13 minute read
Dairy Company of the Year: FrieslandCampina WAMCO
DairyBUSINESS
TRENDS IN FORMULATING, PROCESSING, PACKAGING & CONSUMPTION OF DAIRY PRODUCTS
Dairy Company of the Year: FrieslandCampina WAMCO
By Catherine Wanjiku
For the past 10 years, the Food Business Africa team has closely been following up on the progress the dairy sector has been making across the continent. We have covered everything from new product developments to the adoption of the latest technologies in the dairy sector. We have also highlighted how companies have embraced sustainable growth and made investments that have positively impacted different economies across the region.
Following the publication of the Food Business Africa top 100 listing, Nigeria-based FrieslandCampina WAMCO emerged as the Dairy Company of the Year for its focus on high-quality dairy products, industry leadership, recent investments, adoption of latest technologies, and sustainable business practices that leave the communities and environment it operates in a better place.
FrieslandCampina WAMCO Nigeria PLC, an affiliate of Royal FrieslandCampina in The Netherlands, has been a key player in the Nigerian dairy sector since 1954 through
its flagship brand Peak Milk. Commencing operation as a net importer of dairy products into the country, the company was incorporated in April 1973 and commenced local production in 1975. Since setting base in the West African country, FrieslandCampina WAMCO has expanded its offering from evaporated milk to the production of milk powders, infant milk, UHT milk, creamers, and flavored milk which are marketed in Nigeria in several brands including Peak, Three Crowns, Coast, NUNU and Olympic. These brands have not only become household names but are also credited for being pioneers in the local manufacturing of several dairy products in the country, including evaporated milk and creamers. They are also given credit for the introduction of fortified-based products, among other dairy firsts in Nigeria.
DRIVING LOCALIZATION
Despite being a subsidiary of a multinational dairy cooperative, FrieslandCampina WAMCO has redefined its operations to achieve localization prowess by addressing three national challenges i.e. nutrition security, sustainability, and good living for farmers. At the heart of the company’s operations is the passion to make quality dairy nutrition affordable and accessible. This is strongly rooted in the company’s mission statement of nourishing Nigerians with quality dairy nutrition and made possible by its innovativeness and extensive distribution network across Nigeria.
A stroll through the bustling markets of Lagos to Ilorin will validate this claim. It feels like walking through a FrieslandCampina corporate display case with street vendors towering cans of peak milk, as shop attendants strategically hang sachets of Three Crowns milk powders at the shop fronts. In leading retail outlets, the company ensures all its brands are well laid-out along the dairy aisles, making it impossible for a customer not to catch an eye of them. Following the COVID-19 pandemic outbreak, the dairy processor launched an e-commerce platform to cater to digitally savvy consumers and foster convenience for shoppers. Through e-commerce marketing across digital platforms, over 4 million consumers were reached in 2020 from zero in 2019.
It’s evident from FrieslandCampina’s wide placement of its products, that the company has perfected its route to
FRIESLANDCAMPINA WAMCO NIGERIA PLC HAS BEEN A KEY PLAYER IN THE NIGERIAN DAIRY SECTOR SINCE 1954 THROUGH ITS FLAGSHIP BRAND, PEAK MILK
market. A review of its 2021 financial results indicates that the dairy processor earned a total revenue of N268.4 billion (US$636m). The performance, which was 34.5% higher than N199.5 billion (US$472m) attained in the previous year, was attributed to strong volume growth, a testimony to the high demand for its products. FrieslandCampina WAMCO ensures this demand is always met by availing products that align with consumers’ needs and demands. The company further builds consumer loyalty through its engaging customer-centric campaigns undertaken by the respective brands.
CONSUMER-CENTRIC BRANDS
The company’s flagship brand, Peak, has over the years expanded to add more product lines from the evaporated and powdered milk categories, to the introduction of readyto-drink Peak UHT milk and flavored 3-in-1 milk powders i.e., Peak Chocolate and Peak Instant Tea Mix.
In 2013, the company launched the first and only maternal milk in Nigeria for pregnant and breastfeeding mums under the brand name Frisomum Gold. Coming in rice and wheat variants, the milk optimizes the baby's development through nutrition before, during, and after pregnancy. Frisomum's launch was in alignment with a key millennium goal aimed at improving maternal health and reducing infant mortality. The launch of maternal milk was followed by the introduction of Peak Baby, a new Infant Formula for babies aged 0 -12 months, and Peak 123 Growing Up Milk for children ages between 1 and 3 years old. FrieslandCampina WAMCO stamped its dominance in the Infant and Toddler category (IFT) with the launch of Peak 456 in 2016 to provide specialized nutrition for kids aged 4 to 6 years. In a bid to showcase the importance of healthy eating among toddlers, Peak 456 since its launch has been undertaking yearly consumer education campaigns in schools by equipping teachers with the required knowledge and teaching aids to educate children on the importance of good nutrition.
