Page 1

76% of imported lighter models still do not comply with European safety standards*

*76% of 119 imported lighter models tested by

99% of non-conform lighter models were imported from outside the EU.

PROSAFE since 2008 do not conform to ISO 9994 International Safety Standards.

U 5 million BIC速 lighters are manufactured and sold worldwide every day U BIC速: No.1 branded pocket lighter manufacturer in the World U BIC速: 100% safety record in compliance with ISO9994

Our Quality. Your Safety

JUNE 2011

In this months issue 2




While Irish shoppers are aware of Iceland from its UK ads and celebrity endorsements, most would have been unaware that it has returned to Ireland after leaving 5 years ago. 18 MUSGRAVE PROFITS UP In the Republic, where Musgrave operates the SuperValu, Centra and Daybreak symbol groups, the group’s turnover declined 3.6 per cent to €2.6 billion. 20 NEWS 24 WHOSE NAME OVER THE DOOR? Musgrave, the owner of SuperValu, is understood to have made an approach to buy Superquinn, the upmarket chain. However, the prospect of a deal may hinge upon the attitude of Superquinn’s banking consortium




















- A LESSON IN MAKING CRISPS M.D/Editor: Deputy Editor: Bsn. Dev. Managers: Contributors: Circulation: Design:



A masterplan for the development of FoodCentral, a 113 hectare food park located beside Dublin Airport has been prepared in consultation with Fingal County Council. 32 FOCUS














Todays Grocery Magazine The Mews Eden Road Upper Dun Laoghaire Co. Dublin

Frank Madden Ruth Timmins Niall P. Madden Sarah Griffin Emma Maguire Daire Walsh Margaret Corry 90% Proof

Tel 2809466 (6 lines) email:

Small Print Todays Grocery Magazine is circulated to all proprietors, directors and managers of all relevant manufacturers and distributors, to every cash and carry, every multiple supermarket, group head office and wholesaler, all group affiliated shops and Londis outlets in addition to over 6,300 unaffiliated independent retailers and the country’s leading offlicence outlets. All articles are copyright of Todays Grocery Magazine and cannot be reprinted without the written permission of the editor. All letters to the editor of this magazine will be treated as having been submitted for publication. The magazine reserves the right to edit and abridge them. Disclaimer While every effort has been taken to ensure that all information is accurate at the time of going to press, neither TGM Ltd or Todays Grocery Magazine accept responsibility for any inaccuracies or omissions. Please note that the opinions expressed in the articles are strictly those of the authors.

M&S demographic Targeting NEWS

Marks & Spencer have been doing what they do best for almost 120 years, but is failing to display its wares to best advantage and customers are having trouble negotiating their way around the ranges. Along with having the right products at the right price, ensuring that stores are attractive and easy to navigate must surely be the most basic of retail skills. Marc Bolland presented his first set of full-year figures since taking over from Stuart Rose, admitted it’s a skill M&S appears to have lost somewhere along the line. However, fixing it will not come cheap - the group is ramping up its capital expenditure to Stg£900 million to finance a revamp of its 600-strong UK shops chain. This will include the real basics such as better signage; improved labels and packaging and better store layouts. M&S also plans to experiment with tailormade stores for different areas and, from autumn, will pilot store formats that stock ranges specially selected for local shoppers. The ranges will be chosen according to demographics of the catchment area with age, affluence, ethnicity and regional tastes taken into account, as well as the presence of rival retailers. This is not the first time M&S has overhauled its stores in recent years Bolland’s predecessor, Sir Stuart, launched a lavish programme that dragged on for years. Yet it emerged that almost 100 M&S shops missed out on that revamp.

2 TGm

Marc Bolland Bolland’s take on it is that while the most recent modernisation programme brought improvements to the core infrastructure, it failed to deliver an “inspirational” shopping experience. That is what he is aiming to achieve over the next three years, a determination underlined by the appointment of a

new director of space, Neil Hyslop, who headed M&S operations in Northern Ireland. Tailoring ranges for different stores seems sensible - though there were fears among some customers that those who don’t live in the “right” area might be denied the best ranges.

