A growing Meadow
Meadow is a food ingredients business specialising in milk, fats, confectionery, plant and fresh produce, and it has seen rapid growth recently. It is now a £550 million-plus business, with five different ingredient divisions and multi-site operations. Its growth has been driven by a culture with a very high customer service offering, and constant customer focus, says Raj Tugnait. Dairy Industries International caught up with him at the start of his second year at the head of the business.
Q. What in your background prepared you for your current role?
My career has been all about food for over 30 years. I started in the food industry working for an entrepreneurial family-owned company. I then joined Brakes, which is Europe’s largest foodservice business, where I spent 23 years under two private equity ownerships, until it was sold to Sysco, a global foodservice business. It showed me all kinds of ownership models and how to sustainably deliver rapid growth. I had my first role as MD in my early 30s, and have led businesses since then.
My passion has always been to build a team and then get them to deliver, as a team. After 23 years at Sysco, I was approached for the role at Meadow, and I saw lots of opportunities. I thought I was right for Meadow, and Meadow right for me it seemed big enough to matter, but small enough to care and be agile. The manufacturing sites are well invested in, and its customer reputation is fantastic. It’s now at a tipping point where it needs professional growth that is sustainable, and we do that by protecting the ingredients that have made it successful and building on that for the future. It’s about passion and people, and it retains a family feel, by being nimble and not corporate. It felt like the right business at the right time.
Q. How are things progressing at Meadow?
I’ve now spent a year in the role, and the transition from the Chantler family who were running Meadow, to me taking over as the head of the business has been very smooth. I’m happy to have made the move and I believe we are making a difference as a team, but there is still a long way to go and lots of potential to unlock.
We provide ingredients to the world’s manufacturers, including Mondelez, Unilever, and their brands. Meadow has built its reputation around reliability. It operates from four BRC AA accredited sites in Chester, Peterborough, Holme-on-Spalding Moor and Dolgellau in the UK, where it manufactures value added ingredients seven days a week. We currently employ more than 450 people and handle in excess of 550 million litres of milk each year, direct from our network of milk producers across the UK.
Q. What has changed?
When I first walked in, there were several things that had already happened. The business had grown and evolved rapidly from its foundations in milk trading. It now provides services to customers, makes ingredients and finds solutions to their
complex problems. We have our own milk pool with dedicated farmers, but also manage farmers for our customers. We manufacture butter, AMF, ghee and fresh dairy ingredients for some of the most reputable manufacturers across Europe and are the largest independent supplier of sweet condensed milk in the UK. We make chocolate crumb, manufacture plant based dairy alternatives, and run a milk balancing plant as well.
Our growth has come from new customers joining us for one division and then asking, what else does Meadow do? We are growing organically, but also look to buy other capabilities that our customers need and which we can deliver to them the “Meadow Way”. We have rebranded to simplify and link all the businesses together and to highlight our sustainability credentials.
Q. How much of the company’s portfolio is now plant-based and confectionery?
Dairy is still at the heart of the business – 65 per cent of our business comes from dairy and dairy ingredients, and the other 35 per cent is from confectionery, plant and chocolate ingredients. We are growing in all five areas of the business. The dairy and speciality ingredients is growing with a higher cash value while growth in plant-based is at a higher percentage, but expanding from a low base. It may always remain a smaller part of the overall business, but it’s what our customers need and we want to be a consistent and reliable supplier for them.
Q. What issues have come to the forefront over the past few years and why?
If you’re a business leader in food, the last three years have been all about the volatility and the pace of change. A lot of food businesses have forgotten the basics of a food business: quality, consistency, nimbleness and constant investment. It’s about sticking to the basics, which is not exciting.
For the past few years, it’s been about sourcing raw materials while taking inflation into account, and this is after dealing with covid, where things shut down and then reopened. It has been volatile, and businesses have needed to adapt.
