Interview: Rachel’s Organic on the challenges facing organic food and drink producers

Rachel’s Organic yoghurt has been produced on a certified organic farm since the brand was established in 1982. Brynllys farm in Aberystwyth, Wales, where the brand still operates out of to this day, first achieved the certification in 1973.

Organic certification is awarded by the Soil Association, an organisation that the original Rachel’s mother Dinah was a founding member of. Farms that are certified are able to prove that their processes sustain the health of soils, ecosystems, animals and people, and comply with current EU regulations.

While Rachel’s is now a subsidiary of French company Lactalis, it still retains its traditional ways of working, including its recipe and its networks of organic milk suppliers. Operating on a semi-independent basis, this allows the yoghurt maker to take advantage of the larger organic supply chain that Lactalis is able to tap into, but without compromising on its heritage.

Simon Brook, who joined Lactalis in 2017, met with Food Manufacture at bi-annual trade show TasteWales / BlasCymru​​ last month (October 2023) to discuss the brand’s unique selling point and analyse some of the challenges facing the organic market.

Locally sourced organic produce

“The milk used to make Rachel’s yoghurt is still sourced locally and from some of the farmers the diary has been working with since the very start​,” Brook explained.

“We want the milk to be as fresh as it can, so we get a delivery of organic milk into the factory every day​.”

The history of the brand stretches back to 1952 when Dinah and her husband Stanley purchased Brynllys farm, a fact that Brook believes makes it unique.

“People really connect to the provenance of the brand,”​ he added.​

Today, Rachel’s produces around 6,000 tonnes of yoghurt each year, its range including Greek style, fruit and natural varieties, as well as rice puddings (although these are not made at the Aberystwyth site).

Based in Aberystwyth in West Wales, Brook said that the physical geography of the region creates conditions that are ideal for milk production, where the “high-quality nature of the local supply contributes to great tasting yoghurt​”.

Rachel’s has been committed to organic production throughout its history and remains so to this day, but in the current economic climate that has brought with it some issues.

“Being an organic brand is important and will become more important once again​,” Brook told Food Manufacture.

“Because of the cost of living crisis, organic brands have taken a slight hit due to how people prioritise their spending with energy bills going up, but as inflation eases and people feel they have more control of their finances, ethical and sustainability concerns will become more top of mind and they will seek out these products once again.”​

The latest data from Kantar showed that the grocery price inflation rate is starting to fall​​, but at 9.7% consumer spending on premium products is still being supressed.

Managing rising input costs

As all of the ingredients that go into Rachel’s yoghurt have to be certified organic, the brand has been particularly impacted by the rising input costs experienced across the food and drink industry. Brook said that while the team has been able to weather the storm up until now, the way in which this has affected operations “cannot be under-estimated​”.

“For an organic yoghurt, you need to source organic milk and organic fruit, and the farming processes involved are more complicated, expensive and time consuming​,” Brook explained.

“We have had to pay higher rates but there must come a point when consumer prices get too high​.”

In addition to the added costs facing Rachel’s, Brook has concerns about the future supply of organic milk. Due to the closing gap between the sale price of non-organic and organic milk, some farmers have decided to move away from the production of organic milk.

"We are keeping a close eye on it," ​Brook added.

Despite these challenges, Brook believes that as inflationary pressures abate, the brand is well placed to offer more people “great quality, organic products​”. With support from the Welsh Government it has been able to grow its export market, which now makes up 15% of the overall business, and developing this further remains a target.

“We still have some capacity at our production site in Aberystwyth, so we hope to fill that over the next few years,” he ​said.

“We also want to expand our footprint in the UK and believe that as the cost of living crisis eases, we will be able to pick up more sales​.”