‘We could see how a number of factors were conspiring to push dairy prices up.’ Millbrook Dairy on trading strategies in volatile times
Kevin Beer is the co-founder of Millbrook Dairy – a dairy business that specializes in the production of cheddar and butter. He founded the company alongside David Evans, the duo having previously worked at Ornua Foods UK and who have been cheesemakers in the past.
“David and I had talked about doing something on our own for years,” Beer told us. “We enjoyed working in the corporate world, but we knew we could offer something that was more agile and dynamic if we set up our own business.
“Eventually, we felt that the timing was right - we had to ‘get off the pot’ and try, it was a now-or-never moment! There were a million reasons to not do it, to not take the risk, but we knew that unless we tried, we’d never know what was possible.”
Since then, the company has been busy with bulk cheese and butter production as well as its own brands, including Seanachai Irish Cheddar, and 1057 Scottish Extra Mature cheddar. In October, the company reported a 30% increase in turnover and revenue increase of £6m. Export is also being continuously strengthened, according to Beer. “Each year, we are growing our exports, and this year we are running at about 15% of our turnover, so circa £6m,” he said.
“Our biggest market is the European Union, where we both buy and sell product. We export cheddar and import gouda and mozzarella. Many of our products, including our own value-add brand, 1057 Scottish Extra Mature Cheddar, are exported across the world, particularly to the US, Canada, and Australia.”
This experience included navigating Brexit-related trading uncertainties at the start of 2021, when cheddar exports dipped overall, only to recover again this year. Beer says this decline in exports was ‘due to the late decision-making by the government at the time’. “There was a general lack of clarity about the rules across all sectors and stakeholders as to what the rules would be,” he told us. “This inertia created huge problems for many. We worked tirelessly with our partners, both here and overseas across the supply and demand side to manage these challenges through the transition period. We now have a full competence in export, providing a full export service for third parties.”
Beer said timely purchasing decisions have been key to put the company on firm footing at the start of this year. “Over the last four years, dairy prices have been firm and steadily rising. We could see in 2021 how a number of factors were conspiring to push diary prices up significantly further. We were seeing global dairy production was down, and stocks were falling. In response, we made our buying decisions early, putting us in a strong position as we entered 2022.”
And with rising food inflation alongside input prices for food producers, ‘we are seeing the first signs that record-high dairy prices are beginning to affect global demand,’ Beer noted. “The demand levels need to be watched closely to ensure that high-priced dairy products are not produced without a home - otherwise there is a big risk that prices will fall well below the cost of production sparking a sharp decline in supply,” he added.
In 2023, the company is targeting butter as a key area for growth. “In the same way that we source and supply cheddar, we are building our portfolio of butter customers across a number of sectors including foodservice, industrial and bakeries,” Beer told us. “Whilst we continue to supply bulk butter, we now have a full range of formats and sizes, including our most popular line size 7 mini portions.”
And with the arrival of the winter festivities, Millbrook Dairy is set to release a limited-edition cheddar under its 1057 Scottish Extra Mature Cheddar brand. “This Christmas we are offering a 200g Black Waxed 1057 truckle, full of flavour and looking smart for the occasion,” concluded Beer.
