Arla

[Sid]

Yes. Heard the four crosses guys are over the moon. Being told they be got to lug mid wales milk to taw valley and lockerbie as well apparently. Don't think it can technically be called welsh cheese if it's made out of the country.

The difference being
Scottish smoked salmon (salmon smoked in Scotland)
Smoked Scottish salmon(Scottish salmon that is smoked)

Haulage cost from North Wales to NT.
3-4ppl?

 

[Farmer1001]

Yes. Heard the four crosses guys are over the moon. Being told they be got to lug mid wales milk to taw valley and lockerbie as well apparently. Don't think it can technically be called welsh cheese if it's made out of the country.

You tend to find decision like these are based on nothing but accountants working out 'savings' to be made whilst ignoring the 'cost' of the decision. A prime example is Taunton cider made in Somerset from Somerset apples, the brand was strong but needed investment, it was bought out and then a couple more times as part of a portfolio of brands, eventually Taunton cider was a faceless brand buried amongst Gaymers cider and produced in Ireland! And then in 2015/16 Taunton cider was reborn just outside Taunton where it makes Taunton Somerset cider.

 

[sjt01]

You tend to find decision like these are based on nothing but accountants working out 'savings' to be made whilst ignoring the 'cost' of the decision. A prime example is Taunton cider made in Somerset from Somerset apples, the brand was strong but needed investment, it was bought out and then a couple more times as part of a portfolio of brands, eventually Taunton cider was a faceless brand buried amongst Gaymers cider and produced in Ireland! And then in 2015/16 Taunton cider was reborn just outside Taunton where it makes Taunton Somerset cider.

But Gaymers was originally Norfolk cider!

 

[dairyrow]

Think there's always been a problem with Welsh cheese. Hasn't any brand value. I really can't see any of these gains from cost cutting going any where near to lining farm owners pockets

 

[frederick]

I have no idea of how the commercial decision was made but as Sid pointed out in March Arla lost 14,000 tons of cheese business to ornua, and when Milk link purchased Llandyrnog the capacity was 25,000 tons.

Perhaps this is the positive sort of reaction we should see to commercial decisions rather than hanging onto the capacity and waiting to win the business back by undercutting another company to gain it

 

[Farmer1001]

I have no idea of how the commercial decision was made but as Sid pointed out in March Arla lost 14,000 tons of cheese business to ornua, and when Milk link purchased Llandyrnog the capacity was 25,000 tons.

Perhaps this is the positive sort of reaction we should see to commercial decisions rather than hanging onto the capacity and waiting to win the business back by undercutting another company to gain it

My understanding is they are moving production, therefore hanging on to capacity and moving the milk out of Wales to continue to produce Welsh cheese. Hence my cider analogy.

 

[dairyrow]

I think you'll find the capacity was more information than that. Could process +1 million litres a day.

what puzzles me is therd is a lot of conversions into carrying going on up there. Beef and sheep farmers are converting. Also heard about some really big arable units converting as well. Where's all this milk going how's it going to get processed? If we have a really good spring next year what's the spot market going to look like? Dairy crest already announced a huge investment in cheese and baby powder. Wyke farms in cheese. All needing quite a lot of milk. Arla seam to be investing in liquid milk mostly. How does that make us brexit proof of foreign brands can't compete in the exchange rates against domestic. How can they export more from Britain with such a narrow product mix from us?

 

[farmer on a bike]

I think you'll find the capacity was more information than that. Could process +1 million litres a day.

what puzzles me is therd is a lot of conversions into carrying going on up there. Beef and sheep farmers are converting. Also heard about some really big arable units converting as well. Where's all this milk going how's it going to get processed? If we have a really good spring next year what's the spot market going to look like? Dairy crest already announced a huge investment in cheese and baby powder. Wyke farms in cheese. All needing quite a lot of milk. Arla seam to be investing in liquid milk mostly. How does that make us brexit proof of foreign brands can't compete in the exchange rates against domestic. How can they export more from Britain with such a narrow product mix from us?

Both Lockerbie and Taw Valley have had significant investment and together still mean Arla has the biggest cheddar capacity in the UK. We also have the biggest butter/powder plant in the UK. How does that constitute a narrow product mix? I think every other UK dairy company has a less diverse product mix except perhaps Dale farm, or am I missing something?

Getting costs down is what will make us more Brexit proof, both at the dairy and on farm.

 

[dairyrow]

At what capacity has Westbury been going at?
Lockerbie and taw valley have had big investments. But at what capacity have they been running at? I haven't seen any investment in the high margin speciality cheeses. Just seem to have yoghurt with male in now. We don't even have a good liquid flavoured milk brand which I find really bizzare.

Are we hitting this 2020 strategy that they bandied around 2 years ago? Or are we losing too many producers through pee poor performance?

 

[Sid]

Both Lockerbie and Taw Valley have had significant investment and together still mean Arla has the biggest cheddar capacity in the UK. We also have the biggest butter/powder plant in the UK. How does that constitute a narrow product mix? I think every other UK dairy company has a less diverse product mix except perhaps Dale farm, or am I missing something?

Getting costs down is what will make us more Brexit proof, both at the dairy and on farm.

Biggest doesn't necessarily mean the best.

You have the biggest cheddar capacity but not the best selling brand?

Cheese powder and liquid seems to be the core of Arla UK.

No one company has a real broad base of products. I would guess you can spread your "risk" too wide and not do anything well?

 

[farmer on a bike]

At what capacity has Westbury been going at?
Lockerbie and taw valley have had big investments. But at what capacity have they been running at? I haven't seen any investment in the high margin speciality cheeses. Just seem to have yoghurt with male in now. We don't even have a good liquid flavoured milk brand which I find really bizzare.

