Flughafenallee 17 in Bremen. Outside, there’s a DMK logo emblazoned above the entrance to the office complex, while inside, it’s clear that change is afoot. The group, once a milk processor focused on raw materials and production, is well on its way to becoming a consumer- oriented food producer. The company’s transformation is in full swing and set to continue.
In DMK’s foyer, this transition is clear at a glance. Ingo Müller, CEO of the DMK Group, is sitting in the lobby opposite his new colleague, Dr. Frank Claassen. Claassen joined the DMK Group on July 1, 2019 as Chief Financial Officer (CFO). He’s a finance expert and was previously Vice President Finance Europe at Beiersdorf, where he worked for 25 years. Behind them, the letters D, M and K glow a luminous blue, while on the wall, a 6-meter banner advertises the flagship MILRAM brand. As soon as you enter the space, it’s clear that change is underway.Transformation, however, goes beyond design, furniture and colours. Müller is onboarding his new colleague and describes the DMK of tomorrow. After lengthy preparation, coordinating with the cooperative’s elected officers, executives and employees, DMK is entering the next phase in the far-reaching transformation of one of Germany’s biggest food manufacturers. “During the planning stage, we thought about how the world would look in 2030 from DMK’s perspective and how that would affect our business,” Müller explains. “The focus on 2030 isn’t a brand ‘new’ strategy and it’s not a restructuring program, but an evolution of the direction you’ve been moving in for the last two years?” Claassen asks curiously. The new manager likes change. “I seek out tasks that will challenge me, or where I can make a difference. I don’t like to just administrate and take a back seat,” he told DMK executives at a meeting in May.
“What I like about DMK is that there’s a strong feeling of ‘WE’. That will carry us forward on our journey to the future”
Dr. Frank Claassen
They had asked Claassen why he switched from Beiersdorf – from the Elbe River to the Weser – after having worked there for so long. “In one of our early meetings, when Ingo Müller, and also Heinz Korte and Dr. Herbert Grimberg of the supervisory board, told me about Vision 2030, I thought each point they made sounded great,” he said. His office also reflects the spirit of change at DMK. His first move was to install a standing desk. When you stand during meetings, they are often more agile and focused on solutions, Claassen tells people when they come to his office expecting to see a conference table all set out. “I’m a person who’s interested in other people. What I like about DMK is that there’s a strong feeling of ‘WE’. That will carry us forward on our journey to the future.”The media has been reporting on DMK’s transformation for some time – what’s it all about? Müller sums up the significant changes in six central points. “We’re focusing our product range more, by withdrawing from some business areas, and defining a clear role in each area of our business. We ask where we should invest, and where we can grow. And we look into whether we can make money in markets that don’t promise growth per se, if we take measures to really focus our business there.” Those are Müller’s guidelines. Besides that, the group will further focus its international activities, as organisational changes in the past few years didn’t go far enough. “We see Europe as our home market and we’re going to focus our expertise here in the future, in the right business units.” Brand is the business unit managing European brands, while Private Label is the unit handling trademarks in Europe. The company is orienting itself more towards the market – large retail chains have long been set up throughout Europe. And beyond Europe, the International business unit now has the capacity to structure non-European business. “Internationally we will set priorities. Regional bases in Russia, China or Nigeria with local teams are more effective than exports from Germany. That makes most sense in those countries where we have the right volume of business. We can’t just list the number of export markets,” Müller underlined. Claassen is interested in another topic: “People are changing the way they eat. What do these trends mean for the associated food and drink segments – could these be a pillar of our business in the future, alongside milk products? And what about plant-based alternatives?”
“Milk will remain our number one raw material”
Following his apprenticeship with Nordmilch, Ingo Müller gained career experience in many different parts of the company. In the year 2011, he took on the leadership of the Ingredients business area as well as Quality Management and Research and Development. He had previously been Director of Agricultural Affairs and Managing Director at Nordmilch (2009-2011). In September 2016, the 47-yearold graduate dairy industry engineer was appointed CEO of the DMK Group. Müller is married with two children.
At this question, Müller put his iPad aside – they had been looking at future scenarios. “We’re changing our positioning, from being a volume player in the dairy business to becoming a provider of products of natural origin. Milk will remain our number one raw material. But if you look at global developments, you’ll see two major trends. Firstly, milk won’t be able to feed the growing population. Secondly, consumers are looking for alternatives for several different reasons. It would be reckless to ignore those facts. We’re going to be very focused – in the next few months, at the Brand business unit, we’re going to take a very close look at exactly how we position ourselves in this area.” Claassen nods. From his time at Beiersdorf, the CFO knows all about focusing on the customer first and thinking about their needs. “We’re getting a better understanding our customers and are going to focus on the individual needs of each different age category. For me, our new Vision, ‘The first choice. For always’ sums up perfectly what we can offer with our range of products.”
Müller turns to a question he often hears when presenting DMK’s target, namely, “Isn’t the here and now more important than the future?” He acknowledges that daily business is a challenge and will remain so. But it’s important to look beyond that, in order to ensure there’s everyday business in the future, too. “If we want to improve now, and cut costs, we have to decide where we’re going. Otherwise we’ll make short term decisions that will either stop us from going in certain directions in the future, or will duplicate work. If we’re not prepared to consider that now, putting it bluntly, we needn’t bother to turn up tomorrow.” They also agree that time matters when it comes to change. “We’re aware that in the past, DMK often challenged the patience of its farmers. And we also know that the fundamental changes we’re making can’t be achieved overnight.” Alongside the far-reaching organisational changes underway, the company is also undergoing a massive cultural change. “Our plans are ambitious in both of these areas but we know we also have to implement these carefully so DMK can achieve its best performance.” Vision 2030 spells out how the company will become fit for the future. It’s a clear signal for change. Future measures can be aligned to it and it will enable to the company to reach new products, new target groups and new markets more quickly.
Ines Krummacker, DMK’s HR director, explained what the changes mean for employees at a recent executive meeting. She called for an end to hierarchical thinking, a feedback culture and more inter-departmental, project- based working. For her, that will mean a new attitude, and asking the question, “How do we want to work together?” Often, that means managers will need to learn new behaviours. They will no longer have the knowledge advantage and shouldn’t hand out orders, but instead should support employees and enable them to take responsibility. “Anyone who thinks they can just figure that out on the side is wrong,” Krummacker told her fellow executives. It’s a big change to daily life that managers will have to lead by example, and employees will carry out. “Culture isn’t a program in a continuing education catalogue, you can only live culture.” Müller and Claassen know all too well that the changes over the next few years won’t happen by themselves. But the 2030 goal is clear – and DMK knows the way forward.