Revolutionising a Decade Old Queensland Brand and Business with Stephen Tait, CEO Of Maleny Dairies

Are you ready to revitalise a family-owned business and unlock its full potential? Join our hosts Jackson Barnes and Brad Ferris as they discover the inspiring transformation story of CEO Stephen Tait and his journey with Maleny Dairies. Through Stephen’s leadership, Maleny Dairies achieved phenomenal success by navigating a 90-day plan to redefine the company’s capabilities and aspirations. Get ready to be inspired and discover the powerful strategies that Stephen used to lead his team to success. So, let’s dive in and learn from one of the most successful business leaders of our time! 🚀👨‍💼

Stephen’s journey of modernising a traditional family business is a testament to the power of perseverance and innovation. By leveraging customer feedback, he has transformed the company’s approach to product development and market expansion. Stephen’s unwavering commitment to efficiency and growth has led to operational changes, from improving distribution to diversifying products. His story is an inspiration for anyone looking to overcome obstacles and achieve success. 💼🌟

Yet, it’s not just about strategy—it’s about people. Stephen strongly believes that transparent communication and effective stakeholder management are the keys to success. He fosters a culture of collaboration and adaptability, motivating and empowering his staff to embrace change and contribute to the company’s evolution. With patience and humility, Stephen inspires his team to strive for excellence and achieve their full potential. 🤝🌱

Stephen’s Maleny Dairies journey paints a vivid picture of business transformation in action—a story of resilience, innovation, and the enduring power of stakeholder engagement in propelling a legacy business into the future. 📈✨

#REDDPodcast #BusinessTransformation #LeadershipInspiration #InnovationJourney #SuccessStories #LegacyBusiness

00:00 – Opener
00:53 – Stephen’s Background
05:00 – Transition to CEO of CCIQ
15:33 – Challenges and ESG Focus
16:27 – Lessons Learned from CCIQ
19:21 – Journey at Maleny Dairies
22:19 – Challenges and Opportunities at Maleny Dairies
27:14 – Challenges in Supply Chain Management
30:28 – Investing in People
35:14 – The Economics of Milk Production
36:52 – Challenges in Consumer Perception
40:50 – Understanding Customer Needs and Business Direction
47:14 – Cultivating Change and Nurturing Growth
53:09 – Importance of Stakeholder Management and Communication
56:34 – Engaging and Empowering Staff in the Transformation
58:23 – Outro

 

If you would like to discuss any of the topics discussed in this episode further with a REDD expert or if you would like to be a guest on the show, please get in touch either via our website, [email protected], or through any of the links below. https://redd.com.au

https://www.linkedin.com/company/redd-digital/
https://www.linkedin.com/in/jacksonpbarnes/
https://www.linkedin.com/in/bradley-ferris/
https://www.linkedin.com/in/stephen-tait-2570447/

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(00:21):

Hello and welcome to Redd’s Business and Technology podcast. I’m your host, Jackson Barnes. I’m a co-host, Brad Ferris. Today we’re sitting down with an industry leader for 20 years or so as a current CEO of Melany Dairies. Stephen Tait, thanks for coming in.

(00:35):

Okay. I like the way you use the current CEO. Yeah,

(00:39):

Currently CEO. Yeah, yeah. Let’s unpack your background, mate. You’re obviously transforming businesses currently, and we’ll unpack the Melany Dairies story in a little bit, which is quite exciting. Keen getting some insights there. But let’s go back to where you started in more marketing. Yeah.

(00:53):

I started when I was about 20 odd year old in newspapers and spent nearly 30 odd years working my way through sales and marketing, circulation distribution management. Ended up assistant managing director of one of Scotland’s biggest newspapers, and then got a call to come out to work with News Corp in Australia in 2004.

(01:15):

And what did it look like in 2004?

(01:18):

I think we had a mobile phone that basically could play snake. That was about it. And at the time, I was still using a ref deck to actually find my way around the city while driving a car. So it was going back some time, but in these days I was brought out, I dunno if you remember, the Courier Mail used to be a big broadsheet newspaper, and it was a big broadsheet newspaper, and it was owned by Rupert Murdoch’s family. And basically the plan was that they wanted to transition this business into a new platform, new businesses, new business model, and effectively sell the business back to NewsCorp from Rupert. So we basically had to completely turn that business up on its head and prove that it’s going to be a profitable, sustainable business, and they needed somebody to come in and help change it.

(02:07):

And so they phoned up a guy from Scotland and asked me to come out. So it used to be a big broad sheet paper, and the first decision we made was to make it into a tabloid paper, which in itself still keeps it as a newspaper. But in these days, in 2004, the vast majority of New South Wales and Victorians all wanted to live in Queensland, and most of them are coming to live in suburbs that were expanding like Mango Hill and Northern Brisbane. And they’re used to reading a tabloid. So we basically had to change a paper that was generating 400 million a year in advertising revenue and cut the paper in half and still make it profitable. And so that was probably one of the biggest commercial challenges I think I’ve ever been a part of, which was fantastic.

(02:57):

Did that successfully?

(02:58):

Yeah, yeah. I remember having a conversation with my boss at the time saying, look, I think we’re going to lose a lot of money here. And he says, nah, you’re not going to lose any money. I said, no, I think this is going to be a big ask, getting people to pay the same price, if not more for half a page of advertising compared to what they were paying. And he said, nah, you won’t lose any money. And I said, why is that? And he said, because you’re Scottish and you hate losing money. That’s a true story. So effectively we changed the paper from a broadsheet to a tabloid. We increased its circulation quite significantly, and we kept all the advertising because at the end of the day, it wasn’t about the size of the paper, it was about the audience, and it was what the audience, the amount of audience that advertising reached. Nobody buys advertising on television based on the size of somebody’s tv.

