12 critical questions for Xabier Arbe, Managing Director of H&N International

On 1st September you addressed all the customers with a video message and announced a new business model.

H&N International is a provider of genetic solutions. We also act as a consulting company for these solutions and beyond.

1. For example, we offer technical support and consultancy for all items related to production.
2. We also offer support and consultancy when it comes to explaining the benefits of our birds and marketing them
3. Thirdly, we help our customers take the next steps when they want to diversify their portfolio or get started in hatching themselves.
4. And as a fourth pillar, we offer a broad variety of training and knowledge formats

Why are you offering all this in different packages?

Because we strongly believe in freedom of choice. Every customer is different and individual depending on their climate zone, company size, egg targets and production environment. At the same time, each customer demands top quality and production safety. All three packages provide our quality genetics and our farming 4.0 app KAI as basics. But each package leaves room to pick what services and support distributors really want.

Not everyone needs everything – but everyone can get everything if they want.

Can customers change from one package to another?

Of course! Our solutions are arranged into three service packages to choose from. H&N’s brand promise of customer orientation involves adapting to individual local demands and offering customers more than leading genetics: more choice, more safety and more support to sell a quality product. The customer decides how much safety, what support and what help they really need.

But why is this change of business model needed?

Because as a provider of solutions we adapt to our customers’ needs. Our improvements in genetics consequently also improve the business model towards selling fewer day-old pullets with greater benefits, more profit potential and longer production cycles. All of these assets must be conveyed to each part of the value creation chain: from breeder to distributor to the end customers.

Our new business model supports our customers in doing so and in creating and selling quality.

But why now?

The H&N business has been evolving since we became independent, and as part of the innovation we are bringing to the market, we have decided to change our model even more to prepare our customers to take on the new developments of fewer, longer-living and better performing DOLs

We want to help build new local skills, processes and structures in time to master the change from quantity to quality, paying off for our customers and their customers in turn.

Are there other packages than these?

The three packages cover the entire range of H&N’s portfolio consisting of our genetics, our services and our support for small, medium and large farms. Our solutions cover the layers and the farmers alike, with all the services needed to develop and benefit from the real, full value of working with our birds. All the packages can be enhanced with addons such as clinical analytics. We make sure we cover the entire range of production.

Can customers continue as before?

Yes, the packages enable business to continue with an ongoing supply of back-up that reflects the strengths and benefits of optimized genetics— or an enhanced one for all those who want it. Because that is what drives us: our genetics have been further optimised and our business model, as well as our distributors’ business models, must reflect that to get the full benefits out of it.

What’s going to be in the packages?

More services and support, especially more training and tips in husbandry, more process automation with the help of KAI, our digital farming assistant, and more support and consultancy for local marketing and brand experience to help you sell the birds.

Will there be a price increase?

There will be changes in the pricing depending on the package. But the new features and services that we will provide will literally pay for themselves. Any increase is an investment in our birds that will pay back several times over since they live longer and produce more with lower production costs. Margins will grow and that means profits are protected.

That sounds quite far-reaching…

… and that’s the reason for me to meet every customer personally and sit down with everybody locally to explain and discuss it. I am going to travel to visit each of our customers in person to make sure our new business model is transparent—because it really is a big bundle of benefits! It gives a lot of extra value on top of our top value genetics.

What exactly is that extra value of the non-genetic side?

We are offering new kinds of shipments and logistics, broadened financial incentives and discounts, more technical services and much more sales support than you’ve ever seen before!

There really are a lot of good things and it will take a personal meeting to show and explain it all in detail.

Isn’t it risky to change from quantity to quality?

No—quite the opposite. If the unique selling

proposition of a layer bird is just a low price, the bird becomes exchangeable, and the selling proposition is anything but unique! To achieve low prices, companies cut far too many corners and compromise on quality. But quality is what makes the difference and enables you to justify a higher price—because the performance is also higher, lasts longer and is better. Quality must be explained, which is why we invest in broadened marketing and sales support especially, to help communicate that quality. You need to show and explain your quality because that is really your unique selling proposition.