The European Food Manufacturing Summit 2025: FrieslandCampina’s strategic overhaul
David Cutter, chief supply chain and R&D officer FrieslandCampina.
The European Food Manufacturing Summit 2025, took place on June 11-12, focusing on innovations in food manufacturing, quality assurance, and supply chain optimisation.
The two-day programme included keynote speeches, plenary sessions, and workshops led by industry experts discussing the integration of AI, automation, and sustainability practices in food production. Attendees had opportunities for networking and learning about the latest trends and technologies shaping the future of the food manufacturing industry. The first speaker, David Cutter, chief supply chain and R&D officer at FrieslandCampina, revealed the secret to successful supply chain transformation: fundamentals first.
FrieslandCampina, the Dutch farmer-owned dairy cooperative with €13 billion in annual turnover, is in the midst of one of the most ambitious restructurings in its history.
Over the last three years, the 150-year-old company has shifted from a patchwork of regional silos to a streamlined, performance-driven global business — redefining how cooperatives can compete with listed multinationals in the low-margin dairy sector.
From tradition to transformation
Owned by 14,000 member-farmers, FrieslandCampina operates in 30 countries and supplies products to over 100 markets worldwide. For decades, its cooperative model provided stability but often at the cost of speed and profitability. That model is now being reshaped.
The cooperative’s strategy pivots on a central premise: dairy is inherently a volume business with razor-thin margins, and only disciplined execution and cost control can deliver sustainable returns. Over the past two years alone, FrieslandCampina has stripped more than €400 million out of its cost base, with another round of savings targeted this year.
“Every euro we take out of waste, duplication, or inefficiency is a euro that can go back to our farmers or into our brands,” David Cutter, chief supply chain and R&D officer FrieslandCampina explained.
Four regional engines
The company’s growth model rests on four distinct regional strategies:
- United States: focused on cheese and dairy ingredients, with resilience against tariff disputes.
- Europe: still the cooperative’s production hub, where private label growth is forcing a supply-chain reconfiguration to restore profitability.
- Africa & Middle East: long-established export markets where affordable dairy dominates, making cost control paramount.
- Asia: a branded-business powerhouse, built over decades, and the cooperative’s most exciting growth frontier.
This geographic spread allows FrieslandCampina to balance mature but stable markets with high-growth regions.
Simplifying to compete
Central to the overhaul is radical simplification. An analysis revealed that just 29% of SKUs delivered 81% of global volume. The rest added disproportionate complexity and cost. The cooperative is now aggressively pruning its product portfolio while redesigning supply chain flows — a move that has already yielded hundreds of millions in savings.
Factory operations have been standardised worldwide, from daily performance reviews to safety walk-throughs. The company has eliminated “yellow” status reporting, forcing sites to classify metrics as either “on track” or “off track” — a cultural shift designed to turn problems into immediate action.
These changes are driving measurable results: equipment effectiveness has climbed by 10 points across plants adopting the new model, while employee engagement in factories has risen notably.
From budget discipline to ambition
Strategically, FrieslandCampina has abandoned its old fixation on incremental budgets. Instead, management has set stretch targets and embraced a mindset where missing an ambitious goal is preferable to comfortably meeting a modest one. The cooperative has also overhauled procurement and cost-of-goods practices, aligning negotiations and redesigning products to strip out inefficiencies.
One striking example: transport costs. Until recently, 20% of shipments contained little more than empty space — “shipping air”. Optimisation has pushed truck utilisation into the 90% range, cutting both costs and carbon emissions.
Paying off for farmers and the future
For farmer-owners, the transformation is already paying dividends. Higher profitability translates directly into higher milk prices and better returns on their investment in the cooperative. For FrieslandCampina itself, the leaner cost base creates flexibility to reinvest in brands, digital tools, and sustainability initiatives — critical in an industry under pressure from both consumer scrutiny and climate targets.
The company’s long-term goal is clear: to be recognised as the world’s best-performing dairy supply chain, measured not only by efficiency but also resilience and sustainability.
Competitive implications
FrieslandCampina’s overhaul comes as the global dairy industry faces intensifying competition from private labels, plant-based alternatives, and aggressive listed players like Nestlé and Danone. While the cooperative structure provides a unique farmer-first positioning, it also demands profitability to maintain credibility with its 14,000 owners.
By aggressively cutting costs, simplifying operations, and embracing global scale, FrieslandCampina is positioning itself not just to survive — but to close the profitability gap with its investor-owned rivals.
For a company that once defined success as “being good,” the ambition now is clear: to be great, and to be globally competitive on its own cooperative terms.
