BQ Newsletter

Wensleydale to Waikiki

Tuesday 10 April 2012 11:00

Andrew Mernin meets the Wensleydale Creamery’s top man as he rolls Wallace & Gromit's favourite cheese into yet another export market.

As they gather in the evening sun with the sound of ukuleles and the swish of hula skirts coming in on the breeze, there’s a new ingredient on their alfresco supper table.

It’s crumbly but moist with a mild yet slightly honeyed flavour. And, most importantly, it’s made in Yorkshire.

Wensleydale cheese – the original one which has been made in these parts since as early as 1150 – has just spanned the Atlantic and Americas to land on the shelves of 50 supermarkets in Hawaii.

The deal is the latest exporting success for a product which, just 20 years ago, faced certain doom against a backdrop of economic turmoil.

The volcanic craters and golden sands of Hawaii are a world away from Hawes, the Yorkshire Dales market town which has been home to Wensleydale for generations.

As Wensleydale Creamery’s managing director David Hartley and his thousands of repeat visitors will tell you, though, the town is no less idyllic in the postcard stakes.

Lancashire lad Hartley’s career has been almost entirely defined by the dairy industry.

He left school at 16 with a handful of O-levels and the very next day was starting his first proper job milking cows and helping to process and deliver milk at a farm in Barrowford.

Agricultural college and a career with Dairy Crest Longridge Creamery near Preston followed before he was eventually appointed production manager at what was then the firm’s site in Hawes.

His name became part of the fabric of Wensleydale folklore in 1992 when he spearheaded a management buyout of the creamery, after Dairy Crest’s decision to close it with the loss of 59 jobs.

Since then he has resuscitated the Wensleydale brand from a deathbed business into a thriving exporter and, as Hartley explains, a company which makes a major contribution to the North Yorkshire economy.

“We buy milk from around 50 local farmers and annually buy something in the region of 25 million litres of milk,” he says.

“At the current price of about 30p a litre, that’s £7.5m. We think our wage bill and milk contracts put something in the region of £12m into the local economy.

“In a way our company ethos is more of a cooperative style than a hard-nosed capital business. Clearly we are massively interested in profit and need profit to reinvest in the business so we are staunchly capitalist in a way, but we are also very mindful of what we need to make the business work.”

Within Wensleydale Creamery’s 230 employees is the 40-strong team employed by the visitor centre in the picturesque town it calls home.

This brings in around 250,000 people every year, although Hartley is expecting an increase this year as an estimated 5 per cent of Londoners head for the countryside when the Olympic circus roll into town in July.

As a product with ancestral lineage all the back to the Norman era or, according to some historians, to the days of Roman Empire, Wensleydale is almost as old as the hills surrounding its spiritual home in Hawes.

From the outside looking in, this is an industry that is unchanging, non-progressive and risk-averse.

Far away from the cyber-din that engulfs city-based businesses, here live the Yorkshire cheese makers frozen in time doing as their forefathers did before them.

Or so BQ thought before Hartley opened his doors to a sector as fast-paced, fickle and challenging as just about anything in the retail, technology or fashion space.

“We are always innovating on the way we do things,” Hartley says as he explains how the business benchmarks against – and strives to beat – the competition. Granted, traditional methods have survived the passage of time.

And few managing directors have as green and pleasant a journey to the office as Hartley on his 15-mile daily commute through the Dales.

But make no mistake; this is a modern business as equally reliant on spotting new trends as a high street clothing empire or tech firm.

Hartley and his team are constantly monitoring shifts in demand from the consumer’s palate and applying its findings to its hugely important blended cheeses division.

“You have to put together flavours that actually work from the outset. Then it’s about getting the proportions right. We ask ourselves how sweet it should be, how savoury, whether it should be spicy, if so should it be mild or hot pepper.

"So you’ve got to do a lot of work and then look at the market and benchmark what’s there and see where there’s a gap and try and pitch in. It can also be incredibly collaborative with individual retailers that might be looking for particular attributes.

"Cranberries are a very important part of what we do and make up 30 per cent of our cheese business. There are lots of wacky ideas in the market that don’t always work. Our range includes apricot, ginger and Peruvian ginger for the Australian market. They really do work and we generate some really good sales.”

Such sales helped the group to a 200 per cent year-on-year increase in mail order business in the crucial festive trading period last year.

Having just closed the book on Wensleydale’s 2011/12 financial period, meanwhile, Hartley is expecting an increase of between 6 to 8 per cent in overall annual sales this year, taking revenues to around £22m. Profits, however, will remain “pretty flat.”

“It’s been quite a challenging year in terms of cost increases and milk price inflation. It’s our key raw material and puts us under enormous pressure. Like lots of other businesses, there’s the cost inflation on fuel, distribution and other price increases throughout. I think it’s difficult to recover that.

