Total Dairy Solutions is a new brand that has brought together existing, well-known dairy dealerships across the western US and into Canada. This new dealership model brings new ways of working with our vendors.
DeLaval, our premier vendor, is addressing this industry shift along with us. Fernando Cuccioli, the company’s Executive Vice President of the Americas region, shares some insight on our dealership model and his outlook on the industry.
Where do you think the industry is going in the next two, five or even 10 years?
There is more and more consolidation in the industry. Industries are trying to gain scale in order to be more efficient. Efficiency gains are necessary, and this industry is no exception. Farms are getting bigger, and dealers are getting bigger to serve those farmers. This has been going on for quite some time but since 2019, things are accelerating and since COVID-19, they will accelerate even more. The consolidation in the value chain is inevitable at the farm and dealer levels, and this drives demand for a higher level of competence because there is more and more technology, data and data management, software, automation and robotics in the industry. Applying the use of data and transforming that data into value to the customer is where we as supplier are focusing. Implementing robotics and automation in order to help reduce labor and help make farmers more sustainable from the profitability standpoint. Our vision of the industry has not changed much in the last several years beyond the speed; things are happening very, very fast and will only accelerate. Still, the customer remains at the center of all that we do.
How has DeLaval been handling COVID-19?
It is a challenge for all companies, but we did very well. From the beginning, we had a crisis committee meeting daily. Our number one priority was business continuity, focusing on people. Without our people, we cannot run the business. We always focus on safety and health, making sure we have the proper protocols in our warehouses, manufacturing facilities, offices and in the field. During the pandemic, we have been able to facilitate working from home and have not closed any warehouses or plants. We kept operating all through this difficult time, so we had minimal deflections in supply. We also prioritized our dealers and customers, making sure that we were flexible and implemented options that would be helpful to them. For example, we offered some financing options that we did not have before. We also added a stimulus package and a number of products at reduced prices to help alleviate pressure on the farmers. Another component we considered was the financial aspect, making sure we honored all of our obligations to have enough cash and liquidity in times when there was uncertainty about money. All of these efforts paid off because we did not have disruptions and were able to keep things going in a very smooth way.
How does the formation of TDS help serve dairy farmers?
Farms are getting bigger, and dealers are responding by getting bigger as well. As dealers gain scale, they are able to afford the competence development that larger farms require. In the past, it was enough for the dealer to be a good plumber, electrician, and a good welder, but by today’s standards, those are just the basics. Farmers now need their dealerships to understand robotics software, milk quality, cow traffic and more – making dealerships a more complex business. We see dealers providing more training and development opportunities to their employees, and in order to secure the resources for this, our dealerships are necessarily growing and obtaining more business. TDS is ahead of the curve on this, and I suspect we will see many different dealer groups being created due to the dynamic of the dairy value chain.
In the eyes of DeLaval, what is the role of TDS in the customer’s experience?
For us to achieve the Total Customer Experience, DeLaval needs a strong independent dealership because it is a team effort. We can bring the innovation, the marketing, the efficiencies in manufacturing, but the dealer has to be here around the clock serving customers at 2 AM or whenever they are needed. The cooperation of the manufacturer with the dealer is crucial, as the dealer is the real integrator of the different systems and solutions.
Working together with TDS and all of our dealers, DeLaval aims to be the brand dairy farmers prefer; for not only the solutions and services we offer, but also because our customers value the experience of working with us.