Acorn Dairy: organic growth from council business

Winning public sector contracts has helped Acorn Dairy win more business and grow the company.

Established in 2000 in Darlington by a dairy farming family, as a means to retail organic milk directly to the consumer.

In 2004, the family-run dairy business spotted a contract opportunity to supply Darlington Borough Council with milk for local schools, nursing homes and leisure facilities.

“We tended for it along with everyone else. At the time there was an appetite for high-welfare food, so we put up an excellent tender because we are an organic dairy right on the council’s doorstep,” says Caroline Bell, operations director of Acorn Dairy. “Being a local business was a key factor.”

Acorn Dairy won the contract and has retained it ever since, repeatedly winning the tender over other, larger, non-organic dairies.

Upon winning the Darlington council contract, the company invested in creating a new full-time position on the delivery team and another in the processing department to meet the needs to the contract. Today, the company employs 34 employees. “We’ve become a good local employer for Darlington,” says Bell.

Additionally, using the local authority business as a backbone, Acorn Dairy gained confidence to expand its wholesale business wider into other northern counties.

“It has given us great kudos to supply a local council,” explains Bell. “Once you’ve won one council contract, it is easier to win others,” explains Bell. “A council contract shows a level of competence, even for a new company, which we were at the time.”

In addition to supplying nursery milk to Newcastle City Council, Acorn Dairy also supplies products to Waitrose and Morrisons supermarkets.

A solid foundation

A key benefit of supplying to government is, according to Bell, the security the contract offers.

“There can be less margin in supplying to a local council, but it gives you a nice base rate. You have the guarantee that they will pay, and you can predict what volumes they want,” she adds.

Having this income base has allowed Acorn Dairy to diversity its spread of customers, protecting it from being over-reliant on any one contract.

Bell explains: “The value of the contracts give you a solid foundation. The guaranteed income allows you to dip your toe into riskier supply contracts – the council is not going to go out of business.”


The Government is opening up the public sector’s £187bn annual spend. The new Contracts Finder provides small and medium-sized enterprises with a single online public sector marketplace to find opportunities by price, location and sector. Businesses can register for free for contract alerts

Businesses can also get advice from buyers. Workshops to help small businesses write bids are advertised on Contracts Finder in the events section. 

Businesses can also find subcontracting opportunities and use the open data on Contracts Finder to create apps, expand services or create a new company.