Bega Cheese executive chairman Barry Irvin is the ultimate milk man

Transforming a regional dairy company into a world-class food giant isn’t all Barry Irvin has achieved. The Bega Cheese executive chairman has also defied death.

Barry Irvin in his Bega Valley dairy farm’s rotary dairy, which milks the family’s 500-cow herd. Picture: Robert Hayson

IN JANUARY last year, Barry Irvin’s dairy farm in the Bega Valley was ringed with roaring fire as the tinder-dry hills and tall eucalypt forest of southern NSW burned with frightening ferocity.

The weatherboard farmhouse with Barry’s five young grandchildren sheltering inside was under heavy ember attack, spot fires were rolling across the brown paddocks and licking at the big rotary dairy shed, and Barry’s eldest son, Andrew, 32, was desperately trying to work out what to do next.

“Andrew sent me this photo,” says Barry grimly, showing me a dark image from his mobile phone of the Bemboka farm complete with shooting orange flames and exploding trees sent to him in his Sydney home.

“He said he couldn’t raise anyone from the Rural Fire Service. So I rang a mate in the local brigade who I know – I mean, I’ve known them all, all my life – and said Andrew’s in trouble …

“He said, ‘Everyone is, mate. I’m sorry but I’m afraid he’s on his own’.”

Barry Irvin, 58, executive chairman of the $3 billion Bega Cheese since 2000 and a legendary figure in Australia’s dairy industry, said he had never felt so helpless.

“There I was, lying in a bed in Sydney after having my last bout of chemo and feeling terrible,” Irvin admits. “It was probably a good thing I wasn’t at home as I couldn’t have done much to help Andrew – but it was possibly the worst day of a pretty bad eight months.”

It is well-known in Australian agribusiness circles that in May 2019 the much-admired dairy industry leader temporarily took leave as executive chairman of the fast-growing Bega Cheese company to fight a devastating diagnosis of serious bowel cancer.

Bega Cheese executive chairman Barry Irvin on his Bega Valley dairy farm. Picture: Robert Hayson

It was the same disease that had felled his father, Alan, at the young age of 56; a death that had then brought only son Barry reluctantly home from the glittering banking world in Sydney to run the family’s Bemboka dairy farm in 1989, when aged just 27.

Irvin at the time thought it was the end of his corporate career. “I came back because I had to, not because I wanted to – I never felt it was my natural calling to be a farmer,” Irvin says.

“But there was no other choice; my mother (Joan), my sisters and the farm needed me here.”

In turn, the Bega Cheese boss admits he was completely surprised three years ago when Andrew, who had been raised in Sydney, decided to move back to take over the sixth-generation family farm kept running mainly by his busy father’s loyal staff.

It’s a mark of the man that for 20 years, Irvin would always fly or drive back to Bega from Sydney – where his wife, Harriet, and his profoundly autistic son Matty, 30, live – on Sunday afternoons to be up at 3.45am the next day to look after the farm’s Monday and Tuesday morning milkings, regardless of what else was happening in his high-powered corporate world.

It kept him in touch with the travails of dairy farming – “it grounds me and gives me time to reflect and think” – and made Irvin feel less like an absentee landlord in a suit issuing orders to his workers.

“I was never comfortable with that idea,” he says.

Now that Andrew and his wife, with their boisterous band of five kids aged under 7, have returned to the farmhouse that his grandparents built, Irvin’s dairy duties have retreated to being a holiday backstop milker. Irvin has been equally delighted to discover Andrew – and perhaps too his eldest grandson, Lex, 7 – possesses a natural aptitude and passion for dairy farming that he never felt.

The mid-2019 cancer diagnosis for the super-fit and busy Barry Irvin came as a complete shock. The thought that it was the same disease at exactly the same age that had killed his father loomed large. His doctors later told him – after his recovery – they hadn’t known if he would pull through. Irvin, an admitted fatalist, says he never had that attitude.

Throughout surgery and intense chemotherapy at Sydney’s St Vincent’s Hospital he did exactly what the medical experts told him. He ate what he was ordered, endured what was required, rested when he should, walked for kilometres and lifted weights every day when he could, asked no questions, and tried to stay positive.

But there were times when he couldn’t keep any food down, and weeks, particularly near the end of his last chemotherapy bout in late 2019, when he was so weak he couldn’t drag himself out of bed. On other days, close friends were able to lure him out for lunch to a good restaurant with a great bottle of red wine, to return a touch of normality.

“I never thought I was dying,” says Irvin candidly. “My approach to life has always been to put the best people around you, trust them, let them do their jobs and follow their advice; it has served me well in corporate life so that’s what I did when I was sick.

“I was very focused and task-orientated, to the point where my doctors didn’t think I was taking it seriously enough. But I think it helped that I’m an optimist by nature.”

An avid road cyclist known to ride hundreds of kilometres a day with his corporate mates, including hurtling down the winding highway of the steep escarpment that rises behind Bemboka, Irvin had jokingly always warned his three children and Harriet that he might one day come to a spectacular and tragic end over the edge of Brown Mountain’s bends. “So when I got cancer and had to tell them, I also said this isn’t going to kill me. Because this is neither a spectacular nor tragic way to die.”

Barry Irvin, at a dam on his Bemboka farm, says his task-orientated focus helped him tackle cancer. Picture: Robert Hayson

It is now more than 12 months since his final round of chemotherapy – and the terrible fires of the 2019-20 summer that ravaged so much of NSW’s coast and alpine mountains – and Barry Irvin is once again sitting quietly on the outdoor deck of his country home, sipping a mug of early-morning coffee.

Instead of scorched paddocks and burnt trees, the Bega Valley is lush and green after a wet La Nina summer. Contented black and white Friesian cows hang their heads over the fence below his house, and all is satisfyingly quiet and calm now the bustle of the daily dawn milking is finished.

It’s almost a visual metaphor for how Irvin is personally feeling.

His health is on the mend. He is back at the top as executive chairman of his much-loved ASX-listed company Bega Cheese, more than fulfilling his youthful once-thwarted dreams of being an Australian business leader.

More significantly, Irvin has just successfully completed one of the biggest corporate takeovers of 2020, spending $560 million to acquire the Lion Dairy and Drinks business from Japan’s Kirin. It’s a massive step for the 122-year-old company Irvin has headed and run for the past 21 years.

Irvin is delighted at the success of Bega’s pounce on Lion Dairy, which only occurred after the Federal Government let it be known a higher $600 million bid for Lion by China’s Mengniu Dairy giant would not be approved.

For almost a decade since Bega’s listing on the Australian Securities Exchange in 2011, Irvin had feared the natural fit of Bega’s two arms – one focused on fresh milk products, the other on long-life ones such as cheese and infant formula – would see smaller Bega the one devoured by Lion or its predecessor National Foods.

The deal by Bega is all the more sweet for Irvin as it was engineered from the Bemboka farm while still recovering from his cancer ordeal, and in strict isolation as coronavirus threw the wider world into turmoil.

While for most of Australia, the arrival of coronavirus in March last year and the sudden shutdown of the hustle and hum of normal corporate life heralded a shocker of a year, for Barry Irvin it turned out to be a godsend.

With no immune system left after chemo to protect him from a potential COVID-19 exposure, Irvin immediately fled Sydney and his jetsetting whirl of meetings and decision-making across the eastern seaboard to total isolation back on the farm, where he previously just camped for a night or two each week. It was a godsend in more ways than just protecting his own safety.

“I had thought I was more recovered than I was when I went back to work and told everyone I was better,” says a reflective Irvin, who chaired his first Bega board meeting in nine months in late January last year at Vegemite’s Port Melbourne factory, just days after his final chemo treatment.

“Yet by March I realised I couldn’t keep going and resume my life just as I had before; the constant moving, the crazy days of back-to-back meetings, the pressure and sense of responsibility.

“In that way, coming back to the farm full-time – and this enforced isolation period – came at exactly the right time, it has been a real sanctuary. (Being here) has allowed me to recuperate at my own pace, and in privacy, yet still have all the input into the company, but by Zoom. Acquiring Lion while sitting here at home recovering was the icing on the cake.”

Irvin says despite all the support from his family, friends, farmers and the Bega board, such intensive cancer treatment has not left him the same man. He now has physical limitations he struggles to accept.

The chemotherapy – “it’s poison really” – has killed nerves in his extremities. Irvin now has no fingerprints and little feeling in his hands and feet, but hopes of nerve regeneration within five years. Despite training himself, he still has memory blanks, his balance is poor and some spatial awareness is lacking.

