Published in association with theSociety of Dairy Technology

Yogurt / Ice cream / Pasteurised Milk a beginners guideto processing

ContentsIntroduction and market overview 3

Section 1 - Technical requirements 4

Section 2 - Yogurt 62.1. Summary of business plan for Yogurt 62.2. Outline manufacture Stirred Yogurt 62.3. Yogurt process flow 82.4. Capital and operating costs 92.5. Yogurt production area outline plan 10

Section 3 - Ice Cream 113.1. Summary of business plan for Ice Cream 113.2. Outline manufacture Ice Cream 113.3. Ice Cream process flow 133.4. Capital and operating costs 143.5. Ice Cream production area outline plan 15

Section 4 Pasteurised milk 164.1. Summary of business plan for Pasteurised milk 164.2. Outline manufacture - Pasteurised milk 164.3. Pasteurised milk process flow 184.4. Capital and operating costs 194.5. Milk processing area outline plan 20

Section 5 Appendices 21

This booklet and the information within are intended as a guide only. Please seek detailed support from your accountant, bank, legal advisoror other specialist support organisations.

A list of useful contacts can be found in Section 6 of the DairyCo publication On-farm processing a beginners guide.

Dairy UK has developed a comprehensive guide detailing information on where to source finance, products, training and knowledge forinnovation that can be viewed at www.dairyukinfohub.com.

The Society of Dairy Technology can be contacted via their web site www.sdt.org

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Introduction and market overviewThis booklet is designed to give an overview of the requirements for the capital and cash flow, and somerecipes, for the manufacture of yogurt, ice cream and milk.

Where costs are quoted these are as a guide only and due to the nature of each project being slightlydifferent, special consideration should be given to the size and suitability of water, electricity anddrainage services.

Dairy product manufacturing offers a significant opportunity to achieve better returns for the milkproducer and with it a more secure future. However, it is hard physical work and demands continuousattention from the maker.

Any dairy farmer contemplating these areas of diversification should understand they are not easy options.

There has been significant growth in the areas of luxury and indulgent products. It is unlikely any farm-based diversification project will be able to compete in the lower end of the market; the majoropportunity lies with the added value, luxury products, with the opportunity to exploit provenance as part of the brand positioning.

The liquid milk market is generally split 60% semi skimmed, 30% whole milk and 10% skimmed milk.Doorstep sales continue to decline unless being specifically developed as more of a service. These oftenoffer other products or local, traceable, farm fresh milks. Branded milks are still a large opportunitybut must have a genuine unique selling point (USP) and not just a label. Added value speciality milkssuch as milk enriched with Omega 3 remain a significant opportunity and growth sector.

Yogurt / Ice Cream and Pasteurised milk processing use similar equipment and have in general terms lesstechnological demands and provide faster cash turn around with significantly less working capitalrequirements than cheese. For this reason these products have been grouped together.

This booklet aims to provide a realistic guide to minimising some of the risks involved in investing inyogurt, ice cream and milk processing. It sets out some of the steps needed to ensure production of theright product, at the right quality and marketed to the right people.

The yogurt and pot dessert markets are considered a strong category and one in which consumersdemand choice, quality and innovation. Sales have been boosted bringing innovation and new entrantstogether with significant marketing spend by the major manufacturers of branded produce with year onyear growth.

The ice cream market can be clearly divided into the commodity value sector and the premium, addedvalue sector dominated by major brands and speciality products.

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Section 1 - Technical requirements - HazardAnalysis Critical Control Point (HACCP)HACCP or equivalent system for safe dairy products production is required by law. Specialist advice will berequired in the preparation of this part of the project.

IntroductionHaving deciding to manufacture dairy products, the next step is to prepare the HACCP system for the typeof product to be manufactured.

The preparation of the HACCP documentation assists in the design of the production premises to ensure thatthey are safe and appropriate for the products to be made.

Some of the key HACCP areas to be considered are given below. This is not meant to be a comprehensiveHACCP description for the manufacture of dairy products, but a general overview.

PurposeThe purpose of a HACCP system is to ensure the production of safe food. Potential hazards to food safetyrelating to all aspects of the manufacturing process are identified as Critical Control Points (CCPs), andsuitable records must be produced to prove that they are controlled.

Some benefits of HACCP Preventative system Systematic approach Assists due diligence defence Facilitates verification activities Demonstrates management commitment

The HACCP systemThe first task is to address the HACCP pre-requisites, and these are:

Food manufacturing practice (hygiene) Good laboratory practice Calibration Pest management systems Incident and recall management systems Preventive maintenance programmes Training Supplier quality assurance

The next task is to identify the process / product hazards, and document the CCPs on a process flow diagram.

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Hazard analysis overview Good personal hygiene Correct cleaning and disinfection Adequate pest control Trained and aware operatives

Key process controls Pasteurisation / cooling Correct control of the manufacturing / filling process Correct storage temperature

Examples of hazards and recommended food safety principles to consider in relation to milk production

There are a number of useful sources for HACCP and good manufacturing process guides. For example:

Dairy UK website (Technical Guidance)

Basic Food Hygiene Level 2 & 3, and HACCP, and Hygiene in Focus series produced by the Society of FoodHygiene and Technology (SOFHT)

Hazard Source / Cause Control / Evidence

Raw milkcontamination byharmful bacteria /other substances.

Growth of harmfulbacteria in milk afterpasteurisation.

Poor animal husbandry(eg, animal disease, udderinfections). Milk from treated animalsnot segregated.Contaminated animal feed.

Inadequate pasteurisation.Post pasteurisationcontamination.Dirty plant and equipment.Poor manufacturingpractice.Poor personal hygiene.

Herd health and veterinary records.Medicine / movements book. Mastitisrecords.Milking machine test reports.Feed supplier assurances.Good herd records and practices. Periodic raw milk antibiotic tests.

Pasteurisation records.Calibration certificates.Plant and equipment cleaning andinspection records. Laboratory results.Operator training records.Hygiene training records.

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Section 2 - Yogurt2.1 Summary of business plan for Yogurt case study A real on farm operation - an organic farm - was chosen for this exercise to produce a case study. Thisfarm keeps about 110 cows, producing around 3000 litres of milk per day in the summer. The farmcommenced on-farm production of clotted cream in 2004. The clotted cream business is now wellestablished but created a large volume of skimmed milk. Initially the skim fraction was used as animal feedon the farm and any left over had to be discarded. To make use of some of the skim fraction, a smallproduction facility was set up to produce yogurt. This facility is capable of producing yogurt regularly, onaverage three to four days per week, with a maximum capacity of 100 litres per batch per day.

The equipment considered in this production facility is as follows: Milk reception tank 100 litres batch heater, incubator and cooler Milk separator Yogurt pump Pot filling and sealing unit Two yogurt chillers Large walk in chilled store Hot water boiler and air compressor

When considering an appropriate building and equipment it is essential to involve the EnvironmentalHealth Officer (EHO), and Planning and Building Regulations Control at the earliest stages. It is alsostrongly recommended that an appropriately qualified and experienced technology consultant be used toprogress planning permission and building regulation approval, and for the preparation of a robustHACCP system. Disposal of waste also requires specialist advice as it will probably be classed as aProduct of Animal Origin (POA) and needs to be handled carefully and correctly.

2.2 Outline manufacture Stirred YogurtNote: Rigorous hygiene standards must be observed at all stages of the process.

2.2.1 Milk for Yogurt productionThe highest quality milk should be used for yogurt production as poor bacteriological quality inhibits thegrowth of the yogurt culture during incubation.

Residues of penicillin and cleaning and sterilising solutions also impede culture growth.

For low-fat or fat-free yogurt production the milk fat content of the milk is standardised by separating offsome, or all of the fat.

A normal (full-fat) yogurt has butterfat content greater than 3%. The fat content of a low-fat yogurt isgreater than 1.5%, and for a fat-free yogurt about 0.1%.

2.2.2 Ingredients additionDry ingredients, skimmed milk powder, sugar, stabilisers and emulsifiers, are weighed and added to ameasured volume of milk in the manufacturing tank according to the recipe to produce the base mixture.

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Skimmed milk powder is used to increase the total solids content of the milk to produce a firmer and morestable set when incubated.

Stabilisers, gelatine and pectin for example, increase the viscosity of the product and help to minimise therisk of whey separation in the finished yogurt.

2.2.3 Stirring / heatingThe yogurt base mixture is heated to ~ 60 to 70C while continuously being stirred to dissolve the ingredients.

