The dairy takes all local milk from farmers, which equals about eight million litres a year. But the dairy needs only seven million litres.
Last year the volume of milk taken in by the dairy was up by 2% on the year before.
Mr Tabel said the supply of milk was not steady, meaning that the over-supply came in spurts.
Calving and Mother Nature means that milk production is naturally higher in the spring than during the winter.
‘We are trying to get farmers to provide a more even supply into the dairy,’ Mr Tabel said.
‘It’s down to animal husbandry and farming techniques to do that.’
He said they had been working with farmers from Guernsey’s 13 dairy farms to achieve this.
‘The farmers do understand and they know how the dairy works.’
Milk sales are fairly constant throughout the year, with a spike in Easter and Christmas in the retail sector and around Tennerfest in the commercial sector.
Mr Tabel said they did not want to waste any extra milk.
‘If we have extra, we extract value from it, which is the cream,’ he said.
‘The cream we can use and turn into butter.’
After that process the company is left with white water, which has no use and is poured away.
Mr Tabel said stopping milk production was relatively easy, but getting it restarted again was much harder, meaning they needed to be cautious about how they handled this.
‘We are trying to do this in a phased approach.’
He said farmers would still be paid the same amount pro rata for their product.
‘We want to make sure we have a financially sustainable dairy industry,’ he said.
The aim is to reduce the annual supply of milk by 10%.
Each year a farmers’ cost survey is carried out, which shows how much it costs to produce milk.
Milk prices are no longer set by law in Guernsey, so retailers can price the product how they like. However, that is affected by the dairy’s gate price. Mr Tabel said they had no plans for big increases in the gate price, although the dairy’s costs did increase each year.
‘Everything needs to stack up,’ he said.
He added that they were mindful of the impact milk price rises had on the community.
Ice cream range could change
LOCAL rum and raisin ice-cream could be at risk, as Guernsey Dairy looks at how best to sell its products.
While the business plan stated that the company would be looking at different pack sizes for products, milk will be staying in litre and half-litre packaging, as this is the equipment the dairy currently has.
But it could be all change in the local ice-cream trade.
Currently four ice-cream flavours are sold in smaller 100ml packs – luxury vanilla, rich chocolate chunk, strawberries and cream and honeycomb crunch – while vanilla, strawberry, chocolate, toffee, coconut, coffee, mint choc chip and rum and raisin are usually sold in two-litre tubs.
Mr Tabel said these large tubs meant they might not be getting the best returns for their product, so instead they might look at entering the higher value niche market.
‘So rather than family packs, we might look at luxury ice-cream instead,’ he said.
‘It’s all about what part of the market we want to position ourselves in.’
Häagen-Dazs sells most its ice-creams in 460ml tubs, while Ben & Jerry’s use 465ml tubs.
Vanilla is the island’s favourite Guernsey Dairy flavour, outselling all the others. The island’s least favourite flavour is rum and raisin.
‘It is a lovely ice-cream, but it does not have strong sales, like vanilla or mint choc chip,’ Mr Tabel said.
‘But we need to look at what other people are offering as well. So if no one was offering coconut flavour, for example, then we can justify continuing to provide it. But if there is no demand for it…’
But the loss of a flavour or flavours might not be bad thing, as it might free up the company to try something different.
‘We might do limited edition flavour ice-creams and flavoured butters,’ he said.
‘So we are being more creative about what we do.’