Aarhus Symposium 2014: Peder Tuborgh

Thank you. It's great to be with you. I have butterflies because I want to persuade you, the brightest of you, to come work for Arla Foods when you're finished here. We have 700 people here today, 1500 applied. I know you're bright, and you're quick on your fingers since all tickets were sold in 90 seconds. I'll talk about branding and strategic branding. At Arla Foods, we are completely changing our brand strategy, a complete change of our brand strategic thinking. It's a big risk, and we don't know if we'll succeed or fail. This will impact our innovation, supply chain, production, technologies, and the talent we need. Brands drive over fifty percent of our business. We are owned by 13,500 farmers in seven countries, not on the stock exchange. My contract's paragraph one says I have to optimize the cost of raw milk, which is unique. We have a milk pool of 13 billion litres, more than we consume in Denmark. We need to add value through innovation to pay farmers well. This milk pool has pushed us internationally. We are selling in 100 countries with operations in 35 countries. Arla has grown aggressively with Strategy 2015, and we succeeded two years early. We grew by following retail customers across borders like Tesco and Walmart. This required more milk, dairies, and marketing. Size matters for efficiency and technology, as seen in our new carbon-neutral dairy in London. Now, with Strategy 2017, we are becoming more global, focusing growth outside Europe on emerging markets. Emerging markets account for ninety percent of growth opportunities. Our farmers will increase production due to legislation changes, so we need to find markets for more milk. We are deploying resources in China, Southeast Asia, Middle East, Africa. Urbanization drives wealth and dairy consumption. There's a correlation between GDP growth and dairy consumption. The world will need to feed 9 billion people, and dairy is key. We are changing our brand portfolio to three main brands: Lurpak, Castello, and Arla. We use our cooperative heritage in branding, which works well in emerging markets like China and the Middle East. Our new concept is 'Let in the Goodness'. We have innovation platforms for natural growth, good start, good to go, and health. We relaunched the Arla brand and are rolling out globally with local execution. This is a 2 billion marketing program annually, risky but exciting. I welcome the brightest of you to participate.

There's only one way: approach the scientific reports with science. Luckily, the science community has changed its view on dairy to a more positive momentum. For example, a Swedish report that claimed a 15% increased risk of death per glass of milk died out quickly.

If milk were doomed, we'd be in trouble, but we all start by drinking milk from our mothers. I'm not scared. We have a cooperative structure that drives our thinking.

Very brutally. Our business grew 35-70% in Russia, but now we sell nothing due to the embargo. We have a local company producing cheese to keep the brand alive. Putin said the embargo lasts 12 months, so we'll be ready to open up then. We're exporting from South America through a partner.

It starts with where we have our cows and production. We don't produce in the US for China to protect brand value. Our brand marketers are careful to live up to our position, which sharpens our profile.

I also thought Chinese were lactose intolerant, but that was wrong. They are not, end of story. They are not more intolerant than us.

The only thing that works is moving people around. Leaders from Nordic markets must go out and blend with different nationalities. We also have Chinese and other nationalities in leadership.

We must earn the right to be in areas by involving ourselves in non-business things. We're figuring out whether to enter school programs or help local farmers become more efficient. This gives us a license to operate.

Be prepared for coincidence; don't obsess over career planning. Be good at what you do, enjoy it, make results today. Think broadly about where you want to be good, like in emerging markets such as Asia and Africa.