(03:45):

It’s the eyeballs.

(03:46):

It’s eyeballs. And it’s actually a running theme, I suppose, through my life, which is why are we doing this and who’s going to buy it and what do they need? Where’s the gap? And thinking through the lens of a customer. So in every decision that we made there, it was about who’s the consumer of the paper? Who’s the person who’s going to sell the paper, the news agents? Who are the advertisers? So you had multiple stakeholders that you actually had to work out what they needed from you during this transition. And then you had the biggest piece, which was what about the people involved? And that actually make this thing every day, and it’s a fresh product every day. It’s not static, it’s dynamic, and it’s how you manage that internal structure to make sure you can achieve the objective. So it was a fabulously exciting time and I’m very proud to be part of it.

(04:43):

Yeah, awesome. No doubt. Fresh content, make sure quality’s good and right, people putting the right input in and would’ve been a hard thing. And learning, it sounds like a bit, your marketing background would’ve definitely helped there as well around that product market fit and that kind of thing. But it sounds like you went quickly into the commercial side. So what did you do after NewsCorp?

(05:04):

I worked for a PN newspapers, regional newspapers. I started to see an opportunity to take a lens through that. The digital element was really impacting our businesses, but the one thing that I saw as an opportunity was that local community engagement with local masthead and local brand. And people used to talk about, this is my paper. They didn’t say that about metro mass heads, but when you started to sort of interrogate consumers and advertisers, they would talk about my local paper as if it was theirs. And I started to see, it was during the recession 2011, 2012, when people started to lose their jobs, going back to the community, taking a step back from their big jobs in the city. And I thought, I think there’s going to be an opportunity here on local mastheads to actually generate local relevant content and also help them do that digital transition. So I ended up working at a PN newspapers for about two or three years, and it was a big learning curve for me because at the end of the day, we had, was it 64 local newspapers, 12 dailies, 13 print plants, 1200 staff. And I ended up being the commercial director there.

(06:24):

And that was a massive challenge when somebody really truly believes it’s their paper in their town and you’re trying to get ’em to change the way we do things, that was a big struggle. And not everything that you do turns out the way you want it to turn out.

(06:42):

How did you do that? How was your approach to their paper changing? How did you do that? Well,

(06:49):

You go back to the consumer. The consumer demands for content has to be more parochial than generic. And part of the challenge with newspapers is that they need to almost homogenise content to keep the cost down when they was going through the digital transition. So when you actually need more hyper-local content and the move was to centralise more content and the business model would dictate that you had to do that, you then came down to the fact that not everything can be profitable. And when you’re dealing with a public listed company and shareholders have a drive on profit, sometimes you just can’t achieve what you need to achieve

(07:31):

In the transition. You had to do things knowing you were going to lose money on it effectively so you could do other things.

(07:37):

So it was quite a challenge given that we were in the middle of a recession and we had so many different stakeholders. But I think we were at that early stages of digital transition into local communities. And I remember having a conversation with a local butcher who said, Sonny, not everybody that wants to buy sausages goes online to buy my sausages. I want to be on the front page of the paper.

(08:05):

Right,

(08:06):

Okay. And when you think about it, it was kind of difficult to help somebody move to that digital platform back in 2012, 2013 when the resilience of the internet, Emerald probably didn’t give you the platform to do it. And yeah, I think I was ahead of a curve there, hopefully trying to take advantage of local community stuff. But I think after three years of banging my head against a wall, it became a bit of a challenge for me. And thankfully, I came across a guy who was in the office one day talking to one of the editorial team about this piece of research that they had about business confidence. And I remember sitting in the meeting, and I’m looking at this guy thinking, I wonder what he does. And he was the president of the Chamber of Commerce, and they had this piece of research that they were wanting to have covered to a certain extent where they basically came in and told us all the challenges businesses were facing and what the government needed to do about it.

(09:19):

And all I could see was this great insight, great content, reputable brand. And I thought, that’s a media company, that’s an advocacy company, and it has this deep emotional connection to community because it’s the chamber of commerce. Now, I dunno about you, but I thought the Chamber of Commerce was a networking group, or I thought it was without being disrespectful, almost like a complaints body. Every time you saw them in the paper, they were complaining about someone, but yet they had all this great data and insights in front of them that said, this is what customers wanted.

(09:55):

Right. Then how did you get into being CEO of CCIQ? From that,

(10:02):

We ended up having a conversation in this meeting, and then the guy, I said to them, so do you monetize this? How’d you make money? And he said, well, we have members. And I said, so how many members do you have? And at the time, it wasn’t a great deal. And I said, wow, okay. But basically Facebook can give you a voice, I don’t understand. So we ended up having a chat and a very good chat, a lovely guy, and he eventually said to me, look, we are looking for somebody to help transition this business. Would you be interested? And at the time I thought to myself, what a great brand. And it has real local focus, which I was a real passion of mine. I come from a small business background and they were basically standing up for business. And I thought, that’s just a media company that’s just basically a media company that has great data and great insights, great influence with government, and I’d like to help them. So I moved from being in media to helping somebody move into media, right? Makes sense. Which was I thought would probably the last two or three years you go in, where are we? Where do we want to go? How do we get there? Three years and 10 years later, I was still there and I didn’t have grey hair.

(11:26):

So what was the chamber like when you started? What did it look

(11:29):

Like in terms of size

(11:30):

And membership?

