Blog: Dean BestGlass half full at Dairy UK

Dean Best | 16 September 2009

"Normally you come to something like this and you want to slash your wrists," one high-ranking attendee at this year's Dairy UK conference told just-food yesterday afternoon (15 September).

It's an understandable view - up to a point. As we explained on these pages yesterday, the outlook for the UK dairy sector remains cloudy, especially with the continued volatility in the prices of dairy commodities.

And, when Robert Wiseman Dairies marketing director Sandy Wilkie, one of the more upbeat dairy executives at the conference, started his stint on stage by showing a list as long as your arm of the "pressures" hitting the dairy industry, it is unsurprising that many in UK dairy think the future looks sour.

However, although it was a year in which dairy prices slumped, consumers increasingly looked for value from the dairy aisle and one of the UK's biggest dairy co-ops collapsed, most at the Dairy UK conference preferred to stay optimistic.

Andy Smith, MD of Lactalis McLelland, the business behind brands like Seriously Strong cheese, reeled off a list of "opportunities" in which the sector could invest - be it new products, new categories or the environment. "Lactose-free is a great opportunity," Smith proffered, "why should we leave it to the soya boys?"

Wiseman's Wilkie, meanwhile, used the conference to unveil industry plans to boost milk consumption in the UK. The 'Make Mine Milk' marketing campaign was, Wilkie insisted, part of the dairy industry's "collective responsibility" to grow milk sales.

The Americans also had a useful message for those UK dairy bods present - think global. Jay Waldvogel, head of strategy international development at Dairy Farmers of America, said US dairy processors should no longer treat its domestic market as an "island". Global demographic patterns, Waldvogel said, had, over the last 18 months, started to have a profound impact on dairy prices - and he insisted that this was a trend that would only strengthen in the future.

And such a trend will only strengthen the belief that there will be consolidation in the UK dairy sector. The collapse of Dairy Farmers of Britain may have helped the other co-ops left in the industry but, to truly compete with the likes of international giants FrieslandCampina, it is highly likely that UK dairy companies will look again at ways to come together in the near future.

As another attendee told just-food, the planned merger of First Milk and Milk Link may have failed, but it is only a matter of time before a similar deal emerges somewhere in the UK dairy sector.


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