Innovation in the Food Sector

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1 Innovation in the Food Sector Viborg, 19 March 2015 Virksomheder, Viden & Vækst Lise Berg Kildemark Head of Open Innovation with Suppliers Arla Foods

2 MILK INTAKE 13+ BILLION KILO THE 5TH LARGEST DAIRY COMPANY 13,500+ OWNERS PRODUCTS SOLD IN 100+ COUNTRIES 10 BILLION EURO REVENUE 19,000+ COLLEAGUES

3 What is Arla? Profitable SELL Implementation DO of an Idea THINK

4 Innovation is in all we do Driven by our Strategy 2017 Innovation rate >10% 1: We will create growth outside the EU 2: We will develop the core business and our three global brands 3: We will be more effective

5 Value can be found all along our value chain Farms Dairies Consumers Top and bottom line ADD VALUE Increase value for key product features MAXIMISE SAVINGS Reduce cost base along value chain Incremental and radical Radical Completely new and surprising Incremental Gradual improvements

6 Innovation is guided by our Vision & Mission Our vision Creating the future of dairy to bring health and inspiration to the world, naturally Our mission To secure the highest value for our farmers' milk while creating opportunities for their growth

7 ..and by who we are as a company Good Growth is our identity and also a foundation for what we do - and do not do We want to grow and we care about how we do it

8 As we grow so will our responsibility We help people around the world to live healthy lives Our best results are created in cooperation with others We enrich people s lives with more natural goodness every single day

9 What does HEALTH, NATURAL & RESPONSIBLE mean to these people? It s all perception 23 March March 2015

10 The consumer is at the heart of everything we do

11 Understand the needs What does the consumer...or customer... really want? How the customer explained it How the project leader understood it How the analyst designed it How the programmer wrote it How the business consultant described it How the project was described What operation Installed How the customer was billed How it was supported What the customer wanted

12 Consumer pull and science push To create the Future of Dairy we must master both I have a need!! I have a new invention!! Consumer led PULL PUSH Science led

13 Arla is investing in INNOVATION Arla Foods Global Innovation Centre, Skejby A key enabler to Become #1 on Innovation in Dairy Connect with internal stakeholders, external partners and worldwide strategic research Have a Best-in-class facility in Science, Technology, and Consumer research Be the Excellence center for Knowledge Sharing & Training

14 Denmark as the epicenter of global innovation Arla Denmark is recognized as the most innovative country in Europe for food innovation ARLA FOODS GLOBAL INNO CENTRE Russia China MEA 14 Source: LEI Wageningen UR Report

15 Let s face it Most knowledge and talent is outside your organisation The lab is my world The world is my lab

16 A structured approach to external cooperation We call it OI AMBITION 1.Scale up external cooperation as a key lever to the growth of Arla 2.Work with 'best-in-class' external parties and be seen as a preferred partner

17 A change of mindset We must own everything, invent everything, gain everything How can we create and deliver maximum value most effectively, regardsless of corporate boundries Inside Outside 23 March 2015

18 Arla Foods is what it is today thanks to cooperation

19 Cooperation comes in many forms Business needs Consumers PRODUCTS & SOLUTIONS Consumers Suppliers Focus Consumers Early stage enterprises SMEs Consumers Consumers Benefit areas Early Universities & consortia Consumers Mid Development stage Mature

20 Sometimes we are the little one often we are the bigger one! October 2012

21 We want our relations with others to be of mutual benefit - with big and small March 2015

22 Think WIN-WIN Sharing Trust 1+1=3 Empathy

23 Important business requirements What matters in a B2B relationship? Pyramid of needs

24 Value can also be found all along the value chain of our external partners Farms Dairies Consumers

25 Segmentation Work with the right parties Work with the parties right We use a segmentation model to help us identify the best-fit relationship with external parties

26 What can Arla Foods offer a corporate partner? Long-term relationship Continuing and growing business Close cooperation and relations Collaborative innovation Joint improvement program Profit

27 Our best results are created in cooperation with others. THANK YOU