(11:31):

It was an interesting conversation because one of the things I was very focused on was there was a distinction between what a business model is, so how do you raise the finance to do something? And that was seen through the lens of membership, but the real value proposition was about influence and outcomes. So if you’re asking people to pay you to become a member of something, what value are you actually giving to them? And the real value was almost the impact you could create with government to make it better to do business. Somebody would pay for that. So I wanted us to move away from being a membership revenue model, which is a bit like selling newspapers, subscriptions to actually being about how do you create this body of influence that gives us an outcome, which then we could commercialise through sponsorship and advertising and so forth.

(12:29):

So it was less about being how many members you had to what influence do you have? And I was more focused on how do we reach 400,000 SMEs, capture that data, be much more about forming policies that were solution-based as opposed to being complaints. So what were going to be the challenges facing businesses over the next two, three years, going to government with a larger voice and a greater impact because how many members you have doesn’t get you an outcome. It’s the policy that you are presenting. And would the government accept it? And if they can accept it, you could actually say, because of this policy, you’re going to save $400 a year, $500 a year, a thousand dollars a year, that becomes your value proposition. So I was very much focused on the audience and the impact of the organisation. And I remember a figure probably the year before I left just after Covid, where we analysed that as a result of a membership at CCIQ, if you paid us to be a member, the government policies we managed to achieve as a result of the advocacy we did generated savings of in excess of $400,000 to a business because of this policy around red tape reduction grants, available sustainability programmes.

(13:58):

We added that all up and it came to about $400,000 worth of value. So I think our media coverage went through the roof, our media audience went through the roof. I think we became more relevant, but after seven or eight years of it, you think it’s not good for a CEO to stay, especially one that focuses on change. But towards the end of that period, I was looking at what businesses challenges were going to be, and I saw where I thought that consumers were going to hold businesses more to account around their social impact, their environmental impact, as opposed to being driven by profit or cost or product. It had to be around about what was the overall value of that business. So I started to look at what could we do to help a business go down that journey? Because at some point, if governments are making claims that we’re going to be carbon neutral by 2050, well that’s going to have an enormous impact on businesses. And it was incumbent on us to help businesses go on that journey quicker. And it was through that focus that I started to look at ESG and how you would bring that down to an SME size because Queensland’s an SME state, 400,000 SMEs, and these were going to be the ones that were going to be impacted by it, but consumers were expecting businesses to have that social lens.

(15:31):

How was the general feedback when you were trying to push that ESG element to small businesses? I imagine some would be like, yeah, cool, and some would not want to talk about it at

(15:38):

All. Yeah, absolutely. I mean, at the time some businesses saw it as being as jumping on the bandwagon of a green movement, but I’m more concerned about what a consumer actually is going to be looking for. And when you’re looking for, I saw it as a point of differentiation. I saw it as a point of how can we help you achieve this? And at the very least, what’s wrong with helping somebody achieve a more profitable business through actually doing something sustainable? So I saw it through the lines of perhaps again, a marketing view of a consumer view of a point of differentiation. And if it could be done with no impact to your bottom line, then why wouldn’t you

(16:20):

Seem very focused on the end user of the consumer, which is interesting. What were your maybe three biggest things you learned from CCIQ time and then I want to unpack your me area story.

(16:32):

You can’t fight city hall. No, I think I learned more patience. Okay. I think I learned more. Patience was one of the biggest ones that you can’t change something overnight that’s been around for a hundred years, and we called it a 20 year was a hundred year old startup was because I had been used to the corporate life where you could make a change that would just happen and you had all the resource underneath you to do that. You were working basically for a non-for-profit organisation that had huge amounts of legacy, not a lot of cash and a cultural perception of almost bureaucracy. So I had to be more patient and I was sometimes not very good at it. So I think my biggest learning was to have more patience when it comes to change. That would be the first thing.

(17:29):

So it sounds like just recapping that you were trying to drive a massive amount of change, but choose your regulated, not for profit, not a lot of money, but still wanted to get that lot of change, therefore learnt patience. Yeah, and

(17:40):

I think we did that to a certain extent. So that would be my first learning. The second learning is actually, and I will stress it, it’s about what business, what problem are you trying to solve and to always focus on what problem are you trying to solve. It can’t be because you think it’s a good idea. So having a greater understanding and insight into the person you’re trying to help fix something that could be in some respects, it’s not just the end user. There are multiple people involved and you have to solve all of their problems.

(18:17):

It’s interesting, your sales marketing background, tying into doing that makes a lot of sense, but on paper, sales marketing to CEO of a non-for-profit, it doesn’t make a lot of sense, but it makes a lot of sense when you explain it like that. What was the third thing? If you had to name a third thing, lessons learned from CCOQ time, the 10 years you spent there,

(18:33):

Sometimes you should make brave decisions quicker and be braver and be more confident that the decision you’re making is the right one. If you have the evidence, then you should push through. And sometimes these tough decisions I didn’t make simply because it would’ve just been too tough. And I think being brave and having that commitment to make these changes and see them through, I would like to have made better decisions if I had my time again

(19:10):

From 10 years successfully, CEO of CCIQ drove a lot of change, made a lot of impact. Then you decided to go be the CEO of a dairy up in dairies. What was that transition? What happened there?

(19:30):

I’ve just explained earlier on that fate’s a funny thing, but sometimes you actually perhaps subconsciously drive a fateful decision. And my passion for that sustainability element within business led me to meet several businesses that were also keen to look at what does the future look like for our business? And I really do have a passion for SMEs always have done. So when the time came for me to leave after 10 years, my view was that I would go to my small farm up in the Sunshine Coast and play with my highland cows and perhaps potter around with a couple of businesses here or there. I was over overwhelmed by the opportunities that started to come to my attention, but I decided that I wanted to do something that would be reflective of my values and my passion, and I’d spent 10 years fighting on behalf of SMEs.

