Bega Cheese Ltd
Bega Cheese is Australia’s number one cheese manufacturing brand. Established in 1899, the Company has earned a reputation as a key player in the dairy industry on a global scale, supplying natural and processed cheese into the retail and food service markets both in Australia and overseas.
The organisation is a listed public company following a successful IPO in 2011. Since 2007, the Company has been acquisitive, doubling in size in just six years.
The Secret to Success
Bega Cheese is proud of its strong, yet simple business strategy; “We are extremely disciplined when it comes to cash and capital management,” says Aidan Coleman, CEO. This core focus means that Bega Cheese has a very strong balance sheet, and therefore when opportunities arise and it is in a position to grasp them. In the past six years, the Company has acquired Tatura Milk Industries and major cheese manufacturing and packaging assets in Australia, significantly boosting its bottom line.
Development and Innovation
The Company also invests a lot of time and money into development to ensure its products satisfy demand. Research and development for the Australian market is driven and conducted by in-house market research. “We respond to the domestic Australian market for new products, usually in certain segments (such as the kid’s snacking segment, which is growing strongly in the dairy section). We also respond to the demands from export customers who may want products with low salt levels, added ingredients such as Omega-3 fatty acids for good health, depending on the tastes of the region they are being exported to,” says Aidan Coleman. The Company has a strong presence in the Asian market, which is growing all the time. It has had a presence in Asia for over 40 years and as such has a good knowledge of the market – a lot of its product development is geared towards that customer base.
When it comes to pure science, the Company contributes to a consortium called Dairy Innovation Australia, which manages and leverages a lot of research for the industry as a whole.
The Company not only specialises in cheese; across its portfolio it produces more than 100 sku’s, including infant formula, nutritional dairy products, milk powders, cheddar, mozzarella and cream cheese.
“We’re Australia’s largest producer of lactoferrin, which is an iron-binding protein that works in the digestive system to minimize infection there, providing antibacterial activity to human infants. It's used a lot in infant formula products in Asia and increasingly in adult nutritional products as well. We use a lot of that product for sale in Northern Asia companies,” says Coleman. “We see it as a very strong market, and a very good micro-ingredient for putting into nutritional products in the future. We're very focused on the competitive advantage of many of these industries. We foresee strong futures for them. The most exciting thing is the continuing growth and demand for dairy products as a food source. We see that particularly in Asia where there is increasing consumption. What excites us is our capabilities, and our history in those markets, and our passion for developing business in those markets.”
Producing in excess of 200,000 tonnes of various products each year, the Company is also committed to innovating its processing and packaging facilities. “We have an extremely high level of automation and mechanization within our factories. We have automatic case palletisers, unmanned laser-guided forklifts, and automatic de-boxers in use. We also have one entire line that is fully automated from de-boxing the raw materials at one end, to supply of the pallets to the truck at the other end,” says Aidan Coleman.
Bega Cheese also works closely with other organisations within the industry to facilitate faster growth and development from a technology point of view. “One of our key strengths is our ability to form long-term partnerships with other companies. For example, we can pool our resources and develop technology as part of a joint investment, meaning we can not only manage cost but also bring technology to market faster,” says Aidan Coleman.
Robust Corporate Values
Bega Cheese has been successful in Bega, Australia for many years, largely owing its strong moral values to the local community. “We have been around since 1899 and we believe in creating a sustainable future for both ourselves as a manufacturing and marketing company and for the farmers that supply us with milk. We have pledged our long-term commitment to rural communities and agriculture,” says Aidan Coleman.
And Bega is not all talk, its Executive Chairman Barry Irvin is a fifth-generation dairy farmer as well as a businessman, owning dairy and beef farms. As a result, he has a strong affinity with farmers and a strong empathy for the dairy community. In addition to that, the Company has five farmers sitting on its Board.
“All of our factories except for one are based in rural communities. When you work and operate among these communities you become very aware of the impact you can have on that region. We are very mindful of the areas in which we operate,” says Aidan Coleman.
Furthermore, Bega Cheese also has a Farm Services Team to support dairy farmers in achieving their goals. “The Farm services team interacts directly with farmers, both in terms of managing milk supply and in ensuring the quality of the milk is to our specifications. That also includes working with them in their milking parlour in regards to hygiene and hazardous analysis control systems,” says Coleman.
Bega Cheese really is a brand that people can truly feel good about purchasing. “We employ close to 1,600 people, probably 98 percent of which are in rural areas within the region, so we have a very close relationship and affinity with our communities. Out here at Bega we do have a Heritage Centre, showing the old methodologies of farming and milk processing put together by enthusiasts over many years. We get approximately a quarter of a million visitors there every year, which is a lot for a small community of about 9,000 people. More importantly, we actively raise funds for our local communities. We’re very proud of being involved with our local communities.”
Bega Cheese operates under close scrutiny from the DECC (Department of Environment, Conservation & Climate Change). The manufacture of cheese has very little waste and the by-products of cheese are whey butter and whey powder, which Bega Cheese manufactures on site – the only effluent being water. The Company irrigates surrounding farms with the nutrient-loaded water from the cheese manufacturing process, delivering yet another benefit to local farmers. Constant soil monitoring helps regulate the paddocks, ensuring that they are rested, preventing nutrient depletion in the soil. “In terms of the environmental sustainability aspect, we run a program called BEMS, which is the Bega Environment Management System. We have members of our staff that work directly with farmers. It involves regeneration of land, land that may have been not used for some time, river banks that have eroded, those are the sort of things where we have planted a lot of trees, etc. We have a strong focus on those aspects of the environment, environmental sustainability, and we're strong believers of that.”
“We have a huge impact on our community – with over 700 employees we are the largest employer in Bega, a small rural town on the far south coast of New South Wales. We attract people to the area in highly skilled jobs and we employ a vast number of our factory workers from the local population base.
“Bega Cheese has undergone rapid growth since 1998, in fact we grew from employing 80 people to employing over 500 people in about three years – the result in our community was an increase in the value of land and real estate in the local area and increased profitability for local businesses as a result of additional incomes in the area,” says Aidan Coleman.
A Career in Cheese
There are many career opportunities at Bega Cheese; most jobs are advertised internally before being advertised externally, unless specific skill-sets are required. The Company is also aware of gender issues and works in consultation with the Equal Opportunities for Women in the Workforce organisation.
Aidan Coleman takes pride in exemplary working conditions at the Company: “We operate under a Consultative Agreement in conjunction with members of staff, management and union officials. Safety is a number one priority at Bega Cheese and we have adopted a behavioural safety program in the company that allows all employees to have a say in the safe running of our operations.”
Bega Cheese has an unparalleled reputation in the dairy industry and strives for success in many ways each and every day. The Company’s quality assurance is second to none – it has been awarded pharmaceutical-grade quality standards – and its commitment to product innovation is what sets it apart from the competition. Bega Cheese has a positive impact on the Australian economy, with well in excess of $300million of exports sold during the last financial year. It also provides a healthy, Australian-made product for the domestic market.
Aidan Coleman credits a lot of the Company’s success to its ability to develop long-term partnerships and relationships with suppliers and customers. Looking to the future, Bega Cheese is excited about the demand for dairy products in the Asian market. “We're a growing company. But at the same time, we have our feet well and truly entrenched in the ground. We're a conservative company in a conservative industry, but we have a very strong view of the company and we're determined to be a part of this industry. World dairy consumption is growing on a global scale and that excites me because it means that sustainability of the business and consequently value for our shareholders is a real possibility,” says Aidan Coleman.