More and more sustainable raw materials
Step by step the Uelzena Group is expanding its raw material base as well as its production capacities. At the same time it is also experiencing tangible progress in the development of a more sustainable way of milk production. There is also positive progress in the set-up of sustainable supply chains for non-milk raw materials.
According to the technical dairy magazine, "Molkerei-Industrie", Uelzena eG holds 13th place on the list of top-selling dairies in Germany - which is a very good ranking for a medium-sized dairy especially in view of the strong competition. Our company strives to continue to grow in order to reach a viable size for the future, which also guarantees long-term economical success. This is why the Uelzena Group aims to strengthen its production capacities, which in part have already been used to capacity in 2018.
Growth: New farmers, more raw materials
One reason for this is that the member dairies and collecting cooperatives of Uelzena eG accepted new milk producers as raw milk suppliers in 2018. They come from the periphery around the company's sites, thus keeping the transport costs as low as possible. The plan for 2019 is to increase the proportion of milk from our own producers and to integrate new milk producers into the member companies of Uelzena eG.
In 2018, the newly admitted milk producers caused a rise in the quantity of raw materials received and processed. In particular, the raw milk quantity grew by 11 percent (see also: "key figures"). However, even without the new suppliers and despite the extreme summer heat, there would not have been a reduction in milk raw materials received. The quantity of milk produced by its long-standing suppliers remained constant despite the fact that the long drought in northern Germany was a strain on the company's own green fodder production. This is a sign of the high adaptability and professional crisis handling of the milk producers.
In the long run, the Uelzena Group will grow and process more milk. However, we also want to make sure that the milk is produced increasingly more sustainably. This is why our company participates in the collection of data needed for the pilot project, "sustainability module milk" of the Thünen Institute. The results from the first survey of the project have already been published. Each dairy has been individually informed about their results in an intermediate report. The report for Uelzena eG is already showing lots of good sustainability achievements in milk production. Some weaker results have been incorporated into a continuous improvement process as starting points.
Milk is not the only raw material that is processed at the Uelzena sites. The sugar we use is exclusively from Germany. However, cocoa, coffee and other agricultural raw materials are sourced mainly from other continents. Therefore, it has been one of our goals that all suppliers and producers along the entire supply chain from so called risk countries confirm with their signatures that they meet the requirements of the Ethical Trade Initiative (ETI). The Uelzena Group met this goal in 2018. 27 suppliers and producers have signed the respective declarations, which are on file in the documentation at the purchasing department in Uelzen. The definition “risk countries” follows a classification of the Business Social Compliance Initiative (BSCI). In the future this validation will become even more binding by performing obligatory SMETA, BSCI or comparable audits of these suppliers.
"By the end of 2020, we expect our raw material suppliers from risk countries not only to confirm their compliance with social standards, but also to be able to demonstrate this through audits and the submission of corresponding certificates. This implementation is an important contribution to our Code of Conduct.”
Bernd Nörenberg, Manager Central Purchasing Uelzena
Product safety and quality
In 2018, the quality management department of the Uelzena Group installed a process to prevent food fraud in the company and its supply chains. The establishment of such a "food fraud" process is a requirement of the IFS Food Standard, which is backed by the Global Food Safety Initiative (GFSI). According to IFS, “food fraud” occurs when food, raw materials, ingredients or packaging materials are deliberately exchanged, mislabeled, adulterated or imitated in order to make a profit. This definition also applies to outsourced processes. A team of employees has been appointed within the Uelzena Group to carry out a systematically documented form of risk assessment.
Furthermore, the production sites in Uelzen, Ratzeburg and Bismark passed the important audit for certification according to the new quality management standard ISO 9001:2015 in September 2018. ISO 9001 is the most widespread quality management standard on a national and an international level. The new version of 2015 replaces the former version of 2008 and contains some qualitative revisions. There are higher requirements for the management of the QM system and an increase in the weighting of process management. There is also a new paragraph on risk management, which demands the systematic handling of opportunities and risks for the company. The newly revised version also considers knowledge management to be decisive as a success factor in securing knowledge and making it available to all employees.
In 2019, the Uelzena Group will focus more on recyclable packaging, including biodegradable solutions and products made from renewable materials. For this, internal workshops have been scheduled and important customers will be integrated as early as possible in the process via surveys. Moreover, the Uelzena Group is engaged in intensive dialogue with the manufacturers of film, composite cans and corrugated board in order to obtain information about the development and special features of the materials as well as on economic aspects. However, there are no plans for a joint development project in cooperation with the manufacturers.
Within the scope of the sustainability module milk, the first measures shall be implemented at the farms. In 2020, a second survey including evaluation shall take place to illustrate changes, for the first time.
The modern production of food involves divided responsibilities and comprises several stages. At the heart of this process is the further processing of agricultural raw materials into intermediate products and ingredients. This is the core competence of Uelzena eG and its subsidiaries. In 2018, the Group alone procured 624,502 tons of milk raw materials as well as other agricultural raw materials such as sugar and cocoa.
From all of these raw materials, the facilities in Uelzen, Ratzeburg, Bismark and Warmsen predominantly produce intermediate products and ingredients. Customers are the industry, catering services and food retailers. Moreover, the Uelzena Group also produces products for the final customer (e.g. Butaris) as well as ready-to-eat products on behalf of its customers (private label).
Due to its dual function as a purchaser of agricultural raw materials and as a processor, the Uelzena Group is aware of its multiple responsibilities:
- for the health of the consumers that want to buy high quality and safe food
- for the economic viability of the farmers who depend on reliable buying of their agricultural raw materials
- for the environment and the welfare of farm animals
- for the respect of human rights, which is particularly important for agricultural raw materials sourced from non-European countries.
