Why Fonterra accepted defeat in the dairy aisle
OPINION: Fonterra's sale of its consumer dairy business to Lactalis is a clear sign of the co-operative’s failure to compete in the branded consumer market.
The co-op last week launched a programme entitled The Cooperative Difference, focussed on five key areas: environment, animals, milk, people and communities, and co-operative and prosperity.
The firm intention is to make clearer to farmers what their co-op expects of them today and in the future, and to duly recognise the many farmers who conscientiously produce high quality milk in a more sustainable way. Those who produce will be rewarded, but those who persist with continuously poor milk grades will face the consequences.
The co-op is also assuring farmers there will be no nasty surprises. The Cooperative Difference will enable farmers to better understand the changing expectations of global markets, customers, consumers, communities and regulators so they can plan and prepare for what they must do.
New sustainability regulations won’t be dumped on farmers overnight, and the co-op acknowledges that change cannot happen overnight; it is committed to providing farmers with more advance notice of new requirements and changing expectations.
Fonterra will next month release more details on The Cooperative Difference, and in the coming season it will outline the immediate steps a farmer can take to improve sustainability onfarm and within the co-op.
The co-op says it will recognise farmers who go beyond the minimum requirements to produce high quality, safe, sustainable dairy, according to key needs outlined in The Cooperative Difference for delivering top-shelf milk.
Top farmers will get grade free certificates, plaques and awards, and they could get a digital dashboard and annual scorecard and be recognised at local events. Their stories will be told in Fonterra publications and Farm Source reward dollars may come their way.
With farmers facing more compliance costs and pressures in their quest to farm sustainably farming, The Cooperative Difference is a huge step in the right direction.
Fonterra and its 10,000 farmers shareholders are already doing a great deal of work on sustainability. They are confident The Cooperative Difference will help take that good work to the next level.
