Ready to cash out? The recent

Is it too soon to cash out?

A r e c e n t o u t a g e b y p a y m e n t s e r v i c e s c o m p a n y O p a y o s h o n e a l i g h t o n t h e f r a i l t i e s o f a c a s h l e s s s o c i e t y . R e l y i n g w h o l l y o n t e c h n o l o g y a s o p p o s e d t o t a n g i b l e c a s h , h a s i t s i s s u e s . F i o n n u a l a C a r o l a n l o o k s a t t h e p r o s a n d c o n s o f a c a s h l e s s s o c i e t y

The Covid-19 pandemic caused a drastic decline in cash usage due to the risk of contamination from exchanging cash. In 2020 e-money transactions through methods such as Apple Pay and Google Pay saw a 1,700% increase, according to the European Central Bank.

Businesses that continue to fail to provide card payment services are seen as nearly archaic. Many of us don’t even carry a wallet or debit/credit cards anymore due to the ability to pay through Google Pay and Apple Pay on our phones.

While business owners and consumers have become accustomed to not holding much cash, problems arise when technology fails and this will inevitably happen from time to time. Exclusively relying on technology has its limits. This became apparent when a technical problem at payments company Opayo, formerly known as Sage Pay, happened on 21 March leaving many retail outlets around the country unable to process card transactions. The outage lasted for approximately eight hours but it caused enough trouble for business owners to ponder whether relying entirely on card payments is really the way forward.

CSNA CEO Vincent Jennings has called on the Central Bank to investigate the Opayo card payments outage that occurred on 21 March

Opayo

Opayo was formerly known as Sage Pay, but the name was changed after Sage Pay was bought by US Bancorp subsidiary Elavon in 2019 for a reported €270m. Opayo has around 50,000 customers in Ireland including SuperValu and Avoca, and says that only a proportion of its customers were impacted by the outage that started shortly after lunchtime on Monday, 21 March. The Banking and Payments Federation of Ireland (BPFI), the representative body for the payments sector here, is investigating how it came about and at the time said: “The issue appears to have so far affected card transactions at certain outlets of SuperValu and also an off-licence chain, as well as bookshops and other smaller retailers.”

Shoppers in SuperValu stores were unable to use their cards to pay for their shopping but within a few hours Opayo said the problem had been fixed and the system was functioning normally again. “We can confirm the issue is now resolved and normal service is restored. We continue to monitor the service closely,” Opayo said.

Online affected

Interestingly, the company said its online payment services were not affected during this outage. However some SuperValu customers reported problems carrying out online transactions on the supermarket’s website at the same time. And in a tweet, SuperValu confirmed that its card payment service provider was experiencing technical issues which were affecting the processing of card payments at its stores as well as online.

The last known previous outage experienced by Opayo customers was on 17 June 2021, which impacted companies around the world including EasyJet, Krispy Kreme, Europcar and Office Shoes. Those representing the Irish retail trade are not happy to just accept that ad hoc outages will occur from time to time due to the complete disruption to business that it causes and are looking for assurances that there will be more back-up in the future.

Investigate

The Convenience Stores and Newsagents Association (CSNA) called on the Central Bank to investigate the outage. “The disruption in supermarkets and convenience and forecourts was truly extensive,” said CSNA chief executive Vincent Jennings.

“Retailers lost sales and credit had to be given to other customers, with the hope now that they will pay up,” Jennings added. “I’ve asked the Central Bank to assure me that they are seeking a report and to confirm they are aware the Opayo system went down at the same time throughout the UK.”

“ A s t u d y i n 2 0 2 0 o f m o r e t h a n 2 , 0 0 0 p e o p l e b y t h e c o n s u m e r g r o u p W h i c h ? f o u n d t h a t o n e i n 1 0 p e o p l e w e r e r e f u s e d b y s h o p s w h e n t r y i n g t o p u r c h a s e e s s e n t i a l i t e m s w i t h c a s h d u r i n g t h e p a n d e m i c . ”

Jennings said it was the third card payments outage that occurred in four weeks.

RGDATA also called on the Central Bank to urgently review the back-up services provided by payment service providers in the case of outages.

“In this day and age it seems extraordinary that any payment services provider can lack the relevant contingency supports to ensure that there is continuity of service when technical issues arise,” said Tara Buckley, director general of RGDATA.

RGDATA requested details of the measures that the Central Bank is taking to ensure that payment services providers have appropriate contingency arrangements in place and sufficient back-ups to prevent outages.