In business, it’s about being strong but with the ability to respond. However, being nimble is not built into a lot of businesses. The UK food supply chain is creaking with a lack of investment as it has been squeezed by dominant retailers and foodservice wholesalers. It has also been obsessed with valuations to sell at a future profit, but growing rapidly at a loss in the meantime. For a consistent and reliable company, it’s about investing in infrastructure and people, listening to customers and anticipating their needs, whilst making a reasonable profit to enable that.
At Meadow, the family and private equity firm have both been good at reinvesting in the business. It’s like a house and doing regular repairs. You can get away without maintaining things for a while, but then it costs a lot to get everything right.
Q. What do you see as your greatest challenge/achievement?
We had a solid year last year, and we are set to have very good year this year, despite inflation and war. Covid’s behind us, inflation’s behind us, and if we can thrive through that, we can thrive through anything. It’s about making sure we remain focused, and continue with our evolution. Our preference is to build something out of our own facilities, in the Meadow Way. If we can’t do that, then we go and buy something – we can then offer new capabilities to continue our evolution as a business.
People underplay culture and transition. I’ve seen a lot of value being destroyed when leadership transitions are not smooth. The fact that no one has noticed our transition is good. We’ve started with the same team, and have now added some very talented individuals to it. We have a plan which we co-created as a team, which is a three-year growth plan for the business. My job’s pretty simple – to make sure the team stay on track, and provide support to deliver the plans. The first year’s always about setting the right foundations and then coming up with a plan you can deliver.
Q. What does a typical day look like for you?
I would get bored if there was a typical day! It is more of a typical week. I live in northwest London, and Meadow has four sites in four corners of UK. The centre of gravity is Chester, which is the largest site and where the support centre is. I generally spend two to three days a week in Chester, with the rest of the executive team based there as well. In the evenings, it will be dinner with the team, or customers, or a supplier.
I also spend a day on one to ones with my direct reports. I hear what’s happening to people, look at financial performances, and decide action – a fortnight’s a long time in this business. The other days I’ll meet other stakeholders, or talk to banks, people in the industry, or suppliers and customers. It’s pretty varied but this is a typical week.
Q. Outside of work, what are your hobbies/interests?
I find coming to work fun. My family realises I’m never off duty. When I’m working, I’m on holiday, and when I’m on holiday, I’m working, I also enjoy badminton, watching cricket and have taken up golf. As a family we love travelling, and we eat out a lot – it’s part of being in the food business.
Meadow has become the latest associate partner in Harper Adams University’s School of Sustainable Food and Farming, which is working to help the farming industry on its journey to achieve net zero.
Created by sustainable agri-food chain specialists at Harper Adams, it sees academics working alongside various commercial partners, including Morrisons, McDonalds, The National Farmers Union – and now Meadow.
Through its shared mission, the school aims to plug the knowledge gap in the farming industry and breakdown barriers when it comes to working towards net zero. Its purpose, followed by both the university and its partners, is to equip farmers with skills and knowledge towards net zero within sustainability parameters (economic, environmental and social), as well as improve farm data to track carbon emission reductions and sequestration, offsetting at a whole farm system approach and encourage new entrants into the food industry and a diversity of entrepreneurial people. The school will talk a common language with regards to net zero and sustainable farming.
Meadow also announced that sustainability will now be front and centre in the company’s growth ambitions, with the aim of being net zero across all operating sites
by 2030 and fully net zero by 2050. The company also has a programme of work with its farm supply base which will see Meadow working to achieve a 10 per cent reduction in emissions per litre of milk by 2025. The business also aims for its ingredients to be 100 per cent responsibly sourced by the same year.
Head of sustainability at Meadow, Alun Lewis, says, “We will be combining our influence, knowledge and passion for sustainability, as well as our 30+ years of experience working with producers to identify challenges facing farmers and how to best support them. The opportunity to share knowledge from the partnership with our producers through our farmer engagement programme, being launched early 2023, will be another resilient tool for the farmers, on their road to a sustainable future.”