(20:31):

And whilst there were opportunities that arose that were in the corporate sector, I actually thought it would be a really valuable thing for me personally to maybe walk the talk. And so Melany Dairies reached out to me through previous meetings that they knew I was leaving, and they asked me if I would come in and have a chat to them and I could make some tenuous links between why dairy, my great great grandfather was a dairy man. Because no resemblance to the decision. Some people think it’s because it’s near my house, it’s not. It’s an hour away. The real decision was I could see a family business that had so much potential and would be a great case study on how we could actually help a business grow exponentially. And the challenge I saw was that this very successful family owned husband and wife business that had been there for 20 years and were reaching out for help, they weren’t looking for a CEO to basically just come and run a successful business.

(21:45):

It was how do we help exponentially grow our business? And I suppose because of my marketing background, in some respects, I know nothing about milk and my ability to change businesses. And they understood change. I mean a very brave couple, very brave. I mean, he’d be the last person you’d reach out to by the way, what about a guy that used to run the Chamber of Commerce coming to run our dairy? And so they asked if I would come and help them make some changes in their business. And I agreed. And that was just over two years ago now. Wow.

(22:20):

So when you first went to ies, let’s start there, went into the business, we had to take some time to understand how a dairy operates, no doubt, and how they make money and where the current situation is. Do you want to unpack that story a little bit around what you did to understand the challenges they needed help with effectively? And then we can go into how you solve those over the preceding 24 months.

(22:42):

I remember somebody said to me, well, what do you know about milk or dairy? And I don’t know a thing about it. I was struggling trying to work out which end of a cow is a cow, but it’s very similar to newspapers. It’s a fresh product every day. And okay, it’s a fresh product every day, and no day’s the same, but you have to have raw material coming into the factory and you have to produce a product and you have to send out the door and it has to end up at a retailer and then it has to end up at a consumer. It’s exactly the same as the newspapers, and it’s just the component parts that you have to understand. But the one thing that I was really grateful for is that the people who actually ran the dairy, the technical people were all in situ. They were all there.

(23:35):

And the first thing I did was ask them, if you or me, what would you do? Because they all know. They all know everybody in a business knows, because they’ll always go home at night and say, the problem with this place, if they could do this, it’d be better. But they’re almost too frightened to tell anybody. So when you walk into a business and you don’t know anything, it’s really, really comfortable to be the stupidest person in the room. So all I did was I spent all my time asking everybody, if you were me, what would you do and what do we do better and what do we do worse and what could we do? And I just followed the same path that I did the newspapers. You’re going to speak to a news agent. Well, you’re going to speak to a retailer. What would you do if you were us? How do you think we could grow our business? You then go to the farmers and you say, you provide me with raw material. Tell me how we can do it better. What are your problems and what problems can we solve? So I just went down the whole supply chain of our business and spent six months asking questions, six months, asking questions, six months. And then it was, I mean, this is a very successful business before I turned up. So

(24:53):

What was the impetus? Was there a problem or was it growth or was it growth?

(24:59):

And I think that’s normally I was taken into a business to solve a problem, to then make it grow. This is the first time I’ve walked into a business that was successful and just wanted to grow. But that in itself has growing pains because you can’t grow unless you fix some fundamentals. How old is it? 20 years. So I think it’ll be 23 or 21st in 2020. So it’ll be 24 years, 25 years,

(25:21):

Definitely. At least in Queensland anyway. I mean, I’ve always known about Melany Dairies and thought of it as a premium

(25:26):

Brand, and it should be and it will maintain that. And I think that that’s some of the values in the business are very clear about what this business is. And I think having that singular focus really appealed to me because we’ll never go down the route of price in terms of a point of differentiation because a premium product, why are we a premium product? Because we decided to pay the farmers the highest farm gate price that we could. Well, everybody else sees it as a commodity. We saw it as an integral part of the economy that we support regional communities and their farmers. And that is a philosophy in the business. So honour the farmer is the underlying value in the business.

(26:11):

And how wide is that supply net from

(26:14):

The farm? 80 kilometres from the farm. But to honour the farmer means how do we service them better? Are we making sure they’re profitable? Ultimately though, that price goes down the line, which is why we have a premium product on the shelf because we pay them the highest farm gate price to anybody else. We expect them to have the same values as we are. Make sure you’re paying your suppliers the most amount of money. Make sure you’re giving us a quality product. Make sure your animals are well looked after. So that whole value proposition means that I can sit in front of a consumer and say, this is the highest quality milk product you can buy that’s fresh, provided local, and actually the impact that you’re having, not just on your family, but the economic impact that you’re having all the way down to the farmer is an integral part of our story. So sorting out that supply part was our biggest challenge first because talking about, so

(27:15):

Just to be clear on that, effectively you got engaged for lack of growth was the main reason, and then you went and asked more questions and found out what operational problems or what other problems did you find out

(27:27):

If we made an ambition to double the size of our business within five years, there needs to be fundamental change. You need to look at your productivity, your production capability and capacity, your warehousing, your supply. Because if you ask to double your business in five years, you have to find a lot of milk,

(27:47):

But then you have to find a lot of customers, and then you have to find a lot of retailers, and then you have to find a lot of staff. So every part of the business has to be viewed through the lens of what do we need to do to double the size of this business profitably? And so that’s what we did. We started the questions. I was asking, what the problems now? But if I was to double the size of this business, how would you react if I asked you for twice as much milk to be supplied to me? What do you need to do as a farmer? We’ll have to buy more cows. How long does it take to buy more cows? What’s the price involved in that? So it went all the way through the supply chain. So we are not making, I don’t have to fix a business. I have to make sure it’s growth ready. You didn’t have

(28:37):

A problem. You had a

(28:38):

Challenge and an opportunity. And it’s been one of the best cultures I’ve ever worked into. The owners basically just handed with the keys and said, best of luck.