“It is important that retailers have confidence that there is a robust regulatory oversight of the operations of payment services providers and that appropriate contingency and redundancy arrangements are in place to prevent service outages,” Buckley said.

Irish shoppers ditching cash

Despite the risk of outages, card payments are now the preferred way to pay in Ireland. A study by Paypal of 1,000 Irish consumers entitled the ‘Retail Trends & Spends Study’ showed that over half (56%) of Irish adults say the pandemic has permanently changed the way they pay for products and services, with almost three quarters (73%) preferring cashless transactions. Digital seems to be the preferred route as 72% of respondents indicated they prefer digital payment methods (such as paying with their smartphone), while 71% like contactless checkouts (such as self-service tills).

A cashless society benefits those who have access to technology and money in general. The poorest in society and poorer nations will be disadvantaged most by the move to a cashless society. The charity sector is one that has lost out due to our increasing appetite for cashless transactions. In response to this, Spar has been trialling a digital ‘Smart Poster’ collection solution in its stores that allows customers to donate to Spar’s official charity partner Make-A-Wish Ireland via their mobile telephones.

Using this contactless technology, customers in Spar stores across Ireland can now tap their smart phones on the special posters and a web page is opened on their device. The customer can then choose to donate directly to Make-AWish using the Apple or Android Pay capability on their phone or input their debit/ card details directly. This is a great way to entice people to donate to causes when they don’t carry spare change on them anymore.

Sweden

Many consumers have been simply forced away from using cash due to many businesses not accepting it anymore. A study in 2020 of more than 2,000 people by the consumer group Which? found that one in 10 people were refused by shops when trying to purchase essential items with cash during the pandemic. Contactless payment only has become quite common so we are being pushed in this direction whether we like it or not.

Some countries like Sweden are fast moving towards a cashless society entirely. According to the European Payments Council, cash transactions accounted for just 1% of Sweden’s GDP in 2019, and cash withdrawals have been steadily declining by about 10% per year. Sweden is gearing up to become the first cashless nation in the world by 2023.

There are obvious advantages to a cashless society. It costs money to print and transport cash and we have long heard Irish retailers lament the cost of banking cash and the susceptibility of theft when there is considerably amounts of cash kept in a business. Travelling has become much more convenient as you don’t have to exchange your money for the local currency. Also it makes it impossible for people to evade tax and conduct money laundering if there’s a record of every payment they receive.

Disadvantages of card

It’s not all plain sailing using cards either though as SuperValu customers experienced on 21 March. When technology fails, consumers are left high and dry. Likewise, business owners have no way of accepting payments when systems fail.

When you spend cash, you recognise the financial impact by physically taking the cash out of your pocket and giving it to someone else. With electronic payments, on the other hand, it’s easy to tap without taking account of how much you spend. Also in a cashless society, you’re much more exposed to fraud, which is something people are having to become more wary of all the time with more sophisticated scams being uncovered every week.

And simply there are still a lot of people who like to deal in cash and believe the old adage that cash is king so it’s certainly not any harm to keep some cash in a business for those customers and the odd systems crash that we will inevitably experience. However, despite the flaws of the cashless society, we have to accept that cash is on the decline and the retail trade will need to continue to put pressure on our tech operators to have more robust back-up systems to avoid outages in the future as much as possible. ■

“It is important that retailers have confidence that there is a robust regulatory oversight of the operations of payment services providers and that appropriate contingency and redundancy arrangements are in place to prevent service outages,” said RGDATA director general Tara Buckley

Sticky Toffee, Death by Chocolate, or Praline Perfection…what to try next? Yes reader; it’s a tough gig working here at ShelfLife! That said, our journalistic research rarely proves as delicious as it did this month, when reporting on Lily O’Brien’s milestone 30th anniversary. Not content with munching our way through an assortment of confections drizzled, smothered and sprinkled in scrumptiousness, we headed to Lily O’Brien’s HQ and facility to watch those very same chocolates being made, under the watchful eye of our personal tour guide for the morning, none other than CEO Michelle Vance herself.

Innovation

“We have a long-standing culture of innovation across the business,” Vance tells us as we catch up over a coffee break in the lightfilled boardroom which doubles as her office. “We have an excellent R&D team and NPD team who meet every single week; looking at food trends, new recipes, new packaging formats, and different aspects of the business, whether it’s industry requirements, or consumer needs, so innovation is part of the DNA of our business, and the team do a fantastic job of bringing new ideas to us every year.”

