Cheshire-based Delamere Dairy outsources production of its branded milk, cheese and butter derived from goats to third party processors, but now has a turnover of around £15m and holds around 40-45% of the UK goat’s milk market.
Delamere counts all the UK major multiples as its customers, but Salt says the firm’s main challenge is getting consumers to try goat’s milk in the first place.
“People are more naturally receptive to goat’s cheese but not milk, but when they do try the milk, perceptions change, they like and buy it. After around four weeks, taste profiles alter and cow’s milk can taste a bit odd instead.
“Our research also shows that around 76% of customers buy goats milk for health reasons, while 14% do so because they believe production is less industrial or because they want to support a smaller industry.”
Massive growth opportunity
In October 2009, Salt was quoted as saying he hoped to double Delamere’s turnover within five years, after seeing yearly growth of 15% in the previous five.
But the recession has put paid to the plan for now, he says. “As we slipped into recession we thought, ‘hell we’re going to lose sales’, since goat’s milk and cheese is twice the price of cow’s milk, but in fact things remained fairly stable.
“We’ve grown around 1% this last year, and are attracting new customers, although some seem to have fallen off or are buying less. That said, soya milk is in the same boat growth-wise, despite firms such as Alpro spending millions on advertising."
By Salt’s reckoning, only one in every 1,000 people in the UK drink goat’s milk, but he predicts rapid growth will soon return to the market.
“Goat’s milk has a massive opportunity to grow market share, given that it represents only 0.1% of total UK consumer milk sales by volume. However, we have our hands tied in terms of advertising spend and as regards what we can say on the pack without potentially getting into trouble."
Avoiding health claims
Salt stresses the functional benefits of goat’s milk – intolerance to cow’s milk is linked by some to skin, respiratory and digestive problems – and says the firm has conducted some literature surveys with academics to this end.
“Goat’s milk is close to human milk in nutritional terms, and since many of us were made to drink the latter when we were small it seems to be much more easily digestible.
“But we can’t afford to spend massive amounts of money trying to stand up claims, only for the EU to say ‘no thank you’ at the end of the day.”
Meanwhile, Salt says Delamere is continuing to position itself as a speciality dairy, with goat products now representing 50% of turnover; the firm has also branched-out into cow’s milk and pet products to spread risk.
“We focused on cost during the recession, but our aim from 2011 is to develop our cow’s milk range into a niche brand and add to our goat’s milk range, in addition to launching some more new products.”