first milk and adams foods announce strategic partnership
The Boards of Adams Foods, one of the UK’s leading suppliers of cheese, and First Milk, the largest British farmer-owned dairy co-operative, have announced that they have entered into a long term strategic partnership.
The partnership will establish a fully integrated supply chain for hard cheese in the UK retail, foodservice and wholesale sectors through harnessing the complementary resources, skills and experience of both companies.
As part of the partnership, Adams Foods will utilise its best-in-class facility at Leek in Staffordshire to cut, pack and market 50,000 tonnes of hard cheese, including branded cheddars, produced at First Milk’s award winning Lake District and Haverfordwest creameries. Adams Foods will take on the business for the sales and marketing of this cheese to British retail, foodservice and wholesale customers. First Milk will continue to manage the sales and marketing of its cheddars to export markets.
First Milk will receive a competitive price for the cheese, with the partnership also facilitating significant additional investment at First Milk’s creameries to ensure that they are amongst the best in the UK dairy industry.
The long term partnership will deliver strong benefits to both companies, their customers and the wider dairy industry:
The partnership will create a comprehensive integrated supply chain for the UK hard cheese market. It will be able to guarantee existing and prospective retail, foodservice and wholesale customers a secure, efficient and traceable supply of high quality British and Irish hard cheese.
It will secure a sustainable, long-term outlet for the majority of First Milk’s hard cheese. In doing so, it will allow First Milk to put more commercial focus on brand development outside cheddar. Other priority areas will include lifestyle nutrition, foodservice (excluding hard cheese) and exports.
It will reinforce Adams Foods’ position as a leading supplier of both British and Irish cheese in the UK, and build upon its existing supply relationships with British cheese makers such as Parkham Farms and South Caernarfon Creameries.
It will provide a strong platform for the further development of Adams Foods’ retail, foodservice and wholesale customer label, convenience format and branded cheddar offering. It will complement Adams Foods’ best in class capabilities in relation to product and packaging innovation, marketing and category management.
At a wider industry level, the partnership will play a key role in helping to sustain and develop the British cheese market. It will provide greater stability to the wider British dairy industry following a period of considerable volatility both at a processor and farmer level.
Ian Toal, Chief Executive of Adams Foods commented: “Today’s announcement is a further important move towards our strategic vision of becoming one of the leading suppliers of cheese in the UK and will increase our turnover to in excess of £500 million. It demonstrates our continued commitment to supporting the UK cheese market and to meeting the needs of our growing customer base. It represents a further major investment in building the market for both British and Irish sourced cheese, over and above the £60 million we have already invested in the business, including our state of the art packing facility in Leek and our recently opened innovation centre.”
Kate Allum, Chief Executive of First Milk commented: “This partnership is directly in line with our strategic objective of adding value and delivering a sustainable future for our farmers. It not only enables us to work with a partner to deliver a short, integrated supply chain, but most importantly guarantees secure returns for our members’ milk. Additionally, it will provide a platform for us to focus more of our time and resources on priority growth areas like brand development, lifestyle nutrition and exports.”
The partnership will be subject to competition approval.