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Dairy processors – the big four in the spotlight

Gemma Mackenzie 08 January 2018
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Dairy processors are vying for farmers’ attention by offering lucrative recruitment packages in a bid to secure more milk. Gemma Mackenzie quizzes the heads of the ‘big four’ on what makes their companies stand out and why they think farmers should supply them

Ronald-KersRonald Kers, CEO

 

 

 

Why should milk producers stay with or join Muller?

Our non-aligned price is market-leading and we offer a clean and simple scheme.

We are ambitious – no-one has invested as much in the UK as we have – £500m in the past two years. It’s a sign of the confidence we have in the business and the industry. We do feel we can make a big difference.

Muller in a minute
  • Muller UK & Ireland is wholly owned by the Unternehmensgruppe Theo Muller based in Germany
  • Twenty-one sites nationwide with about 6,000 employees across three business units – Muller Dairy, Muller Wiseman Dairies and Muller Minsterley (chilled deserts including Cadbury products)
  • UK’s leading yogurt manufacturer with major brands such as Muller Corner, Mullerlight and Muller Rice
  • Supplied by 1,094 producers with 381 non-aligned and the rest aligned to major retailers via the Muller Wiseman Milk Group
  • Group turnover increased from £450m in 2011-12 to £1.5bn in 2012-13
  • UK’s largest butter plant at Market Drayton, Shropshire, due to be commissioned in October – investment of £17m. 

What are your plans for the company?

We have a plan for the next five years to be the largest and most competitive dairy company in the UK.

We want to have the most producers and have the biggest share in the industry – with that I need the greatest amount of milk.

We started as a yogurt company and we bought Wisemans in 2012.

We are now building a butter plant and we are actively looking at other areas of dairy. In the future I would envisage us being in other segments of dairy.

What makes Muller different from other dairy processors?

We have a clear strategy, are very determined to succeed, have a proven track record and we are very ambitious.

Peter-LauritzenPeter Lauritzen, CEO

 

 

Why should producers stay with or join Arla?

We are a farmer-owned co-operative and our interests are our dairy farmers. Our vision is to create the future of dairy and secure the highest possible value for farmers’ milk.

We have invested £500m in the UK since 2007, we have some of the strongest brands – Lurpak, Cravendale and Anchor – and are a major supplier to six of the key retailers.

I am sure public limited companies (plcs) care, but we are looking after our farmers. It’s our farmers who decide everything and the profit goes back to them. That’s a true co-op.

Arla in a minute
  • EU farmer co-op with more than 12,000 farmer-owners
  • £2bn turnover in the UK and 26% share of GB milk pool
  • 1,600 UK farmer-owners via Arla Milk Link, supplying 1.3bn litres a year
  • 1,250 Arla Foods Milk Partnership (AFMP) members – these own part of the UK business and have the option to become full EU co-op members next year – supplying 1.6bn litres a year
  • 350 farmers on direct supply contracts producing 300m litres a year
  • Brands include Cravendale, Anchor and Tickler cheeses 

What are your plans for the company?

We will start processing at our new Aylesbury plant, which will be operational in October. This will secure a long-term home for British milk.

After the merger with Milk Link, we became the UK’s number one cheese manufacturer.

We have launched our Anchor cheddar brand and brought production back to the UK for Anchor butter and spreads.

We will also add some specialities [to the UK market] under our global Castello brand. These investments demonstrate our long-term commitment to British farmers and British milk.

What makes Arla different from other dairy processors?

It’s quite simple. We are working for our farmers – they are the owners of the business.

We have a strong strategy in place, a balanced business in the UK and a global presence. The profits we are making go back to the owners – the farmers.

That is why we are different from plcs and private companies. Everything is decided by farmers. I think it’s a fantastic model – the most successful dairy companies in the world are co-ops.

mark allenMark Allen, CEO

 

 

 

Why should producers stay with or join Dairy Crest?

We pay a fair, transparent price and there are no hidden extras or obligations. Quite often there’s this concept that plcs don’t care about farmers and co-ops do. That’s nonsense.

Our shareholders want the business to grow and develop and for that we need farmers that are paid to supply us with milk, so they are loyal to us and we are fair with them.

Dairy Crest in a minute
  • Only UK listed dairy business
  • Sources about 2bn litres of milk a year from about 1,250 farmers. About 600 are on liquid non-aligned contracts, 400 on Davidstow cheese contracts and 250 on customer-aligned contracts, including organic
  • 75% of milk sourced from farmer suppliers via producer group Dairy Crest Direct
  • Turnover in 2012-13 was £1.4bn
  • Key consumer brands include Country Life, Clover, Cathedral City and Frijj 

 What are your plans for the company?

We are a consumer-led business and we focus heavily on trying to add value to our products. In the long term we plan to acquire new businesses in the UK and broaden our product offering.

There are 100,000t of cheddar brought into the UK and that’s a lot to go at in terms of converting these consumers.

In 2001-2 we were producing about 28,000t of cheese at Davidstow and now we are producing about 45,000t.

All through that process we have been investing in that facility. Over the next 12-18 months we will also start to produce whey variants at Davidstow.

What differentiates Dairy Crest from other dairy processors?

The thing that differentiates us is the fact we are a British company. People often say being a publicly-owned company is bad news for farmers, but I would argue the contrary.

It means we have to be open, transparent and visible in what we do and I think farmers should take comfort from that.

Kate-AllumKate Allum, CEO

 

 

 

Why should farmers stay with or join First Milk?

Our sole focus as a farmer-owned business is to maximise the return for farmers. I think farmers have a trust issue with a few other companies after their behaviour last summer prompted the SOS Dairy campaign.

Farmers like the transparency we provide in areas such as strategy, direction, election of board members and, ultimately, influence to set the milk price and returns on farmers’ investments. For British dairy farmers, this transparency and influence only exists with First Milk.First Milk in a minute

 
  • UK farmer-owned co-operative sourcing 1.45bn litres of milk from 1,800 suppliers annually
  • £579m turnover for 2011-12
  • Former farm minister Jim Paice will take on the role of chairman in November this year
  • Main brands include Lake District Dairy Co, Mull of Kintyre, Pembrokeshire Cheddar, Scottish Pride and Isle of Arran 

 What are your plans for the company?

Businesses can follow two strategies – either commodity price leadership or differentiation. Ours is the latter.

We are focused on driving better returns by delivering great-tasting, nutritious food for consumers, both in the UK and abroad.

Farmers can see this direction through our investments in CNP professional and Lake District Dairy Co Quark.

As an industry we have a great story to tell on dairy, we just need to get far better at talking about the positives of what we offer consumers.

What makes First Milk different from other dairy processors?

Our strategy to focus on added value and differentiation instead of commodity products makes us stand out.

Also, the transparency of our business allows farmers to influence key areas such as strategy, board member appointments and producer returns.

While the SOS Dairy campaign prompted other companies to look at how they were treating farmers, none of them gives farmers this level of influence.

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