While creativity clearly flows through this business’s (chocolate-filled!) veins, satisfying consumer tastes remains paramount, according to Vance. “Interestingly, we developed a collection called the Exquisite Collection a number of years ago,” she recalls, “a premium range, all about the authenticity and provenance of ingredients. The very first iteration of that had a fantastic sweet; white chocolate with pink peppercorns. We loved it, but it never went to market because the consumer didn’t like it. It was Marmite! Ultimately, we took the decision not to put it into the collection, but I think it’s one that resonates with everybody in here. You can push things very far, but you’ve got to meet consumer tastes as well.”

At times, the more cutting-edge chocolate trends will appeal to a certain demographic, Vance concedes, but they won’t appeal to everyone. The success of more unusual combinations will also depend on geographical location. “What we have found over the years, is that the trends tend to come from the West Coast of the States across into Europe,” she continues. “Flavours that we would have seen as trends ten years ago in the States are now readily available here.” A case in point being Salted Caramel. “It’s everywhere now in the European markets,” says Vance, “but it’s taken a number of years to reach that point.”

Hot chocolate

A s L i l y O ’ B r i e n ’ s c e l e b r a t e s i t s m i l e s t o n e 3 0 t h a n n i v e r s a r y , G i l l i a n H a m i l l c a u g h t u p w i t h C E O M i c h e l l e V a n c e t o r e f l e c t o n t h e s w e e t s u c c e s s o f t h e N e w b r i d g e - b a s e d c o n f e c t i o n e r , w h i c h h a s g r o w n f r o m f o u n d e r M a r y A n n O ’ B r i e n ’ s k i t c h e n t o e m p l o y i n g 2 1 9 p e o p l e t o d a y , w i t h p l a n s f o r a n e x c i t i n g n e w l a u n c h i n t h e p i p e l i n e f o r Q 4 o f t h i s y e a r

The task of tasting

Naturally, while tasting treats is a fun perk of the job for us sweet-toothed journos, it’s an extremely serious business for this premium confectioner, where “affordable luxury” is paramount. The initial tasting is always conducted by the R&D team, who “won’t let anything out past them if it’s not up to standard”. Wider tasting panels, “to which everyone is invited at some stage,” also yield insightful results according to Vance, because “everyone is very honest internally. We will get true feedback from everybody because everyone is invested in the business succeeding.”

Today, Lily O’Brien’s employs 219 people, including some 160 permanent, full-time staff members and those on fixed-term contracts. That’s a lot more potential tasters on hand, than when Mary Ann O’Brien first started the business from her kitchen 30 years ago, naming the brand after her young daughter Lily, and originally selling the homemade treats to her hairdresser’s before approaching Superquinn. While O’Brien is no longer involved in the company, “there’s a lot of Mary Ann left in the business in terms of that passion for chocolate; that passion for the brand which is still here,” says Vance.

Career background

Michelle Vance first started with Lily O’Brien’s back in 2008. “Prior to that, I’d been the financial controller of a logistics and warehousing company for five years here in Newbridge,” she tells ShelfLife. “Previously, I was a finance manager in Freshways sandwich business in Finglas, which was acquired by Kerry Foods when I was there.” Based in Freshways for five years, it was here where Vance trained as an accountant. Her very first role was actually as a general operative at a pizza factory in Naas, where she progressed to a supervisor role and then into office administration and pay roll. “Luckily for me, one of the managers there moved to Freshways and I got the call to join them,” she recalls, modestly describing her trajectory as “a bit of a skip and a jump to move different places. Freshways was a start-up and getting the business up and running there and putting the systems in place was right up my street and

that moved me into finance and resulted in my accountancy qualification.”

Vance was originally only expected to join Lily O’Brien’s to “help out with some Enterprise Ireland grant applications for two weeks” but her tenure has obviously lasted significantly longer. We suggest that she must have impressed the boss, but Vance asserts that both parties were mutually impressed. “You’re adopted into the team when you join the business,” she says of the company’s welcoming atmosphere. She later progressed to the position of management accountant, which she held for four years. “In 2014, when the business was first sold to private equity, I was appointed finance director at that stage where I stayed right through until March 2020 when the CEO departed, and I was given the opportunity to take up the role as CEO/ managing director.” Former CEO Eoin Donnelly had previously stayed on with the business after its €40m buyout by Warsawlisted Colian Holdings in 2018.

