Creamery buy-out pays off
in a very big way…
recent success shows
how a business can grow
after a management
buy-out, which is often
regarded as a risky venture.
Wendy Owen reports
WENSLEYDALE Creamery, which makes the famous Wensleydale cheese in Hawes, North Yorks, had a £2.8m turnover the year after it was acquired from Dairy Crest in 1992. It has since grown year by year and now has a turnover of £14m.
Last year, the Creamery also bought Fountains Dairy, a 4.5-acre site at Kirkby Malzeard, near Ripon, where the bulk of commercial-type cheeses are now produced. This allows the Hawes centre to concentrate on speciality products, which are made in traditional, open-topped vats.
Unusually, when Dairy Crest decided to sell the Hawes site and move its operations to its more profitable centre in Preston, Lancashire, it took all the trading accounts with it. That left the new company the task of marketing cheese from scratch, says former production manager, David Hartley, who is now the Creamerys managing director.
"To be fair to Dairy Crest, it had not marketed Wensleydale cheese as a speciality or added-value product," he says. "But we were confident that there was a market. The site had the history of the area and a long tradition of cheesemaking behind it. That gave it romantic appeal and we felt it had too much going for it to allow it to close."
Mr Hartley was one of five directors who formed the new company, financing the purchase of the site and assets out of their own pockets and securing a bank loan to provide the working capital.
The popular film animations of the Wallace and Gromit characters have given the Creamery a tremendous boost by mentioning Wensleydale cheese in the script of A Close Shave. The film company agreed to allow the two characters to be featured on the cheese packaging and a royalty is now paid for each labelled cheese sold.
"The writer picked up on Wensleydale cheese because one of the characters has a Yorkshire accent," explains Mr Hartley. "The association between Wensleydale cheese and Wallace and Gromit has been very powerful and we have sold thousands of mini-cheeses because of it."
The cheeses range in size from 100-500g and, as well as the traditional varieties, new marketing opportunities have been created by developing new cheese products. A cold-smoking facility has been built which uses oak dust to give the cheese a different flavour and it is also blended with other ingredients such as cranberry, blueberry, apricot and ginger. The most recent development is El Gringo, which contains chilli peppers and other spices.
As the business has grown, more ways have been found to attract visitors to the site and make Wensleydale cheese into a household name.
A visitor centre, complete with restaurant and conference facility, was opened in 1994 as a direct outlet for the cheese.
This sells other local produce, such as jams, as well as Wallace and Gromit artefacts and souvenirs.
The site also houses a museum telling the story of cheesemaking and tourists can watch how it is made in a special viewing room.
Another venture is the van distribution network, which takes cheese and other bought-in chilled foods to restaurants, pubs and delicatessens all over north-east and north-west England.
But the mainstay of the business is cheese sales to all the major supermarket chains. Mr Hartley says the company has forged good relationships with the multiples and has some advice for anyone thinking of contacting them with a new product.
"It is no use approaching the multiples with the idea that you have a product and you want them to sell it," he advises. "But if you have something the consumer wants, the supermarkets will take it – gone are the days when the multiple retailers dictated to the customer.
"We could not survive by selling large blocks of cheddar, we dont have the economy of scale. But we do have an added-value food which people want. That means we can stand our ground."
Wensleydale cheese and Wallace and Gromit – the association has boosted sales, says David Hartley.
• 1898: Commercial cheesemaking began in Hawes town centre.
• 1930s: Business ran into difficulty and was bought by Kit Calvert.
• 1953: Present site built on the edge of Hawes.
• 1966: Site bought by the Milk Marketing Board.
• 1979: Renamed Dairy Crest by the MMB.
• 1992: Management buy-out to form The Wensleydale Creamery.
• 2000: Bought Fountains Dairy, Kirkby Malzeard, near Ripon, from the Murray Vernon Group.
• Two sites at Hawes and Kirkby Malzeard, North Yorkshire.
• 130 staff producing 3,000 tonnes of speciality cheese annually.
• One million mini-cheeses made for the Christmas market.
• Production capacity of 35,000sq ft.