Robert Wiseman: A modern milkman with a lot of bottle

Location, location, location is the key to the dairy business, the Robert Wiseman chairman tells Sarah Arnott

"It feels like a war of attrition at the moment," says Robert Wiseman, the chairman of the eponymous dairy group set up by his father – also Robert – more than five decades ago in Glasgow.

We meet at the company's Bridgwater facility in Somerset. With the final phase of the £100m scheme completed in November, the factory can now process a staggering 500 million litres of milk every year.

It is an impressively industrial place. Robert Wiseman is not the kind of dairy company that has its own herds. The nearest thing to an actual cow at Bridgwater is the distinctive black-and-white Friesian pattern on the endless lorries to-ing and fro-ing in the loading bays. In fact, the only sign of the product at all is the faintest tang of dairy in the air. The plant is a network of gleaming tubes, vast machines and fast-moving conveyor belts, processing around 10 per cent of Britain's daily milk consumption and about 9 million litres every week.

By a coincidence of lead times, Bridgwater is at full whack just as the dairy industry is facing more than usually straitened times. The pressures in the food industry are always the same, with supermarket customers on one side fighting to keep their prices down, and volatile global commodity markets threatening a spike in costs on the other. The difference at the moment is in intensity.

Steadily rising oil prices – sent to more than $100 this month by the political crisis in Egypt – are a double hit for Robert Wiseman, the 1,500-strong truck fleet and plastic bottle requirements adding £8m on to the company's costs with every $10 rise in the global price. Meanwhile, two of the biggest supermarkets, Asda and Tesco, have committed to permanently lower milk prices, with the rest expected to follow. And soaring farm-gate prices have seen both Robert Wiseman and rival Dairy Crest increase their payments to farmers from the start of next month.

"It is particularly ferocious at the moment," Mr Wiseman admits in a broad Glaswegian accent. "There are 60 million people in this country, and they are all looking at what they are spending their money on."

Robert Wiseman dairies is already feeling it. Since floating on the Stock Exchange in 1994, massive expansion plans have seen the company's market share rocket from 2 per cent to 32 per cent, with financial results to match. But last September, the group warned that this year's profits will be down by £7m, and next year's by £16m, wiping nearly a third off the share price in a single day.

"It's disappointing to see profits fall, of course," Mr Wiseman says. "As consumers find things tougher, our big retail customers try to buy better, and as they fight for share of a very competitive industry we are caught in the backlash."

But the dairyman is far from gloomy. "We've got to get in there and compete," he says, with genuine relish. "We're still making money, we're very efficient, we've got a committed workforce, and we really are quite good at what we do."

There are some tough decisions to be made. As part of an organisation-wide efficiency plan, some 3,000 projects, from mobile phone contracts to fleet procurement, are under the microscope. And two of the company's smaller facilities – one dairy and one depot – are under consultation with a view to possible closure.

"When you come under pressure then you sit at the board meeting and say there are no sacred cows," Mr Wiseman says. "No decisions have been made yet but we've got to look at these things."

When the company listed in 1994, the family used the £14m raised to pay off their mortgages and set about turning the local doorstep-focused milk company into a national titan supplying shops. The first stop was Manchester – "because our drivers could get there and back in a single shift" – then Leeds, then south again to Wolverhampton and Droitwich.

Now, 17 years later, Robert Wiseman has seven dairies and 14 distribution depots, from Aberdeen to Pensilva, in Cornwall, all carefully located along a spine running between the milk-producing lands of the west and the motorways connecting them to the rest of the country.

It was a canny move, establishing the most modern dairy network in Britain. And at £480m in capex, it has not been cheap. But the Wisemans used profits and capital raisings to fund the expansion, leaving the company in good shape now, even with the recent profits warnings. While rivals are feeling the pinch from vast debts, yawning pension deficits, and outdated facilities dating from the monopolistic days of the Milk Marketing Board, Robert Wiseman has modest debts, an obsession with efficiency, and Bridgwater.

