CEO INTERVIEW

We catch up with Catherine Mead OBE, owner of Lynher Dairies, home of the famous Cornish Yarg and Cornish Kern cheeses. Catherine explains how a tumultuous last few years has impacted her business and the wider agricultural sector as a whole, and she looks forward to the return of the Royal Cornwall Show.

Like most other people, I’m challenged to think back more than two years! And I doubt if in 14 years, we’ve had as much change as we’ve had in the last two or three years! What with Brexit, the pandemic, and now the war in Ukraine. Crikey! The things we’ve all had to deal with, in different ways, Brexit, Covid and war are absolutely extraordinary.

We always knew Brexit was happening, didn’t we, right back from 2016, we knew Brexit was coming. And there was a lot of hope and optimism that it wouldn’t affect us too badly. I think in the food industry we’ve been quite badly affected by things like import tariffs, quotas and by currency which has been quite a significant problem in export. And then of course, by the lack of Eastern European workers, which has really been bad for food and farming. Recruitment is an enormous problem for us now.

Gosh, it was such a roller coaster. We were supplying supermarket deli counters and they went. We supplied airlines, they went. We supplied restaurants. They went. We had quite a lot of work with Premier League; there weren’t any football matches. We were exporting and there were problems with export into both Australia and America, for varying reasons. So we had this really dramatic period where everything looked absolutely cataclysmic. And we did lose 30% of our sales in 2020, it was really quite a significant drop. So, the dairy had to work in a completely different way. It becomes a moment where you take a step back and think about how you want the business to be going forward. It gave us a chance to think about the business and what kind of market do we want to work in. How do we want to work going forward? And so, a lot of that business that we lost, we didn’t necessarily go rushing to get back. And furthermore, we replaced it with other business of the kind that we really wanted to be working with. So it was definitely a case of swings and roundabouts. And in the face of adversity, good things can happen. There were definitely some positives, as I think many people would say. Well, this was really hard work, but actually, this happened. And that was quite good for us. So it has been a very difficult couple of years because of its volatility and uncertainty. It took about 18 months, through to probably September 2021, before we felt really confident in what

we were doing and the direction we were heading in.

And then Putin invades Ukraine! And our input costs are absolutely terrifying. They’re going up, every single solitary day. And they are some of our key costs. Milk, being the primary cost, is literally looking like it’s going to double. It’s heading in that direction. And then you can’t hold your own prices, because if you did you wouldn’t have a viable business. At some point you have to pass it on and every single link in that supply chain has that same problem. They cannot keep absorbing the prices, they have to pass them on. And I find that very disappointing. It is not how I would choose to engage with customers. I don’t want a world where potential customers cannot buy our product because they’ve been priced out. That would be a really disappointing outcome from the last three years. But right now, there’s an awful lot of food that is going to be sitting in that category, because the input costs are so high.

Absolutely. I was on the farm today. And Jonathan our farmer was saying he’s really worried about the input costs - the fertiliser, the feed. These are fundamental costs, fundamental parts of his business model. If he can’t balance his books, why would he stay in farming? What would be a reason for staying in?

I think it definitely will force some farmers out of business. A number of farmers are already thinking that this isn’t viable because although it’s difficult now, the worst is to come before we feel the effects of much more expensive fertiliser and not having the Ukrainian and Russian feed stock. I think all the farmers in the next six months will seriously be reviewing what they’re doing. I was reading an article today that said it is likely that we’re going to lose 5% of the milk market. That’s quite significant. That puts quite a bit of pressure on the price and availability of milk.

The Government has delayed on the new spreading legislation and has said farm slurries can be spread, to try and alleviate some of the pain on the fertiliser price. That was very welcomed, but no farmer is advocating that we don’t continue to look very closely at climate change mitigations. So, can the Government sensibly help the price of fertiliser in the interest of ensuring we have food? That’s a pretty significant dilemma. I would suggest the answer is they can’t, but others might have a different view on that. I don’t know. It is worrying for everybody as to how we get through this. I think ultimately, the farmers would say in the main there isn’t a choice, the consumer has to pay. And there’s a terrible concern around that with emerging food and fuel poverty.

There have always been number of challenges, which run is themes. One theme is succession. The average age of farmers is high, I think 57 at the moment. So how do you bring young farmers into businesses? Climate mitigation is another massive challenge and we go through the debate of whether or not we should be producing more food and having greater self-resilience as a nation. At the moment, we only produce 63% of the food we eat. And recent issues have shown, such as backing up at the ports on the outset of Brexit, that our supply chains are quite fragile. That takes us full circle to the Brexit issue, which is the price of food will go up with input tariffs. And the supply chains are more vulnerable, because there are so many more hurdles. Therefore, should we not be focusing more on buying British food? There’s a strong campaign for buying British food coming out of Government, but I personally believe we could do a bit more on that. And the horticulturists, in particular, are seriously challenged by the lack of pickers. So that 63% figure could actually go backwards. We could actually lose some of our horticulture, which would really affect us in Cornwall very badly, because horticulture is a very significant part of the mix. So that is something that is unresolved; the seasonal workers scheme was a great help, but didn’t go far enough. And then I think we then have this other challenge, which is probably bigger than all the others put together, which is whether or not we produce food, or carbon sequestration. Planting woodland and rewilding for the benefit of the planet is a massive issue. But we need food to eat and we’re not ready to create all our food in the lab. That isn’t about to happen.

