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Sustainability shapes ForFarmers' strategy for the future
14 Plays2 years ago
ForFarmers CEO Pieter Wolleswinkel discusses what the future may look like for the company, and the feed industry as a whole.
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Transcript
Introduction and Leadership
00:00:06
Speaker
Hello and welcome to the Feed Strategy Podcast.
00:00:08
Speaker
I'm your host, Feed Strategy Senior Reporter Ann Roos.
00:00:11
Speaker
Peter Woleswinkel has been CEO at 4Farmers since April.
00:00:15
Speaker
4Farmers is the third largest feed producer in Europe and number 16 in the world, according to Feed Strategy's top feed companies database.
2023: A Year of Transition
00:00:22
Speaker
This year has been a period of transition for Woleswinkel and 4Farmers, as he recently told me in an interview, and he is looking forward to developing the company's strategy for the future.
00:00:31
Speaker
We talked about what the future may look like and what that means for the feed industry.
00:00:35
Speaker
Hi, Peter.
00:00:36
Speaker
Thanks for being here with me.
00:00:37
Speaker
Hi, Anne.
00:00:38
Speaker
Nice to be here.
00:00:40
Speaker
You've been in the permanent role of CEO at Four Farmers for more than six months after an interim period before that.
Organizational Changes and Sustainability
00:00:46
Speaker
How has the transition been for you and the company?
00:00:48
Speaker
Tell me about some of the changes at Four Farmers during that time.
00:00:53
Speaker
Yeah, 2023 is for us, you can call it a transition year.
00:00:58
Speaker
We've set our strategy end of last year.
00:01:01
Speaker
So we're now in the execution modus.
00:01:04
Speaker
That means several things.
00:01:06
Speaker
We reorganized ourselves from a central led company into a more local oriented company with strong local management teams.
00:01:14
Speaker
We're making choices.
00:01:15
Speaker
For example, we divested our Belgium compound feed activities and we did an acquisition in Poland.
00:01:22
Speaker
We're focusing on our cost in this huge period of hyperinflation and we are accelerating our sustainability journey, especially working also with chain partners to make progress within our European ambition.
00:01:39
Speaker
So all in all, busy agenda.
00:01:41
Speaker
But if I thought for myself in my CEO role, it's great to lead the company.
00:01:46
Speaker
And especially in this period of time, I think we have a great story to tell.
00:01:51
Speaker
So I'm very happy about that indeed.
Revising Vision and Mission
00:01:55
Speaker
For Farmers is in the process of updating and reworking its vision and mission statement.
00:01:59
Speaker
What are some of the reasons behind this update and what will be the focus in the future?
00:02:04
Speaker
The key thing is that, as I just said, we are working on our strategy, strategy 2025, but we also see that we need to think long term in this period of time.
00:02:15
Speaker
There's a lot going on within Europe with regards to the food systems that we want to have towards 2030, towards 2040.
00:02:24
Speaker
So we use this period of time to have a lot of discussions with many of our senior leaders, but also other employees with farmers to discuss, hey, what will society look like, demand towards the future?
00:02:40
Speaker
For us, what clearly came out here, we recognize the need for affordable and sustainable foods.
00:02:46
Speaker
And we can play a great role in that.
00:02:48
Speaker
We truly believe that livestock farming and farmers play a crucial role in that.
00:02:54
Speaker
And for us, it's great to have an essential role in circular food systems.
00:03:01
Speaker
So that is what our focus will be.
00:03:03
Speaker
focusing very much on today, making sure farmers have good returns, but also ensure a long-term robust income for the farmers.
00:03:14
Speaker
And we believe that the sustainability journey is a great opportunity for us in that, lowering carbon footprint,
00:03:21
Speaker
enhancing circularity and protect biodiversity are the crucial pillars under our sustainability journey.
00:03:28
Speaker
So all in all, it was great to have these conversations with our employees, and this will help to determine our strategy 2030, because 2025 is only one year ahead of us.