The new dairy is not just big. It is also green and highly efficient, part of the company's five-year programme to its environmental impact on measures covering everything from fuel consumption to landfill waste to bottle design.

The biggest innovation at Bridgwater is the on-site effluent treatment plant that cuts water usage by 200,000 litres every day – a scheme with potential to be rolled out in the group's other facilities if it proves effective.

This is no marketing gimmick, this is pure business, Mr Wiseman stresses. "The environmental targets are not some fluffy bunny idea," he says, almost angrily, pointing out an empty acre of land behind the Bridgwater boiler house which would have had a biomass electricity station on it, only the company could not make the economics add up.

"If we get it right then it will pay us, but the payback has to be there," Mr Wiseman says. "Environmentalism will only work if it is good for shareholders."

Alongside the issue of running costs, turnaround time is vital. The milk goes from cow to factory in less than 24 hours and will be pasteurised, separated, bottled and shipped within another 48. Mr Wiseman likes to describe the company as a logistics business that happens to deal in fresh milk. In such trying times, such a focus on efficiency, and modern facilities like Bridgwater, are a central competitive advantage, he says.

"Operators with old dairies are less efficient, they are built the wrong way and in the wrong places," Mr Wiseman says. "The industry has got to go forward, it's survival of the fittest, and we're in a great position."

Milking it

* Since 2002, Robert Wiseman has been chief executive and then chairman of Robert Wiseman Dairies, set up by his father in 1947.



* Mr Wiseman started with a milk round at the age of 11.



* He joined the business under the auspices of brother Alan in 1975, after studying at agricultural college.



* He now commutes to Britain every week from Marbella, in Spain, where he lives with his wife and the youngest three of his seven children.



* If he had not gone into the family milk business, he would have been a chef, and he cooks Sunday dinner for his family every weekend.



* On petrol prices: "If the Government can do anything to reduce my fuel bill I'd be delighted."



* On debt: "We were criticised on the stock market for years about building our balance sheet, but I just think that you shouldn't spend what you don't have. I'm not averse to a gamble – investing £480m in the dairy business is a hell of a gamble – but I've got to shave myself in the morning and not cut my throat."

News
Jacqueline Bisset has claimed that young women today are obsessed with being 'hot', rather than 'charming', 'romantic' or 'beautiful'
people
Arts and Entertainment
Lena Dunham
booksLena Dunham's memoirs - written at the age of 28 - are honest to the point of making you squirm
Arts and Entertainment
A bit rich: Maggie Smith in Downton Abbey
tvDownton Abbey review: It's six months since we last caught up with the Crawley clan
Sport
Frank Lampard and his non-celebration
premier leagueManchester City vs Chelsea match report from the Etihad Stadium
PROMOTED VIDEO
News
people
Life and Style
A new app has been launched that enables people to have a cuddle from a stranger
techNew app offers 'PG alternative' to dating services like Tinder
Sport
Greg Dyke insists he will not resign as Football Association chairman after receiving a watch worth more than £16,000 but has called for an end to the culture of gifts being given to football officials
football
Arts and Entertainment
Jake Quickenden sings his heart out in his second audition
tvX Factor: How did the Jakes - and Charlie Martinez - fare?
Sport
premier league
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvOnly remaining original cast-member to leave crime series
Sport
Mario Balotelli celebrates his first Liverpool goal
premier leagueLiverpool striker expressed his opinion about the 5-3 thriller with Leicester - then this happened
News
ebooksAn unforgettable anthology of contemporary reportage
News
Britain's shadow chancellor Ed Balls (L) challenges reporter Rob Merrick for the ball during the Labour Party versus the media soccer match,
peopleReporter left bleeding after tackle from shadow Chancellor in annual political football match
Arts and Entertainment
Female fans want more explicit male sex in Game of Thrones, George R R Martin says
tvSpoiler warning: Star of George RR Martin's hit series says viewers have 'not seen the last' of him/her
News
i100
News
i100
Sport
Plenty to ponder: Amir Khan has had repeated problems with US immigration because of his Muslim faith and now American television may shun him
boxing
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Day In a Page

A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments