The following content originally appeared in issue 65 of Dairy Innovation, which you can subscribe to here.
Oldenburger is the export brand of the DMK Group, Germany’s largest dairy co-operative with an annual turnover of 5.3 billion euros. The DMK Group as a cooperative-based company owned by farmers has strong regional roots and, at the same time, as an international corporate group it continues to focus on growth in other countries.
Known for producing milk, milk powder, cream, coffee creamer, yoghurt, butter and cheese for both retail and food service consumption, Oldenburger products are exported to more than 80 countries around the world. Claire Phoenix spoke with Frauke Windolph, Marketing Manager International, DMK Consumer, on the changing dairy marketplace.
What is Oldenburger’s position within the DMK Group?
The Oldenburger brand accounts for a very significant share of the DMK Group’s export sales.
What is the portfolio split in terms of revenue?
We generate around two thirds of Oldenburger’s volume with white line products, in other words fresh dairy products and butter, and around one third with cheese and milk powder.
How many plants do you have and how many lines in all?
The DMK Group processes its milk at 17 dairy factory sites in Germany. We produce baby food, ice cream and health products at a further eight German sites. We also have international sales offices in Asia, the Middle East and in the European market. For example, last year we opened a new distribution branch in Dubai. All our business activities in the Gulf states, the MENA countries and the rest of Africa are concentrated there. DMK’s office in Shanghai opened more than three years ago and is well established in the Asian market, where DMK is one of the big suppliers of end consumer products with the Oldenburger brand. One example of our long-term international relationships is the supply of milk powder and cheese to the Japanese market. DMK has been satisfying Japanese demand for more than 35 years with products including cheese that is tailor-made for these customers.
Business operations are focused within four business units with a wide range of products. These business units are DMK Consumer with Oldenburger and the German brand Milram, DMK Baby, DMK Ice cream and DMK ingredients.
What has been your latest investment in terms of equipment?
The DMK Group has invested more than 500 million euros in its factories and the development of leading-edge production and process technology in the past four years. For example, a modern aseptic production plant was put into commission at our factory in Erfurt, Thuringia, with which we can manufacture products for export with state-of-the-art process technology. We have also invested in a special new filling line for small packs (125 – 250ml) with straws. In addition, a new milk powder factory has been built at the Zeven site near Hamburg, because DMK will be making more high-quality milk powder from raw milk in future.
The aim of these investments is to expand the export business further, because the demand for dairy products in the growing economies will continue to rise in future years. That applies particularly to Asia and the MENA countries. China in particular will continue to have a high demand to cover, despite the current temporary low spending. The new facilities for milk powders and for UHT export products take account of this development. In future, DMK will use its raw milk to make more special products and high-quality milk powder that is perfect for the export market. We will concentrate on countries that cannot cover their demand themselves in the medium to long term.
Regarding innovation – what have been your biggest projects over the past few years?
Novelties in Oldenburger’s product range include strawberry, banana and chocolate flavoured milkshakes. In a 200ml pack with a straw for easy drinking on the move, these products combine the consumer trends of healthy nutrition, taste and convenience. A further innovation is Oldenburger blended spread. This blended spread is particularly easy to spread even straight from the fridge. Added to these is a new cooking cream with a fat content of just 20 percent: available in 1kg or 200g packs, it targets both bulk and retail consumers.
We have added mozzarella in 2.5kg and 10kg packs to our range for international Food Service customers. The cheese is produced at our new mozzarella cheese factory with state-of-the-art technology and the highest quality and safety standards.
A strong pillar of the Oldenburger range is dairy products to add to hot drinks such as tea or coffee. They cover a very wide range of applications, whether for consumption at home or in cafés. The product range includes sweetened condensed milk in a reclosable softpack, which is very popular particularly in south-western Europe for making ‘Cafe Bombón’. We also have evaporated milk in a convenient, resealable 200ml pack for home use.
The coffee creamer dairy drop is a new idea in creamer packaging being shaped to the cup. How large are your R&D packaging and ingredients teams and what led to this innovation?
At the company’s Milk Innovation Center (MIC) more than 30 technologists, scientists and external practitioners work in expert teams to develop innovative novelties made from the basic product of milk. The Dairy Drop for coffee cream arose at an interdisciplinary idea workshop with DMK team members from the Research & Development, Production, Marketing and Sales departments. We wanted to create a novelty that would not only give us a distinctive edge over competitors, but also deliver functional value added for servers and guests. The idea was to design a shape that looked attractive and at the same time was more practical than the little round packs. We discussed a number of new approaches that were then visualised by a graphic artist. The outcome was decided relatively quickly: a drop-shaped version that would fit perfectly around the curve of cups and mugs and wouldn’t splash when opened.
Please describe your total cheese offering and target market.
Oldenburger’s most popular varieties of cheese are Gouda and Edam. The 3kg blocks can be found mainly on cheese counters, for example in Spain and Greece.
Overall, Oldenburger’s cheese portfolio offers a wide span of different products and packs. Retail consumers can choose from mozzarella, Gouda, Edam, Maasdam and Tilsit. We also offer bulk consumers Oldenburger Havarti, Burland and Emmental in 3kg blocks. Gouda and Maasdam are also available as a 12.5kg round cheese and Gouda as a 15kg block. These last products are then packaged or are used more for industrial application. The range also includes a grated cheese mix made of Gouda and mozzarella in 2kg bags, which is also used particularly by bulk consumers. The product combines the excellent melting and browning qualities of mozzarella with the popular taste of Gouda.
What does your milk and cream offering comprise and how has this altered over the past few years?
We also offer a broad product portfolio for retail and bulk consumers in the milk segment. This includes UHT whole milk and low-fat milk in a variety of pack sizes and the new strawberry, banana and chocolate flavoured milk drinks.
In the past years we have focused our milk range in particular even more on consumers’ preferences. In the Asian market, particularly China, milk is a status symbol. For this reason, we have concentrated our new product development mainly on the to-go segment. The result has been new tastes such as the flavoured milk drinks and attractive packaging solutions. We have now launched a new, slim 200ml upright format on the market. It’s much more practical and looks more modern, which will appeal to young consumers in particular.
Our cream assortment comprises a selection of products with different fat contents that are tailored to different areas of application. In addition to classic whipping cream with 35% and 30% fat for whipping and for adding the finishing touch to food, we also offer special products for hot dishes. These include our new cooking cream with a 20% fat content and Oldenburger Culinary Cream with 18% fat.
Have you adapted to meet changes in the powdered milk sector? If so how?
Oldenburger’s portfolio also offers an instant full cream milk powder in four different sizes of tins. Key target countries are in the Middle East and African regions. Oldenburger will evaluate options to extend the portfolio to meet consumers’ needs.
Where next for Oldenburger? What do you see happening over the next five years?
Our intention is to launch more added-value products and offer a balanced mix of basic articles and added-value articles. We aim to find a profitable balance between international articles and a regional portfolio approach. In some countries our clear focus will be on consumers, i.e. our main target group is ‘families with kids’, while in other countries we will build on the strong basis and strong image we have with food service customers.
© FoodBev Media Ltd 2024