Justifiably, when we ask Vance what her proudest career achievement is, she responds that it’s her progression from a general operative to her role today. “It’s not any one achievement,” she says. “There are multiple achievements as such. I’m most proud that having started as a gen op in a factory in Naas 29 years ago, I can sit here in the privileged position that I am in today as head of a fantastic business.” We were keen to hear how much an ambitious mindset drove this advancement. “There’s an element of ambition and drive, there’s an element of luck and there’s an element of meeting the right people at the right times who appreciate the right skill sets and give you opportunities,” she says. “It’s important to take those opportunities when they present themselves.”

Impact of pandemic

Vance’s major opportunity came at an unprecedented time for Ireland, just days after then Taoiseach Leo Varadkar made his address from Washington announcing that lockdown measures would be in place from 6pm that day. “It was a huge baptism of fire,” she says. “There was about ten days from when I took on the role and when the country went into lockdown, so where I thought I was taking a position to ease my way in and learn the ropes, within two weeks we were in crisis management.” Thankfully, she continues, the team environment of Lily O’Brien’s meant that “when big things happen, everybody just gets around the table and gets stuck in to deal with what’s in front of us. It was a big eye opener for me; just how strong and supportive the team were and how willing they were to work hard to keep things moving.”

Despite the fact that it was a key selling period with Easter on the horizon, the difficult decision was made to shut the business for six weeks. “The economy just stopped overnight so the first week was spent trying to evaluate what that meant for the business; what stock we had in trade, what stock we had in-hand,” says Vance. “We had to make the unfortunate decision to cease production for a number of weeks to allow things to settle down and push through the market. We made the decision to shut down for a longer period in the shortterm so that when we did reopen, we could remain reopen. That was key for the staff and for the employees that we could keep things moving once we opened back up.”

With enough stock to tide the business over for six weeks, once production re-commenced, it was straight into Christmas preparation mode when they started back in May; “in a

Denise Kehoe, sales manager at Lily O’Brien’s

smaller way than normal years but still in the hope that we could just keep things on an even keel and get ourselves through to September, October, November which would be key selling periods.”

Double-digit growth

Thankfully, the business has since made a full recovery, and posted impressive double-digit growth in the Irish market during the past year. “We’ve had a good two years once the initial impact of Covid resolved itself,” says Vance. “We’re very much focused on the core elements of the brand; increasing distribution and listings on our core boxed products and that strategy is working in Irish retail.

“We’re about to do a big launch in the Irish market in September into a new category so we’re really excited about that,” she continues. “Hopefully, that will give us some more growth in the Irish market and recruit more consumers to our brand. We do genuinely feel that if we can get somebody to taste our chocolate once, we will get them to buy it a second time.” At present, she politely declines to reveal any further details of the new product but watch out for further details from ShelfLife in the coming months.

While the group has bounced back from the pandemic seemingly stronger than ever, a silver lining of the crisis was how it illustrated Lily O’Brien’s has the agility and adaptability to navigate difficult times. “The priority for the business has always been the health and welfare of the staff, so whatever needed to be done to protect them was a priority,” says Vance. Accepting absenteeism and coping with slower production schedules became a way of life. “Like many businesses at the end of last year, we came in on a daily basis and counted how many people we had and planned accordingly. Working as a team every day to solve those challenges was the only way forward.”

This attitude is very much in accordance with how Vance describes her leadership style. “I like to collaborate with people,” she says simply. “It’s important to have input from all the managers on-site and everyone involved in the business so we’re all clear on the direction we’re heading in. Coming from a finance background, that collaborative element plays a huge part in the decision-making process, making sure we have the information available and talking through that information to make decisions. Personally, I love to be part of a team and Lily’s is driven by teams across all areas of the business, whether it’s the management team, the operations team, the sales team, or the R&D team.”

This team ethos certainly came to the fore during Covid, when strict protocols around temperature monitoring, 2-metre social distancing and daily contact tracing were in place. “We still monitor the situation on a daily basis,” says Vance. “One thing it is important to say is that the staff and the team here did a fantastic job during Covid in protecting themselves and everybody they work with. They were always conscious of abiding by rules and keeping themselves safe and that made our job easier.”

