Long-term partnerships

Royal A-ware is an active partner in the agri-food value chain. We collaborate closely with dairy farmers, customers and suppliers, and we aim for long-term, sustainable and mutually beneficial partnerships. These partnerships are essential to realising our mission – the shortest route from consumer to cow – with shorter, more direct and more sustainable supply chains. The guiding principle is that all links in our chain experience lasting benefits: dairy farmers can continue to farm, customers can choose from increasingly sustainable products and employees feel at home and continue to develop.

Impacts, risks and opportunities

As part of our DMA, we identified the following material IROs related to 'Long-term partnerships':

Impact

Actual positive impact across multiple stages of the value chain because of long-term collaborations that offer lasting benefits for every partner in the chain.

Opportunities

• Opportunity to strengthen business continuity by continuing to commit to long-term partnerships with dairy farmers.

• Opportunity to make (complex) chains more sustainable through long-term collaboration and partnerships with value chain partners.

Our approach

We maintain a long-term perspective that is rooted in our identity as a family business, with a history going back more than 135 years. We think in generations rather than years. Our strategy prioritises building a resilient business, contributing to a future-proof dairy farming sector, and working with our customers to provide assortments that grow and develop with them.

Dairy farmers

We work together with over 1,700 dairy farmers in the Netherlands, Belgium, Germany and Spain and believe it is important that we are aligned with them and do business together. We enter into long-term partnerships with dairy farmers and set out agreements in an individual cooperation agreement. Thus, not only are dairy farmers guaranteed that their milk will be purchased by Royal A-ware for a longer period, but there is also security for ourselves. A cooperation agreement also ensures that it is clear what conditions must be met.

To gain insight into the views and practical experiences of dairy farmers, we set up a focus group in both the Netherlands and Belgium. A group of dairy farmers who meet regularly with management and the Livestock Affairs department to discuss developments, give input and advice on decisions to be taken. This could include current events in the sector, changes in supply conditions or developments in milk streams. For example, we think it is important to hear whether the conditions we set for a milk stream are workable for the dairy farmer.

The focus group meets online at least once a month. Physical meetings take place as often as necessary, but at least four times a year. The participants in the focus group are a reflection of the total group of dairy farmers in both size, milk stream, business operations and region. Because every region is represented, we stay close to what is going on at the regional level.

Connecting dairy farmers and customers through milk streams

We develop and offer various milk streams based on specific customer requirements, connecting customers to dairy farmers and building more efficient, sustainable supply chains. Each stream has its own requirements, such as animal welfare or climate-related requirements, and dairy farmers can choose the milk stream that best suits their operations. Dairy farmers who participate in a milk stream receive an extra premium for their efforts.

Strategic partnerships

Ahold Delhaize

Our collaboration with Ahold Delhaize goes back decades. Since 1983, we have been ripening, cutting, packaging and distributing cheese for Albert Heijn. Together, we continuously work on an optimal assortment of Dutch and European cheeses. We also serve Delhaize and Albert CZ, both Ahold Delhaize companies. In 2008, we started developing innovative tapas bites with meat, fish and vegetables. Our partnership led to the development of the ‘Better for Nature & Farmer’ programme, launched with Albert Heijn in 2017. The programme enhances the sustainability of Albert Heijn’s private-label dairy and cheese products through a closed production chain. Today, more than 450 dairy farmers supply their milk exclusively for Albert Heijn dairy and cheese.

New Zealand dairy cooperative Fonterra

Our partnership with New Zealand dairy cooperative Fonterra began in 2015, with the opening of a Fonterra ingredients factory located on the same site as our cheese factory in Heerenveen. Fonterra uses the whey released during cheese production to produce high-quality products sold through their global sales network.

Irish dairy cooperative Tirlán

We have partnered with Tirlán, Ireland's largest dairy cooperative, since 2019. Our partnership involves the joint construction and operation of a sustainable cheese factory in Kilkenny, in the south-east of Ireland. The factory has a production capacity of at least 50,000 tonnes of Dutch cheeses, using milk supplied by Tirlán member dairy farmers. Both the construction and operation of the factory have contributed to the economy and employment opportunities in the region. The partnership is mutually beneficial, enabling the further diversification of Tirlán’s portfolio with Dutch cheese varieties while strengthening Royal A-ware’s access to cheese produced from high-quality milk within a controlled chain. Our collaboration with Tirlán exemplifies our ambition to develop chains with our partners and expand our product range.