The dairy is operating as an essential service, but safety has been ramped up.
As a leading supplier of milk for Gauteng, North West, Limpopo and Mpumalanga, Douglasdale Dairy has been named an essential service and continues to operate during the 21-day lockdown period due to Covid-19.
Not business as usual
Douglasdale Dairy CFO Bradley Wentzel says that there has been a shift towards consumers buying long-life milk during lockdown. “While this shift in demand is to be expected, as a fresh milk producer this has created some sales pressure. Luckily, we supply to the major retail chains which has really helped us to limit the impact of this shift.”
He explains how the Douglasdale business model works: “We contract with our farmers to ensure consistent, high-quality supply and as a result we purchase everything that they produce, this can present challenges when demands vary,” Bradley says. “The product has to be turned over in one day, so if the milk comes in tonight, it’s processed in the early morning, packed into a bottle and on the retailer’s shelf in the afternoon.”
Although Douglasdale Dairy typically forecast demand quite far into the future, given the significant impact Covid-19 is having, particularly on smaller customers, they are having to relook at their supply and sales forecasting models. Every day new information comes out, which means the dairy’s executive team needs to have daily meetings as to plan the weeks and months ahead from a supply chain and sales standpoint.
“Notwithstanding the challenges we currently face, we are incredibly fortunate to still be able to trade. We realise that for many companies across our country this is not an option and we need to do everything we can to keep the economy going, protect our workforce and continue to supply essential products to our customers.”
Keeping the workforce safe
Given Douglasdale Dairy’s strict food safety protocols and hygiene processes, the lockdown has little impact on its day-to-day operations. It has tightened its controls to further reduce contact between employees. It has put in strict shifts so that its workers don’t come into too much contact with others. Office workers are also separated from the processing teams, and even the different processing and production teams are being required to work separately.
Dividing the work into shorter, half-day shifts has had a big impact in terms of business cadence. “For processing, we’ve moved to a day on, day off system,” Bradley says. “This means you’re only interacting with people every second day.”
Where possible the company has provided onsite accommodation to employees to ensure continuity and also reduce exposure risk to employees who may be reliant on public transport. “The people whose jobs are integral to business operations, are physically staying on-site as a means of self-isolation.”
Less interaction with the staff means productivity in the dairy has dropped. “We’re quite a fluid business. We get orders on a daily basis and milk coming in on a daily basis. So the ability to be able to move quickly, which you have to do in any FMCG business, is hamstrung somewhat as you are only dealing with workers and decision makers on alternate days,” he explains.
The finance and broader head office functions also had to move to half-day shifts. “What people used to do in nine hours, they now have to do in six hours, which is not possible.”
Because of this, the company has had to move out deadlines and planned expenditure. “We had some cash, capex and reinvesting plans that all had to be put to one side based on the fact that nobody is sure what’s going to happen over the next three to six months,” Bradley says.
Many of the energy-saving initiatives the dairy had been planning also had to be cut, which had a knock-on effect for suppliers. “Those people were depending on those cheques coming through,” he adds. “That was going to help their businesses.”
Bradley believes that what this boils down to is that everyone is fending for themselves and trying to keep as much cash in their own environment as possible.
Asked how he has seen his role as CFO change over the last couple of weeks he says the lines have become very blurred. “It’s largely become about managing the people and IT risks. As more people are working off-site, you have to think about the information that’s also moving off-site and how it’s being looked after.”
One of the few still working from head office during lockdown, Bradley says he has also become the “chief cheerleader”. Bradley says he has also identified that people are battling at the moment and a key part of his role is to try to maintain morale. “People walk into the office quite sombre; they’re all driving on empty roads that used to be busy,” he explains. “I have to be upbeat and tell them that business is trading, and even though times are tough, we’re working hard to make sure it doesn’t impact us too much.”
When it comes to AC, ‘after Covid-19’, Bradley says that they are just trying to manage the current situation. “We’re a family-based business and we care about our people, so our key priority is to help them all get through this,” he says. “We have a lot of workers that live in Tembisa, Alexandria, Diepsloot and Soweto so our one of our main focus points is to constantly communicate with them and share whatever information we have to assist them in staying safe.”
When it comes to his own personal life, Bradley says his day-to-day existence is pretty much the same. His wife and two-year-old daughter, however, are mostly stuck at home. “My wife works in healthcare, so she sometimes has to leave to work, but for the most part she’s working from home.”
The only thing that’s different for him, are the quiet roads when he leaves work in the evening.
“I believe the country will battle for 12 to 18 months, but we’re just too big and too smart to fail,” Bradley says. “We fully appreciate the swift and necessary steps that the Government has taken to address COVID-19 and if we pull together as businesses and citizens, I firmly believe we can come out of this situation a stronger, better and more united country. South Africa has strong principles and fundamentals from banking infrastructure and Reserve Bank governance standpoint and if we focus on those and we keep ticking over, the country will come back.”
He believes that now is the time when there’s the most opportunity. “We’ve got a lot of smart minds and hard-working people that are committed to South Africa. If we all band together, there’s just too much opportunity for us to go wrong. If we can focus on ourselves and stick to our core principles, I think we as a country will be fine.”