February 22, 2018
Bega Cheese chairman Barry Irvin dropped in to the South Burnett Regional Council’s monthly meeting on Wednesday to outline his company’s plans for the Peanut Company of Australia.
One of them is to increase PCA’s processing capacity by 50 per cent as quickly as possible.
Mr Irvin told the meeting he started out as a dairy farmer before ‘escaping’ into the banking industry, then returning to dairying again on his father’s death.
He has been chairman of Bega since 2000.
At that time, Barry said, the dairy industry had just been deregulated and it looked like disaster was about to engulf the small dairying town of Bega, on the far south coast of NSW.
“I’d like to say that when I put up my hand for the job I was chosen for my skills, but the real truth is that no one else wanted to do it,” he told the audience.
“Until deregulation, 70 per cent of Bega’s milk went to Sydney and the other 30 per cent was used by the company.
“Now we were suddenly facing a future where 100 per cent of the milk would stay in Bega and farmers’ incomes would be cut in half.”
To make matters worse, Bega’s factory equipment was 30 years old and the company was uncompetitive, which made the future look even bleaker.
But under Barry’s 18 years of leadership Bega has grown from a small, regionally based dairy company to one of the largest of its kind in Australia, a national brand supplying a wide range of dairy products to Australians and 40 countries around the world.
During that time Bega’s staff has grown from 63 to around 2200.
It operates in Victoria, NSW and – thanks to its recent acquisition of PCA – in Queensland across nine centres, and was listed on the ASX in 2011.
Bega’s market capitalisation now ranges between $1.3 and $1.4 billion.
In January 2017 the company also acquired Mondelez International’s Australian and New Zealand grocery and cheese brands, including Kraft Peanut Butter and Kraft Vegemite, for $460 million.
It is now in the process of replacing the Kraft logo on Vegemite and peanut butter with Bega’s – two product lines that hold dominant positions in Australia’s retail market.
Barry told the meeting he realised very early that the dairy industry had suffered from a lack of investment over many years, and this had gradually made many dairying companies uncompetitive.
So one key to Bega’s success was that from 2000 onwards, it began to reinvest in better systems, and this gave it the funds to tackle progressively bigger projects over time and grow its brand.
“When I started, farmers received no respect and were seen as economically unimportant – but no one doubts the worth of a dairy farmer in Bega now,” Barry said.
He owns eight cattle and dairying properties himself, including one managed by one of his sons.
Barry said Bega was interested in the entire supply chain.
He had come to Kingaroy with a team of experts from Bega’s Melbourne head office to conduct a thorough analysis of PCA’s current operations and find ways Bega can make a positive difference.
“PCA has had a long and successful history, but the past five or six years have been very challenging and it has suffered from a lack of investment,” he said.
“Right now I can tell you that we believe PCA can increase its production by 50 per cent.
“But we’re used to much higher growth, so we’d like to expand beyond that into the future if we can.”
Barry also told the meeting that Bega is focussed on being a good corporate citizen, and last year gave away half a million dollars to community organisations in need of assistance in the areas the company operates in.
In his private life, Barry helped found and is also chairman of Giant Steps, an organisation providing services to children and young adults with autism since 1995.
In 2008, he was awarded a Member of the Order of Australia for his contributions to children with disability and the Australian dairy industry.
He has also won the NAB Agribusiness Leader of the Year and the Rabobank Leadership Award.
South Burnett Mayor Keith Campbell thanked Barry for addressing the meeting, saying he was “a great inspiration” and that it was a genuine pleasure to meet him.
“We are very glad to have Bega in the South Burnett, and we look forward to a long and productive relationship with your company,” Mayor Campbell said.
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