How Ash Amirahmadi has steered Arla through crisis after crisis

All in all, he’d be forgiven for wanting to lie down in a dark room. But it’s clear he thrives on pressure. That’s just as well, because drama has been a consistent feature of his 18 years at the dairyCo-op.

Since joining Arla from Unilever in 2004, Amirahmadi has risen through the ranks in a variety of commercial, farming and trading roles. Over that time, he’s seen the business grow from the fifth biggest dairy company in the UK to the largest, and has had a ringside seat as a series of financial crises befell the sector, both on farms and at processors.

Then, after taking over from Tomas Pietrangeli as MD in July 2018, Amirahmadi was plunged into the uncertainty of post-Brexit trade relations with the EU, which threatened to scupper the imports to the UK of some of Arla’s key brands, such as Lurpak.

At the same time, he had to contend with the company’s drive to cut costs through its Project Calcium initiative, not to mention a flatlining liquid milk market and growing concerns over dairy’s contribution to climate change.

But all that pales in comparison with the events of the past year-and-a-half, which have created a battle just to keep milk on shelves. “We’re in a very volatile, uncertain time. People talk about the VUCA world,” he says, referring to the managerial acronym for volatility, uncertainty, complexity and ambiguity. “Well, we’ve had a real-life experiment of what that entails over this pandemic.”

Amirahmadi has had to adopt “a crisis management style of leadership” as a result. “And while it has tested me, it’s something I’ve also found extremely energising. It’s not that I would want to do this for the rest of my career, but I’ve learned a lot about leadership in that time.”

The 51-year-old’s most recent challenge hit the headlines in July, when he intervened in the debate over the food sector’s labour crisis to warn Arla was struggling to fulfil its milk orders.

“If dairy is making that journey towards carbon zero at pace, then I don’t see any need or any call for reducing the consumption or production of dairy in the UK”

It has proven a greater challenge than the panic-buying of the first lockdown, which Arla managed by axing a quarter of its range. By contrast, no amount of range rationalisation could avert the impact of Brexit and the ‘pingdemic’, which created up to 100,000 HGV driver vacancies this summer.

“These driver shortages absolutely impacted the dairy industry, and particularly companies like Arla, who do a significant number of daily deliveries of milk, direct to store,” he points out.

A ‘structural issue’

Indeed, so bad were the shortages that Arla failed to deliver milk to 25% of its intended customers at the peak of its problems on weekends in July and August – representing about 600 stores per day.

“Clearly that has hurt us and our customers,” he says. He believes more needs to be done to tackle what has become a “structural issue” for the whole food chain. In the short term, classifying driver roles as skilled would help, he suggests, and would attract EU drivers who had returned home due to the pandemic, Brexit or both. Arla has also launched a £2k bonus to attract new drivers in a bid to alleviate the problem.

In the longer term, a greater emphasis on skills training and apprenticeships will help tackle labour shortages – not just among drivers, but across the myriad vacancies in the supply chain. That’s something Arla is doing “across all our sites”. By encouraging skills, the business can turn vacant jobs into something more aspirational, Amirahmadi claims.

In the meantime, retail customers have worked with Arla to manage the situation through solutions, such as changing the frequency of deliveries. Some supermarkets have even collected milk directly from its DCs. “This is a great example of industry collaboration in a crisis,” he says, though he admits it will remain “tricky” in the short-term. And the same issues continue to affect Arla’s day-to-day operations.