Cornish dairy business continues to grow

By Jim Cornall contact

- Last updated on GMT

In November, the business established a dedicated wholesale division, food&dairy Ltd. Pic: Trewithen
In November, the business established a dedicated wholesale division, food&dairy Ltd. Pic: Trewithen

Related tags: Cheese, Dairy, COVID

Trewithen Dairy, a UK dairy producer, and the trading name of Cornish Farm Dairy Limited, has announced its results for the year ended April 30, 2021.

Against the challenging backdrop of the Covid-19 pandemic, the Cornwall-based business said it continued to grow and develop.

The business also undertook strategic investments and initiatives intended to provide a platform for future, longer term, growth and profitability improvement. This included an investment in its regional distribution capabilities through establishing a dedicated wholesale division, food&dairy Ltd and complementary acquisition of Lillie Brothers, the Falmouth-based dairy produce supplier.

During the year, the business also launched The Earth Milk sustainability project, focused on supporting, initially, two pathfinder Trewithen Dairy farmers to adopt regenerative farming techniques to measure and improve their impacts on soil carbon retention, biodiversity and water quality.

Bill Clarke, chairman of Trewithen Dairy said, During the year, the business performed satisfactorily, strengthening at a financial, commercial and operational level. While at the same time, we undertook a number of strategic investments and initiatives which we believe will provide a platform for future, longer term, growth and profitability improvement.”

The company's turnover increased to £56.3m/$76.3m (up around 8% on the previous year).  The business generated a profit before tax of £1.6m/$2.2m (2019/20: £1.4m/$1.9m) reflecting the increase in sales, an improved sales mix and a continued focus on maintaining cost control.  Its balance sheet also strengthened with total net assets increasing by £1.2m ($1.6m) to £7.6m/$10.3m (2019/20: £6.4m/$8.7m).

In the early months of the financial year the ongoing lockdown had a major impact on sales of milk and added-value products into the foodservice, hospitality and tourism sectors which are an important part of the business’ sales mix.  However, from early summer through to the calendar year end, the business said it saw a rapid recovery in these sectors, particularly in its branded sales.

Sales of customer own-label and Trewithen branded milk, clotted cream, butter and yogurt continued to grow as a result of organic growth with existing and new customers. The latter included a new contract with Appleby Westward to supply Trewithen branded milk and yogurt to its network of more than 250 Spar stores across the region.

In November, the business established a dedicated wholesale division, food&dairy Ltd. Central to this was the acquisition of Lillie Brothers, a dairy produce supplier with an established wholesale and direct-to-home business, which was complemented by an investment in a new distribution center at St Columb Major. At the same time, the appointment of a team to oversee the development of food&dairy has enabled the business to increase the management focus on its processing operations, customer service levels, new product development and further development of the Trewithen brand.

Clarke said, “In the current financial year, the business is having to address not only the ongoing challenges of Covid-19 but also the emergence of significant cost inflation which is impacting on all aspects of the business. The latter relating in particular to a significant and rapid increase in the cost of raw milk, labor, energy, packaging and distribution.

“Although these strong headwinds impacted on profitability in the first half of the year good progress is being made in recovering this in the second half. While the business is continuing to witness sales growth with volumes in particular being driven by a further significant expansion in fresh milk and clotted cream with a major retail customer.”

 

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