Keep on trucklin'

Spending money to make money is a key strategy for the Long Clawson dairy. And its recent acquisition of Dairy Crest's Stilton and speciality cheese business is the latest in a long line of investment moves.

But life in dairy is tough at the moment. "With soaring input costs, it's do or die for manufacturers, they are having to run fast in order to stand still," says Long Clawson chief executive Martin Taylor.

The farmer-owned co-operative completed the acquisition of Dairy Crest's Derbyshire-based Hartington creamery in August. However, to maximise productivity a full or partial closure of the site is likely and this will result in significant redundancies.

"At the moment our overheads are too large to keep all the sites working at full capacity and in the current environment we are obviously looking at keeping down our costs as much as we can," says Taylor.

With nothing yet set in stone, Taylor says the company will be looking at folding the volume of the Hartington site into its existing operations. A further investment would then be made at the Long Clawson site to accommodate two extra vats.

"Commodities and energy costs are reaching new levels and consumers have less money than before," he adds. "Milk, for example, has gone up so much in the last year that it is costing cheese makers an extra £1,000 per tonne. If we didn't place so much emphasis on investment, expansion and efficiency then our costs would spiral out of control."

Long Clawson has three sites in Leicestershire: Long Clawson, Harby and Bottesford, as well as the Hartington site in Derbyshire. The company typically invests between £2.5 and £3M a year.

Investment at Bottesford

In its blended cheese business at Bottesford, Long Clawson has invested £2M to completely refurbish the factory. Work started in April last year. The factory does not make cheese from scratch, but blends cheeses made at its other sites or from cheese bought in.

"We had to change the room layout to accommodate automation," says Taylor. "Before there was a lot of manual handling involved. We also wanted the manufacturing of the cheese from blending to packaging to go down the factory in one long continuous processing line."

All the new equipment is bespoke. The ultrasonic cutter - which connects to a check weigher - is unique, claims Taylor. "We worked with several manufacturers to get this equipment exactly as we wanted it, so that instead of manually cutting the cheese with wire, the ultrasonic cutter ensures it is cleanly cut," he says. "It dramatically cuts down on wastage, especially as some of our blended cheeses are very crumbly. Also, because the cutter is connected to the check weigher, an exact amount is chopped off each time."

Automation allows the business to respond to orders more quickly. "Multiples can now make an order in the morning and we can have it to them by the afternoon," Taylor explains. "It also saves on labour costs."

The site used to hire agency workers during seasonal peaks, such as Christmas-time, when production tripled. It used to increase staff from 60 to 150 for the season. But because of the changes at the factory, it now employs 60 workers all year round.

The company intends to install similar technology at its Long Clawson site, where it manufactures Stilton and Leicestershire cheese.

In order to do this, the factory needs to double in size, especially the packing area. "We have planning permission to do this," adds Taylor. "But we envisage that this may take some time, as all of our machinery has to be made for us. Packing Stilton is not easy, it is very delicate and crumbly, so we are working with two or three specialist manufacturers to build equipment that we have designed.

"Stilton is a very small part of the overall cheese market, so you can't just go and buy a standard piece of cutting or packaging machinery. If we were making cheddar it might be a different story. We physically have to design all of our equipment and then find a manufacturer that will make it."

Despite this, Taylor says that there are some steps in production that need to be done by hand. For example, salting the curd after it comes out of vats: "We have not yet found a machine that can do this delicately enough. And we will not compromise on quality."

Radio frequency identification tags Another technology that the business is currently investigating at the Long Clawson site is the introduction of electronic tagging, as opposed to cloth tagging.

It is important for any business to understand where they are making yield loss, says Taylor. Radio frequency identification tagging will mean that Long Clawson can accurately trace variations during manufacturing, from optimum timings that the milk should stay in the vats to the best maturing times.

The information can be electronically processed and "we can then accurately pinpoint the most effective and efficient processes". For the best results, processes can then be replicated.

The company is currently updating its computer systems to take in this extra data and translate it into reliable, easy-to-use information. A trial run will take place in the early part of next year, as the factory avoids trying anything new in the run up to the busy Christmas period.

As well as Stilton, the Long Clawson factory also makes Cheddar cheese truckles and Paneer cheese - which is used in vegetarian Indian cooking as a protein replacement. The factory supplies all but one of the major multiples and wholesale and catering.

The market for Paneer is growing by about 20% every year. "We print recipes on the back of the packet, which really help us sell the product," says Taylor. "People want to try it but they're not sure how to cook with it."

New product development

Taylor says that Long Clawson is looking at producing cubed and sliced Paneer so it is in a format that is easy to use.

"New product development is a huge part of what we do," he adds. "We looked at our overall product range and realised that we were not focused enough on where the market is going. There is a growing need for convenient product formats, including cubed cheese, spreadable, grated and smaller portions."

The Bottesford site started making spreadable cheese in mid-August, which was launched into Tesco. The site is also about to approach retailers with snack size, 30g pieces of the blended cheese.

At Christmas the factory makes gift boxes, which include port and Stilton. "Because of this we are the third largest buyer of port in the UK," says Taylor.

"As well as developing new products that grow sales, we also need a constant stream of investment flowing into the business - and a grasp on new technologies that help improve our efficiency. Only then will we be able to cope with soaring input costs." FM

Long Clawson Facts

In 1911 12 farmers founded the dairy

It now has 36 milk suppliers within 25 miles of the dairy. By January 2009 it will have 44 suppliers and farmer members delivering 58M litres of milk

Having a 100% farmer board ensures close links with all farm issues

2003 saw the start of a £7M investment in a vat room and cheese vats

Long Clawson has more than 30 products in its portfolio, including Blue Stilton, Shropshire Blue and Blue Vinney and blended cheeses such as Cheddar truckles

The company operates from three sites in Long Clawson, Harby and Bottesford and has recently acquired a fourth at Hartington

It exports to 35 different countries - a market which is seeing double digit growth