But his sense of humour remains intact. “When I came here and went into isolation I was worried I might run out of red wine; I quickly realised I might run out of wine glasses first,” Irvin says, laughing about the concentration required to hold cups and glasses in his unwilling fingers.

Riding a bike on his regular mammoth adventures – usually long charity rides with mates to raise funds for the Giant Steps schools for autistic children he helped found and a charity he still chairs – is not feasible yet. Every day he practises on the green grass of home but finds unless he watches his feet all the time, his balance has not returned.

“Lex (his grandson) comes over and watches me fall off and says, ‘Pa, I’ll teach you’; I try and explain that’s not it,” says Irvin, a little sadly, who has books of the best bike rides of the world and Mexico-to-Canada endurance trekking piled high on his coffee table. “I still think of myself in the way I used to, riding hundreds of kilometres a day; the upside is I’m a much more patient person now.”

Another positive is the time spent with his five young grandchildren, who pop in and out of his house via a special tunnel built underneath the main road between the two family homes.

So too has been the support of the close-knit farming community of the Bega Valley, not just for Irvin himself, but for Andrew as a newcomer dairyman.

Despite its public listing and open share register, just under 20 per cent of the now giant Bega Cheese remains owned by the 120 original Bega Valley farm families who were part of the early cheese cooperative.

Other employees and town locals bought shares for $1.80 each on its ASX listing in 2011 that are now valued at $5.80. The Irvin family, original shareholders who have farmed in Bega since the 1850s, hold 1-2 per cent of the company.

It’s a success story that has brought quiet prosperity to the Bega Valley, with a $250 million-plus of shares on paper tucked away in superannuation and bank accounts. The company is also the biggest employer in town.

Local dairy farmer Norm Pearce and his family forebears have been part of the Bega dairy co-operative since it first started in 1899. On Bega Cheese’s ASX debut, he was one of its top 20 shareholders and still owns a “fair chunk” of shares, despite dilution from the company’s expansion.

“I’ve known Barry all my life; I can still ring him up today and he’s just the same Barry, there’s no airs and graces,” says Pearce, who runs 250 milking cows with his son, Thomas, just north of Bega and is proud to be part of the Bega Cheese success story.

“He’s done an amazing job, growing the business and buying Vegemite back; it makes you feel good that even in this modern world, Bega is still the home base of the company and it’s provided so many jobs both here and around Australia – it’s an extraordinary achievement for a small town with one or two traffic lights.”

Barry Irvin with the range of foods now owned by Bega Cheese.

Pearce sees the Lion deal as making Bega Cheese much more secure and stable financially. “It’s pretty exciting bringing all these brands back into Australian ownership; in the past everyone was looking to take us over but I think those worries are gone now.

“It’s personal too; having the Bega shares gives us a backbone to borrow against. I’m looking to build a new dairy with robot (milkers) and the shares give us that financial capacity to move forward.”

Irvin says his own efforts on behalf of Bega’s local farmers are quietly acknowledged in the form of the best dairy sires lent to breed with his 500-cow herd, meals delivered when he was recuperating and always-present advice and mentors on hand, like Norm Pearce, to help his son build his own dairy business.

“My mother, Joanie, (who passed away last year) always used to tell me not to get too big for my boots and always to be respectful towards others,” Irvin says.

“I like to think I’m humble; when you grow up in a small community like this (Irvin went to Bega High along with many of his long-term farm friends), you learn to have a responsibility to other people greater than yourself. Service to others is the big one that has always mattered most to me.”

It was that basic sense of fairness that made Barry Irvin so outspoken in April 2016 when Victorian farmer co-operative Murray Goulburn, quickly followed by NZ’s Fonterra, slashed its pledged farmgate milk price overnight and announced a “clawback” of $200 million already paid to its farmers for milk supplied in the previous 10 months, to fill a hole in its ill-managed balance sheet.

More than a quarter of all dairy farmers went broke or left the industry as a consequence of the 2016 crash.

“It was just such a wrong thing to do; it was that sense of injustice and refusal to consider another path or outcome that really made me angry,” Irvin says.

“I had good farmers on the phone in tears; I thought it was important to be a voice that told the media and politicians that farmers had good reason to be upset and distressed and to put pressure to turn the decision around.”

Irvin says he takes no pleasure in seeing the “terrible damage” he predicted the crash would wreak on producers’ trust in dairy processors such as Bega and their long-term confidence in the dairy industry has come to pass.