High quality and safe products and reliable purchasing of agricultural raw materials are by tradition important topics for the Uelzena Group, and which have always been carefully managed within the company.
The action field products comprises several sustainability topics, which are important for the stakeholders of the Uelzena Group. Customers, members and suppliers are interested in sustainable and reliable sourcing, customer health and safety, labeling of products and a strategic focus on growth markets.
By applying various strategic objectives and coordinating measures, the Uelzena Group strives to maintain and possibly improve the already achieved level. In doing so, the Group is pursuing a continuous development process, for example, by gradually identifying possible sustainability risks in its supply chains. For milk raw materials, for example, the sustainability module milk provides the basis for that. Using a continuous improvement process, data is collected and analyzed and weak points are identified in order to develop objectives and measures. The overall goal: constant improvements aimed at a sustainable milk production. Added to that, the Uelzena Group is setting up sustainable supply chain management for important non-milk raw materials including cocoa, sugar and coffee creamer.
Our sustainable product strategy – targets and measures
- The Uelzena Group aims for profitable growth in strategic business areas, predominantly in the fields of milk ingredients, instant beverages, contract manufacturing and health food.
- A high safety level and uniform good quality are ensured in the production of food – from the receipt of raw materials and throughout manufacturing.
- The sourcing of raw materials and other materials is to be more sustainable. The Uelzena Group is taking the increasing customer demands for sustainability as a reference.
- The process-focused quality management system systematically accompanies all processes, checks for errors and ensures that product specifications are complied with.
- The Uelzena Group has been certified according to the most important schemes: ISO 9001/2008, IFS Food (higher level), BRC (British Retail Consortium), Fair Trade, UTZ, EU Eco regulation, Kosher and Halal upon request.
- Our laboratories operate at high-end chemical-physical standards, which for example include specific test methods on the structure of particles. The laboratories are certified according to ISO 17025.
- Risk-based quality control plans with defined sampling schedules are in place for all raw materials, intermediate and finished products. This process ensures that the defined microbiological, chemical-physical and sensory product properties as well as quality parameters are complied with.
- HACCP management includes allergen management, computer-aided maintenance and repair, foreign matter management, a hygiene concept (zones and requirements) as well as pest control.
- Suppliers are controlled by requesting specific information, on-site visits and supplier audits. There must be raw material specifications available for each raw material. Moreover, the Uelzena Group produces its milk-based ingredients and products exclusively from milk raw materials that stem from Germany or the European Union.
- Risk technologies such as genetic engineering, nanotechnology or irradiation are, in general excluded.
- Packaging materials as well as food contact materials and articles comply with German and European regulations. Added to that, supplier declarations of non-objection according to Regulations (EC) 1935/2004 and 10/2001 are available for these materials.
- In order to further improve the high quality and hygiene standards of the Uelzena Group, a new automatic gantry for the transport of products between the storage facilities and the production area was erected at the Uelzen site. Repacking onto plastic pallets reduces the impact on the environment, the risk of intrusion of foreign matters (such as wooden splinters) and the external contamination of the production areas. The lock concept was also expanded, which now allows the different product streams to be better segregated. This prevents allergens that are subject to labelling such as milk powder to get into other products (for example, yeast).
The Uelzena Group controls its suppliers on the basis of risks. Should any information be conspicuous, our buyers reserve the right to have it checked by auditors directly at the suppliers' companies.
Since 2016, the Uelzena Group has been working step by step on the development of a sustainable procurement management program. All procurement materials have been analyzed and future strategic priorities defined based on these findings. The most important agricultural raw materials are: milk raw materials, sugar and cocoa. For these materials, a management approach was developed and passed which includes several stages: analysis of potential sustainability risks, supplier dialogues, definition of requirement and risk-based reviews of compliance with the requirements.
Sustainable sourcing: milk raw materials
85 percent of our milk raw materials (quantity share) came from regional producers (as of 2018). The agricultural companies producing the milk are located within a radius of less than 150 kilometers around the Uelzena sites.
Starting in 2017, sustainability data on milk production are being collected via an online survey. This survey at farm level is based on the sustainability module milk, a science-based questionnaire containing more than 70 ecological, economical, social and animal welfare criteria. See also: sustainability module milk.
Sustainable sourcing: labor and human rights
- Customers of the Uelzena Group shall be given the opportunity to select whether they use conventional or sustainable non-milk raw materials such as cocoa. Sustainable raw materials comply with internationally acknowledged sustainability standards such Fairtrade, UTZ, Rain Forest Alliance and Organic.
- Compliance with labor and human rights is a high priority for the Uelzena Group and is laid down in the company's Code of Conduct. Therefore, the Uelzena Group requests transparency from its suppliers when they sell raw materials from sensitive countries of origin in Asia, Africa and South America. The buyers at the Uelzena Group request self-disclosure from their direct suppliers in Europe - in most cases intermediaries or processors – confirming that the companies observe human and employee rights in accordance with the requirements of the Ethical Trading Initiative (ETI). New suppliers provide the required information and data via an online supplier portal. Step by step, the suppliers’ suppliers shall be included as well - along the supply chain back to the origin. In line with the further development of sustainable procurement management, more sustainability aspects from the suppliers may be requested.
- The Uelzena Group is a member of SEDEX, a data platform where companies share information on the results of SMETA audits. SMETA is an ethics-based audit format that provides information on the four areas defined by SEDEX: work, health and safety, environment and business ethics. The Uelzena Group has also been audited for a number of years and can therefore present its customers a SMETA 4 certificate confirming compliance with ethical, labor and environmental standards.