Wiseman to milk Britain's organic boom

By staff reporter

- Last updated on GMT

Related tags Organic milk Milk

New supply contracts and a new dairy will help the Robert Wiseman
group to corner a significant share of the UK's soaring organic
milk market, the firm has said.

Wiseman, one of the UK's top three dairy processors, will begin two new contracts this month, one to supply 60 per cent of organic milk required by Britain's largest supermarket, Tesco, and the other to pack Rachel's organic milk for Horizon Organic Dairy.

The deals will bring organic milk further into the mainstream dairy sector, as sales continue to grow.

"These two agreements will help to transform our organic milk business and provide a platform for further development,"​ said Wiseman, also announcing a 40 per cent rise in operating profit for the half year ended 30 September.

The firm this month began building a state-of-the-art dairy at Bridgewater, southern England, intended to become "a centre of excellence for organic milk production".

Confidence in the growth of Britain's organic milk sector is such that Tesco recently agreed to cover admin and set-up costs for all new and existing members of the Organic Milk Suppliers' Co-operative (OMSCo).

Tesco, where organic milk sales were up 45 per cent year-on-year, will pay £400 per year for the next three years in an effort to bring more farmers into the sector.

Rapid growth across the UK has left the country short of supplies, a report from OMSCo said this summer. It predicted another 60m litres would likely be needed over the next two years.

Some both in and outside the organic food movement have warned the involvement of major retailers and processing firms could damage the sector's strict standards.

Wiseman said it worked closely with OMSCo, which has around 300 member farmers.

For the UK's dairy firms, expanding into organic milk offers new opportunities in the added value market and so may help to raise earnings in the sector.

"While the recovery in our [operating profit] is welcomed, it is still some way short of the levels we have achieved in previous years,"​ said Wiseman, in its half year results statement.

Other added value milks, including extended shelf life brands and low fat product 'The One', also performed well during the six months.

These, together with Wiseman's cost savings programme, have helped profit margins to a slow recovery. Plastic packaging costs remained "stubbornly high", the firm added, despite recent a recent fall in the price of oil.

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