But with global consumers looking for natural healthy products such as milk – and being prepared to pay for them to be produced in a natural way, such as predominates in Australia with cows eating green grass – Irvin is optimistic that dairying has a bright future.

As to his own future, Irvin is playing his cards close. He acknowledges it is unusual for such a large listed company to have an executive chairman who is effectively running the shop, a structure not favoured by corporate governance sticklers.

Succession planning has also been top of his mind – and the Bega board of directors’ – since Irvin’s cancer bout. “I have had some very open conversations with the board, where they effectively were asking are you alive or dead,” Irvin laughs.

Highly regarded Peter Margin, a former chief executive of both the Goodman Fielder food group and National Foods became deputy chairman of Bega last September. Experienced agribusiness leader and former Tatura Milk general manager Paul van Heerwaarden, who Irvin has openly mentored, is also playing a much greater chief executive role since Irvin’s illness.

“At some point I’ll fade into oblivion; we’ve now got the right people on board and ideally succession will be smooth,” Irvin says.

“I will see in a year’s time what I may or may not do; it might be a natural thing and free up more of my time (for me to remain solely as non-executive chairman) or I might go (altogether); right now my priority is not on titles, but bedding down the Lion acquisition.”

BEGA’S MARCH TO THE TOP

1899

Bega Cooperative Creamery company founded in the Bega Valley

1991

Barry Irvin joins Bega Cheese co-operative board

2000

Irvin made chairman of Bega Cheese co-operative

2002

Bega Cheese sales revenue passes $100 million

Jan 2007

Barry Irvin takes the helm as CEO and executive chairman of Bega Cheese, announcing its intentions to grow bigger and change structure

April 2007

Bega acquires 70 per cent of Tatura Milk Industries for $39m, adding 400 million litres of milk and $270m sales to Bega’s bottom line

2008

Bega changes from a farmer-owned cooperative to a public unlisted company

2010-13

Bega builds quiet 18.8 per cent stake in Warrnambool Cheese and Butter

2011

Bega Cheese floated on the ASX, processing 585 million litres of milk annually, with sales of $943m annually

2011

Bega buys remaining 30 per cent of Tatura Milk

2014

Canada’s Saputo buys WCB for $700m after fierce battle with Bega and Murray Goulburn. Bega sells its key stake to Saputo for $101m

2017

Bega Cheese purchase of Mondelez’s Australian grocery business – including Vegemite – and major Port Melbourne manufacturing facility for $470m, diversifying from dairy products into being a genuine Australian food company

2017

Bega spends $12m buying Peanut Company of Australia to secure local peanut supply

2020-21

Bega Cheese buys Lion Dairy and Drinks division for $560m, turning Bega into a $1.7 billion company with sales of $3 billion

THE LITTLE COMPANY THAT ROARED

The familiar sign on the farm gates of the lush dairy farms dotted across the Bega Valley in southern NSW used to simply say it all. “Bega, since 1899: The Great Australian Cheese Company.”

Those were the days 20 years ago when Bega Cheese was a quaint provincial dairy co-operative owned by 120 local farming families, with one cheese factory producing bulk cheddar and 80 staff. Exports were limited and sales were less than $100 million annually.

The year before, local Bemboka dairy farmer and former corporate banker Barry Irvin, then 38, had become chairman of the venerable 101-year-old business, at a time of industry turmoil and the collapse of many similar small rural cooperatives following dairy deregulation.

Fast-forward two decades and Bega Cheese’s small-town days are long gone. Bega Cheese is almost unrecognisable from its former self. It is now a giant public food corporation listed on the Australian Securities Exchange, with a valuation of $1.74 billion and annual sales of $3 billion.

Barry Irvin at the company’s Bega factory. Picture: Robert Hayson

It has become Australia’s second-largest milk processor, with 1.7 billion litres of milk produced on 800 dairy farms passing through its factories every year, and more than 1700 employees.

Shares that once sold on Bega Cheese’s first ASX listing in 2011 for $1.80 are now worth $5.80 each, and its 15,000 shareholders are no longer solely its own dairy farmers but some of Australia’s largest financial institutions, ethical investors and superannuation funds.

“From the time I came on board as director in 1991, I was always concerned that if (Bega Cheese) stayed only in the Bega Valley, that was the end of us,” Irvin says. “My view has always been that we should not become too protectionist and parochial about protecting Bega (and its regional origins); that we should never build a fortress around the Bega Cheese cooperative and the valley and keep it isolated. I thought that was a recipe for us to disappear.

