Dumfries & Galloway Facility to Enter Growing Cottage Cheese Market Amidst Strong Dairy Sector Turnaround
Rowan Glen, an independent Scottish dairy producer, is embarking on a significant £1 million-plus transformation of its Palnure facility in Dumfries & Galloway. This substantial capital injection marks a pivotal moment in the company’s resurgence, enabling it to modernise operations and strategically expand its product range beyond traditional yogurts to include cottage cheese.
The investment package comprises over £600,000 directly from Rowan Glen, complemented by a crucial £400,000 grant from the Scottish Government’s Food and Drink Processing Scheme Scotland. This government initiative, part of a broader £9 million investment strategy, is designed to bolster Scotland’s food and drink processing sector by offering capital funding to businesses that demonstrate potential for increased productivity, improved supply chain efficiency, and broader economic benefits. The competitive scheme provides grants of up to £400,000, covering a maximum of 40% of eligible project costs, supporting goals such as Net Zero and Sustainability, Stronger Supply Chains, and Innovation.
Slated for completion by March 2027, the comprehensive project involves significant upgrades to key areas of the Palnure factory, including a reconfigured layout and the installation of advanced production equipment. Crucially, these enhancements will introduce a specialised high-care environment within Rowan Glen’s filling operations, providing the dairy with enhanced flexibility to manufacture a wider array of chilled dairy products and explore future innovations.
This strategic move into cottage cheese aligns with prevailing trends in the UK dairy market, where consumer preferences are increasingly shifting towards protein-rich foods and healthier snacking options. Recent data from the Agriculture and Horticulture Development Board (AHDB) indicates a significant surge in demand for cottage cheese, with sales experiencing a 29.4% year-on-year volume increase as of March 2025. This “cottage cheese boom,” amplified by social media trends, has led major retailers like Tesco to report a 200% increase in demand over the last two years, prompting new product launches from brands such as Arla Foods and Philadelphia. While overall UK dairy market volumes have seen declines in some segments, new product launches in yogurt are growing faster, with yogurt production itself witnessing an 11.3% increase in the first half of 2026 compared to the previous year. The UK yogurt market is projected to grow at a compound annual growth rate (CAGR) of 5.11% from 2026 to 2034, driven by health trends and product innovation, particularly in Greek-style yogurts which are perceived as healthier and higher in protein.
The investment represents a remarkable turnaround for the Palnure site, located near Newton Stewart, which ceased operations in November 2022 under its previous owner, Dale Farm Group, leading to 45 redundancies. The Rowan Glen brand and factory were subsequently rescued and re-established as an independent business by a dedicated team of nine former employees, led by Managing Director Alan Baxter. The initial management buy-out received support from South of Scotland Enterprise (SOSE) with a £285,000 grant and extensive guidance. Since its relaunch, the company’s workforce has expanded to approximately three times its original restart size, now employing around 27 individuals.
Reflecting on the arduous journey, Alan Baxter, Managing Director of Rowan Glen, stated: “When the previous business closed and everyone was made redundant, there was a real possibility that those 45 jobs would never return and Rowan Glen could disappear for good. A small group of us were prepared to take a big risk to make sure that wouldn’t be the end of Rowan Glen.” He added, “We knew the skills and experience that existed in the team, and we knew there was real affection for the Rowan Glen brand across Scotland. Everything we’ve achieved since has been built on the commitment and hard work of that original team and the people who have joined us along the way.”
You Might Also Like:
Scottish Dairy Producer Rowan Glen Invests £1M to Expand Into Cottage Cheese
Graham’s Family Dairy secures largest-ever Asda listing with 11 new Scottish product lines
Glen Mhor Hotel secures world award for pioneering £7.5m green energy centre
Glasgow Distillery secures £11m funding for production expansion
Baxter views the latest investment as a significant milestone: “When you’re building a business, there’s rarely time to stop and appreciate how far you’ve come. This investment is one of those moments. It’s a massive step for Rowan Glen and a big vote of confidence in our people, the brand and the future of Rowan Glen.”
The government grant is anticipated to expedite Rowan Glen’s strategic plans and forms part of a long-term modernisation strategy. “The Scottish Government’s Food and Drink Processing grant will allow us to accelerate our plans, significantly upgrade the factory and strengthen our manufacturing capability,” Baxter explained. “It will give us much more flexibility to develop new products and move into areas such as cottage cheese, creating a better platform to innovate, grow and make more great Scottish dairy products here in Palnure.”
Rowan Glen currently sources all its milk from Scottish farms within Dumfries & Galloway. The factory expansion is expected to enable the company to process larger volumes of Scottish milk as the business continues to grow. The introduction of cottage cheese production will also provide an additional outlet for skimmed milk, while cream separated at the Palnure facility can be supplied to other food manufacturing customers seeking Scottish cream, optimising raw milk utilisation. The company currently produces approximately 20 million pots and bottles of cultured dairy products annually, supplying major supermarket retailers across Scotland as well as foodservice customers.
Sources Cited:
- Scottish Dairy Producer Rowan Glen Invests £1M To Modernise Palnure Factory And Expand Into Cottage Cheese – EDairy News English
- UK Yogurt Market Size, Share, Trends & Growth, 2034
- UK Flavored Yogurt Market Size & Outlook, 2026-2033
- UK Yogurt And Probiotic Drink Market Size & Outlook – Grand View Research
- £1m Investment Marks Next Stage In Rowan Glen Comeback – DGWGO
- £1m factory investment marks next stage in Rowan Glen comeback
- Brits are crazy for cottage cheese – will the trend last? – AHDB
- Rowan Glen invests £1m to modernise factory and expand into cottage cheese – DairyNews
- Rowan Glen production restarts after management buy-out – South of Scotland Enterprise
- Q1 2026 dairy market review – AHDB
- Net Zero funding helps Rowan Glen to take sustainable step forward
- £1m investment set to relaunch Rowan Glen dairy factory | The Herald
- Food & Drink Processing Scheme Scotland – Farm Advisory Service
- Town facing ‘devastating’ jobs blow as yoghurt factory faces closure – STV News
- Dairy market outlook – AHDB
- Dairy retail performance – 16 May 2026 – AHDB
- Dairy retail performance – 18 April 2026 – AHDB
- More UK milk diverted to cheese and yogurt as liquid consumption continues to fall
- Food and Drink Processing Support – Rural Support Plan (RSP) – Annex – gov.scot
- Food and Drink Processing Scheme Scotland | Scottish Grocers’ Federation (SGF)
- Rowan Glen undergoes management buy-out with support from South of Scotland Enterprise
- Cottage cheese boom now so strong it has become one of the world’s biggest food trends
- UK Cheese Market Size, Share, Trends and Outlook 2034
- Big news for Rowan Glen We’re excited to announce a £1 million investment in our factory in Palnure as we prepare to expand beyond yogurt into cottage cheese. The investment includes over £600000 from Rowan Glen alongside a £400000 Scottish Government Food & Drink Processing Grant. This will upgrade our factory with new production equipment, increase our manufacturing capabilities, and give us flexibility to develop even more great dairy products for both retail and foodservice customers. Today we produce around 20 million pots of yogurt every year with Rowan Glen products stocked at most major supermarkets across Scotland. To think that less than 4 years ago the previous business had closed, makes this milestone even more meaningful. We’re incredibly proud of how far we’ve come and excited for what’s next! Here’s to the new chapter of Rowan Glen. – Facebook
