GRAHAM’S The Family Dairy has reported a surge in annual pre-tax profits to £2.2 million, from an underlying £1.3m, boosted by successful diversification into protein-rich, dairy-based products such as yoghurt.

The family business, based at Bridge of Allan in Stirlingshire, has in recent times expanded into production of Icelandic-style skyr and “protein 22” yoghurts.

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Robert Graham, managing director of the dairy company, highlighted his view that the business was “aligned” with market trends, noting strong demand for natural, protein-rich products.

Mr Graham said: “The products that are doing well are products that would be broadly a combination of natural as well as being functional.

“That would cover products that are higher in protein, such as skyr and protein yoghurts.”

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He also flagged an upsurge in demand for butter, noting it was a “very simple” product made from fresh cream.

Graham’s, founded in 1939, notched up turnover of £109m during the year to March, up by 4.7% or £4.9m on the prior 12 months.

Mr Graham cited challenges in the liquid milk market.

However, he emphasised that, unlike some major rivals, Graham’s was making a profit in its liquid milk business.

He said: “We are still profitable in that area – whilst still challenged – because we work very hard in it…We need to keep working hard. I think that market is also going to have to change.”

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Mr Graham added: “Our business…has become a dichotomy. Added-value products, particularly the ones where we are very closely aligned with consumer trends, are continuing to drive sales as well as margin, while our liquid milk business, while still profitable, is more challenged at a bottom-line [level].”

Graham’s currently employs about 750 people.

Mr Graham noted the workforce had risen by about 8% over the past year.

He highlighted his appetite for continued diversification.

Mr Graham said: “We have been…focused on driving these added-value sales, and exploring and investing in new product development. That has been very successful. That is what we will continue.

He added: “We have got a lot of exciting products to launch. That is what we are all about. We are passionate about it – maybe too passionate at times. We are passionate about dairy products.”

Mr Graham sees consumers showing a greater preference for “less-processed, more natural” forms of protein.

He said: “That works very much for dairy. It ultimately comes from milk from a cow.”