“I said the only way we would survive as a company was to be outward looking, open and go out in the world, and to be significant in dairy you have to be in Victoria. That put in place the foundations of what was to come later with our changed (non-co-op) company structure, ASX listing and then our vision for long-term growth.”

In the intervening two decades, Bega Cheese first bought Tatura Milk Industries and factory (2007), giving it a major slice of the action in the manufacture of infant formula under contract for other companies such as Bellamy’s, Blackmores and Bubs from the heart of dairying in Victoria’s Goulburn Valley.

In 2013 it made a play to seize western Victoria’s prized cheese manufacturer Warrnambool Cheese and Butter, losing out to Canada’s Saputo but turning a quick $62 million profit in its share sales.

Well-armed financially, it then sprung a surprise deal in 2017 with its $470 million purchase of the grocery arm of Mondelez International, popularly bringing the famous Vegemite brand and peanut butter spread back into Australian ownership.

Then, late last year, Bega Cheese announced its ambitious $560 million takeover of the Lion Dairy and Drinks group.

“Tatura was our catalyst for change; the start of our methodical growth to get to where we are today,” Irvin says. “It has been a long-term vision and not always in a straight line – we have taken a slightly different path to get to the top of the mountain – because at the start, the companies that were attractive to us, that were good fits and owned good quality brands and assets, were just too big for us to buy.

“Lion Dairy was the classic example. We have been interested in Lion since it first came on to the market in 2018, but we couldn’t afford it; so we kept building Bega – that was part of the reason we bought Vegemite – to increase the size of the business and create a more secure bottom line to the point that we could make the Lion acquisition.”

It marked a big day for the little company that roared.

In one swoop, it doubled the financial might of Bega Cheese, with an extra $1.6 billion of sales revenue from Lion added to its balance sheet. The purchase also gave the major cheese, infant formula and spread manufacturer a big share of the fresh milk, flavoured milk and yoghurt business in all Australian states, delivered the well known Pura, Dairy Farmers, Farmers Union, Yoplait, Big M and Dare brands into Bega’s bulging stable and provided the business with 11 new manufacturing sites.

Critically it moved Bega from a company that primarily supplied non-branded products such as infant formula, cheese and milk powder to other companies – or manufactured them for the homebrands of supermarket chains – into a business with popular and well-known branded fresh products that offer much higher profit margins.

In 2017, before its purchase of Vegemite and Bega peanut butter, only 20 per cent of Bega’s sales were from branded products. After the Lion Dairy and Drinks deal, that branded revenue portion had jumped to 59 per cent, with an ambition for it to rise to 70 per cent by 2023.

With its Lion purchase, Bega has also now mushroomed to become Australia’s second-largest – and only Australian-owned – dairy processing giant, with its annual milk intake exceeding 1.7 billion litres, one-fifth of the national milk pool, leapfrogging NZ-owned Fonterra in scale and lapping at the heels of Saputo.

It is now producing and selling fresh milk in every Australian state, with 800 dairy farmers supplying it with milk.

“It’s a company-defining acquisition,” says Irvin of the Lion deal. “The timing of the asset coming into play was ideal for us and the scale it now gives us puts Bega in a good position to drive the business forward.

“We don’t have current plans to buy (other companies) overseas but we should have ambitions that allow us to compete and be present in markets anywhere around the world, just as international food companies are here in Australia.”

In all this massive growth, three things remain stalwartly the same at Bega. Barry Irvin, now 58, endures at the helm of Bega Cheese as its executive chairman. But now he has a chief executive, Paul van Heerwaarden, to lighten the workload and a strong deputy chair, highly-regarded food industry stalwart, Peter Margin, by his side.

The $1.7 billion corporation’s head office is not housed in a flashy glass skyscraper in Melbourne or Sydney, but continues to be based in the prosaic front office of its red brick cheese factory on the banks of the river in little Bega.

And the 120 local dairy farming families in the Bega district who owned the original cheese co-op back in 1990, remain its biggest bloc of shareholders, collectively owning just under 20 per cent of the company.

And those Bega farmgate signs? Soon hundreds of milk suppliers across Australia will trumpet its new-look slogan: “Bega since 1899, The Great Australian Food Company.”

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