Are we hitting this 2020 strategy that they bandied around 2 years ago? Or are we losing too many producers through pee poor performance?

Clearly Taw valley and Lockerbie are not currently running at capacity or we would not be consulting on shutting Llandyrnog. Westbury balances so will be running at very variable capacity across the year. We are selling more and more Tickler. Trevarian and Tuxford & Tebutt cheeses continue to sell well but it is very difficult to get more into UK speciality cheese without the ability to have a farmhouse tag ( a description which some rather push to the limit!).

Currently we are pretty much on line for 2020 strategy across the whole of Arla. That strategy was also clearly biased towards expansion in fresh milk products with very limited investment in yellow cheese. Us reps asked a lot of questions around that and were given strong justification for it being the right strategy for Arla.

 

[farmer on a bike]

Biggest doesn't necessarily mean the best.

You have the biggest cheddar capacity but not the best selling brand?

Cheese powder and liquid seems to be the core of Arla UK.

No one company has a real broad base of products. I would guess you can spread your "risk" too wide and not do anything well?

It is not easy to build a brand. DC have been at it for a long time and done a very good job. We were trying with Anchor cheddar but the supermarket drive to reduce SKUs came at just the wrong time and it was delisted by most.

I would still argue that Arla's base is broad, but I think you have to choose whether to be a small niche player or a large more commodity type player.

 

[Sid]

Clearly Taw valley and Lockerbie are not currently running at capacity or we would not be consulting on shutting Llandyrnog.

Just because they are not at fully capacity doesn't make it the best margin to" fill em up".
For example westbury making SMP just to fill it up probably not the best way to get a return on milk.

I would still argue that Arla's base is broad, but I think you have to choose whether to be a small niche player or a large more commodity type player

Broad yes but not as broad as MLs as Arla dropped many smaller than average customers to keep the "pile it high sell it on a smaller margin"
Brands yes. So many fall at the wayside.

 

[betweenthelines]

Both Lockerbie and Taw Valley have had significant investment and together still mean Arla has the biggest cheddar capacity in the UK. We also have the biggest butter/powder plant in the UK. How does that constitute a narrow product mix? I think every other UK dairy company has a less diverse product mix except perhaps Dale farm, or am I missing something?

Getting costs down is what will make us more Brexit proof, both at the dairy and on farm.

What you're missing, is the huge of dairy goods-flavoured milk, creams, butters, other spreads, yogurts etc, made by the big processors but sold as "own label" products. Just think Tesco butter, asda yogurt etc. etc.

 

[farmer on a bike]

What you're missing, is the huge of dairy goods-flavoured milk, creams, butters, other spreads, yogurts etc, made by the big processors but sold as "own label" products. Just think Tesco butter, asda yogurt etc. etc.

Don't understand the point, many of these products are produced by Arla, including own brand flavoured milk, a huge proportion of the UKs cream and a lot of own label butter and cream cheese. We also have the very strongly growing Arla Lactofree brand. Admittedly we are very small in yoghurt in the UK but are the dominant yogurt maker in Scandinavia.

 

[coomoo]

Just me that’s happy as Larry with Arla then ( bar McDonalds grant communication)

 

[coomoo]

Proud tho that as Arla we’re big enough to quiz on social media whereas Graham’s etc seem to, I’m guessing threaten??

 

[farmer on a bike]

Just because they are not at fully capacity doesn't make it the best margin to" fill em up".
For example westbury making SMP just to fill it up probably not the best way to get a return on milk.

Broad yes but not as broad as MLs as Arla dropped many smaller than average customers to keep the "pile it high sell it on a smaller margin"
Brands yes. So many fall at the wayside.

ML did very little fresh milk products so can't see how you can suggest ML had a broader base. If you are just talking customers, then Arla also has wider customer base. ML did very little business with Asda, Morrison or Tesco. ML also tended to sell quite a bit of milk on to others like Roddas, etc. Yes it made money but it was not exactly added value.

ML often punched above its weight but we were usually in the bottom half of the milk price league and almost always below the DEFRA average UK milk price. Now we are more usually in the top half of the milk price league and above the DEFRA UK average milk price with Arla. I acknowledge that has not been the case in the last 6 months but it was for much of last year.

 

[Sid]

ML did very little fresh milk products so can't see how you can suggest ML had a broader base. If you are just talking customers, then Arla also has wider customer base. ML did very little business with Asda, Morrison or Tesco. ML also tended to sell quite a bit of milk on to others like Roddas, etc. Yes it made money but it was not exactly added value.

ML often punched above its weight but we were usually in the bottom half of the milk price league and almost always below the DEFRA average UK milk price. Now we are more usually in the top half of the milk price league and above the DEFRA UK average milk price with Arla. I acknowledge that has not been the case in the last 6 months but it was for much of last year.

So your saying Arla when they merged with ML didn't drop any customers of milk? Are you 100% sure?
I know from an ex ML/Arla employee that many smaller customers were dropped. I don't need to tell you risk spreading is about having many customers/contracts rather than the all eggs in one or 2 or 3 large baskets.

Arla are trying to add value, but adding value has cost and risk. You win some you lose some. Cravendale i understand didn't pay back for years but you have to speculate to accumulate.
Yes the milk price league has been a roller coaster for Arla in the last year. But on average has the price been in the top or bottom half?

 

[bar718]

I see @Sid is on one again, not bad for someone who is a representative of a competitor company. This whole thread wants renaming as @sids inquisition of anything Arla.