Introduction

Many surveys have been conducted over the years which include questions about the perceived view of farmers and their importance or otherwise to the nation’s economy and security. There have been many positive descriptors applied; hardworking, honest, salt of the earth, good at ensuring high standards of animal welfare, custodians of the countryside etc. However, I am yet to hear a high profile proclamation that farmers are innovators, collaborators and able to make things happen when they want to make things happen. But think about it. As far back as anyone can remember and many years previously, farmers have demonstrated their ability and willingness to do each of these things.

Innovation

The 2nd Viscount Townsend, more commonly known to us as ‘Turnip’ Townsend developed the Norfolk Four Course Rotation that transformed land use from the early 18th century onwards. The son of an Irish farmer, Harry Ferguson took the already invented tractor and added the three point linkage. This transformed the use of tractors and remains in constant use on farms around the world today. The current Duke of Westminster, through his breeding company Cogent, instigated and developed the process of sexing semen which is having a major impact on the cattle industry both at home and abroad. And my neighbouring farmer and cattle breeders club member Mary Mead and her late husband Roger founded the Yeo Valley yogurt business from their kitchen table which as we know is one of the major success stories in the British dairy industry over the last couple of decades. They are all innovators that have had a massive impact on our industry. They are a few of the higher profile ones. If you look at those you know and our wider industry you will see innovators aplenty. It appears second nature to farmers and those involved in agriculture who appear to have a natural ability to think outside the box and be in a position where they can try to develop their bright idea. Their reason might not be for the greater good. It might be to save money or make things easier on their own farm. Nevertheless, for whatever reason they are innovators.

Collaboration

The definition of collaboration as found in the Oxford English dictionary is ‘the action of working with someone to produce something’. The terminology makes the definition somewhat vague but if you think about it, the phrase is very apt to our industry or indeed our sector. There aren’t many things you can do totally on your own to produce something. The majority of milk producers rely on someone to supply concentrate. Beef producers rely on inputs to grow top quality forage and so it goes on. If you ‘Google’ collaboration models, there is a plethora of diagrams to demonstrate the complexity of collaboration. However, there is one very simple model that speaks absolute volumes. Two overlapping circles. In the left hand extreme it says ME, in the right hand extreme it says YOU, in the overlapping bit in the middle it says US. So very simple but a really powerful message that can be visualised by linking arms and going forwards. Working together makes us stronger and it’s something some in our industry need to think more seriously about.

Making things happen

We all know farmers are resourceful. The majority of us have flexibility and capacity in our businesses to give us the opportunity to give our bright ideas a chance of becoming reality, at least to try it out in private before telling the next door neighbour about our new found route to future prosperity.

So, bearing these three things in mind and the request for me to deliver my paper within the bounds of ‘farming as part of a growing agri-business family enterprise’ I will attempt to explain how Innovation, Collaboration and Making Things Happen fits into the Alvis Bros business.

By way of introduction Alvis Bros is a family owned west-country farming and cheese making business. It was formed by John and Sam Alvis in 1951 in response to being fed up with receiving what they thought was not enough money for their product which was milk. Instead they sought to add value to their milk by making it into cheese. As a consequence of the cheese making they encountered the bi-product of whey which they fed to pigs, manure from the pigs was applied to the land to grow the crops for the cows and so the virtuous cycle of integration was introduced to the Alvis Business. This has stood the test of time and with the exception of some minor change the only variation to date has been scale.

So, to put my presentation in context we need to consider integration, being market led rather than production driven, devolved responsibility and accountability, quality, traceability and transparency which any food business needs and the Alvis effort to promote communication and education.

Before we get carried away with that, the one thing that underpins everything we do is Profit with Integrity. We are not embarrassed about trying to make a profit. That’s what we’re in business for. That said, we are not prepared to pursue profit at all costs. Whatever we do, we want to be able to stand by it and by virtue of that integrity welcome suppliers and customers alike to trade with us year after year.

As far as the company’s ownership goes it remains wholly with the Alvis Family. The third generation of Alvis Brothers are currently in executive control with Peter Alvis being Managing Director, Johnny Alvis being Company chairman, their father John Alvis whom many will know being recently retired MD and chairman still sitting as a Director with his brother doing likewise. John Alvis’s wife Pauline is Company Secretary. Very much a family business as far as ownership goes. As far as operational directors, roles are divided between four of us. Peter Alvis as well as his MD role has day to day responsibility for dairy operations, I am responsible for the farming part of the business and the estate, Ian Bugg is responsible for cheese sales and marketing and John Watts is responsible for the finance of the business. As you can see, ownership doesn’t necessarily mean the family want or need to manage the business and are prepared to import expertise where required.

The division of responsibility within the business is made clear by the split in activity. It is very simple, the dairy side includes everything to do with cheese whilst the farms covers all aspects of the farming side of the business.

Within this simple split there are a number of departments across each part of the business. For example, in the cheese side of the business there are separate entities for the Cheese Dairy, Finished Goods, Sales and Marketing, Farm Shop and Local Sales and Quality Assurance. Each is the responsibility of a working manager. Each is on the ground and empowered to make the decisions that affect the quality of their output. Each department is separately costed and a monthly profit and loss account drawn up for each. This ensures that as well as the relevant manager doing as good a job as possible with whatever he or she is engaged to do, nothing gets paid or banked without them agreeing to it. In that way, physical performance is optimised and financial control ensured. Further encouragement is provided in the form of profit related pay in addition to salary. By a combination of physical performance measured by various key performance indicators and financial performance measured by regular accounting the manager is encouraged to try things out to improve their part of the business. Obviously there have to be boundaries and we wouldn’t expect the dairy manager to sell all the milk and sack his staff but he is entrusted to innovate and try different things. Alongside that, with the integration in the business the others working upstream and downstream are instrumental in deciding whether something is worth trying and quick to point out if it is having a detrimental impact on their part of the business.

