Fomento Lechero – Supporting Small Dairy Farmers

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Publication Date:
June 17, 2016

Industry:
Food & Beverage

Source:
CLADEA-BALAS Case Consortium

In 1980, the ALFA Group, a Mexican conglomerate, initiated a diversification process that led to the acquisition of a cold cuts company, thus creating Sigma Alimentos. Fourteen years later, seeking to make greater use of its refrigerated supply chain, Sigma Alimentos chose to make its way into the then very competitive dairy industry. Having found that large milk producers were already committed to large dairy processing companies, Sigma Alimentos decided to launch a development program for small dairy farmers in order to ensure sufficient supply of quality milk. This case study explores how Sigma Alimentos’ Fomento Lechero Program helped small suppliers to grow alongside the company. A little over 15 years since the program’s inception, the case recounts how small farmers managed to overcome various challenges to grow exponentially. In addition, at the time this case was written, imported powdered milk prices had dropped considerably below fluid milk prices, thus generating the case’s core dilemma: letting go or retaining small farmers that have been working alongside Sigma Alimentos for a very long time.

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Fomento Lechero – Supporting Small Dairy Farmers

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