The Sainsbury’s Dairy Development Group (SDDG) was established in 2007, and we’ve been working collaboratively with the group of farmers ever since. We look back at the journey we’ve been on together, and how this unique relationship has generated benefits for farmers, Sainsbury’s, and customers alike.
Sainsbury’s now has over 1,200 stores and buy and sell upwards of 500 million litres of milk a year. The vast majority (over 97%) of by Sainsbury’s milk is provided by the 270 dairy farmers who are members of the Sainsbury’s Dairy Development Group. The SDDG was founded in 2007, when the volatile dairy market was experiencing a particularly dramatic “trough” and prices were at an all-time low. Trust was difficult to cultivate across the whole dairy value chain, which made it difficult to work collaboratively and, ultimately, to drive improvement.
Sainsbury’s wanted to get a better understanding of its milk supply chain in order to guarantee a sustainable milk supply, improve herd health and welfare and collect data to provide valuable insights into dairy on-farm. In order to do this, they got to know the farmers who were supplying the milk, and so the SDDG was born!
In addition to the development group, 8 farmers were elected to the SDDG Steering Group to represent the wider group of farmers. The Steering Group farmers are instrumental in facilitating great communication between the group and Sainsbury’s, and also played a key role in developing the Herd Health, Environmental Initiatives, and payment models which the group operate to.
Involvement in the Sainsbury’s dairy development group is more than just a tick in a box – it’s a community of farmers, working together to share best practice, improve animal health and welfare, and maximise farm efficiency and milk quality through a sustainable milk supply chain. We make the most of the unique relationship Sainsbury’s has with our dairy farmers through a number of initiatives, open to all members of the SDDG. These initiatives provide benefits to both farmers and Sainsbury’s: a win-win.
Benchmarking for success
A key aspect of the SDDG’s success is the recording and sharing of great quality data. In 2009, the Sainsbury’s Dairy Development Group introduced welfare standards which were higher than legislation required to improve animal health. Key Welfare Indicators (KWIs) are used to measure health and welfare in an objective way, and track improvements, even down to a farm-by-farm basis.
Within the group, each farm’s performance is captured and monitored by an online website. Sainsbury’s and SDDG members can assess herd health and welfare outcome data, and the farms can benchmark their farms performance against other farms in the group - in order to drive continuous improvement.
The Farm Metrics data set is the largest dairy herd database in Europe and also includes the results of annual independent vet assessments. To ensure the reporting tool is a success, Sainsbury’s ensure that all farmers have access to computers with the appropriate software.
Collecting this data over the years has provided us with valuable insights into the dairy supply chain, and enabled farmers to make insight-driven decisions, backed up by great data, leading to tangible improvements in efficiency, health and welfare, including a 45% reduction in clinical mastitis and a 47% reduction in lameness.
Pricing for long-term stability
The huge volatility in the milk price was a challenge for many dairy farmers, and riding out the peaks and troughs made it difficult for farmers to invest in their businesses. To counteract this issue, Sainsbury’s removed itself from this volatile milk market and introduced a Cost of Production (COP) model which was voted in by the farmers themselves, a true testament to the trust which we have built with the group.
Additional group initiatives
We run Business Improvement Groups that allow farmers to review the costs of their business and understand how they can become more efficient. Topics include nutrition, calf management and grassland management to help our farmers produce more from less.
Offers & deals
We facilitate exclusive offers and deals on electricity, grass seed and soil testing. We also provide the opportunity to join Feed Groups where we negotiate the price of compound feed, utilising purchasing power to ensure farmers get better value.
Bonus & rewards
We pay a bonus to farmers to reward them for higher animal welfare outcomes and production efficiency.
Funding for research & development projects
Successes have included a study into fertility and heat detection with our veterinary consultant, The Evidence Group.
These are held with the Steering Group farmers who represent the rest of the SDDG to discuss challenges facing the industry.
Annual Regional update meetings
We hold these in order to update all farmer members on group activities
The model makes sure the Sainsbury’s farmers continue to get a fair price for the milk they produce, and are able to invest in their businesses and become more sustainable for the future. This has provided farms with a more stable milk price, as well as ringfencing a volume of guaranteed supply for Sainsbury’s. This price stability has given farmers the confidence to invest and has allowed them to make longer terms business decisions.
This means that not only are our dairy farmers efficient and sustainable now, but they have a fabulous infrastructure to continue producing top-quality milk for our customers, to high welfare standards, well into the future.
Measure it to manage it
In addition to the great work we carry out with SDDG farmers, the group provides benefits for our customers, too. Sainsbury’s facilitate milk recording, collecting data on key parameters so that farmers can monitor the milk they are producing. The insights from this data have instructed the dairy strategy and led to on-farm improvements in production and milk quality - in a cost-effective way.
Our relationship with the dairy farmers has had benefits in other areas, too. The success of the group led us to launch steering and development groups in other areas, from lamb and pork to beef and wheat. We also identified the opportunity for a black-and-white calf scheme, paying a decoupled price for these animals and creating a market for male dairy calves in the form of RSPCA Assured veal. For all SDDG farmers, we facilitate purchase of calf coats through the TU range, which are provided at cost price to help keep the calves warm in the winter. By keeping calves warm, they can use more energy for growth, improving feed conversion and becoming more efficient. High welfare of these calves has also been of utmost importance – through our work in our dedicated veal supply chain, we have moved to no shooting of bull calves throughout our entire dairy value chain.