“I think the challenge for the business is to manage costs even more rigourously than we have been doing. I have taken quite a bit of cost out in the last 12 months and I think we’ve got to look at it in even more detail.

"Which parts of the business can we lose and which can we afford not to do because the margins aren’t necessarily there?”

This is not to say that investment and expansion are on hold.Hartley is currently looking to raise up to £6m in new finance – through various sources – to fund a mass restructuring project at the company. Currently the group makes cheese at Hawes and an additional site 33 miles away in Kirkby Malzeard .

Hartley intends to raise enough investment to shift the firm’s entire cheese making operations to Hawes and bring other duties such as packing together at its secondary site.

“At the moment it’s a bit disjointed and there’s good reason to do it, we just need to work out exactly how.

“We want to promote a cheese making facility that is modern and traditional so it satisfies all of the standards, all the good manufacturing practices that any modern consumer will be comfortable with and yet we still retain all the traditional hand crafted values that we’ve had for so long.

“It feels like the right thing to do and we’ll end up with a more efficient system and a better flow through the business.

“Hopefully if we can time it with an upturn in economic conditions, we can be on the front foot,” he says.

Meanwhile, exports have held up well in recent years, with Hartley seeing evidence of new opportunities emergiung in the Far East market in particular.

“We did a trade show last year in Shanghai and we are getting quite a bit of interest from parties in the UK who export food to China,” he says.

“There is also tangible interest in the Hong Kong market, where our premium cheese is already sold.

“We’ve got good distribution routes in America but there’s still a lot of potential for us over there and in Canada.” Much of Wensleydale’s success is intrinsically linked to its association as a traditional product of Yorkshire.

A Visit York poll, which surveyed 4,000 people throughout the UK in 2010, labelled Wensleydale as Yorkshire’s third most cherished export behind puddings and tea.

Such national adulation, says Hartley, warrants recognition from Europe that only cheese made in Wensleydale’s spiritual home is the genuine article.

His battle to achieve Protected Geographical Indication (PGI) status from the European lawmakers is not done yet.

He oversaw the creation of a 14,000-strong petition, as part of a local media campaign, which was delivered directly to Richmond MP William Hague in support of giving Yorkshiremade Wensleydale the same kudos as Melton Mowbray pies and Gorgonzola.

Today, although there are still hoops to jump through before official recognition is signed and sealed, the end goal is in sight.

With only 44 per cent of Wensleydale cheese on supermarket shelves actually being produced by the Hawes creamery, it’s little wonder that Hartley is so determined to see the legal wrangling through to completion – not least to fight back against rival cheese makers.

But surely a Wensleydale truckle by any other name would taste as good? Not so, says Hartley.

“Of the main territorial cheeses there are, it will become one of only three that has protected food name status.

It is protecting the heritage and giving customers the confidence that they are buying Wensleydale that’s actually made in Wensleydale.

“People are really interested in the Wensleydale story; they understand it and they are interested in whether it is the genuine article or not.”

If, as expected, Wensleydale is given PGI status by Brussels, no other producers of the crumbly cheese will be permitted to claim to be made in Yorkshire.

Recognition as the only thoroughbred cheese of its kind on supermarket shelves looks certain to bolster its marketing credentials.

But let’s not forget the unfading power of its two most famous ambassadors; Wallace & Gromit.

Grinning man and eye-rolling dog have been champions of the cheese ever since Wallace pondered whether the moon was made of Wensleydale before he embarked on his first adventure with his four-legged friend.

By the time they came to the second chapter in 1995, A Close Shave, Wensleydale was declared their favourite cheese and reports at the time charted a genuine spike in sales of the cheese at the firm which was then struggling for survival.

This eventually prompted an official commercial tie-in and the pair continues to adorn and market the product to this day.

Having been to the moon, battled robot dogs and fought off mutant rabbits, perhaps the warmth and tranquillity of Hawaii will provide welcome respite for the duo.


Export update

Wensleydale Creamery is not the only Yorkshire-based company to ignore the adverse conditions and extend its global reach, as BQ discovers.

Recently published figures show that the UK trade deficit in goods and services was £1.8bn in January this year, up from £1.2bn the previous month.

That exports are growing faster than imports has provided further evidence for analysts who believe the economy is rebalancing and recovery is imminent.

Growing exports will undoubtedly play a huge part in driving the national economy towards brighter times, and recent reports suggest there is certainly an appetite for businesses to boost their overseas prowess.

And businesses in Yorkshire & Humber – where we this month report on the latest international breakthrough for Wensleydale cheese – are no exception.

Over a third of businesses in the region expect to grow their total exports during the first half of the year, with only nine per cent braced for a fall, according to a Lloyds Banking Group study.

This figure has grown seven per cent from the balance recorded in the last survey. Twenty seven per cent of businesses expect exports to Europe to improve in the first half of the year, while 15 per cent anticipate weaker demand.

