1. The Scottish Ice Cream Company

2. Background Mackie’s of Scotland is an agri-business, based at Westertown Farm in Aberdeen, most famous for its ice cream. The company was originally established as dairy farm at Westertown Farm in Aberdeenshire 1912 by Dr. Maitland Mackie. In 1935 the company diversified from milk production into retail distribution to local homes in the towns of Huntly and Aberdeen. In 1956 the milk retailing division was sold but in 1964 Mackie’s re-entered the milk retailing industry in the north-east of Scotland by buying some local milk retailers. The 1980s saw a shift in the market from whole milk, with a high cream content, to semi-skimmed milk, with a low cream content. This resulted Mackie’s having a cream surplus, so in 1986 the decision was made to diversify into ice cream production. This is what made Mackie’s the business it is today.

3. Purpose The company has a diverse portfolio which includes the core business of ice cream but also includes ice and crisp production and renewable energy production. The year 2002 Mackie’s started to export ice cream to South Korea and in 2004 using water from the hills around their farm they started to manufacture and market ice originally under the ‘Icy Glen Ice Cubes’ but the name was changed to ‘Mackice’ in 2009. In 2005 Mackie’s purchased the first of three wind mills, the other two being purchased in 2007 to provide electricity for the farm and ice cream dairy with the excess being sold to the national grid. As of the present the wind turbines are providing 2.5Mw of power annually. 2009 saw Mackie’s enter a joint venture with the Scottish potato company Taypack to manufacture and market premium Scottish crisps under the market name of ‘Mackie’s Potato Crisps’.

4. Management The company is a family owned and so the majority of the management team is from the Mackie family. The current chairman and owner of Mackie’s of Scotland is Maitland Mackie CBE. Mr. Mackie has a degree in Agriculture from the University of Aberdeen and was responsible for re-entering the milk retailing industry in 1964. The current managing director is Maitland (Mac) Mackie, who is responsible for the day to day running of the company The management of sales and marketing consists of Sales Directors Denis Emslie and Ivan Jefford with Karen Hayhow (a Mackie) as Marketing Director. Production of both ice and ice cream is managed by Rhona Wight, with the farm being managed by David Hay. This composes the senior management team

5. Size The main office for Mackie’s is at Westertown Farm in Aberdeenshire. They have one ice cream shop in South Korea and an e-commerce site online where all products are available for purchasing. Mackie’s currently sells its ice cream to Asda, Tesco, Morrisons, the Co-op and other major retailers in the United Kingdom. The company is a small global business exporting mainly to the Far East with plans to increase global sales in the near future. Mackie’s does not currently export any products to mainland Europe. Mackie’s currently employs around 70 people.

6. Employees There are no unions at Mackie’s and the majority of the employees work full time with just over half being women. According to the Mackie’s website the majority of employees have worked for Mackie’s for most of their working life. The website also states that most employees stay for an average of nine years with twelve employees having worked at Mackie’s for twenty or more years. These employees are recognized with a plaque on a wall in the ice cream dairy. Mackie’s also has a profit sharing scheme amongst all 70 employees. The majority of employees, 43, work in ice cream and ice production branch of the company with the rest either working on the farm as herdsmen or in the offices. The company would not release salary information.

7. Finance As privately owned company they have no obligation to release financial information and accounts to the general public; they have however made it known that they have had a £7 million turnover in the last year. This position is most likely due the recent release of crisps and growing brand awareness across Scotland and the UK.

8. Marketing Mackie’s ice cream is currently sold in Scotland, where it is the leading brand of ice cream, and the rest of the UK. Mackie’s is also currently exporting its’ ice cream to South Korea with plans to start exporting to Japan Hong Kong, China, Dubai, United Arab Emirates and the United States. Mackie’s crisps are currently sold in Scotland and some parts of England, but with plans to market the crisps over the rest of the UK and start to export them. Mackice is only sold in the Northeast of Scotland. All products except ice are available for purchase from the Mackie’s website. Both the ice cream and crisps are marketed as premium products. Ice cream is marketed under the slogan of ‘Affordable Luxury’, however only carry a sight price premium over the stores own brand. Customers are retained by having prize draws on their website the winner receiving free crisps or ice cream for completing surveys etc. Brand loyalty is also maintained by having a ‘Friends of Mackie’s’ email club were subscribers are informed about company news and competitions.

9. Pressures At present the greatest pressure and threat to Mackie’s is the rising cost of red diesel for tractors and other farm machinery. Diesel prices have increased from 9p a litre in the 1990s to the present 60p a litre at present. Although this may seem like a bargain but considering that you could be burning up to 10+ litres an acre to complete some farm tasks the costs soon add up. The high cost of fuel in general is also having a trickle-down effect on the cost of artificial fertilizer which is needed for nearly every field nearly every year. So at present the greatest pressures to Mackie’s are those related to producing feed for the cows.

10. Evaluation Mackie’s of Scotland has an incredible knack for seeing opportunities in the agricultural and consumer market and more importantly being able to exploit the gap to its fullest by simple, but effective marketing, as shown by Mackie’s crisps; already a household name in a short two years. Another strength of Mackie’s is producing their own milk, fodder and electricity which protects them from market fluctuations allowing them to maintain a steady price for their products and more importantly a steadier profit margin. However, this is a double edged sword and although it protects them from when the milk and energy prices are high when they are low, as of the present, profits will take a dip when in comparison to completing companies. Mackie’s also, because of extensive tree planting schemes and wind turbines on the farm, has the opportunity to market themselves as a ‘green’ product and therefore command a price premium over competing ice cream and crisps manufacturers. Because of increased international interest in its products Mackie’s has the opportunity to become a multinational company, but to do this Mackie’s would have to make a large investment in more farm infrastructure and land to support the more animals needed to support production.

11. Future Prospects As long as the company follows its current marketing strategy, and continues to produce their own raw materials, Mackie’s will continue to grow and flourish and one day, in my mind, become the bench mark which all modern agri-business are bench-marked against.