dairy.