You could forgive workers in the dairy industry for being concerned about their future. With reform of the Common Agricultural Policy (CAP) set to have a significant effect on the sector, further consolidation and job losses are on the cards. Arla has already set the scene with its acquisition of Express Dairies last year. This resulted in the loss of over 300 jobs. These certainly won't be the last.
However, the future needn't look so bleak for all in the industry, says Albemarle Interim Management.
According to a survey Albemarle conducted in the dairy sector -- which included some of the UK's biggest milk processors, such as Nestlé, Dairy Crest and First Milk -- 80% of respondents say that CAP reform will have a positive effect on their businesses as it will reconnect production to demand. The result is that dairy companies are raising their game. They are driving innovation and require skilled staff to help them to achieve this.
The survey shows that the key area for growth will be in new product development (NPD). Consequently, job opportunities for NPD staff are set to rise over the next few years, predicts Albemarle.
Of the companies it approached, all said that product innovation was key to their survival, with the majority saying they were turning their attention away from liquid milk to more added-value products, with yoghurt seen as the biggest opportunity, followed by dairy desserts and cheese.
"The most important factors driving sales are consumer trends and interest in health and new tastes," says head of client services at Albemarle Chris Bernard. "Growth from the industry will come -- and is coming -- from added-value dairy products and also in organic products. All of this requires investment, both in machinery and in employees in key disciplines -- notably in marketing and NPD."
Albemarle cites Nestlé's trading results for the first quarter of 2004 which demonstrated the greater importance being placed on NPD. Nestlé reported strong performance from its added-value dairy business, where sales were up by 7.6%. This was attributed to renewed innovation in its products.
McLelland Cheese is another example of a producer that is extending its added-value offering. It has just launched a branded farmhouse cheddar under its Seriously Strong label to take on own-label cheese, which currently accounts for over 85% of all cheese sold. Yoghurt manufacturer Müller has also announced a further NPD drive and, as a result, is currently recruiting an NPD technologist at its Market Drayton plant.
Bernard also says that change in the industry as a result of CAP reform and the push by companies to broaden their product portfolios will give rise to many opportunities for interim managers and workers looking to take on short-term contracts.
"Operational efficiencies, waste reduction, productivity improvements, and business and IT process improvement are essential to the future of many dairy companies," says Bernard. "These are short-term projects and while commitment to permanent hiring may not be appropriate, interim management can be a very cost-effective solution."
According to Albemarle, 19% of companies intend to increase their permanent headcount within the next year and a further 18% said they were considering using short-term contracts or employing interims to cope with change.
"Within the dairy industry we are seeing an increasing need from employers to have a flexible workforce which is able to help them manage change," says Bernard. "Several of the assignments we have handled recently have been about helping to affect change." FM
For more information visit http://www.albemarleinterim.co.uk