No, not at all! And by the same token, there are some fantastically interesting things happening in farming. Innovative use of technology and science to further the industry and look at how we best provide food. So, in many respects I think when you say who would go into the industry now, it is potentially more attractive now than ever. Yes, there are some crunchy issues to deal with but let’s face it, crunchy issues can be quite exciting. No longer is farming that sort of rather sleepy, kind of bucolic pastime or way of life. It’s really quite sharp. It’s got some massive, massive issues to deal with, but it’s exciting to be part of the revolution.

The cheese I of the biggest changes you have seen in recent times? make today, we’re I think we’re going to see going to be selling much more out of agri tech particularly agri robotics, which in May 2024 has been heightened by the issues with Brexit and the challenges of recruiting labor. But techniques on precision farming have much improved. Who would have thought 30 years ago, that we would only put the very exact amount of fertiliser in the very exact amount of space. And ditto with the very exact amount of feed to the very exact number of cows and or even right down to the cow itself. Farmers have really embraced the technology that’s available to them to make them leaner, meaner, and more commercial. And at the same time, they have had to meet ambitions for this really ethical green farming and the conservation of our environment. So, there is a lot being asked of farmers and they are doing incredibly well. There are some outstanding examples in Cornwall of where agri tech has been harnessed with a really positive effect.

Absolutely. But just in the same way as other businesses. 30 years ago, we were using pens and papers and clipboards galore. Now every single solitary thing we do is digital and all our systems are streamlined. And I’m sure that will be the same for most food manufacturing businesses. And farmers are no different. They are embracing the need for change in the longer term.

You’re always seeking to improve your product. And when you go into the awards season, which generally runs from the beginning of April through to the world cheese awards in November, you have five or six months where your cheese is being looked at. And basically, you get this amazing opportunity for a bunch of people to come together tasting cheese, anonymously, say just where they think the strengths and weaknesses are of your product. And if

you’ve made changes, it’s a really good way to get some external feedback.

So, while I don’t always hang on to the end result of whether this was a gold or a silver, every single time we win an award, it is a wonderful moment and a massive pat on the back. And it’s a pat on the back for everybody who makes the cheese. We look at the business interdepartmentally, but I’m always at great pains to say, every single person here has a critical role.

So we started making Kern in 2015, winning Best British Cheese in the 2016 British Cheese Awards. So that was a kind of heads up that this is looking quite good. And it kind of came from nowhere. We had been making small amounts of cheese but that was the first time taking it out and showing it to the world. And then we went to the World Cheese Awards and won supreme champion, which is an extraordinary event, without doubt. We were then absolutely inundated, and we really didn’t have much stock because we were taking it steadily. I think people understand this in wine but maybe less so with cheese. But the cheese we’re making has a two-year profile. The cheese I make today, we’re going to be selling in May 2024.

And I know it’s a bad pun, but you’re kind of banking on it, you’ve got a lot of cash tied up in it. But aside from that, you have some early stages of trialing where you’re waiting to see what the profile of that cheese is like, probably into it being 18 months old. There’s masses of anticipation tied up with making longer-term cheese. And what we found out was that at certain times of the year, there were environmental spores in the milk, probably to do with the changing seasons, when you get a lot of loose pollen. And so these spores can get into the milk and then what happens is that you get something that’s called a second fermentation.

And basically, the cheese sits on the shelf, looking perfectly benign and happy for three months. And then suddenly, the spores kick into action. And they literally create gas and blow the cheese up. So, your cheese ends up looking like a football. And at that point, it’s game over, they spoil and you’ve got nothing left to show for it.

It was a soul-destroying period, and we had made quite a bit of cheese. The year after Cheese Awards, we lost quite a bit of cheese because of this, and so we decided that the only way to keep complete control was to have our own herd. So, we had the opportunity to buy this herd of cows, Ayrshires. The composition is this really nice balance between good fat and protein and a certain amount of volume. They’re not a cow designed to give masses and masses of volume like a black and white might be for a liquid contract. And nor is it looking to give you a very soft cream, it sits nicely in the middle, which is great for cheese. And it meant that we could control the milk and what was going into the milk. So, we could have input into the diet and the regime of the cow to ensure that late blowing didn’t happen. And touch wood, two years on we’ve not seen that problem. So, it seems to have been successful, but quite apart from that, it feels like the right thing to do, keeping connected with our most important raw material. We can we have that supply chain integration and are able to look at what’s going on in the farm and see how it’s affecting the milk or vice versa. And our customers like it because of the provenance.