The Peak brand has further moved into other valueadded products with the addition of a ready-to-drink line debuting Peak Drink Yoghurt in 2019, coming in strawberry, plain sweetened, and orange flavors. In the same year, FrieslandCampina WAMCO through its accelerator program Milkubator launched Milky Pap, a prepacked all-in-one powdered pap product that contains milk for protein, corn for energy, and also enriched with vitamins and minerals under a new brand known as Fristi.
Fuelling its second engine is the Three Crowns brand, which is positioned as Nigeria’s leading low cholesterol and heart-friendly milk. The brand was launched into the Nigerian market with evaporated milk in 1988 and extended into the milk powder category in 2015. Two years later, it launched Nigeria’s first locally produced Creamer. In pursuit to provide valuable experience and giving consumers strong reasons to buy the brand, Three Crowns has set itself apart to show care for mothers and acknowledge the important role they play in the family. To this end, the brand undertakes a yearly fitness challenge to encourage mums to cultivate a healthy lifestyle.
Further expanding its portfolio, the company acquired Nutricima’s dairy business from PZ Cussons Nigeria in 2020. The investment encompassed a production facility in Ikorodu, Lagos State, and its brands, Olympic, Coast, and Nunu; a range of powdered, evaporated and ready-todrink milk products. These brands have a good presence across the Nigerian dairy market and are set to strengthen FrieslandCampina WAMCO’s leading position in the sector.
It is important to note that all its production processes are regulated by the Commercial Dairy Ranchers Association of Nigeria (CODARAN) and the National Agency for Food Drug
and Administration Control (NAFDAC). Other than being locally certified, its operations align with internationally recognized standards such as FSSC 22000 Certification, ISO 9001:2008, and HACCP.
INVESTMENT-DRIVEN EXPANSION STRATEGY
The growth of the brands has been majorly fuelled by huge capital injections into its operations. Some of the company’s recent investments include major renovations and improvements undertaken in the Powdered and Evaporated milk factories in 2016. In line with its policy of constantly exploring ways of optimizing operational efficiency, FrieslandCampina WAMCO in the same year commissioned a new ultra-modern and well-equipped finished goods warehouse with a capacity of over 14,000 pallet positions. This enabled the company to consolidate warehousing operations from five different locations in Lagos into a single new warehouse, improving efficiency in warehousing, distribution, and logistics.
Fast-forward to 2019, the company commenced operations at the state-of-the-art yogurt processing factory that enabled it to introduce the new Peak Yoghurt Drink range. Strengthening its yogurt production capacity, the company unveiled a mobile yogurt plant concept in 2021 to enable the production of yogurt drinks with a long shelf life from locally sourced fresh milk. The new yogurt plant started by processing 1.8 million kilograms of milk and can annually produce over 18 million pouches of drinking yogurt.
Still, in 2021, FrieslandCampina Wamco accelerated growth with an additional processing line in the can factory, installed an end-of-line robotics sorting solution at the powder factory, and added a new lid supply line in the evaporated milk factory. In addition to that, a new homogenizer was installed at the recently acquired Nutricima operations, doubling its processing capacity.
CHAMPIONING NIGERIA’S DAIRY SECTOR DEVELOPMENT
To ensure constant production of its highly sort-after products, FrieslandCampina Wamco has channeled tonnes of resources towards boosting milk production in the country and improving the quality of the milk availed by dairy farmers. Being a trendsetter in Nigeria’s dairy industry, the company pioneered its first backward integration program in 1984 through the establishment of a dairy farm located in Vom, Plateau State. Since then, FrieslandCampina WAMCO has integrated all its operations and progressed into a more sustainable dairy value chain model named the Dairy Development Programme (DDP). The program was launched in 2010 with an investment of N21 billion (about US$50m).
DDP currently operates in various communities across the Southwest and Northern parts of Nigeria, covering the states of Oyo, Osun, Ogun, Kwara, and Niger. The DDP focuses on working with pastoralists, smallholder dairy farmers, and commercial farms, with support from various partners such as IFDC-2SCALE, Bles Dairies, Wageningen University, URUS, Barenbrug, Agrifirm, Federal Ministry of Agriculture and Rural Development (FMARD) and the Central Bank of Nigeria under different initiatives such
as the recently completed FDOV program and Value4Dairy, among others.
Through the Dairy Development Programme, local farmers are supported in the production of milk (yield per cow improvement), improving milk quality and hygiene, feeding, breeding, and farm management. The locally sourced milk from the farmers is collected through the company's Milk Collection Centers (MCC) which are 28 in total with a capacity of 85,000 liters. The milk is then transported to the WAMCO processing facility in Lagos, where it is processed into yogurt and other dairy products, in line with FrieslandCampina WAMCO's grassto-glass philosophy which seeks to ensure quality from the grass the cows feed on to the glass of milk taken by the consumers.
Some of the notable achievements attained by the DDP include improving the livelihood of over 120 communities and over 11,000 smallholder dairy farmers and pastoralists organized in 23 cooperatives. With improved dairy farming practices, the company recorded an increase in fresh milk collection from farmers, hitting an alltime high record of 40,000 liters of milk per day. In addition, it achieved premium fresh milk quality levels with TPCs below 500,000 cfu/ml; increasing milk fat from 3.8% to 4% and total solids from 11% to 12%.
