“Acteurs pour un lait durable”: co-building a sustainable supply chain with milk producers

Summary

Florence Chambon, Milk Director at Danone Dairy France, explains how Danone in France works on securing a milk supply chain that is beneficial in economic, environmental and quality terms, both for the company and for the milk producers it works with. And guess what? The key word here is collaboration.

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With every challenges comes opportunities. In a context of growing competitiveness and heightened economic difficulties, these opportunities often take the form of cooperation between various parties, which allows them to strengthen their relationship, common ecosystem and specific activities.

This idea led Danone France to initiate a series of very strong partnerships with the 3,300 milk producers who supply the Group every day.

In order to efficiently tackle the major challenges these farmers are now facing (with the liberalisation of the milk market and the upcoming reform of the Common Agricultural Policy – CAP), Danone decided to side with them and, together, to co-build solutions. Consequently, over recent years, we have progressively developed a four-pillar approach, “Acteurs pour un lait durable” (“Actors for sustainable milk”) encompassing all aspects of milk production:

1) Economic development: alongside the Ecosystem Fund, Danone co-funds “Horizon 2015”, a personalised support plan which involves working with farmers to develop their businesses. This means access to training, tailor-made analyses, help to fund projects, etc.

2) Environmental development: Danone is involved in a series of projects where it works with farms on improving their environmental impacts. Firstly, with Les 2 Vaches/Stonyfield (its organic subsidiary), and the development of an innovative organic milk supply chain around its Normandy factory, and secondly with the Institut de l’élevage, the Ecosystem Fund and the Basse-Normandie Regional Council, who co-lead the “Reine Mathilde” programme to transform the region into a leading organic milk producer. And lastly with FCI, an animal nutrition specialist, to develop feeding programmes for cattle that will help reduce their methane emissions.

3) Quality development, in terms of both safety and nutrition. Back in 1997, Danone had already made a precursory commitment with the DQSE, an internal Quality, Safety and Environmental charter binding the Group and its suppliers to guarantees concerning hygiene and food safety. Since 2004, this has been extended to cover a responsible approach to environmental impacts (waste management, responsible use of phytosanitary products, preservation of biodiversity, reduction of water and energy consumption, etc.). In 2008, the Linus programme took things a step further by closely linking animal well-being, methane emission reductions and milk quality, mainly through quality feeding.

4) Communication development. This means, firstly, seeking opinions from producers on an annual basis, in order to understand their needs and expectations and keep improving the relationship. Secondly, Danone helps producers communicate what they do to the general public, using personalised signs around farms, specific equipment for those who open their premises to the public, etc.

In order to find out more about the aims, resources and challenges involved in the “Acteurs pour un lait durable” approach, we asked Florence Chambon, Milk Director at Danone Dairy France, a few questions.

 

How does “Acteurs pour un lait durable” work, bringing together the various programmes and pillars?

 

Firstly, it is important to understand that it is a global approach, and not a one-shot programme. And this approach is becoming a state of mind. Even during complicated negotiations, we always keep in mind this spirit of co-construction and collaboration with our producers, and we make propositions that take us in that direction. With such an approach, we could never decide things unilaterally.

 

How does the approach fit into food safety challenges?

 

Danone was always a pioneer in quality management, with the DQSE which we established over 15 years ago. It carries a strong focus on traceability, and we can go all the way back to what the cows eat. We buy only from our producers, and we constantly work with them to keep improving. Traceability is in their DNA as much as it is in ours.

 

Are short supply chains a must?

 

On average, the milk we use comes from a 56km radius around our factories. This is for quality as well as economic reasons. The supply chain is short in terms of time, by definition: milk is fresh, we cannot stock it and we cannot stock our dairy products either.

And since we are committed to buying all the milk that our producers make, we have to be responsive to manage stocks efficiently. The supply chain is also short in terms of distance, like I said, and in terms of intermediaries: 95% of the time, we work directly with our producers. This is another reason why we are committed to working closely with them.

We have chosen also to buy milk only in France. When we launched “Acteurs pour un lait durable”, we used the phrase “Le lait de nos éleveurs” (“Milk from our farms) in our communication. When we asked consumers what this phrase meant to them, they said: milk from France. So we chose to make that a constraint, to ensure we met this consumer expectation.

 

How does the approach fit into environmental challenges?

 

When we started working on the approach, we defined various pillars, but they are in fact all very deeply linked. Milk producers are facing tough economic challenges, with the upcoming CAP reform: most European subsidies are now becoming conditional on environmental criteria. Consequently, we simply cannot deal with the financial health of milk producers without taking the environmental element into account. And then, the livestock farming world has a strong environmental impact, which is of major importance to us. We have to work with our producers to address all the issues: water use, soil erosion, methane emissions, etc. The good news is that these issues almost always have an economic impact too, so all of our projects work on both aspects. For instance, having farmers abandon monocultures to grow the cereals they will feed to their cows has a positive impact on their income, on the environment… and on the landscape! And quality completes the circle: giving the cows a range of foods has a very positive impact on the quality of their milk. You see how the pillars are interconnected. And it works!

 

Does Danone implement similar approaches in other countries?

 

It is part of our culture to replicate ideas that work, with specific local adaptations of course. In Spain, for instance, the “Plan guanaderos” was launched shortly after “Acteurs pour un lait durable”. There, the farming world is facing even bigger difficulties than in France, so a slightly stronger emphasis has been placed on the economic aspect. There are also initiatives in Brazil, Argentina, Germany, etc. It really is a global approach.

 

What are the main challenges for the future of Danone’s milk supply chain in France?

 

When we started “Acteurs pour un lait durable”, we agreed to limit it in time, to 2015. But what is becoming clear now is that it will never be over. With the Ecosystem Fund, we are already working very hard on what will happen when we stop supporting the producers, on how to make things sustainable and perennial without us. We know that it will depend a great deal on the will of the milk producers, on whether they take ownership of the approach and see its potential for them. We also work on building networks so that they can be durably interconnected. We will be able to consider “Acteurs pour un lait durable” a success if, several years from now, we can look at how things are on the ground and see that they work by themselves.

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