'Challenging year in terms of milk volumes': Graham’s the Family Dairy announced full year financial results

The global milk market has shown a great deal of instability and 2015 was a particularly challenging year in terms of milk volumes
The global milk market has shown a great deal of instability and 2015 was a particularly challenging year in terms of milk volumes

Scotland’s Graham’s the Family Dairy has announced full year financial results to March 2016 amid a global milk market which showed a great deal of instability.

The dairy business, based in Scotland since 1939, has signed significant deals in this period. It acquired a new site in Fife, invested in production capabilities and expanded its product range, and was named as being named number 1 Scottish dairy brand.

The global milk market has shown a great deal of instability and 2015 was a particularly challenging year in terms of milk volumes, with farmers producing more milk than the market could comfortably consume. The oversupply led to significant balancing costs for Graham’s and deflation in the market.

During this period, Graham’s continued to pay its farmers the highest price in Scotland, and with the market showing signs of recovery in the second part of 2016, Graham’s has increased its price to farmers in recent months.

Trading against this challenging backdrop, Graham’s sales are down year-on year to £83.6m, principally driven by deflation despite volume wins during this period. Profit before tax is also down slightly to £1.5m.

There was continued investment in plant and machinery representing investment of £1.4m. New Product Development is a key part of Graham’s growth strategy and the purchase of Glenfield Dairy in November 2015 saw the business extend their award winning product offering to include quark, cottage cheese and sour cream – all of which have achieved multiple UK listings.

Investment during this time also included significant spend at the Nairn dairy, from which Graham’s launched a new range of yogurts in September 2015. The dairy also relaunched their ice-cream in March 2015 with distinctive packaging and a nostalgic advertising campaign, which saw sales rise by 66%.

Two significant partnerships were secured in 2015. In February, Graham’s became exclusive milk and whipping cream supplier to all 68 Starbucks stores across Scotland. And in March, Graham’s signed a seven figure deal with one of Scotland’s leading food suppliers, Brakes Scotland, to provide their award-winning milk, butter, cream, cheese, yogurt, cottage cheese and crème fraiche to all of its customers across Scotland.

'Incredibly challenging time'

Robert Graham, Managing Director of Graham’s The Family Dairy, said: “We are pleased to have delivered a solid performance during what has been an incredibly challenging time for the entire dairy industry.

“As farmers ourselves who continue to milk our own cows, we understand the pressures farmers face and this why we continue to pay them the highest price in Scotland. We truly value the relationships we have with our 100 farming partners and are committed to continuing an open and regular dialogue to the benefit of all of our businesses going forward.

“We’re a family business at heart and our core values of farming, family, quality, heritage and provenance always ring true. At Graham’s we never stand still, we’re always innovating and have exciting plans for future growth, including new product development, ambitious plans to develop a new dairy processing plant in Stirling, and further expansion of the brand overseas.”