2.2.4 High shear mixingThe yogurt base mixture is thoroughly blended with a high shear mixer.

2.2.5 HomogenisationThe mixture is passed through a homogeniser to break the milk fat globules into smaller sizes and aid evendistribution throughout the mix. This process improves the stability and consistency of the yogurt bypreventing fat separation.

2.2.6 Pasteurisation / coolingThe yogurt base mixture is batch pasteurised at 90C for 10 - 15 minutes then cooled to 35C. This heat treatment provides a clean medium for culture growth and also improves consistency bydenaturing the whey proteins.

2.2.7 Culture additionA culture of harmless micro-organisms, which converts the milk sugar, lactose, into lactic acid, is added to themixture and stirred. The yogurt can be filled at this stage and incubated in the pot if set yogurt is required.

2.2.8 IncubationThe yogurt mixture is incubated until the required acidity has been reached.

Incubation temperatures and acidities may vary depending on cultures used and final product requirement.

2.2.9 Cooling and flavour additionThe incubated yogurt mixture is cooled to ~ 12 - 15C to retard any further increase in acidity. Colours,flavours, fruit etc. are added and mixed as required by the recipe.

2.2.10 FillingThe finished yogurt is filled into pots and lids and labels applied.

2.2.11 Storage / testingThe finished product is transferred to a cold store and cooled to below 4C ready for despatch and sale.Product testing for compliance with legal requirements is carried out at this stage.

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2.3 Yogurt process flow

Manufacturing tank

Stirring / heating (60 - 70C)

High shear mixing

Homogenisation

Pasteurisation (90C for 10 - 15 min)

Cooling (35C)

Incubation

Cooling (~10 - 15C)

Filling / lid label application

Cooling (below 4C)

Storage / testing

Ingredients additionMilk

Skimmed milk powderSugar

StabilisersEmulsifiers

Colour / flavour addition

Culture addition

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2.4 Capital and operating costs for yogurt manufactureThe costing in this section was based on the procedure used for set yogurt manufacture with a dailyproduction capacity of 100 litres of skimmed milk. The farm is a registered organic milk productionfarm and therefore the price used for costing reflects the prevailing ex-farm price for organic milk.

The capital investment required for start-up of on-farm production is as follows: (See appendix 1)

Equipment, mostly reused 18,600 Or alternatively use all new equipment 38,350 Building premises, 7m x 3.5m food process area 30,625

Table 2.1 Cost of production of organic yogurt

Costs per day (pence)Item Using reused equipment Using new equipment

Daily production costsProcessing 234 234Labour 3000 3000Ingredients 3077 3077Equipment 1488 2192Buildings 490 490Daily admin and other running costsAdmin and maintenance 540 602Product delivery 1000 1000Building repairs 123 123Return on capital 297 329Return on working capital 571 663Product storage 250 250Sub total excluding packaging 11070 11960Sub total to produce 1 litre 110.7 119.6Sub total to produce 500ml 55.4 59.8Packaging cost per 500ml 14.2 14.2Total cost before profit 69.6 74.0Profits at 20% 13.9 14.8Ex-farm cost per 500ml 83.5 88.8

Note 1: Capital costs for equipment (new and second-hand) will depend on availability.

Note 2: The prevailing milk price in this illustration was 28 ppl.

Note 3: The costs for other packaging sizes can be evaluated by adding the cost of packing with the processed product.For example, cost of processed product for 200ml is 22.2p from the above table. The cost of plastic container and foil lidwould be about 9p. Therefore, the total cost before profit would be 31.2p.

Note 4: No two enterprises will be able to cost products similarly. Producers will need to carry out their own detailed costings.

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Section 3 Ice Cream3.1 Summary of business plan for Ice Cream case study The calculations for this study are based on a pilot facility used for ice cream production for industrial trainingcourses, students projects and for sales via an on-site shop. The daily production capacity is 100 litres usingbatch preparation method. The equipment required for ice cream making is as follows:

Raw milk storage tank 100 litre jacketed tank for product mixing and heating Homogeniser 100 litre jacketed tank for cooling and storage of ice cream mix Continuous ice cream freezer Tub filler Hot water boiler and air compressor

When considering an appropriate building and equipment it is essential to involve the Environmental HealthOfficer (EHO) and Planning and Building Regulations Control at the earliest stages. It is also stronglyrecommended that an appropriately qualified and experienced technology consultant be used to progressplanning permission and building regulation approval, and for the preparation of a robust HACCP system.