Likewise in the farming division the business is split into separate entities. Again, we have separate farm departments; we have Regilbury Park Farm, a 650 cow dairy with Johnny Alvis responsible for its day to day operation. In addition he has responsibility for beef production using his land mass. Next we have Box Bush Cotel which until just before Christmas was a 300 cow dairy farm. Unfortunately due to TB it is now a 150 cow dairy farm in the midst of a strategic change. Ham Green is our 250 cow organic dairy farm which is 15 miles away from base, the piggery which we will look at in a bit more detail later, arable and estate maintenance and property. Again each have individual P&L accounts each month so we can see exactly what is going on financially with each farm manager knowing what is going on physically on farm and key performance indicators being published.

To put the Alvis business in context we will produce, mature and sell 4,500 tonnes of cheese in the coming year. We have BRC Grade A accreditation across the whole cheese business, are Soil Association registered for organic cheese and West Country Farmhouse PDO accredited for non-organic production.

Customers include a number of the major retailers, various outlets in the organic retail sector, export to 40 countries and a variety of local outlets serviced via our own van delivery service. You can see we cater in one way or another to a whole cross section of customer size and type.

With regards farming, we farm 4500 acres split almost equally between forage and arable. 500 acres is managed organically within a stand-alone ring fence. Half of the total acres are owned with the remainder being a mix of tenancies and contract agreements. A collaborative approach with our landlords goes a long way to delivering what both parties want out of the particular arrangement.

Pigs are contract reared using whey permeate from the cheese dairy mixed with supplied cereals and protein. It is a simple collaborative system with Alvis Bros providing buildings, labour, water, permeate and land to put the manure on and the pig owner supplying everything else.

We also have a 50% share in an agricultural contracting company. The limited liability partnership was set up with the manager of what was formally an in house contracting business. He wanted a slice of the financial action so ten years ago we spun this off from the main company and to date it has performed very well and satisfied the aspirations of both partners. Again a collaborative effort that took some innovative thought in setting it up.

As mentioned earlier we have a farm shop. Historically, and to a degree to date the shop has acted as a public relations tool rather than being an out and out profit generator. We sell our own produced cheese and meat and have no aspiration to compete with supermarkets in Bristol or indeed Budgens a few miles down the road. What we try to offer if something a bit different that isn’t readily available from those types of retailers.

Communication and Education is something we are passionate about. There is a considerable lack of understanding about where food comes from, how it is produced and the potential impact consumer decisions have on the environment. We were approached by a local head mistress in 2000 to address these issues with the pupils at her school. From the initial contact with the 400 pupils at that school our original effort has developed into FarmLink, a company limited by guarantee with charitable status, we deliver curriculum based lessons covering all key subjects related to food, farming and the environment, we work with five other providers, it has a Board of Trustees, employs a part time chief executive and in this academic year would have had contact with 27,000 pupils either in school or on farm. It is an innovative way of telling young people what farming is all about.

As stated earlier, our management team is a working management team. Each of them is in a position to understand completely what is happening in their part of the business and are empowered to act accordingly. The role of the operational directors is to support the manager to ensure the best possible performance, stimulate and make a collaborative effort to improve the business.

For example, in the cheese dairy considerable effort has been invested to recover heat from wherever possible to reduce the amount of power required to pasteurise the milk. Previously, it took 405kW of energy to raise temperatures to pasteurise the milk for each tonne of cheese made. Now, after capturing heat off the bi-products of manufacture we have reduced our power requirement to 161kW per tonne.

A PV array has been installed on the cheese store roof which supplies all our electricity requirement for the cheese store and packing hall.

We use that electricity to refrigerate the cheese store. From the refrigeration plant we capture the heat generated to heat 50,000lts of water to 55°C everyday.

Some of these are big ticket items but there are others such as multiple use of water on the dairy units that took very little capital investment. Heat recovery off vacuum pumps, combined with heat exchange from milk cooling goes some way to pre heating wash water for the milking parlour. Innovative work practices often thought up by those doing the job often aids output, makes the job easier and as a consequence can make the operation more efficient.

The list goes on and no doubt is common practice in many parts of the food industry. What we have been doing is introducing technology into a proven situation and then adapting for wider use in the Alvis business. We break down whey from its original form into whey protein concentrate for human consumption, lactose permeate for animal feed and water for re-use in the dairy. We have recently been granted planning permission for an anaerobic digester to be fed with the lactose permeate currently fed to pigs. Could absolute self-sufficiency in electricity from bi-products be the next innovation in Alvis Bros?

To summarise, innovation doesn’t have to be expensive. Consider work processes, plant employed and be willing to think differently from how you have thought up to now.

Collaboration really does mean working with others. Work with your neighbours, your suppliers and your customers. Think back to ME and YOU combining to form US. You can’t go into a rugby scrum without the pack binding together. It’s no different in business. You need to communicate and work together.

When it comes to making things happen, give yourself and your staff the freedom to allow things to happen. Create the structure that allows things to happen. That said, make sure you have key measures in place that shows to what level you are succeeding.

Many of us in this room are already doing these three things to some degree or another. For those of you who aren’t I’ll leave you with this message.

Change isn’t compulsory, survival is optional.