Yeo Valley bounced back into the black last year, shrugging off inflationary challenges in the dairy sector to record a £5.1m operating profit.
The organic dairy supplier increased turnover by 22% to to £315.9m for the year to 28 May 2023 – driven by record farmgate milk price inflation, showed Companies House accounts for its main Yeo Valley Production business.
The figures mark a turnaround from the £2.5m operating loss recorded in 2022.
The yoghurt giant pointed to a diversification of its range into areas such as soups as one factor, following its acquisition of Tideford Organic Foods last spring.
The acquisition was part of its strategic goal to develop a broader food offer and increase net profit margins, Yeo said.
The supplier’s balance sheet also strengthened during the period – net assets increased by 8.5% to £41.2m.
Yeo said its outlook “was more encouraging than it has been for a few years” and expected volumes to continue growing.
However, it did point to challenges in the market. While higher farmgate prices boosted value sales, they also hiked consumer prices. The brand said it had tried to minimise the impact through “collegiate ways of working” with customers to ensure market volatility “was managed in a timely manner”.
This meant Yeo’s “quality and healthy products are affordable and ensure great farming is viable and valued”, the company said.
Yeo also noted deflation had been passed on to the consumer in the wake of farmgate prices falling from their peak early last year.
Looking ahead, Yeo warned it “remained concerned about the viability of elements of British farming and their returns being below the cost of production”.
The company said it hoped “the shocks of the last few years will end and British farming will continue to be well supported by both the government of the day and a fair market price”.
“We will continue to do our bit to support great farming,” it added.