(28:53):

So what actually is your title? Because I’ve seen chief Excitement Officer,

(28:57):

Chief Chief, enthusiasm Officer, enthusiasm. Yeah, there’s a degree of humility and reflection on that. And I did it for that very reason because to be a CEO, you really should know what you’re doing all the time. I thought, damn, passion and enthusiasm will get me through. And again, reflective of what my job is, is to make people enthusiastic about change because nobody wants to change through fear. You can’t frighten people to make change, but you can make them excited. And if you give people hope over fear, they’ll take hope every time. So when you say to somebody who’s been there 10 years, by the way, we have to double our production. You can either say, you can view that through the lens or else. Or you can say, wouldn’t it be amazing if we could double this business? What would we need to do to make it double? What would be the enablers that we would need to make this happen? So leading through hope rather than fear, I thought was more reflective of my title, that I would be more excited and get people more excited about that opportunity than fearful. And everybody within the organisation understands that.

(30:14):

I’m a very, I walk around a lot and I sit in the canteen with people and I go out in the trucks with people and I go see the farmers with people. And my job is basically to enthus them about the changes that we’re making, and we are making a lot of changes.

(30:28):

What change have you done in the last 24 months, just for people listening? Do you want to articulate that? It sounds like the first bit was going to uncovering where we’re at. And then what have we achieved in the last two years that you’re most proud of?

(30:41):

What I’m most proud of, I think the people that work for us, the first person that I actually hired was an HR guy, which is an unusual hire in most cases because you normally employ a sales guy. And I wanted to make sure it is hard to attract talent to come to Miley.

(31:02):

It’s in the middle of nowhere and they’re kind of hard to find. But I thought that we had great staff, but we had to give them clarity to keep them safe, to make sure, making sure that we’re making sure everybody comes to work and goes home safe and sound. We need to have more policies around how we recruit, how we retain, how do we develop. It was all about getting the fundamentals right in the people side of it, putting in health and safety practises that were there but needed to be improved upon. So I thought people were the first thing.

(31:38):

What did the owners say when you said to them, when they approached you and said, I want growth. And you go, I’m hiring a HR manager that land.

(31:45):

Well, interestingly enough, the trust that they extend to me is quite incredible because as you say, that would be the last thing I would think of. But your people are your most important asset.

(32:00):

And if you are seen to be investing in these people and you are investing in these people and you’re giving them clarity and support and a say in how things are happening, that sets the foundation for everything you’re about to put in place. Because if you put in place a sales or a growth strategy and people are just expected to work harder, then that doesn’t create the right culture. So the first thing we did was make sure that everybody saw us investing in the people about to start a marathon. So that was the fundamental thing that we did, and I think we’ve done it great. I think we’ve done really well. The guy that I employed has been phenomenal, so he’s been good. So I think the people side of it, we’ve done really well. The supply part, I think we’ve done a great job of, we took the decision that the most important part of growth will be our soft dairy, which is our creams and our yoghourts and potential new products. That means that you have to have more fat in your milk, which means that the farmers actually have to invest more in their cattle to produce better quality milk. In order to do that, you have to pay them more. But you’re also in competition to every other dairy processor who’s trying to find a never diminishing pool of milk, which is bizarre because the only reason it’s diminishing is we’re not paying them enough.

(33:30):

So does Melany have their own herd?

(33:34):

No. It all outsource. We used to inservice, we used to, but that’s all very well, when you’re selling 10,000 litres of milk a week, now we’re selling hundreds of thousands of litres a week. You really need to bring in everybody else. So we’ve been very focused on working with those local farmers who are prepared to invest in their her

(33:54):

Just so mostly from, is milk mostly in Mullany? Yeah, within

(33:59):

Regions of the cq.

(34:01):

That’s not to say we won’t go back to having our own cattle, but at the end of the day, we’re a processor. We put milk in bottles, and that’s what we’re got to be looking at first. That’s our core business, especially when you have this thing about honouring farmers, you have to go out and find more farmers to bring in to the family. So we’ve been very good at keeping a hold of those suppliers and paying them a good price, which means they’ve given us better quality milk, and it is the best quality milk. And it’s stupid things like our products, a cream product that you see on the shelf, a tub of cream. If you look at everybody else’s fat content on that cream, it’d be around about 38% fat. Ours is 54.

(34:51):

Wow.

(34:53):

Our fat content and our cream is 54%. Wow. Now that doesn’t mean it’s fat, it means it’s great cream. We don’t put anything else in it, whereas other creams may have a thickening agent in it or additional products that we don’t do. So we have a very, very pure focus on what we do.

(35:15):

Steven, one thing I wanted to ask was dealing with supermarkets in 2024, obviously the consumer, very price driven around the price. They pay for everything, not just milk. What’s the other benefit and why would consumers buy Melany dairies milk, which is a premium product and more expensive? I

(35:30):

Think that’s part of the narrative that we are having to build on, is that a lot of people see Melany Dairies as just being a local brand. So if you’re on the Sunshine Coast, you buy Millennia dairies because it’s a local millennia brand. But the fact of the matter is, our challenge is to move our product to a bigger distribution area, and therefore we’ve got to establish credentials in a consumer’s mind of why they should be paying a premium. In order to do that, we have to convince supermarkets to pay a premium for our product because ultimately the price a consumer pays cascades all the way down to the farm gate price. And the only reason that we can pay the farmers the highest price than anybody else is because we have the highest price of our product on the shelf. Now, we know there’s a vast range of pricing for milk products, and people make decisions on different reasons, but I think our biggest narrative, our biggest story, is about the social impact that our brand has both within our region, our area, but also our commitment to having that impact across a broader geographical area.

