Dairy firm Graham’s took a hit to profits to avoid passing on the rising cost of raw materials and staff wages to customers.
Pre-tax operating profit fell to £2.6 million from £4.5m in 2024, while turnover was steady at £154.9m from £153.4m.
The Stirlingshire family dairy continued its capital investment programme with £3.2m being reinvested in modernisation, particularly in manufacturing sites in Nairn and Cowdenbeath.
This is on top of capital investment of £5m in 2024 and £8.4m in 2023.
Explaining the Bridge of Allan dairy’s decision to protect customers, managing director Robert Graham said: “During the year, the farm gate milk price increased from 36 pence per litre in April 2024 to 40 pence per litre in March 2025.
“We also saw increases across the board from our ingredient and packaging suppliers to the largest increase in National Living Wage we have seen in recent years.
“We made the decision not to pass all of these increased costs onto our customers but instead to absorb what was feasible, with the intention of easing any price increases to the end customer.
“This is reflected in a decreased net profit whilst remaining a profitable business, and we are already seeing strong targeted growth in the year ahead.”
A more positive development was the largest ever increase in demand for its Jersey and organic milk ranges, which allowed the diary to recruit new Jersey farmers into its growing milk field.
“We’ve also continued to work hard to satisfy consumer demand for high protein products, with the launch of our first protein ice cream range and the expansion of our cottage cheese production facility,” said Mr Graham.
“This has helped us to secure new distribution deals in premium stores such as Waitrose, Sainsburys and Booths, to name just a few.”
The family-owned business has proved adept at spotting consumer trends and moving quickly to respond.
Demand for cottage cheese increased as a result of trending recipes on social media, while 85-year-old Dr Graham has helped the brand develop a loyal social media fan base through his own Tik Tok channel.
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