Note 1: There are many different styles and types of ice cream for example: standard soft scoop, Italian, andfrozen yogurt.

Note 2: This example is based on premium ice cream from quality ingredients and whole milk; differenttechnologies are used to produce different ice creams.

Specialist advice should be taken from ingredients suppliers, equipment manufacturers, specialist consultants ororganisations such as the Ice Cream Alliance.

3.2 Outline manufacture Ice Cream Note: Rigorous hygiene standards must be observed at all stages of the process.

3.2.1 Ingredients additionDry ingredients, skimmed milk powder, sugar, stabilisers and emulsifiers, are weighed and added to a measuredvolume of milk in the manufacturing tank according to the recipe to produce the base mixture.

Skimmed milk powder is used to increase the total solids content of the milk.

Stabilisers and emulsifiers improve the viscosity and texture of the finished product by binding in water moleculesand assisting emulsification of the mix.

3.2.2 Stirring / heatingThe ice cream base mixture is heated to ~ 60 to 70C while continuously being stirred to dissolve the ingredients.

3.2.3 High shear mixingA high shear mixer is used to thoroughly blend the mixture.

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3.2.4 HomogenisationThe mixture is passed through a homogeniser to break the milk fat globules into smaller sizes and aid evendistribution throughout the mix. The correct combination of temperature and homogenisation pressure isimportant in helping to determine the consistency of the finished product.

3.2.5 Pasteurisation / coolingThe homogeneous ice cream base mixture is gently agitated during batch pasteurisation at 66C for minimum30 minutes or 72C for minimum 10 minutes then cooled to 7C within 90 minutes.

3.2.6 Ageing / coolingThe mixture is gently stirred and aged for between four and 12 hours then cooled further to below 5C.

During the ageing process the fat crystallises and the protein and stabilisers bind water to improve theconsistency of the finished ice cream.

3.2.7 Holding / flavour additionThe incubated ice cream mixture is held and colours, flavours, fruit etc added and mixed as required by the recipe.

3.2.8 Freezing / fillingThe mixture is frozen in a continuous ice cream freezer, which whips air into the mixture and disperses thewater content in the form of small ice crystals. The finished ice cream is then filled into tubs or containers,and lids and labels applied.

3.2.9 Deep-freeze storageThe finished product is transferred to a freezer at -18C maximum in preparation for despatch and sale.Product testing for compliance with legal requirements is carried out at this stage.

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Deep-freeze storage / testing

2.3 Ice Cream process flow

Manufacturing tank

Stirring / heating (60 - 70C)

High shear mixing

Homogenisation

Pasteurisation (eg, 60C for 30 min)

Cooling (7C)

Ageing (~4 to 12 hours)

Cooling (below 5C)

Holding

Freezing / filling

Lid / label application

Ingredients additionMilk

Skimmed milk powderSugar

StabilisersEmulsifiers

Colour / flavour addition

Note: Different types /styles of ice cream usedifferent types ofingredients and recipetimings. Please followyour ingredient suppliersrecommendations

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3.4 Capital and operating costs The system for ice cream making was a batch method of maximum capacity 100 litres. A standard recipe wasused for calculation of the ingredients cost using milk, cream, sugar, skimmed milk powder and emulsifier /stabiliser.

The capital investments required are as follows: (See appendix 2) Capital required for equipment, using second-hand equipment 25,600 Or alternatively using new equipment 75,600 Capital for building premises, 7m x 3m 16,150

Table 3 - Cost of production of ice cream

Costs per day (pence)Item Using reused equipment Using new equipment

Daily production costsProcessing 404 404Labour 8000 8000Ingredients 4903 4903Equipment 1584 2520Buildings 431 431Daily admin and other running costsAdmin and maintenance 769 2015Product delivery 1000 1000Building repairs 65 65Return on capital 321 443Return on working capital 1454 1565Product storage 1200 1200Sub total excluding packaging 20131 22546Sub total to produce 1 litre 176.6 197.8Sub total to produce 70g ice cream 12.4 13.4Packaging cost per 70g ice cream 7.1 7.1Total cost before profit 19.5 20.6Profits at 20% 3.9 4.1Ex-farm cost per 70g ice cream (typical pot size) 23.4 24.70

Note 1: The costs of various other sizes of packed ice cream can be calculated from Table 3 Cost of production of ice cream.For example, 50g of processed and frozen ice cream cost 8.8p and the packaging costs about 5.0p. This makes the total cost13.8p before profits.

