First Milk and Adams Foods complete strategic supply partnership

First Milk and Adams Foods have announced the completion of their long term, strategic, cheese supply partnership. The completion of the ground breaking deal follows approval from both the UK’s Office of Fair Trading and Irish Competition Authority for the development of a secure, efficient and fully integrated supply chain for hard cheese in the UK retail, foodservice and wholesale sectors. The partnership will commence integration from 12th March 2014.

The partnership will secure a long-term outlet for the majority of First Milk’s hard cheese. In doing so, First Milk will receive a competitive price for the cheese and this move is directly in line with its strategic objective of adding value and delivering a sustainable future for its farmers. The partnership will also enable First Milk to make significant additional investment in its creameries to ensure that they are amongst the best in the UK dairy industry. Whilst it will also allow the company to put greater commercial focus on developing brands in areas such as lifestyle nutrition, foodservice (excluding hard cheese) and exports.

The partnership will reinforce Adams Foods’ position as a leading supplier of both British and Irish cheese in the UK, with a turnover of around £500 million. Adams will utilise its best-in-class facility at Leek in Staffordshire to cut, pack and market the high quality hard cheeses, including branded cheddars, produced at First Milk’s award winning Lake District and Haverfordwest creameries. This will complement and build upon Adams Foods’ existing long term supply relationships with other British cheese makers such as Parkham Farms and South Caernarfon Creameries.

Kate Allum, Chief Executive of First Milk, commented: “Our partnership with Adams Foods is directly in line with our objective of adding value to our members’ milk and in doing so delivering a sustainable future for them. It will provide us with secure and competitive returns for our cheese and allow us to invest further in our Lake District and Haverfordwest creameries.

“The partnership is a big piece of the jigsaw coming together in defining the strongest core base we have ever had as a business. Additionally, it will enable us to focus more of our time and resources on priority growth areas like brand development, lifestyle nutrition and exports.”

Ian Toal, Chief Executive of Adams Foods, commented: “Adams Foods’ strategic goal is to be the leading supplier of cheese in the UK through guaranteeing our customers a secure, efficient and traceable supply of high quality British and Irish hard cheese. Central to achieving this has been our focus on establishing long term cheese supply partnerships, a £60 million investment to date in the UK including our state-of-the-art cutting and packing facility in Leek and the development of best in class capabilities in relation to product and packaging innovation, marketing and category management.

“Our partnership with First Milk will enable us to create a shorter and more effective supply chain. As such, it will provide a strong platform for the further development of Adams Foods’ retail, foodservice and wholesale customer label, convenience format and branded cheese offering. At the same time, I believe that it will it play a key role in helping to sustain and develop the British cheese market and wider dairy industry.”

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