Key points
We produce around 44,000t of product a year and depending on the day of the week, we can put out between 80t and 140t a day.
Cream, as well as other fresh dairy products, are packed in 15kg bag-boxes, 25kg bag-boxes, 500kg pallecons and 1t pallecons.
The creams we make are split between standard cream – which can be 16% fat up to 48% fat – and the cream you find in the middle of a doughnut or a trifle, which is called stabilised cream. Dextrose is added to give it sweetness and stabilisers to ensure it stays whipped.
Meadow Foods operates from three sites in the UK, all focusing on different dairy products. Here we focus on cream, which is about 90% of our business. The other 10% is split evenly between cultured products and milk. The Chester facility focuses on milk and Spalding processes sweetened products, such as condensed milk and chocolate crumb. The company as a whole turns over more than £350M a year, but here at Peterborough it's more like £50M.
Investment (Return to top)
We’ve gone through a two-phase £3.1M investment plan. The first tranche saw £1.3M go into fully automating our cultured production facility, as well as doubling cream storage capacity from 100t to 200t. It also increased energy efficiency and decreased waste.
We wanted to increase cream storage because there were only two 50t silos here when Meadow Foods bought the site from the dairy cooperative, Dairy Farmers of Britain, after it folded in 2009.
Although it wouldn’t have been the end of the world if we didn’t increase cream storage capacity, it has made things more practical logistically, as we can move cream between silos more easily for cleaning. But, essentially, it’s allowed us to take in more product and has given the business more space to grow.
The equipment here is very traditional. There’s a pasteuriser, homogeniser, separators and tanks. But we have a site of two halves where equipment is concerned. A lot of it was put in when the factory was built and is in stark contrast to the new facilities installed. They are more efficient and were installed as part of the second phase of investment, which saw £1.8M pumped into the site to add new mix tanks, inline standardisation and additional on-site storage.
Serviceability is also better as a result of the investments, since the new facilities have been designed with easy access in mind. So, there are gantries above the machines reducing the need to climb ladders and scramble between pipes, as we have to with the older facilities.
New products (Return to top)
I suppose you could also say there is a third and unofficial investment phase, which is to develop new products here at Peterborough. We’re only doing basic things here, such as making different creams and cultured products. Although we’re doing them very well, there's an opportunity to do more.
Last year I convinced Simon Chantler, who is my boss and the majority Meadow Foods shareholder, to allow me to take on a new product development person to improve our existing products and to create new ones too – there is no reason why we couldn’t make products like custard at Peterborough.
Getting the new equipment and keeping the site moving forward is my responsibility as site director. I make sure I stick my nose into things, interfere and wander around to spot what needs doing and generally make sure we’re progressing. I have only been with the company for two and a half years; I jumped ship after spending 20 years with Dairy Crest.
Things here move quickly compared with the bureaucratic chain you have to follow in larger companies. I’ve probably done things here in a fraction of the time it would have taken me at Dairy Crest. Part of the reason is because Simon is very close to the business and if I want something, I ask him and don’t get bogged down in the paperwork. But, at the same time, there are fewer places to hide if your boss is so close to the business.
There are 54 employees at this site and we produce Sunday to Friday. On Saturdays we tend to carry out maintenance and deep cleaning.
Employees (Return to top)
There’s also an element of investment in our employees and we’ve just started to look at a lean manufacturing programme to see how we can get people in the company to think about being more efficient. The decision to invest in the staff came before Christmas last year and we’ve already sent three key people from this site – the logistics manager, the production manager and the site accountant – on a six-day training course to learn how to assess opportunities to be more efficient.
We see it as a cultural change for the guys on the shop floor, who may not spot a £200,000 saving even after the course, but if 20 of them spotted a £10,000 saving, then that will add up to the same.
Meadow Foods started off as a small farm-based milk operation and trading firm, which then merged with the dairy processing business Bodfari in 1995. Only through acquisitions and by branching out into butter and other dairy products has it grown to the size it is now. It has increased its number of milk suppliers from 150 to 600 in the past six years and claims about 2% of the UK's milk production, which we broker into the major dairy companies.
I call it the brand behind the brands, because we produce and supply a lot of the dairy ingredients that go into the dips, sauces and cream cakes in supermarkets. Take Gü Puds, for instance, we supply to them as well as Mars, Burton’s Biscuits, Bakkavor, Samworth Brothers, Sainsbury, Tesco, Marks & Spencer, Waitrose, Morrisons … it's a long list.
Squeeze on margins (Return to top)
Although we supply into branded manufacturers, we’re a retailer-led business. We see headlines about retailers fighting over market share with promotions and by trying to promote themselves as being ‘inflation-busting’ and that puts a squeeze on margins.
This isn’t helped by an increase in demand for milk and high global dairy commodity prices, driven by China’s demand for milk powder. It all ends with you having to go to your customer to say cream prices are up and can you put your prices up, which is quite tough to do.
The plan for Peterborough now is to spend more on upgrades to the refrigeration facilities, not only because it will be illegal to use hydrochlorofluorocarbon refrigerants from January next year, but because it’s important to improve our equipment and production facilities.
We’re investing a lot of money into the business to make it a better place, because that’s how we’re going to stay ahead of the competition.
Listen to our exclusive podcast to learn more about Jackson’s views on what capital investment should do to enhance the efficiency of food companies.
Factory facts (Return to top)
Location: 1 Whitehead Drove, Fengate, Peterborough. PE1 5BF
Staff: 54
Products: Cream
Customers: Major supermarkets and brands like Gü Puds
Turnover: £50M
Personal
Name: Paul Jackson Age: 49
Title: Site director, Meadow Foods Peterborough
Domestics: Married with two sons aged 22 and 15
Outside work: I try to keep fit in the gym, walking and riding motorcycles