Technology and Carbon Footprint
00:03:41
Speaker
And we'll talk a little bit more about sustainability here in a minute, but first I want to ask you, how do you define agriculture technology and how do you see it tying into For Farmer's Vision?
00:03:51
Speaker
Technology has always been the heart of our company, I think farming as a whole.
00:03:55
Speaker
We've always been there to make progress.
00:03:58
Speaker
So on this, I can look at it from two directions.
00:04:02
Speaker
The first is we serve within Europe 26,000 farmers.
00:04:07
Speaker
That is what I often say the largest research farm in Europe.
00:04:12
Speaker
We have so many data coming to us that will help us compare farmers one to another, and that helps a lot to ensure that our feeding programs help the farmers move forward.
00:04:24
Speaker
On the other side, we do see that around sustainability, the ambition becomes more clear.
00:04:31
Speaker
And that also means that for us, we spend much more time with regards to technology to see how can we move forward?
00:04:38
Speaker
How can we lower our carbon footprint?
00:04:40
Speaker
How can we replace conventional protein sources?
00:04:44
Speaker
That is very high on our list.
00:04:46
Speaker
So from a technology point of view, yeah, at this point in time, we're looking both at today, but clearly also at tomorrow.
Sustainability Practices
00:04:55
Speaker
Back to the topic of sustainability, the scope of corporate sustainability is broad and includes animal welfare and reduced emissions, among many other things.
00:05:04
Speaker
How do you most commonly see for farmers members adopting sustainability in their operations?
00:05:10
Speaker
Yeah, if we look at it from those two directions, for us it's different.
00:05:15
Speaker
If we talk about animal welfare, we often do what regulation or market parties ask from us.
00:05:22
Speaker
If I can give an example, for example, in the Netherlands, the broiler chickens are moving more to a free range system, meaning less chicks per square meter.
00:05:35
Speaker
And we need to adjust our feeding programs on that.
00:05:38
Speaker
They have a different
00:05:40
Speaker
nutritional demand, so for us, it's a good way to differentiate.
00:05:45
Speaker
On the other side, if you talk more about, for example, lowering the emissions, that's at the heart of farmers.
00:05:51
Speaker
Obviously, we look at our own factories, our own logistics, but also very much at the way we use our raw materials, how we source.
00:06:00
Speaker
And with that, we spend a lot of time talking with our suppliers to see how we can improve things.
00:06:07
Speaker
With this know-how, we also have interactions with retailers.
00:06:10
Speaker
We also talk with the processes, dairy processes, slaughterhouses, to make sure we set the dot on the horizon that is feasible, feasible for the farmers, feasible for the chain, and at the end of the day, also feasible for the consumer.
00:06:25
Speaker
So based on that, sustainability is very high on our agenda.
Carbon Footprint Reduction
00:06:31
Speaker
In your opinion, what is the most important measure feed producers can adopt to improve their sustainability score internally and externally?
00:06:40
Speaker
If you would force me to pick one, I would look at the carbon footprint.
00:06:46
Speaker
At the end of the day, many things come together in this figure and it's also the hardest figure.
00:06:54
Speaker
So, for example, we often talk about circularity and circular food systems.
00:06:59
Speaker
Why do we do that?
00:07:01
Speaker
Mainly to lower our carbon footprint.
00:07:03
Speaker
So that is for us very high on our list.
00:07:06
Speaker
We look at it, as said, at our own supply chain, but especially how we can lower the carbon footprint within the chain, within meat, dairy and eggs.
00:07:16
Speaker
So if I could pick out one, I would take this one.
Challenges of Hyperinflation and Commodity Volatility
00:07:20
Speaker
What are the biggest challenges and opportunities facing the European feed industry in the next 12 months or so?
00:07:28
Speaker
Yeah, obviously there's a lot going on.
00:07:31
Speaker
Geopolitics are still affecting raw material prices as we speak.
