Exclusive:Famous Scottish family dairy Graham's riding 'phenomenal' revival of retro milk product

“This last 14 months with cottage cheese has seen phenomenal growth,” observes managing director Graham. “That’s great but it’s such big numbers that it has presented some challenges around just making sure that we are hitting the customer demand. We have done a lot of capital expenditure on that front to meet forward growth.”

Across the family-run and owned business there has been some £5 million of investment undertaken in the past year, on top of the £8.4m of capex pumped in previously to modernise production plants and meet rising demand in the “most sustainable and responsible way possible”.

Founded in 1939 by the present MD’s grandfather, another Robert, the Bridge of Allan-based business has grown into one of Scotland’s most familiar and successful Scottish food brands, with a growing presence on big supermarket operators’ shelves, as well as in independent stores, farm shops and delis. It also ranks as a major export success story - with a large slice of its business now coming from beyond its home country.

Graham’s Year End Results

Newly released results for the year ending March 31, 2024 show that turnover for the Stirlingshire business rose slightly to £153.1m, from £152.9m in 2022/23, with increased sales across all product lines. Crucially, the company ended the year just past with a pre-tax profit of £2.8m. Soaring inflation and cost pressures alongside the heavy investment programme led to Graham’s racking up a £1.3m loss before tax in the year to the end of March 2023 - the first deficit on that measure in its history.

Graham, whose father is also called Robert, describes the outcome for the year just finished as “positive” but says the business will need to “try and kick on from there”. Much of its recent success has been driven by that sizeable investment in new products, including the dairy’s high-protein range featuring Protein 25 pouches, yogurt pots and drinks, dessert-style protein yogurts, Skyr Icelandic-style yogurts and Scotland’s first Greek yogurt pouch - the latest innovation from the firm.

Last year, it emerged that for the first time on record, the firm had seen sales of protein and Skyr products overtake sales of conventional milk in major supermarkets. Yet demand for more traditional products remains buoyant.

“Dairy is still in a great place despite all the noise two or three years ago about alternative milks,” says Graham. “It’s being driven by cottage cheese and protein yogurts and also traditional products like our gold top milk and butter. The people who are driving that are actually a lot younger and that is really positive for dairy overall. They are seeing the health benefits, it’s relatively affordable and it tastes good.”

New Products

A £2m investment has been undertaken at the firm’s facility in Nairn, resulting in the launch of the Greek yogurt pouches, and allowing the company to maintain its position as the largest supplier of protein pouch products in the UK.

“We have done a lot of capex across the business,” Graham stresses. “It’s a big number and we now need to maximise that new capacity. Really, it’s about getting through this year and for next year trying to get our returns up to a more sustainable level, allowing us to continue to invest in the business. We are going to have a decent year but these are still challenging times. As dairy farmers ourselves, who continue to milk our own cows, we understand the pressures of continued high energy, staffing and raw material costs.

“Energy prices are proving pretty stubborn and that is a concern,” he warns. “Electricity and gas are still pretty big numbers. We will need to work very hard to recover those costs. While they say that overall inflation is dropping, there are still upward pressures out there.”

The dairy business, whose milking herd features large on the exterior design of hundreds of supermarkets and delivery trucks, also scooped a number of Great Taste accolades at the 2024 awards for the likes of its cottage cheese, mango and passionfruit yogurts and renowned gold top milk. The last year has seen Graham’s The Family Dairy expand its partnership with Dunnes stores in Ireland, as well as establish new markets in the UAE thanks to a deal with Spinneys.

The new Greek yogurt pouches come in three flavours - natural, strawberry and honey. The 150g pouches contain up to 14g of natural protein and are being touted as the “perfect snack for on-the-go families and health conscious shoppers looking for an indulgent snack”. An initial rollout took place across scores of Lidl stores in Scotland followed by a wider push across Sainsbury’s sites.

“We take pride in our family legacy and heritage, which from the offset has been driven by innovation,” adds Graham. “Our new Greek yogurt pouches have been specifically designed to appeal to the market after the huge success of our Protein 25 pouches, which fly off the shelves.”