IN this week's SME Focus an entrepreneur who runs a firm that has built up an international customer base from the Isle of Arran provides an example of how necessity can be the mother of successful invention.
What is your business called?
I am managing director and owner of Arran Dairies and Taste of Arran.
Where is it based?
On the Isle of Arran
What does it produce, what services does it offer?
Arran Dairies manufactures dairy products made from milk sourced from Arran's three dairy farms. We also wholesale food and drink products to the hospitality trade.
We sell award-winning ice cream through our sister company, Taste of Arran, a 10-company collaboration focused on sales, marketing and distribution of food and drink products from the Isle.
Taste of Arran offers an option to Arran's artisan producers that allows our products to be sold through one portfolio. Collaboration is difficult to engage with, but once it is energised it really is the way to develop business in a cost-effective way.
We also still run a family farm. Due to economies of scale and suitability of ground we now don't do dairy but we do have sheep and beef cattle.
To whom does it sell?
Arran Dairies started by selling our products exclusively on the Isle of Arran but 12 years ago embraced the local/artisan food revolution and started Taste of Arran as a standalone company. We now sell to customers throughout the UK and abroad. We have recently had some great success in the Middle East and also have a very successful website.
What is its turnover?
How many employees?
Twelve full time, backed up by my son, daughter and nephew during university holidays. My 10-year-old son does all the paper shredding on a Saturday and loves helping on the farm.
When was it formed?
Arran Dairies 1978
Taste of Arran 2000
Why did you take the plunge?
Opportunity with Arran Dairies and necessity with Taste of Arran really. I met my wife-to-be and wanted to return to Arran to start a family as it is such a great place to grow up.
Necessity arose as I quickly realised how fragile an island-based business could be. I saw the opportunity to develop our family business into a more outward-facing company with a UK and global reach.
This opportunity presented itself when Arran Dairies started making ice cream in 1999. I began production because we had been buying ice cream to supply our customers on the island. I was looking for a new product to manufacture.
We had great milk and cream on the island so it seemed a great idea to make our own ice cream. I approached a good friend of mine, Alasdair Woods, who imports Italian ice cream machinery and told him if he could get someone to train me then I would buy his machines. He sent me to the Isle of Man to work with a small manufacturer for a week. I learned quickly, we ran some product samples, I bought the machines within two months and off we went. My first goal was to replace our existing sales on the island of bought-in ice cream with our product; encouragingly sales increased 50 % because it was a local product, this was a game changer. Very quickly it became evident that our provenance-based products were being sought by chefs and consumers from all over Scotland.
Using my previous experience in UK sales development, I was prompted to discuss with other local food producers the opportunity to start a new sales, distribution and marketing co-operative representing all the Arran brands, selling to chefs and retailers throughout the country. Many were reluctant to work in a new way and to invest; collaboration can be scary at first. I market tested the concept and the products, gained confidence within our own team then turned up at the next meeting with a multi-temperature van with new Taste of Arran branding on the side and announced I would start the company.
Everyone was happy, we agreed commercial terms, shared customer bases and prospects and we just got on with it. We now have a tight core group and it is great sharing ideas, issues and moans with the other business owners.
Running a small business by yourself is a lonely game; Taste of Arran gave us all an opportunity to look at things differently.
We started by doing direct distribution and telesales. Within a few years we collaborated with a couple of our customers, notably Braehead Foods and moved to a more sustainable wholesale network. This was a step change as we needed to sacrifice margin for increased turnover. But it has worked.
What were you doing before you took the plunge?
I was a sales manager with FMC Meats, which was at that time the UK's biggest red meat processor.
How did you raise the start-up funding?
Arran Dairies: After working alongside my mother and father for 10 years learning the ropes I bought the company through sweat equity and cash within the company, I couldn't have done it without them.
Arran Dairies provides the working capital and operations for Taste of Arran.
What do you most enjoy about running the business?
Meeting and working with passionate people who are proud of what they do and where they come from. There is still a great depth of quiet pride within the Scottish people and I see this when they want to do the best for their community locally and nationally. We are so lucky to be able to be part of that. I see it in rural and urban situations. I also enjoy working with young people who want to be involved in food and drink, tourism or manufacturing.
What do you least enjoy?
Time wasting, irrelevant meetings and bad coffee.
What are your ambitions for the firm?
For Taste of Arran to be Scotland's most recognised and successful artisan food brand.
For Arran Dairies to be Arran's catering supplier of choice. We hope to replicate the Taste of Arran model and offer an export solution to other progressive Scottish food and drink companies looking to develop international markets.
What are your top priorities?
Make great products; have happy customers on Arran, in UK and worldwide; develop our company; keep working with great people and develop them and our companies together; have fun doing it.
What could the Westminster and/or Scottish governments do that would help?
Reduce the administrative burden on SME businesses.
We need to understand how the public sector tender process can encourage more use of Scottish products and services. I think we all need to be more innovative as to how we can work within EU regulations.
I wouldn't expect there is much Scottish cheese on French school menus. Things are getting better though.
What was the most valuable lesson that you learned?
Life is too short so it is important to get the work/life balance right.
Enjoy what you do and be passionate about it, make great products, employ great people, keep committing to better communication and hopefully our customers will be happy with what we offer them.
How do you relax?
The Isle of Arran is a great place to live and work. So if I am not travelling in Scotland or abroad, within five minutes of my office I can be at home relaxing with my wife and family or out on the golf course.
I also really value time chilling in a local bar or restaurant with friends.