(36:41):

So for example, the last few weeks we put together some research on what is the impact of our business on society in which we work. And when you look at our whole supply chain, it’s quite incredible. It’s quite incredible the impact we have on local plumbers, local sparkies, down to a farm farmer who needs somebody to come out and fill fuel into these tanks. When you add that altogether, I think we’ve got over 350 people working in that supply chain, and it generates $40 million worth of economic impact to Queensland’s economy. It’s an enormous impact. And when you think of every time you buy that milk, I mean for every 34, 30 5,000 litres of milk that we produce, we can employ another person. So we have a direct impact into society, but also with that social conscience that we will only work with those people who have similar values to being respectful to the animal husbandry, the communities in which they work.

(37:47):

But literally, every penny that we generate has an economic and social impact. And I think that the supermarkets are starting to understand that why? Because consumers are, are demanding not necessarily the cheapest price for every product, even though there is pretty challenging times at the moment. But if they are going to spend that money, we have to be clear on why they’re doing it. And I think that rather than being price driven and driving price down, we have to talk more to both the supermarkets who buy our products of the benefit of them paying us. That price goes far beyond putting money in our pockets because it doesn’t, there’s not a lot of profit in milk, believe me. But it does have an enormous economic impact in society. And so supermarkets are getting that way under social pressure to do that. But also we’ve got to look at other customers, not just supermarkets. All retailers and governments, governments have a procurement policy of best use of taxpayers’ money. Well, buying the cheapest product isn’t necessarily always the best solution when you’re looking to have a greater impact on society. And so I think governments, retailers, independents, consumers, we all have an obligation to look at why we are going to pay that price and how does it cascade down into society.

(39:10):

Makes a lot of sense. So you say every 10,000 litres of milk purchased 4,000, 34,000 creates one job in Queensland? Yeah. Awesome.

(39:19):

So think about when you’re buying your milk. The one thing I can never get my head around is that I love Bundaberg ginger beer, right? It’s the best ginger beer I’ve ever drank. I drank bucket loads of it, and I pay about three and a half bucks for 300 mil of really good high quality sugary water. But I have people complaining about buying a litre of milk for a dollar 80 where a farmer gets up at three o’clock in the morning to milk cows and look after his family and do it twice a day, and he gets paid a dollar a litre. We’ve got to be better at telling consumers that milk is not a commodity, it’s not a luxury, it’s a necessity. 97% of people in Queensland drink milk, and yet we haven’t been able to articulate why they should pay more for it, but they’ll pay more for a Queensland based soft drink, a third of the size, and they’ll pay twice as much for it. That’s our problem, not everybody else’s. And we have to be better at telling that story.

(40:31):

So let’s unpack that a little bit. It’s not like you’ve made a lot of change, but for people listening, maybe say the first 90 days as A CEO, which sounds like you’ve got a lot of experience in that, even before you were CEO in current last two roles, you were kind of doing that when you changed through the newspapers, to be honest. What’s your advice to someone who’s stepping into a CEO role or trying to drive big business change? What would you advise you go and do in the first 90 days?

(40:59):

Well, in my case, it was 90 days of asking questions if the truth be known. But no, I would say that the first 30 days was actually about getting to understand the people we were working with, the capability and the capacity of what we were dealing with currently. So it was basically establishing where you are now. The next 30 days was actually the questions around about where do we want to go and where do you think we should go and how do you think we could do it better? And then the last 30 days is, well, how do you get there? So it’s very much a three part of where are we, where do we want to go, how do we get there, which is a straightforward textbook marketing approach to businesses. That’s marketing strategy. Where do you want to go? It’s three questions. So I spend the first 30 days and asking people, where are we? What do you think we should do better? The next part is, if we did these things, how big do you think we could get this? And what would we need to do it? And the last 30 days is, so how do we do it then? And when are we going to do it and who’s going to do it?

(42:04):

And then measuring it and going back and saying, are we on track?

(42:10):

And I want to pivot this to obviously land dairy’s fairly legacy business. How did you go getting the data to make those decisions apart from asking people? And what was the journey went through there around modernising effectively the business?

(42:28):

It’s actually probably one of the biggest challenges that you face when you’re dealing with a family business. It is a family business for a reason in the sense of it’s limited by its capacity and capability to, I suppose, adapt to change that that’s coming at a rate of not, they

(42:48):

Don’t have a big IT team and data on News Corp would, for example, around how many news hosts out who’s reading what retail stores are doing stuff.

(42:56):

I could press a button in my previous roles and I could tell you who the customers were, how much were they buying? So not in this one, this is be a business that outsourced an awful lot of its distribution to a third party. The company needed to start understanding its relationship with a customer and understanding that customer better and actually building a closer relationship with it. And we had no data. We had an invoicing system. And your customer would be your retailers ultimately, or? Yeah. Yeah. So there’s consumer, which ultimately is our job, is to drive their behaviour to go into the retailer. But the most commonly used phrase that when I first joined, which was a real telling thing, Facebook is an amazing source of data for me when they go, we love your products when we can buy it. And what it pointed to was the fact that our supply and our distribution needed to be improved upon because the lack of, I suppose, comprehensive supply into as many outlets as we could get into was sadly lacking. So you can see this is great milk going by it. If they turn up and it’s not on the shelf, you’re wasting your time.

(44:12):

So

(44:13):

In terms of customer data, which is the retail side of it, we didn’t really have a great deal of data, which is a big challenge. It’s like flying blind. It’s like flying with half an eye because I had no ability to forecast, I had no ability to see trends. I had invoicing, I could see invoices, I could see numbers, but we had no customer insight. We had no CRM system. We’ve got none of that.

