SUS-CHAIN: Case Studies
NL: Beemsterkaas – cheese marketed by the CONO, a dairy farmers co-operativeThe CONO is a cheese co-operative in the North Western region of the Netherlands marketing ‘BeemsterKaas’. As medium sized cheese factory (producer co-operative) the CONO developed a niche market strategy as a respond to decreasing cheese sales and returns in the mid nineties. With a new marketing director as leader, the CONO shifted from a production led marketing strategy and high price competition towards a niche market led strategy and branding. ‘BeemsterKaas’ is their main dairy cheese brand.
In 1995 the CONO started to move from away from a bulk market towards a niche market for high quality cheese. In doing so, it started to influence directly the demand by engaging in marketing activities that address directly towards consumers. Furthermore the CONO established a variety of labels with specific claims and images (grazing cows, the Beemster polder as a UNESCO world heritage) and diversified the outlets for their cheese (from specialty shops to supermarkets). Recently CONO has concentrated on sustaining its market and to explore new innovations in marketing, packaging and quality control, for instance to find a scientific basis for ensuring milk quality.
Currently (2005), 650 farmers are members of the cooperative. Most of them are based in the Province of North Holland of which some are in the Beemsterpolder. The other farmers are based in the Province of Flevoland and Overijssel. The farmers deliver 280 million kg of milk per year which will be processed into 27 million kg of cheese. The milk from the farmers outside North Holland is processed into butter. The total turnover was € 130 million in 2003. Compared to other dairy companies in The Netherlands, CONO is a small player.
The potential for creating added value or a premium price at consumer level has increased significantly after CONO has taken up BeemsterKaas as its main label and started to control marketing activities themselves. They succeeded to create a price differential with factory processed Gouda cheese of almost 20%. The value added at producer level becomes evident in the yearly comparisons and analysis of milk price listings of Dutch dairy cooperatives. These listings show that for the past five years CONO was able to pay the highest milk price to its members. Although in terms of turn over and production CONO is one of the small players in the Dutch dairy sector, they demonstrate that active chain involvement, quality production, higher profit margins and high producer prices can be obtained in a market that is under strong pressure by international competition.