With this particular product the volume of the final ice cream is larger due to incorporation of air. Therefore, a 50g of ice creamoccupies a volume of 100ml at 100% overrun. That means the container size should be approximately 110ml to fill 50g of ice cream.

Note 2: In this illustration the milk cost was 18ppl.

Note 3: These costings are a guide only. The availability and price of equipment will vary depending on the area and time.

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Section 4 Pasteurised milk4.1 Summary of business plan - Milk pasteurisation and bottlingThis example of a farm in South Wales shows milk as the dairy product for on-farm production. The farm keepsabout 100 cows and the daily milk yield in the summer is about 3000 litres.

Previously farm milk was sold to a UK milk co-operative for processing. The opportunity was established to sellpasteurised bottled milk. It was necessary to build a new dairy to facilitate the processing and filling of milk.An initial production level of about 500 litres per day was considered satisfactory for these calculations.

The equipment considered for this production is as follows:

Milk reception tank Continuous milk pasteuriser at 500l/hr Milk separator at 500l/hr Homogeniser Pasteuriser milk storage tank Poly bottle filler Chilled store Batch cream pasteuriser Hot water boiler and air compressor

When considering an appropriate building and equipment it is essential to involve the Environmental HealthOfficer (EHO), and Planning and Building Regulations Control at the earliest stages. It is also stronglyrecommended that an appropriately qualified and experienced technology consultant be used to progressplanning permission and building regulation approval, and for the preparation of a robust HACCP system.

4.2 Outline manufacture Pasteurised milk

4.2.1 Pasteurisation / homogenisation / separationRaw milk is pumped to the pasteuriser balance tank and into the regeneration section of the pasteuriser platepack where it is pre-heated to ~ 60 - 65C.

Whole milk processing:The milk passes into the heating section of the plate pack where it is subjected to the legally requiredtemperature / time combination of 71.7C minimum for 15 seconds. It is then cooled to 5C and pumped intoa holding tank.

If required, homogenisation of the pre-heated milk takes place prior to the pasteurisation stage.Homogenisation breaks the milk fat globules into smaller sizes and distributes them evenly throughout the milkpreventing them rising to the top forming a cream line.

Skimmed milk processing:The pre-heated milk at 60 - 65C exits the pasteuriser plate pack and passes into a separator, which removesthe cream. The cream is transferred to a raw cream storage tank prior to pasteurisation in a dedicated cream pasteuriser.

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The skim returns to the heating section of the milk pasteuriser and is subjected to the legally requiredtemperature / time combination of 71.7C minimum for 15 seconds. It is then cooled to 5C and pumped intoa holding tank.

Semi-skimmed milk processing:The pre-heated milk at 60 - 65C exits the pasteuriser plate pack and passes into a separator, which removesthe cream. Some of the cream is then blended back with the skimmed milk to provide the required butterfatcontent. This standardised milk is then pumped to a homogeniser, which breaks up the fat globules intosmaller pieces and distributes them evenly throughout the milk. It is then returned to the heating section of themilk pasteuriser and is subjected to the legally required temperature / time combination of 71.7C minimumfor 15 seconds. The semi-skimmed milk is then cooled to 5C and pumped into a holding tank.

The surplus cream is transferred to a raw cream storage tank prior to pasteurisation in a dedicated creampasteuriser.

4.2.2 Filling / cappingThe cooled, pasteurised milk in the finished milk holding tank is pumped or gravity fed into a filling machine.Bottles are filled, capped and have labels and codes applied prior to being crated and transferred to coldstorage at less than 5C in preparation for despatch and sale. Product testing for compliance with legalrequirements is carried out at this stage.

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4.3 Pasteurised milk process flow

Pasteuriser plant

Pre-heating (60 - 65C)Pasteurisation

(71.7C for 15 sec.)