Over 50% of the market is cheddar and probably half of There are some that will be own label. And after that you’ve got the big players fantastically such as Davidstow. After that interesting you have some of the big imports like mozzarella and parmesan. things happening And then you’ve got what we might call British territorial, your in farming Wensleydales, Caerphilly, Stilton. And then not counting much for volume, but more for value are your other specialist cheeses. We’re a small part of the market, but we have this massive halo effect. We punch way above our volume/value rate in terms of brand promotion, because we have introduced the world to variety, breadth, diversity, depth. And we introduced the concepts of profile maturity, recipe developments and so on. I do believe we form a very important part of the market because most cheese lovers want to have variety.

I think Cornish food has a very good reputation in this country. It’s synonymous with fresh air, with land and sea. It feels right that food comes from Cornwall and that it will be good. And Cornwall has seen a lot of growth in specialist food making, which has been helped by our enormous tourist industry, so yes, we do trade on it. It is part of our story. Cornwall is where we come from, this is what we’re about. This is how we look, this is what we do. And the fact that our cheese is called Cornish Kern and Cornish Yarg, I think adds value to it.

It’s funny, we were doing some work on that today. So, we have national distribution, and we export to the States, Australia and a bit into the Middle East. And we’ve got a very strong following in Cornwall. But equally, we’ve got years’ worth of a very strong tourism market, people coming down, buying Yarg in Cornwall, and then going home and seeing it in their local shop and buying it there. And coming back to Covid, we quickly got behind online sales, because people still really wanted to eat our cheese, but the places where they might have bought it were not open. And one of the things that we found is that a lot of people will treat it as a go-to product because they like that connection they have with Cornwall.

I don’t think we are a luxury product, but we are towards the premium end of the everyday product market. We’re not in any of the discounters, for example, or the large supermarkets. So, on that basis, maybe we’re not an everyday product but we have a huge number of customers who say they always have it in their fridge. We punch way above our volume/ And you yourself had a Royal value rate visit recently with a visit from Prince Charles. How was that? We love having visitors, full stop. But to have Prince Charles Duke of Cornwall come to the dairy, I think is the greatest privilege and honor. And I think everybody in the dairy felt that every inch of the way. He is the patron of the Specialist Cheese Maker Association. He has a genuine interest, understanding and commitment to cheese. And we had some really interesting conversations about the role of artisan cheese in the market, and the challenges that we face and the opportunities that we have. And I think he really did enjoy talking and hearing about it. I look back in the photos and he’s smiling in them all. And I think that is a sense of enjoyment and also a reflection of his connection to the countryside and his connection to food and farming and specifically his connection to Cornwall.

I think it is going to be an absolute knockout show and yes, really excited. And a lot of what we have talked about is all encapsulated in The Royal Cornwall Show. On one hand we’ll be celebrating our traditions, we’ll be celebrating our crafts. We’ll be celebrating the music, the culture, the food of Cornwall, and that will be incredibly uplifting and I just think it’s celebrating being back together again. But at the same time, we will be looking at some of these issues of what does farming look like in the future, what agri tech opportunities are available to us and we will be having meetings and discussions with the CLA, with the NFU, and Young Farmers. There will be all those moments when people are really getting their heads together to discuss what does farming look like, globally, nationally, and specifically in Cornwall. And there isn’t another opportunity for that to happen, so I think the return of the Royal Cornwall Show couldn’t come a day too soon. It really has been missed.

We will be looking on the product side, we’re looking at some new product ideas and we’re really interested in looking at the possibilities of marketing dairy beef. We’ll have a look at making butter and I think we need to look at products where we can use some of the waste products. Waste is so unacceptable, coupled with which it would be highly favourable in terms of our carbon mitigation. We’re looking at a woodland project here, very small, but it will contribute and we’re looking at alternative energies. We’re absolutely focused on how we can reduce our energy usage through improved processes.

We have a small shop here, I think we could do some development there because our customers enjoy coming by, they love to have that connection, while at the same time continuing to develop our online business. Another area of development would be in using IT and technology, as we spoke about earlier, farm businesses and food businesses are employing far more technology to good effect.

Driving change and meeting challenges. I think a lot of these challenges are the macro challenges, the external challenges. Any business would get them from time to time. Having that peripheral vision that says, “what’s happening externally is actually going to impact on our world”. Sometimes it’s quite hard to see, because it’s really quite a long way away. But if you can get ahead of that, get into that space, you can then start thinking, okay, what could be the challenge for our business? And how could that be turned into an opportunity?

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The project has received funding from the European Regional Development Fund as part of the European Structural and Investment Funds Growth Programme 2014-2020. The Department for Levelling Up, Housing and Communities is the Managing Authority for the European Regional Development Fund. Established by the European Union, the European Regional Development Fund provides funds to help local areas stimulate their economic development by investing in projects that will support innovation, skills and employment and create jobs. For more information visit https://www.gov.uk/european-growth-funding