FrieslandCampina SWOT & PESTLE Analysis

Strength

1. Manages the complete production chain - from grass to glass: The main agenda of the “grass to glass” model is to ensure that Friesland Campina has complete control over the entire process from starting till the end so that they can achieve their goal of providing good quality nutrition to the world. They closely monitor every step with their Foqus Quality system. Here grass is representative of the food that the cows eat to the glass where the products are stored in cold storage. The Foqus Quality System covers food safety, quality, and good working conditions for the employees as well as fire safety. This program also has a dedicated audit team that monitor compliance with the outlined standards and regulations of all locations across the globe. Transparency, inspection and monitoring are the pillars of the Foqus program. The program also utilizes external and independent institutes to perform inspections. Foqus ensures to inspect elements as basic as the microbiological quality, hygiene and composition of products.

2. Strong cooperative of member dairy farms: At its very core, the cooperative constitutes more than 19000 members, who focus their efforts towards dairy farming. The company is wholly owned by Zuivelcooperatie FrieslandCampina, who sources the dairy directly from the members, ensuring timely payments for their products. This raw dairy is then optimised by FrieslandCampina into finished dairy products which have an outreach of 100 countries. By outsourcing the optimisation, the cooperative can focus all their efforts and resources towards quality dairy farming, thus creating an inclusive business model that benefits both the farmers, as well as the company. Each of the 19000 members is eligible to apply for a council member position. The member council is elected democratically, and these council members form a direct link between the farmers and the cooperative board. The cooperative board includes members chosen by a selection committee, as well as members from Frieslandcampina, thus ensuring adequate representation during policy structuring. This organisational structure creates and sustains a stable foundation for all the dairy farmers associated with FrieslandCampina.

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Weakness

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Opportunity

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Threat

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Political

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Economic

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Social

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Technological

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Legal

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Environmental

1. Issue of greenhouse emissions – methane from cows: The Agriculture industry contributes to about 25% of the greenhouse gas emissions and 14.5% of this come from cattle and livestock. The shift to veganism is not attributed just towards exploiting animals, but also to reduce the carbon footprint in the environment. Alternatives for milk such as almond, coconut, etc. are on the rise, and it is estimated to be a $10 billion industry by the end of 2020. Water pollution is a problem too, with close to 74 million tonnes of manure being produced a year. This contains phosphates and nitrates that leach into the water, excessive amounts of which cause algal blooms and starve aquatic life of oxygen. FrieslandCampina had launched a project in 2016 named “Poo Power”, to combat some of this environmental hazard. The project aimed to work with a thousand Dutch farms with a mission to convert manure into biogas using anaerobic digesters. Jumpstart, which is a cooperative established by FrieslandCampina, helps farmers with the financing, construction and maintenance of this initiative.

2. Complete circular packaging by 2050: Since circular economy has been in focus for a while now (almost a decade), circular packaging solutions too are gaining immense popularity to enhance sustainability efforts. FrieslandCampina has a target of achieving 100% circular packaging by 2050. To achieve this, the first order of action is to make all packaging recyclable by 2025. They have developed a tool called Respackt software tool which is used during the development of new packaging in order to check how environmentally damaging it can be and how recyclable it is. After analyzing their whole packaging portfolio they made certain changes and at present 87% of their entire packaging are recyclable and they are on track towards their goal of 2025. Also, for certain dairy products they have been able to achieve full resealable and recyclable packaging like cheese.

The remaining section of “Environmental” is available only in the 'Complete Report' on purchase.