(44:41):

Interesting. That’s obviously massively important. I imagine if you send there in your invoice and you’re trying to add staff on, but you’re not sure how much is going to continue buying, for example, or

(44:52):

Even what day he buys or what day needs it delivered, or could it be a different day to be delivered as he asked for more days to be delivered? It’s very hard. And if they’re only buying certain skews, they’re only buying the milk, but they’re not buying the cream or they’re buying the cream, but not buying the milk,

(45:10):

Where that data then, how do you know where to go on effectively grow, for example, in that retailer as well? A

(45:16):

Large retail group asked me about a year ago, do you make custard? That’s a real scary fact that a major customer group asked me if we made custard and we’d been making it for 20 years, right?

(45:32):

One of your top 10,

(45:33):

They would be up in the top two. Wow. Yeah.

(45:36):

Wow.

(45:37):

Which was a real scary, I mean, actually when he said that to me, I actually thought that was a joke. Did you

(45:43):

Say it was one of your top customers as well

(45:45):

In terms of custard? No.

(45:47):

No. The customer who didn’t know you made Custard, were they one of your bigger customers? They

(45:51):

Were in my top two. Top

(45:52):

Two customers. Top, yeah, top two customers. Top two

(45:55):

Customers. One of my top two customers asked me if I made custard. And that’s when you realise you’ve got maybe a lack of data. Yeah.

(46:02):

I must admit, I’ve only known Melany Dairies. I mean, I’m no expert, but I’ve only known it for milk.

(46:06):

But even then, it’s product development’s an integral part of the business. And in the last 12 months, we’ve introduced, I remember somebody asked me, why do you never make lactose free product? And I realised that we hadn’t changed products, changed our product for 20 years. So we made the same milk gold, top red, top blue top. We made the same yoghourts and the same creams, and we hadn’t changed that product range for 20 years. And one of the first questions I asked when I met with customers and they said, why do you not make lactose free milk? I said, I dunno, would you like us to? And they went, well, yeah. And I said, okay. And so I went back to the factory and spoke to the production manager and said, why do we not make lactose free? And he said, I dunno. I said, can we make it? And he went, yeah. I said, can we make some? He goes, yeah. So we’re now doing tens of thousands of litres a week. Oh wow. Of lactose free milk that we had never made before.

(47:12):

So would that be on top of your normal business or does that Yeah, because a completely different product, right? It’s

(47:16):

A completely different product. So now it doesn’t cannibalise because it’s a completely different audience, which is why I was interested in it, say to them, where are we missing? Where are we missing? When you look at the wall of milk, where’s our product missing? Is it size? Is it, what are we lacking? Is it the bottle shape? And this customer said, I don’t know why you don’t make lactose free milk. And it’s just gone off.

(47:38):

Yeah,

(47:39):

Wow. We had the same conversation about cream. We don’t make lactose free cream. Can we make it? Yeah. Can we make it? So it’s been this fabulous insight comes from customers, consumers on social media telling us where we’re not being sold, telling us what products they’d like to buy, telling us Why is your yoghourts never, why are they that size? They’re too big for a single serve, but they’re too small for a family. Can you change the size? Yeah, we can change the size. That’s awesome. Yeah. So we basically use consumer feedback, retailer feedback, and then test a little bit and then take it to market. So we are relaunching all of our yoghourt range at the end of this month. New flavours, new packaging, really simple things like when I was a kid and I worked in a small supermarket, I was like 15.

(48:34):

And you were given the chance to load the stuff up on the shelves and I had to do canned fruit. I remember it. And it was a pain in the neck. It was single cans and you had to put them up on the shelf. But my mate, rim the corner was doing packet stuff and they all came in boxes and all he had to do was rip the box lid off and put it up on the shelf. So he was working less than me. And I said to the supermarkets, we send all our product and crates to you. Is that a problem? And they said, well, it’d be a lot easier and you get more shelf space if you put it on a box. So we put it in a box, we came back, sat down with the team and said, can we put our creams in a box to allow it to be put on the shelf easier? And if we made it instead of too wide, we made it three wide, that means we’d get more shelf space. So that’s what we did.

(49:25):

Wow. There you go. A big thing in the yoghourt space is like Greek yoghourt. These are Chobani, all those kind of guys you venturing in there. Yeah.

(49:32):

Greek yoghourt launches at the end of this month.

(49:35):

There you go.

(49:36):

So there you go. So yeah, literally conversations like

(49:40):

This

(49:42):

Are what we use in pd, which is I had this conversation with somebody who wants Greek yoghourt.

(49:47):

Yeah, interesting.

(49:49):

But with that size of business that if that volume of requirement turns up to somebody saying, if you did this, we would buy it. We’re such a small company, we only have 50 staff, but it’s a very dynamic place. Yeah. It’s good that you can just

(50:06):

Rapidly

(50:06):

Act on that. And we’re not running at full capacity. We’re only running one shift a day. So there’s an opportunity for us to double that shift. So it’s been, NPD is a big part of what our growth has been over the last sort of 12 months, which I’m really proud of. I think we’ve done a great job of that. Yeah, awesome. The opportunity for us to continue there is enormous. Do you know that all the butter that you’re getting into Queensland’s coming from New Zealand,

(50:31):

Really

(50:32):

Crazy,

(50:33):

Did not even know that.

(50:34):

Crazy that we don’t make butter

(50:36):

All of them. All the brands, like all the

(50:38):

Brands that you see, they’re all coming from New Zealand, not all of them obviously, but the vast majority of butter that’s coming, that country’s coming from New Zealand.

