One of Britain’s most innovative dairy co-operatives is setting a gold standard for member engagement.
First Milk, the UK’s only major dairy business to be 100 per cent owned by British farmers, now operates according to a members’ charter which formally sets out its commitment to giving 1,500 co-operative members a significant role in how the business is run.
The charter includes clarity on how milk prices are set, details of how members can take part in governance and how members’ capital investment is rewarded, as well as information on how it consults and communicates with members and their representatives.
Every member has the opportunity to become an area representative and to stand for election to the board, and key decisions are subject to a members’ vote.
The charter was launched by First Milk in February last year, as part of its continuing commitment to responding to members’ needs and requirements.
Company secretary Angus Waugh says: “We seek out and aspire to global best practice among farmers’ co-operative businesses, and are constantly looking for ways to improve our member/co-operative interface.
“As a farmer co-operative, our members ultimately determine the strategy of our business and the basis of the trading relationships through which they supply their milk and invest their capital. So we have produced a members’ charter that details our strong farmer-focused governance and 100 per cent farmer control.
“The charter has been independently reviewed by SAOS (Scottish Agricultural Organisation Society) who are experts on co-operative strategies, structures and management – and they have agreed to conduct an annual review of our corporate governance which will be made available to all of our members.”
With an annual turnover of £529 million, Glasgow-based First Milk has seven manufacturing sites across England, Scotland and Wales, employing 667 people, and is in the top ten co-operatives in the UK.
It is a recent recruit to Co-operatives UK, which has developed a special code of practice for its growing number of agricultural members, including Anglia Farmers, Torridge Vale Ltd, Kent Wool Growers and English Mustard Growers Ltd.
Co-operative status gives farmers much greater security in an often volatile marketplace.
“As a co-operative, our farmer members ultimately determine the direction of our business,” adds Angus. “Therefore, our objectives are intrinsically aligned with those of Co-operatives UK. Our membership of Co-operatives UK will ensure First Milk is in line with best practice on corporate governance for agricultural co-ops.”
First Milk’s aspiration is to drive better returns for its farmers by delivering great-tasting, nutritious food for consumers. It supplies a wide range of dairy products and dairy ingredients to customers in national and international markets as far afield as Taiwan and Dubai, including block cheeses, soft cheeses, raw milk, butter, skimmed milk powder, whey proteins and sports nutrition brands.
It has a strong branded portfolio of foods including Mull Of Kintyre cheddar and the Lake District Dairy Co, a fast-growing brand which won several awards in 2012, including Best Mature Cheddar at the International Cheese Awards in Nantwich. Other innovative products include the CNP lifestyle nutrition ranges for athletes and gym enthusiasts.
The co-operative is also passionate about the environmental and economic sustainability of its farms and recently produced First Things First, a report detailing its strategy.
It has invested in a sustainable supply chain with a programme which helps farmers reduce costs and improve the health and welfare of their animals. Its partnership with Edinburgh Veterinary School offers famers expert advice via workshops and seminars on issues such as reducing lameness in cattle and disease prevention. It is also working with renewable energy suppliers.
Another key benefit is its partnership with Anglia Farmers, a co-operative of arable farmers, which gives members access to cheaper fertilisers and fuels and a diverse range of farming products.
The new charter is seen as an invaluable way of strengthening the co-operative’s relationship with its farmers by offering them the chance to offer valuable feedback on business strategies as well as forming a bridge between members and key decision-makers.
Adds Angus: “At First Milk, we are totally committed to openness and transparency with members, to ensure they remain fully informed in the rapidly changing business environment that is the global dairy sector.”
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