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The Welsh organic dairy making waves in Hong Kong and China

Michael Wale explains how an unusual chain events led a small organic dairy in the south west corner of Wales to build a valuable export business in the lucrative Asia-Pacific market.

Daioni is a highly unusual business story of organic dairy farming success, in which a farm-based organic milk business based in the south-west tip of Wales (UK) transformed itself into a well-known and successful player in Hong Kong and China. 

The company was founded by Laurence Harris, who originally moved into what was then a mere 120 acres of conventional farmland  in the 1970s. Four years later he bought the next door 90 acre farm, and gradually over the years he increased the farm to its present size of  3,500 acres, which pasture feeds the 320-strong herd of organic friesian cows.

Organic friesian cows on Daioni’s family farm in rural Wales.

The conversion to organic farming began 18 years ago when Harris’s eldest son Tom chose to change the direction from a PhD he was studying at Cambridge University (from which relentless desk-based research left him longing to return to an open air life), return home and plan, in partnership with his father, to transition the farm to organic.

Meanwhile the ever increasing expansion of the farm was funded by a loan from the HSBC Bank. Remembering the organic conversion Laurence Harris admits: “It was quite exciting”. An understatement, indeed. What really made Laurence himself turn away from conventional farming was an altogether more serious matter – the skin rashes he developed from exposure to the crop sprays he was using on the farm”. 

Another reason for turning organic was the economics of having to service the farm’s debt to the bank. It reasoned the return on their milk would be higher. But, ironically, as soon as they became totally organic the price of organic milk dropped. 

But this worrying economic reality of organic farming would be turn out to be thing that drove the farm towards its long-term success. The Harris’s decided the only way forward was to diversify, so they bought a local milk round, and moved away from just producing milk to into sales and distribution.

They decided to take the risk themselves, even though they were offered the safety net of forming a co-operative with two other local farmers. It was the success of the milk round business, that led them to the founding of Daioni, and developed the idea a of moving into flavoured UHT milk drinks, that were quickly taken up by many Welsh schools, and eventually supermarkets supermarket distribution across Wales.

During this part of the company’s expansion, backing from the Welsh Government would prove invaluable, says  Laurence Harris. Welsh Government pavilions at food shows in the UYK and further afield, provided very visible exposure for Daioni during these early years and enabled them secure crucial orders.

Harris is full of praise for the Welsh Government, which continues to support the brand. He recalls: “ When we launched our first flavoured UHT milks it was pre-Jamie Oliver, and his campaigns for better food in schools, is we were grateful for the support we got from Welsh authorities in getting our products into West Wales schools. We were the pioneers. In other words, the ones who always get shot! But we still supply the local schools, and some further afield, but we just cannot beat the big boys”.

So how did this organic family dairy farm in West Wales break into the Asia Pacific market? Laurence’s younger son Ben is a corporate lawyer and he went to live and work in Hong Kong, where, with his farming background, he recognized that there was a developing market for organic milk. He set up a deal between Daioni and international food-to-go retaier Pret a Manger to supply all its Hong Kong outlets with Welsh UHT organic milk.

“He set up a deal between Daioni and international food-to-go retaier Pret a Manger to supply all its Hong Kong outlets with Welsh UHT organic milk”

Daioni milk range in an organic fixture at Hong Kong lifestyle retailer City Super.

Dan Jones is in charge of exports. He has been with the company since he left Cardiff University six years ago. Almost immediately he was dropped in at the deep end when his senior manager was taken ill, and he had to travel to Dubai to represent the company at the influential Gulf Food Show in Dubai. It was a success. He recalls: “It was the first time I’d been to that part of the world. I love the different culture and their growing organic market. There’s still a big demand for organic, and we have several outlets there”. 

The culmination of Daioni’s success in entering China was the decision to open an office in Shanghai. Another milestone for the company was when it became the first UK dairy company to be awarded full organic certification by the Chinese Government.

Chinese visitors to Daioni’s farms and dairy in west Wales.

Daioni has since  appointed a head of brand and marketing for the Asia Pacific, based in Hong Kong. Already its milk is being sold in Vietnam, Singapore and the United Arab Emirates, and next door Oman. When we spoke, Jones was just back from a week in Qatar, where Daioni has a small presence that it is looking to grow. It also have further ambitious plans for the market in mainland, where their organic milk is positioned as a health drink. 75% of Daioni’s Asian export sales are of whole milk, with 20% semi-skimmmed and the remainder skimmed. Jones says : “ We want to sell a full range of our organic products in China”.

Some milk is flown to overseas markets, but most of it is shipped to save costs. That is one of the great advantages of being in the UHT milk market – because some of the ship’s voyages take up to 30 days. The one drawback of these long journeys is that it the accuracy of predicting future sales becomes even more important. 

Daioni’s sales last year were worth around  £2 million, and the prediction is that this year they will rise by a remarkable £1.5 million. The company predicts that if the upward sales trends continues, turnover should top £5 million in the not too distant future.

As for Laurence Harris, he remains wedded to his roots in the Welsh countryside. “I’m a farmer. I look out of the window at the farmland I love. Yes, the company is quite challenging, we bring in milk from farmers around us. But we remain a family farm, which is why I’ve spent the past week on a tractor doing the ploughing. Why shouldn’t I be found on a bloody tractor, that is what farming is about!”

One rather amazing fact about the company, despite its considerable successes at home, and in export markets, is that its office in Wales still only employs just four people.  You might think that would put more pressure on Laurence Harris. But he tells me: “I don’t have any sleepless nights. But I do now have an excuse to travel”.

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About the Author

Michael Wale

Writer and broadcaster on food and farming issues
Michael Wale is a writer and broadcaster with a particular interest in food and farming. He is a regular contributor on radio and TV and writes for the Financial Times and The Times.

Articles by Michael Wale
Michael Wale
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