In 2019, DPP got a boost when the government assigned FrieslandCampina WAMCO 10,000 hectares at the Bobi Grazing Reserve in Niger State under a 40-year lease contract agreement in line with the CBN policy to discourage the importation of dairy products and other milk derivatives, of which the country spends about US$1.5 billion annually.
In its bid to widen the scope of the DDP and make it more inclusive, FrieslandCampina WAMCO, in partnership with key stakeholders, launched Nigeria’s first expertise dairy development hub, the Centre for Nigeria Dutch Dairy Development (CNDDD) in 2020. The Centre focuses on improving dairy productivity and sustainability through the entire dairy value chain in the country, supported by Dutch partners, who have experience and practice developed over a century. The CNDDD will strengthen cooperation among relevant stakeholders, including the Nigerian Government, dairy farmers, academics, students, and key industry players.
KNOWLEDGE IS KEY
Capacity building is engraved in the dairy cooperative’s DNA. To sharpen the skills of its over 700 employees, the company established a WAMCO Academy in 2019. The academy is a one-stop system and structure that provides generative and adaptive learning, leveraging technology. It is an L&D system for building competent people with the right skills, knowledge, and behavior required to deliver outstanding business results in a complex environment, accelerating
KEY NUMBERS
US$636M
REVENUE OF FRIESLANDCAMPINA IN 2021
its transformation culture from status quo to high-impact learning and performing organization.
Further navigating the wheels of doing business ethically, FrieslandCampina Wamco has availed a safe and conducive environment for its employees, substantiated by its 9 years of work without lost time accident (LTA) track record as of December 2021. The company also has a unique platform, dubbed Speak Up, that encourages employees and related third parties to speak up against malpractices and compromises on the fundamental Code of Business Conduct, Ethics, and Culture of FrieslandCampina, otherwise known as Compass. Through these and many other employee-oriented initiatives, FrieslandCampina Wamco has fostered an atmosphere that ignites team spirit, commitment, and loyalty to the business.
SUSTAINABILITY AT THE CORE OF OPERATIONS
At the surface level, FrieslandCampina WAMCO seems to be ticking all the right boxes by having a wide array of innovative products, modern facilities with groundbreaking technologies, and even championing the country's dairy development agenda. However, as a purpose-driven company, the owner of Peak Milk has strived to align its contribution to a sustainable world in line with the United Nations SDGs through its parent company’s Nourishing a better planet strategy. To this end, the company has prioritized offering better nutrition through its products by ensuring affordability to consumers and good returns to its member dairy farmers. To further improve milk output and quality, the company plans to train 75,000 local farmers through its Dairy Development activities by 2025. Alongside this, it seeks to source 100% of its agricultural raw materials sustainably and trace 95% of the materials by 2025.
In addition, the dairy processor aims to reduce over a third of its greenhouse gas emissions by 2030 compared to 2015 and become climate neutral by 2050 as it attains net positive biodiversity within the cooperative. One of the ways FrieslandCampina seeks to reduce harm to the environment is by utilizing better packaging. It targets that 100% of its packaging will be recyclable or reusable by 2025 and more than 99% of waste material will be reusable.
Going by its strategy, in 2019, FrieslandCampina WAMCO designed two recycling machines using scrap materials. This has helped the company achieve a 54% reduction of trademark wastes to landfills and a decrease in the cost of destruction by 91% in that year against a 2018 baseline. Through the Dairy Development Program, the company has promoted eco-efficient practices to safeguard the eco-system through the construction of 122 solar-powered boreholes as of December 2021, providing farmers with portable water. The dairy has also introduced hydroponics, a method of growing high-nutrient grass in harsh environments.
IMPACT DRIVEN COMPANY
FrieslandCampina WAMCO has been lauded as a highly stakeholder-oriented business as its emphasis is not only on the products it sells but also on how the entire business contributes to the well-being of the system in which it operates. They have done this by deploying interventions for the advancement of society beyond commercial targets. Some of the notable initiatives undertaken by the company include ensuring the availability of quality dairy nutrition, especially among growing children through participation in school feeding programs; creating a link between industry and academia through championing knowledge transfer and fostering mentorship programs; and supporting charitable organizations and needy communities across the country through donations and kind.
Noteworthy, in 2019 following the outbreak of the COVID-19 pandemic, Frieslandcampina WAMCO was at the forefront in aiding the country to alleviate the negative impact of the pandemic. The company donated N500m (US$1.1m) towards Nigeria’s Covid-19 Intervention Fund through the Private Sector Coalition Against Covid-19 (CACOVID). This is in addition to the N100m (US$273,000) worth of products donated for distribution to 100,000 vulnerable families.
To acknowledge the company’s leadership position in the dairy sector and its key contribution to the economy, FrieslandCampina WAMCO has garnered tonnes of accolades and recognition both locally and internationally. In the previous year, the dairy company hauled over five awards from the Brand of the Decade and the Agribusiness Company of the year to the Best Tax Compliant Company in Nigeria. These add to the tonnes of awards received over the years since its inception, a testament to the company's leadership position in the region FBA
