Ornua, Ireland’s largest exporter of dairy products, recorded a corporate turnover of €3.1 billion in 2022. The company’s renowned products, including Kerry Gold and Pilgrim’s Choice, have gained popularity in countries such as Germany and the US. Ornua operates three innovation centers and 16 production facilities. Unlike traditional businesses run by a board of shareholders, Ornua operates as a cooperative, with members playing an active role in its management.
According to Seán O’Brien, Ornua’s communications manager, the transition to a cooperative structure occurred 50 years ago when Ireland joined the EU. Since then, Ornua has fostered a strong relationship with its member cooperatives, which consist of eight dairy cooperatives spread across the country. These cooperatives supply dairy produce to Ornua for sale, effectively serving as its shareholders. The cooperatives, in turn, are owned by 14,000 Irish dairy farming families who are known for their grass-based dairy farming system and world-class produce.
In 2022, Ornua purchased 387,000 tonnes of products from its cooperatives, amounting to a value of approximately €2.3 billion. As the largest butter exporter in the EU, Ornua’s responsibility for the globally recognized Kerry Gold brand significantly contributes to this success. The company also rewards its members through a bonus scheme, with the intention that the members pass on the benefits to their farmers.
Ornua’s structure emphasizes the importance of supporting farmers by providing them with capital. The returns generated by the company are reinvested in its member cooperatives, ultimately benefiting the farmers. This approach aligns with Ireland’s unique farming tradition, which has preserved a family farming system over generations, distinguishing it from more intensive models prevalent in other countries.
In terms of Ornua’s relationship with farmers and their cooperatives, successful farmers have the opportunity to leverage Ornua’s resources to maximize the potential of their products. A prime example is Knockanore Farm, a family-run farm specializing in cheddar cheese. This farm, associated with the Tirlán cooperative, supplies excess milk to Ornua while also experiencing substantial sales growth within Ireland. Looking ahead, the farm aims to explore export opportunities beyond Ireland.
While Ornua’s member cooperatives may have the freedom to engage other customers, the partnership with Ornua offers significant advantages. The cooperative structure ensures that cooperatives receive a fair and robust price for their products, as highlighted by the volume and value of products purchased by Ornua. Furthermore, Ornua’s approach to profit differs from conventional businesses, prioritizing the return of value to its members. Despite an 18% decrease in profits, Ornua remained committed to supporting its members.
In conclusion, Ornua’s business tone resonates with its highly connected and cooperative roots. The company values the shared vision with its members and emphasizes the relevance of this approach in its organizational culture.