00:07:36
Speaker
So the volatility of commodities will be very high on our list, especially if we link that to the current hyperinflation that we see.
00:07:46
Speaker
We see changing consumer behavior because of the hyperinflation.
00:07:50
Speaker
And we have quite some concerns on this because especially the people
00:07:55
Speaker
with less income might be affected harder.
00:07:59
Speaker
So as feed company, we need to take a crucial responsibility in this to really make sure we have the economics right of the food and feed systems that we supply to our farmers.
00:08:14
Speaker
So all in all, the hyperinflation causes concerns and the volatility of the commodity is there to stay.
Impact of Animal Diseases on Feed Industry
00:08:23
Speaker
How is animal disease such as avian influenza and African swine fever affecting your business and how is the EU animal production sector overall responding to these threats?
00:08:34
Speaker
Yeah, I think you need to differentiate the animal diseases in two effects on the feed industry.
00:08:41
Speaker
Obviously, there's a direct effect, which means that if an animal disease comes by, like avian influenza, the animals are curled, the barn is empty, and there's no food supply anymore.
00:08:55
Speaker
So from our side, there is a direct effect that we see, especially around avian influenza.
00:09:02
Speaker
If we look at, for example, African swine fever, we've mainly seen an economic effect.
00:09:09
Speaker
So, for example, in Germany and Belgium, we've seen outbreaks in the past that caused to export limitations and with that affected the pig prices.
00:09:20
Speaker
Luckily, at this point in time, there's no ban on that anymore.
00:09:24
Speaker
So hopefully, fingers crossed on this part, will be on the right direction, but especially the direct effect of killing of animals is, and that is quite clear now, there to stay.
00:09:39
Speaker
So year after year, we see sometimes more, sometimes less, that the animal disease also plays a role on the animal husbandry and the number of animals within Europe.
Research and Innovation in Feed Products
00:09:55
Speaker
What technologies, investments, or research do you think for farmers and the feed industry should make today to reap the greatest benefits in the next five to 10 years?
00:10:04
Speaker
Yeah, on one side, it is very much about making sure that the farmers have a good return.
00:10:10
Speaker
And with that, we still zoom in on, let's call it the conventional research, achieving more with less resources, improving the feed conversion ratio, as an example, is still very high on our list.
00:10:27
Speaker
On the other side, we see that the characteristics of feed are changing.
00:10:32
Speaker
More and more co-products from the food industry are used within animal feed.
00:10:39
Speaker
Sometimes you see that new raw materials come in our direction, and that is an opportunity.
00:10:45
Speaker
We just need to make sure that we can use that.
00:10:48
Speaker
So we look, for example, within our factories, can we be more flexible in the way we accept raw materials and can produce animal feed?
00:10:58
Speaker
So this is an example where we see that by making the right investments in our factories, we are more flexible and can produce more sustainable.
00:11:08
Speaker
So on one side, we look conventional to the way we look at the animal performance, but especially if we look at this point in time on using more raw materials in our feeds, we are investing in our factories now.
00:11:22
Speaker
An example is that as of two years ago, we can use processed animal proteins from, for example, the poultry industry and pig feed and from the pig industry and poultry feed.
00:11:37
Speaker
And by using that, we are able to improve the common footprint of our feeds.
00:11:43
Speaker
And that, at the end of the day, helps the chain.
00:11:46
Speaker
So some examples how we look at the future and where the feed industry can take a great responsibility towards the future.
00:11:55
Speaker
All right.
00:11:55
Speaker
Well, thank you so much for taking the time to talk with me today.
00:11:58
Speaker
Thank you.
00:12:00
Speaker
And thank you to the audience for listening.
00:12:02
Speaker
Keep an eye out for my profile on 4Farmers featuring excerpts from this interview in the January-February issue of Feed Strategy Magazine.
00:12:09
Speaker
I'm Anne Roos for Feed Strategy.