After a PR débâcle, Nocton has been forced to rethink its plans for a superdairy. Will a scaled back model be viable? Richard Ford and Julia Glotz report
After almost a year of 'cow concentration camp' headlines and high-profile tussles with the animal-rights lobby, Nocton Dairies has finally bowed to pressure.
Controversial plans to build a supersize dairy in Lincolnshire have been scaled back in a bid to win round public opinion, with less than half the number of cows in the 'battery-like' farm.
It's good news for Nocton's critics, but what does it mean both for Nocton and the wider dairy industry? Is Nocton still a viable business model? What sort of message does this send out to dairy farmers? And what lessons can the industry need to learn from this?
While the downsizing means that Nocton's original budget for the project has been revised from between £50m-£55m to £34m, resulting in a substantial cost saving, the venture's profits are likely to be reduced by 50% to 60% as a result, Nocton directors Peter Willes and David Barnes admit.
And they have already incurred overall costs, including communications and planning, of £350,000 to £400,000 without a brick, or cow, or contract in place.
Yet the directors' resolve has not been broken. If they get the 3,770-cow operation off the ground, they will consider making a second planning application in order to take the herd back up to 8,100.
"Any business that is successful looks to go forward. It'll be a measurement of our success whether a new application comes in for the extra cows," says Willes.
Some industry analysts believe Nocton could still be a very viable enterprise, financially.
"If it's well run, the economies of scale tend to kick in at more than 1,000 cows because you get greater specialisation of labour in larger units and that allows you to do a better job at looking after the animals," says John Allen, managing partner at Kite Consulting.
But there are concerns from other quarters that Nocton's concession on size could have inflicted lasting damage on the prospect for superdairies in the UK. A key part of Nocton's public message was 'size doesn't matter' large herds can have high animal-welfare standards just as small herds can have poor ones.
And yet its new planning application is likely to put the focus firmly back on herd size, potentially undermining one of its most powerful levers.
Although there are many changes from the original plans, submitted in December 2009 including a big focus on green credentials (see p28) the standout, headline-grabbing difference is going to be that cut in cow numbers. "If it's all about animal management, then why cut the size?" asks one bewildered industry executive.
Barnes and Willes admit they could have done a better job of communicating the potential benefits of large-scale dairying. "Looking back, we probably should have handled it differently to how we started out," says Willes. "But hindsight is easy, isn't it?" he adds.
That may be true, but many on the processor and retailer side feel Nocton's bungled approach to public relations is indicative of a wider communications problem within the farming industry.
If there was one clear message coming out of this week's announcement at Nocton Dairies, it was 'you ignore consumer sentiment at your peril'.
"Whether it's superdairies, cloning or GM all of these new technologies have their merits, but all have failed to pass the consumer acceptance test because they were undermined by poor communications," says one dairy processor.
As Allen puts it: "The whole exercise has in some ways crystallised the debate for good or for bad. It's made us as an industry realise that we need to communicate better with our consumers."
If Nocton's new plans are accepted and they receive the necessary funding it hopes to build a visitor centre, so consumers can judge for themselves how the cows are treated. Let's hope the cows haven't already bolted.
After almost a year of 'cow concentration camp' headlines and high-profile tussles with the animal-rights lobby, Nocton Dairies has finally bowed to pressure.
Controversial plans to build a supersize dairy in Lincolnshire have been scaled back in a bid to win round public opinion, with less than half the number of cows in the 'battery-like' farm.
It's good news for Nocton's critics, but what does it mean both for Nocton and the wider dairy industry? Is Nocton still a viable business model? What sort of message does this send out to dairy farmers? And what lessons can the industry need to learn from this?
While the downsizing means that Nocton's original budget for the project has been revised from between £50m-£55m to £34m, resulting in a substantial cost saving, the venture's profits are likely to be reduced by 50% to 60% as a result, Nocton directors Peter Willes and David Barnes admit.
And they have already incurred overall costs, including communications and planning, of £350,000 to £400,000 without a brick, or cow, or contract in place.
Yet the directors' resolve has not been broken. If they get the 3,770-cow operation off the ground, they will consider making a second planning application in order to take the herd back up to 8,100.
"Any business that is successful looks to go forward. It'll be a measurement of our success whether a new application comes in for the extra cows," says Willes.
Some industry analysts believe Nocton could still be a very viable enterprise, financially.
"If it's well run, the economies of scale tend to kick in at more than 1,000 cows because you get greater specialisation of labour in larger units and that allows you to do a better job at looking after the animals," says John Allen, managing partner at Kite Consulting.
But there are concerns from other quarters that Nocton's concession on size could have inflicted lasting damage on the prospect for superdairies in the UK. A key part of Nocton's public message was 'size doesn't matter' large herds can have high animal-welfare standards just as small herds can have poor ones.
And yet its new planning application is likely to put the focus firmly back on herd size, potentially undermining one of its most powerful levers.
Although there are many changes from the original plans, submitted in December 2009 including a big focus on green credentials (see p28) the standout, headline-grabbing difference is going to be that cut in cow numbers. "If it's all about animal management, then why cut the size?" asks one bewildered industry executive.
Barnes and Willes admit they could have done a better job of communicating the potential benefits of large-scale dairying. "Looking back, we probably should have handled it differently to how we started out," says Willes. "But hindsight is easy, isn't it?" he adds.
That may be true, but many on the processor and retailer side feel Nocton's bungled approach to public relations is indicative of a wider communications problem within the farming industry.
If there was one clear message coming out of this week's announcement at Nocton Dairies, it was 'you ignore consumer sentiment at your peril'.
"Whether it's superdairies, cloning or GM all of these new technologies have their merits, but all have failed to pass the consumer acceptance test because they were undermined by poor communications," says one dairy processor.
As Allen puts it: "The whole exercise has in some ways crystallised the debate for good or for bad. It's made us as an industry realise that we need to communicate better with our consumers."
If Nocton's new plans are accepted and they receive the necessary funding it hopes to build a visitor centre, so consumers can judge for themselves how the cows are treated. Let's hope the cows haven't already bolted.
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