SALES COOPERTIVES

AND THEIR IMPORTANCE

IN SPAIN

DAIRY SECTOR

Gabriel Trenzado

EU and International Affaires

Director

Prague, 19th September 2017

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2006 2012 2013 2014 2015Var

2014/15Var

2006/15

Turnover (M€)1 20.095 25.233 25.688 26.929 26.198 -2,7% +30%Turnover including Ltd. (M€)2 s/d 25.935 27.330 29.152 28.204 -3,3% s/d

Total Farming Production (M€)3 37.176 41.955 44.186 42.600 43.665 (A) +2,5% +17,5%

Food Industry (M€)4 78.726 90.169 91.450 93.396 94.938 +1,7% +20,6%

Importance of the Spanish agrofood Coops

• 65% Total Farming Production.

• 30% Agrofood Inustry.

1. Facturación directa, sin mercantiles participadas. Proyección a partir del Directorio Anual de Cooperativas 2016

2. Dato anterior + facturación a través de mercantiles participadas según el % capital social de las cooperativas- Directorio Anual Cooperativas 2016

3. (A)= avance de datos. Anuario Estadístico 2015 (MAPAMA)

4. Informe 2015 FIAB

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+30% desde 2006

-2,7% año anterior

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Coops in the Spanish dairy sector

Total Production: 6,375 million/t.

• 118 Coops.

• 42% delivered to a coop.

• 24% marketed to a coop.

Dairy farms

• Total. 16.433.

• Coops: 6.264 (36%).

Top 15 of Coops

• 95% liquid milk value on coops.

• 93% cheese value.

• 74% total value

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Mission to enhance

“Improving a cooperative business model

which is profitable, competitive,

professional, value-adding with a relevant

size, thus contributing to the

sustainability of the Spanish agro-food

sector”

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Perfect Storm

Market Challenges

Globalisation New Threats. Multilateralism crissis

Economic crisses EU incertity (BREXIT)

No Market management tools Price Volatility

Demand concentration (Retail and Input Sector)imbalance in the food chain

Climate change and environment action.

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43.665

M€.

94.938

M€.

Industry

28.278

Export-Import = +9.987 M€

Top 5 GD 61%

cuota mercado

Housing

consumption

67.043

M€.

non housing

consumption

31.994

M€.

28.204

M€.

965.000 farms

Coops

3.762

Spanish agrofood market structure

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External

markets

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Dairy market: Mainly a commodoty.

>70% go to liquid milk.

>70% of the liquid milk go to retailers

brands.

>Farms are sized and competitive but its

activity not.

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Bussines evolution in the Agrifood Coops

Buy

Basic inputs Commodity

sales Processing Marketing

Market is different in any step The cooperative chooses its

strategy to became relevant and efficient in the market

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Importance of cooperatives

> From a production point of view the cooperatives enable improvement production

efficiency scale economies to buy inputs, advising, services, and so on….

> Market orientation, adapting the members’ production to the new consumers’

needs/opportunities.

> Contributing to the food chain balance. Size– Bargaining negotiation power.

– Long term alliance.

– Added value.

> Price volatility– Compensate highest and lowest pricing.

– Market diversification risk diversification.

– Generating savings to be used on crises time.

– Offer management.

– Future Markets

> Internationalisation– Take advantage of new markets.

– Costumer diversification.

> Innovation

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Strategies for the main Cooperatives:

Size; Farms’ efficiency; Sustainability; Brand; Innovation; Internationalisation.

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Main findings

> Cooperatives remain the most suitable model for farmers to face the market.

– Farmers’ income is the main objective.

> Farmers are in the core of the cooperatives.

– Owners-Suppliers-Clients

> Cooperatives look for the most balanced decisions.

– Long term vision (Company) Vs Short term vision (Farmer).

> Governance is fundamental.

> 3 “I”: Integration-Innovation-Internationalization.

>Key in structuring production.

– Young farmers.

– Women integration.

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>

‘If you want to go fast, be alone, if you want

to go further, be together

Thank you