By introducing a sustainable business model, Cristian Swett has found a way to produce dairy products in Chile that is good for cows, the community, and the balance sheet. “You can't run a successful business if you don't look after the environment.”
Cristian Swett is CEO of Manuka, one of the leading dairy producers in Chile. The company was founded in 2005 when a group of dairy farmers in New Zealand realized they would need new land to grow their intensive pasture farming. “Since Chile has similar soil and weather conditions to New Zealand, it was a perfect choice,” explains Swett, who took over as CEO in 2015. At that time, he was at the top of his career in another important industry for Chile, salmon.
Taking care of the environment
“It was there that I learned you can't have a successful business if you don't take care of the environment,” he says. “By not respecting the natural conditions that salmon thrive in, our finances plummeted and people lost their jobs.” When he was asked to become CEO of Manuka, he wasn't too keen at first. “I knew nothing about the dairy industry, and it didn't have a great reputation in Chile. But when I went to New Zealand to find out more, I got excited. I saw the potential of their pasture model and what it could do for an undeveloped country like ours.”
“We keep farmers motivated by offering them a professional career”- Cristian Swett, CEO of Manuka
Good grass management
Traditionally, Chile operates feed-based dairy farming. “Even though Chile has great conditions for grass, it needs good management to get the best out of it. Most farmers buy commercial feed and since it is often made from ingredients that have to be flown in, it's not good for their pockets or their CO2 footprint. Our cows eat 90% grass, which only needs sun, rain – and good management.”
90% grass fed
To manage grass effectively you need people who are properly trained. Swett: “For example, if you force cows to eat a rate that isn't natural for them, you could damage performance. By offering farmers training and a professional career, we keep them motivated.”
Largest pasture model producer
Swett is committed to maintaining sustainable operations for Manuka, which currently operates 45 farms, producing 132 million liters and 11,000 metric tons of milk solids each year, making it the largest pasture model producer in the country. To monitor sustainability performance he has set up a dedicated committee, asking Rabobank to play an advisory role. “Rabobank is by far the leading company on sustainability in Chile,” says Swett. “We're fixing sustainability indicators and targets, so we can keep up our performance.” And he wants to open up their business model to the rest of the sector. “We want to let everyone know what we're doing and join us as partners.”
“Sustainability is a long-term business necessity”- Cristian Swett, CEO of Manuka
Chile is net importer of dairy products
Manuka's innovative approach is timely. Dairy production in Chile has stagnated in recent years; the supply of raw milk has been unable to keep up with growing demand, and the processing industry has stayed in a comfort zone, with more imports and less focus on improving efficiency. Swett believes his sustainable model can help turn this around.
“Now we've proved we can produce dairy products efficiently, and sustainably, there's no reason to import so much. In 30-years’ time, when there are three billion more people on the planet, we will need up to three times the amount of dairy we produce now, so we must produce it sustainably. We're not operating in this way because we're Mahatma Ghandi, but because it's a long-term business necessity. It’s just common sense.”