(50:45):

What’s the one I buy? The red and yellow one? Best Western, is it? Yeah, that’s

(50:49):

New Zealand. No, that’s what I’m saying. The vast majority of them will come from New Zealand on Eastern, but there’s no Queensland butter though. They’re small artisan butters that make small amounts and maybe have a small shelf space. But I just think that’s an opportunity for us. I’d love to make Queensland butter. I’d love to make a really high quality local butter. And the only thing that’s stopping me is technology and automation, because I kid you not every innovation that we do, it is not unheard of myself and the CFO and the people officer to be putting yoghourts in boxes by hand at six o’clock in the morning because we have no automation.

(51:32):

So you need to test the product, see how much demand there is before you go and invest in big technology and machinery to automated.

(51:39):

So yeah, so that’s what I’m proud of the most is the cultural shift. The fact that we’ve reviewed our distribution, changed our distribution, improved our availability. We’ve done a whole heap of product development. And the last piece is probably around about, well, how do we make ourselves more efficient and effective? And hence the reason that we talk to people like you guys is that how do you help us take full advantage of all the excitement that we’ve got and help us be better at what we do? It’s not sexy in terms of the company. Like my team won’t get really excited about digital transformation because they like making raw products. We have no CTO. We have, in fact, my CTO is my CFO at the moment. So there is a massive opportunity for us to actually take that next step forward to growth, which will be around about how do we enable that growth? Because at the moment I think we’ve got a great brand, we’ve got some great products, we’ve got a willingness of the people, it’s our job now to make it easier for them to do their job and to have the right people doing the right things at the right time. And at the moment we have got too many people doing too much manual things when they could be moving to somewhere else.

(53:01):

It’s inefficiency for scale and so on. Do you think

(53:03):

You’re getting to that point with all the changes you’ve made, the growth you’ve had, assume profitability is running where you want it, or at least on track to where you want it to be on

(53:12):

Track to where we want it to be.

(53:13):

Is that something, since you’ve got the keys to the castle and you’re now implementing the strategy, is that part of the next chapter from

(53:21):

Yeah, it’ll have to be. I think we’ve, you don’t make a change and then it’s okay, you just move on to the next thing. You still have to nurture that change for a long time. If you’re going to make Greek yoghourt, it’s all very well to make it and send it out the door. But you’ve got to make sure that it’s consistently good and it’s consistently so you still need to have that focus on quality. You have to make sure that it’s going out at the right time. So distribution is always going to be something that we have to deal with. But I think there is an allocation of resource that we can look at putting more people in the right place to focus on the right things instead of focusing on things that they shouldn’t be. Having three people packing yoghourts into a box probably isn’t the most efficient way of doing it.

(54:09):

CO 6:00 AM in the morning, packing boxes isn’t the most,

(54:13):

I don mind doing that

(54:13):

Actually. Actually feeling sometimes it’s actually very therapeutic.

(54:18):

I don’t mind it. We’re almost out of of time. But I did want to ask one more question, which I think you’re going to have a good answer for, is your tips for modernising a legacy business. What advice would you have around the process you go through to modernise?

(54:33):

I’ll just apply this example here. The management or stakeholder management for me has been a big, big change for me. I think it’s important that when you take a family business to make it less of an S and more of an M, you have to be very sensitive to these changes and the impact and the emotional connection that owners have. And I think the reason that we’ve gotten so well with these changes is because I spend an inordinate amount of time over communicating the changes that we’re making and helping them understand the changes. And if you reflect back on the sentence where I said at CT IQ, I wish I’d made the braver decisions quicker. That’s a learning I’ve learned is that to be more direct to the stakeholders of the impact of change and the commitment that I want to make it happen and building trust with them by providing them with evidence.

(55:39):

And they’ve never really seen that data, that information that I’ve been provided with a business case, a true business case that says this is the optimum and this is the negative, and helping them help me make decisions has been a big learning curve for me. So the patients involved in doing that has been something that I’ve actually quite enjoyed. And that speed or urgency of change has been tempered quite a bit. And I think that that’s been something I’ve learned is that I had to be more patient and I had to be a better communicator with the decisions that I was making so that everybody joined on the journey instead of it just charging from the front. And so I think I learned quite a bit dealing with a family business of how important a stakeholder

(56:30):

Is probably communicating. Imagine as well, yeah, the business owners, but also some of the employees who are making the same three coloured lids of certain size for 20 years. Right?

(56:40):

Absolutely. And I think that that’s part of the very first meeting we had was a staff meeting with 30, 40 people in a room. They’d never had a staff and all of staff meeting, it was one of the first things I’d learned. The production crew knew this, the cleaning crew knew this, the finance team knew this, but nobody understood how they all played a part of each other. And I asked them, how much milk do you think we sell in a week? There’s only one crew knew, nobody else knew. So it was important that they get involved and excited. And I do literally will go and sit in a truck and drive to pick up milk with the truck driver and spend four or five hours with him. And knowledge that these guys have is just unbelievable. They can tell you, the farmer that would love to come and work with us, but can’t because his contract’s not renewable until such and such a time. They just have this incredible insight into the business that they’re just desperate to tell you. So I think trusting the staff that are there has been a big learning for me as well, and you have to have a greater degree of humility than perhaps you would incorporate life because you are the stupidest person there. You have no idea what you are doing, and therefore you have to have greater humility.

(58:02):

Yeah. It sounds like bringing that whole ecosystem that you’ve discussed throughout this conversation on that change journey with the business, from suppliers to customers, to staff, to people,

(58:15):

There’s a product offering and it sounds like you’ve driven a lot of change in the 24 months. So excited to stay in touch and see where you go on this kind of journey at ies. So appreciate you seeing for coming in. Thanks

(58:23):

Very much.