Meadow Foods is the UK’s largest independently owned dairy group.
Katie Jones spoke to chief executive Mark Chantler about the challenges ahead for the industry...
Sustainability was high on the agenda for dairy processor Meadow Foods, with the environment a concern for consumers, retailers and its own investors.
The dairy was looking towards the future with a programme aimed at reducing the environmental impact of dairy production, as well as a scheme for young farmers and new options for farmers, such as fixed price contracts.
Chief executive Mark Chantler said the company was two years into its programme, which helped farmers be more aware of sustainability issues.
"This will cover five key areas; environment and energy, community, employers, production, and suppliers,” he said.
“Sustainability is now very important to consumers and is very much on the agenda at the moment for retailers and also for our own investors.
“We want our farmers to be producing milk in a sustainable way, including limiting the damage to the environment.”
On the rise of dairy alternatives, Mr Chantler said it was not an issue for consumers to have more choice, but the industry needed to portray its positives.
“We need a more concentrated effort on consumer education to help dispel some of the myths around animal health and welfare, dairy’s impact on the environment and explain the health benefits of its consumption”
And as part of this, the industry needed to be able to show it was looking at the environment and welfare in a sustainable way, he added.
The processor works with 650 dairy farmers, with three processing facilities in Chester; Peterborough; and Holme, Spalding Moor Yorkshire.
It was the UK’s largest dedicated manufacturer of dairy-based ingredients including butters, creams, milks, cultured soft cheeses and sweetened products.
“So while we do not sell anything direct to supermarkets, a lot of our products end up on supermarket shelves in other products,” he said.
Its Peterborough site was the home of fresh ingredients including packed milks, creams and stirred cultured products. At Holme, it was manufacturing sweetened dairy ingredients, such as condensed milk, and soft cheese. And at the Chester head office it produced butter and butter oil products, including ghee.
The dairy has also launched a Young Meadow Foods Farmers scheme, designed to give young people business skills and industry knowledge as well as giving them an insight into the Meadow Foods business.
“It is not about telling them how to farm, but it is about giving them the extra tools to be able to run a successful business,” he said.
And last year, it launched a fixed pricing option. Mr Chantler said while the volume for each producer was ‘relatively modest’ it wanted to build on this.
"About 83 per cent of our farmers have signed up for this fixed contract, and having the 28ppl fixed price for a 24 month period [starting in July last year] will give these producers the security they desire for a part of their allocated volume,” he said.
With about 15 per cent of its products exported, Meadow Foods has made ‘considerable preparations’ for Brexit and mitigating problems which may arise.
“While the outcome remains so uncertain, all we can do is prepare,” Mr Chantler said.
“The tariff barriers may be an opportunity for us and our suppliers, but the problem will arise if there are barriers to goods going out, but not to goods coming in.
“In the short-term we are worried about the impact of the spring flush of milk. All that milk could need to be kept in the UK market, and if we cannot get exports out but imports continue coming in, this may cause us difficulties.”
And with proposals for contract regulation in the dairy industry on the horizon Mr Chantler said there needed to be more detail, but the industry also needed to be careful of unintended, negative consequences.
“What we do not want to see is even more volatility,” he said.