Standardisation(skim and semi skim)

Homogenisation(if required)

Cooling(5C)

Raw milk

Separation Holding

Surplus cream

Cream pasteurisation

Cold store (Below 5C)

Filling / capping

Cream filling / capping / label / code

Label / code

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4.4 Capital and operating costs Milk processing and bottlingThe production unit in this example uses a continuous plate pasteuriser. A homogeniser is required to producehomogenised milk. The aim is to produce 500 litres of pasteurised milk per day but the capacity will allow fordoubling the output.

The capital investment required is estimated as follows: (See appendix 3) Capital for equipment using second hand equipment 27,500 Or alternatively using new equipment 53,800 Capital for building premises, 8m x 3m 34,800

Table 4 Cost of production of pasteurised milk

Costs per day (pence)Item Using reused equipment Using new equipment

Daily production costsProcessing 470 470Labour 4800 4800Ingredients 8925 8925Equipment 2200 2690Buildings 696 696Daily admin and other running costsAdmin and maintenance 718 1138Product delivery 1000 100Building repairs 140 140Return on capital 434 508Return on working capital 377 644Product storage 250 250Sub total excluding packaging 20010 21261Sub total to produce 1 litre 40.0 42.5Packaging cost per litre 7.8 7.8Total cost before profit 47.9 50.4Profits at 20% 9.6 10.1Ex-farm cost per litre 57.5 60.5

Note 1: Other packed sizes can be calculated using the cost of processed milk and adding the packaging cost. For example, cost oftwo litres of processed milk is 80p and cost of two-litre poly bottle and cap is bout 10.7p making the total cost of 90.7p before profits.

Note 2: The prevailing milk price used in the example was 18ppl.

Note 3: These costings are only a guide. The availability and price of equipment may vary. Ensure you consult your financial advisorbefore proceeding.

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Section 5 - AppendicesAppendix 1

Capital items for Yogurt manufacture, 100 litre batch per dayBuilding premises (7m x 3.5m x 2m high) cost at 1,250/m2 would be 30,625

Capital for Equipment

Second Hand New Batch pasteuriser 4,500 10,300Separator 1,000 3,500Walk in chilled store 5,000 7,500Product Chiller x 2 3,400 5,500Yogurt pump 850 3,600Raw milk tank 900 3,500Compressor (air) 200 600Hot water boiler 600 800Dish washer 300 500Pot sealer 1,600 2,300Buckets, jars etc 250 250Total 18,600 38,350

Appendix 2

Capital items for ice cream manufacture, refurbished premises(7m x 3m x 2m high) Refurbishment of floors, walls ceilings and drains 16,150

Capital for Equipment

Second Hand New Jacketed tanks, 100 litres x 2 3,200 15,800Homogeniser 5,500 18,500Continuous freezer 2,000 15,000Pipes, fittings 300 300Hot water boiler 600 800Compressor (air) 200 600Cup filler 5,800 14,200Trays and ancillary items 200 400Large freezer store 7,800 10,000Total 25,600 75,600

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Appendix 3

Capital items for milk pasteurisation and bottlingBuilding premises (8m x 3m x 2m high

New building, fabric only 19,200Walls and ceiling 5,100Epoxy floor 1,800Electrics 6,000Wash basin, hygiene equipment 2,700Total 34,800

Process equipment

Second-Hand New Pasteuriser 500 l/h 2,500 14,000Balance tank 400 800Homogeniser 7,800 12,000Separator 1,000 3,500Poly bottle filler 8,500 11,900Pipes, valves, pump 3,500 5,000Pasteurised milk tank 2,500 4,000Hot water boiler 600 800Compressor (air) 200 600Batch cream pasteuriser 500 1,200Total 27,500 53,800

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This booklet and the information within are intended as a guide only. Costs stated are approximate and were felt to berepresentative at time of going to press.

Please seek detailed support from your accountant, bank, legal advisor or other specialist support organisations available in pdfand printed copy format from the DairyCo, formerly the Milk Development Council

Disclaimer: DairyCo seeks to insure that the information contained within this publication is accurate. However, DairyCo shall notin any event be liable for loss, damage or injury howsoever suffered directly or indirectly in relation to information containedwithin this publication, and no liability will be accepted for errors or omissions.

The contents of this publication may not be reproduced in whole or in part without the consent of DairyCo.

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Trent LodgeStroud RoadCirencesterGloucestershireGL7 6JN

T: +44 1285 646500F: +44 1285 646501E: info@dairyco.org.uk

www.dairyco.org.uk

December 2008