Campina's new strategy

Related tags Milk Investment

Campina Germany is looking to put a disappointing year behind it by
concentrating on its Landliebe brand in 2004. A decline in group
turnover in 2002 was blamed on lower prices and a focus on quality
improvement instead of turnover growth.

The company believes that nest year, a higher rate of return can only be achieved through better brand promotion.

"It is for this reason that we have chosen a two-brand strategy: Campina and Landliebe,"​ said group director Detlef Holst. "This year we invested considerably in the Campina brand and we will continue to do so. At the same time we must not forget the importance of the other brand, Landliebe. In the future this two-brand strategy will result in an even better market position in the German dairy market for us."

The Landliebe brand is sold throughout Germany and Austria. It includes a wide range of dairy products such as milk, dairy drinks, yoghurts, desserts, cheese and butter. The manufacturer believes that the promotion of these products will bring the company back into the black again.

"We will be in the black again this year,"​ said Holst. " We have to realise at least two to three per cent more turnover per year. However, even if we consistently follow the chosen strategy, the two-brand strategy, it will take some years."

The German dairy market is particularly competitive. According to Campina​, over three hundred new products are launched onto the market every year. "It is not easy to successfully introduce a concept,"​ said Holst. "The success lies in the distinctiveness. You have to fulfil the consumer needs and at the same time offer something extra. What's more, you can distinguish yourself from the rest by having the proper price-quality ratio, certainly in the current German market situation."

Holst is confident that things are looking up for the group. He says that Campina is ready to resume its expansion strategy, following extensive reorganisation in the last decade. The investment in Farm Dairy and the acquisitions earlier this year of the dairy company Strothmann and part of Avebe's ingredients business are examples, he says, of this strategy in action.

"We were not dissatisfied with 2002," said executive board chairman Tiny Sanders. "Our corporate objectives were achieved and Campina turned in a respectable performance, given the wider operating environment. Despite heavy exceptional pension charges and the accounting treatment of the write-down of the Wessanen shareholding, the result showed a substantial improvement. In this time of stock-market turbulence, the stability of the food industry and the benefits of a solid co-operative structure are clearly apparent."

It remains to be seen whether the strategies outlined by both Holst and Saunders will bear fruit.

Related topics Processing & Packaging