A strong team comes from the fact that everyone truly believes in the product, she adds. “When people taste Lily O’Brien’s chocolate, they know it’s made with care and that somebody has thought about every ingredient that’s gone into the box, how it looks, how it tastes and how it’s presented. Over the last five/six years, there’s been investment in the brand at retail level in terms of driving the brand awareness and market share. Around €3-4 million has been invested in marketing to drive brand awareness in key markets. A large proportion of that would be geared towards the UK market which would be our major export market outside of Ireland, as well as always supporting the home market.”

Navigating challenges

Naturally, preparing for Brexit was a huge task, but by working well in advance of the Brexit date with Bord Bia and Enterprise Ireland, Lily O’Brien’s was fully Brexit-ready on 31 January 2020. That said, Vance concedes that “it did slow the supply chain down and continues to slow the supply chain down. Customs clearance tends to add extra time to goods coming into Ireland - less so going out - so we’ve had to build that into our supply chain and accommodate that by organising extra storage and extra lead times on ordering.”

Another major issue affecting the FMCG industry is of course, cost inflation, which Vance notes is “harder to tackle. It’s ongoing and we still don’t know yet where the final cost base is going to end up. All you can do is negotiate with your suppliers as much as you can, or in some cases, there have had to be cost increases passed on. It’s never nice to have to do that but sometimes it’s a reality that just has to happen.”

Logistics and internal shipping have seen the largest price increases. “A container two years ago would have cost about $4,000 to the US, we’re now looking anywhere in the region of $12,000 – $15,000. It’s a massive increase, and that combined with the backlogs that are existing in international shipping and in the landing time to your destination is a huge challenge for the business. Again, you’ve got to go back and really look at the process and build in more time to cope with all of those things.” While the business also ships to Australia, Norway, Denmark and Sweden, “America’s the one where we have seen the biggest impact,” she notes. Ingredient increases meanwhile, have risen from “anywhere from 3 to 10% depending on where they’re coming from”.

Relishing diversity

Thankfully for Vance, diversity is a quality she relishes within her role, and all the panoply of challenges and problem-shooting strategies that entails. “When the economy and the world is changing as quickly as it is,” that can prove challenging, she admits, “because you no longer have a fixed plan in place; a piece of the jigsaw puzzle will move and you have to realign with it.” Despite this, Lily O’Brien’s enthusiasm for driving export growth certainly hasn’t waned. “We are travelling to New York with Bord Bia now in June to the summer food fair,” Vance says, “to start some serious market investigation to see how we launch into the US market; what channels we can use, and what opportunities are there. We are also continuously working on driving our export markets in Europe, which were impacted by Covid and only now starting to open up. Ultimately while you can do a lot on digital and Zoom and Teams, there’s no substitute for actually meeting a customer face-to-face.”

Of course, sustainability is a key focus for businesses across the globe and Lily O’Brien’s is no different in this regard. “Sustainability has been a hugely important part of the business for the last number of years,” says Vance, “whereby looking at sustainable paper, ingredients and plastics, are all an integral part of the R&D team. We’re also working to reduce our usage of paper, plastics and all materials across the business. Within foodservice, we have been moving away from single-use plastics into paper-based materials and that’s been ongoing in R&D for the last three years. We’re currently just in final testing to be able to launch paper-based packaging into the foodservice sector.”

Kevin Keating, managing director, Tennant & Ruttle

Celebrating everyone’s contribution

Without a doubt, there’s certainly plenty to celebrate at the current moment within Lily O’Brien’s and so its 30th anniversary celebrations come at an ideal time, with a number of key events expected to kick off in June. Unsurprisingly, Vance is keen to note that “the year is all about celebrating the team and partnerships”. Some team members have been with the business for a long time, and the month of June – 30 days celebrating 30 years –will pay tribute to the “huge amount of value they bring to the business” with mini celebrations, such as prizes and get-togethers, taking place throughout the month. “One of our key sales managers Denise is with us 25 years, Michael one of our engineers is with us 26 years, and we have 49 people who are in the business more than 15 years, and the month of June will be all about celebrating all of those people.”

A family fun day will follow in August, while September will see Lily O’Brien’s host a key celebration with “business partner Tennant & Ruttle, who also celebrate 30 years in partnership with us and are a key part in driving the Lily O’Brien’s business in Ireland, through the strength of our partnership.

“As we exit out of Covid and return to our normal business and social lives, it’s nice to celebrate with the people who have been through the hard times with you,” Vance says. “They have supported the business in so many ways over that time, and it’s important to celebrate their contribution.” ■