Last year Yorkshire and the Humber was one of only two regions to register an annual rise in the number of companies selling overseas alongside the North East of England.

But for export virgins in Yorkshire who are yet to take the global plunge there are plenty of success stories from their patch which can only serve as inspiration.

Almost a decade ago Taylors of Harrogate confirmed it had cracked the toughest nut in the tea industry when it landed a heavyweight deal to ship its famous Yorkshire brew to China. It has not looked back since and today has distributors in 23 markets such as Australia, Ukraine and Taiwan.

A less traditional case study is that of GHD hair products which have been nothing short of a phenomenon across the globe since their inception in Leeds in 2001.

Last year, as its group turnover hit £147.5m, the company acquired a distributor network in Australia which means it now directly supplies in all nine territories where it operates.

But what of the lesser known export success stories from Yorkshire-born firms? BQ charts the businesses that have marked the first quarter of 2012 by stepping up their global presence.

A Well baked plan

Yorkshire bakery Haywood & Padgett began exporting traditional fresh British scones to Australia this year as part of a major expansion drive. The Barnsley-based manufacturer invested more than £2m in new technology and buildings, including a new 40-metre long, £600,000 oven which will produce 50,000 scones an hour. Director Wayne Padgett, whose firm also exports to France, Portugal and Spain and is preparing for an assault on the US and Asian markets, reports: “We believe that we are the world’s biggest scones manufacturer and our scones are being very well received in Australia. “We are pleased to be expanding in a difficult climate as we have big plans with other trademarked lines which are to be developed thanks to Yorkshire Bank’s investment and our strong partnerships with supermarkets. We are also working to increase our business with airports as we feel it is very British to have a scone with a cup of tea and the airlines are helping us to promote this. Without Yorkshire Bank’s help we would not be able to consider expanding. It would just not be an option.”

Growth on the go

Mobile Tornado, which is based in Harrogate, this year, landed a deal with America Movil, a mobile phone network operator from Mexico. This agreement was reached with the help of Atencion en Comunicaciones, Mobile Tornado's Mexican partner. As a result of the deal, the internet protocol radio service product offered by the pioneering UK firm will now be adopted by American Movil in Brazil and Mexico. The device facilitates instant communications across the web. However, the South American venture is not the only recent deal to be struck by Mobile Tornado. The company is also to provide European communications giant Telecom Italia with 'push to talk' services. These will be offered in Italy, as well as Argentina and Brazil. Mobile Tornado partnered with Softec to reach this agreement with Telecom Italia. The Mobile Tornado technology will enable Telecom Italia to give its customers instant voice and text messaging services. Chief executive Jeremy Fenn said the agreement would “usher in the era of next generation instant communications services across South America”.

Jumping into Asia

Halifax software firm Frog celebrated the start of Olympic year with a leap into Malaysia, with a contract to supply its educational products to 10,000 schools, or six million students. Frog will see its programs delivered through a partnership with Malaysian telecommunications company YTL Communications. This will further expand the Halifax-based company's global reputation and also highlight how Britain is at the forefront of innovative thinking and educational developments. The firm was first established in 1999 with only two employees, but it has since grown to cover a 75-strong workforce and make a key difference to the way youngsters learn. Managing director Gareth Davies said the key to the new contract was the strong reputation and success the firm has cultivated in the UK. He added that everyone at the company is “delighted” with the deal and sees this as a massive opportunity to propel the brand further. “We have invested heavily into a local joint venture with YTL to ensure both that this project is a success, and that it does not adversely affect our performance in the UK,” he said. “In fact, we are very excited about the future road map that we are now able to provide for our schools in the UK due to this expansion.”

Forging a brighter future

As with most international contracts, competition was fierce for the £1.7m deal secured earlier this year by Sheffield Forgemasters (SFIL) with German firm Schuler Pressen to make screw press parts. SFIL will build a 300-tonne table and a 288-tonne headpiece at its site in Brightside Lane. The components will be shipped to Germany once they are completed, which is expected to be in September next year. Michael Holloway, SFIL Senior Sales Manager, said: “We have worked on similar projects in the past with this client, however these pieces are much heavier, and they will be finished completely in-house.”

A hole new world

Yorkshire-based manhole cover maker Fibrelite announced plans this year to launch a new factory in Malaysia to service its customers in Australia, New Zealand and South East Asia. The Skipton company already has a manufacturing plant in North America and its new site will enable it to sidestep the challenges presented by sea freight costs and customs duties. “The advantages of making our customers’ requirements in Malaysia include elimination of customs duties and expensive sea freight which are both associated with imported products,” said managing director Ian Thompson . “Fibrelite will pass on these savings to our established customers and intend to use this competitive advantage to win valuable new business with the local oil companies in the region.” It is hoped that the Malaysia factory will help Fibrelite respond to the growth of car ownership in the region. Service stations are quickly being constructed in a bid to meet this demand, and the firm hopes to make the most of this.