M&S’s performance last year was judged to be good, with profits coming in ahead of forecasts at Stg£714m. That is an increase of 13 per cent on the previous year. But it still leaves it well short of the Stg£1 billion the group made in 2007/2008.


Diageo looking to cut 70 jobs Drinks giant Diageo has told staff in Ireland that it would seek redundancies in support functions and marketing as a result of a reorganisation of the business across Europe. It is understood that Diageo is seeking to achieve labour cost savings of €8 million a year. This could result in more than 70 redundancies in Ireland, where it employs 1,700 staff on the island. Staff were informed of Diageo’s plans at a series of briefings. The changes will primarily affect support functions and marketing, and will not impact on Diageo’s manufacturing operations or its Storehouse visitor centre. Diageo plans to consult with employees on the restructuring, and is expected to offer voluntary redundancies. John Kennedy, managing director of Diageo Ireland, said the changes were “absolutely essential” to ensure that Diageo continued to have a “competitive and sustainable business” in Ireland. “Diageo is fully committed to Ireland and has very significant operations here that are an essential element of our company’s operations globally,” said Kennedy. “However, we do need to make changes and deliver greater efficiencies in some of the support functions of the business. The latest decision is shaped by a sharp decline in beer sales in Ireland in recent years due to the recession and other factors.

In February Diageo said Ireland was the “key driver” of a 4 per cent net sales decline in beer in Europe in the first half of its trading year. This was attributed to weakness in the “on-trade”, particularly in rural areas. In 2008, Diageo unveiled plans to build a

IN SHORT 500 whiskey lovers attended the first ever Whiskey Live held in the Mansion House, Dublin recently. The affair was officially opened by Dublin Lord Mayor Gerry Breen. The one day event showcased Irish whiskey, its distilleries and the success of the industry, and was the finale of the inaugural Whiskey Week Ireland. Also on show were a number of international whiskey brands, whiskey food pairing, a whiskey cocktail mixologist and Cooley Distillery’s cooper who held an interactive workshop on the ancient art of cooperage. “We are delighted with the success of the first ever Whiskey Live in Dublin,” said Damian Riley-Smith founder. “The response from the industry and the general public has been phenomenal. We hope to build on this success and come back even bigger and better next year.” A series of Masterclasses hosted throughout the day were sold out. The Whiskey Live package also included a gourmet meal served in the bespoke dining area of the balcony level of the Mansion House’s Round Room.

super-brewery in Kildare as part of a €650m investment that would have resulted in the Kilkenny and Dundalk brewing closing and some land at St James’s gate being sold. The plan was put on ice at the start of 2010 due to the recession.

June 2011 3


Irish honey a healthier choice

Greencore US makes progress

Patrick Coveney

Shares in convenience foods group Greencore fell by 3.2 per cent in Dublin recently as it posted a loss for the first six months of its trading year and cautioned that consumer buying would “remain subdued” throughout 2011. Greencore recorded a loss of €251,000 for the six months to March 25th compared with a profit of €25.1 million in the same period of 2010. The turnaround reflected an exceptional charge this year of €17 million and the stripping out of discontinued operations (it exited malt and bottled water), which contributed €16.4m to Greencore’s bottom line profit in the first half of last year. Greencore’s exceptional charge included €13 million in costs associated with its unsuccessful attempt to acquire UK-based rival Northern Foods this year. Greencore’s revenues rose by 7.9 per cent to €442 million while its operating profit, before exceptional items and

4 TGm

acquisition-related amortisation, was up 17 per cent at €27 million. Convenience foods turnover rose by 8.2 per cent to €402.4 million while the operating profit was 4.9 per cent higher at €26 million. In sandwiches, the value of sales rose by 8.4 per cent in the period compared with 2.6 per cent for the market as a whole. In chilled ready meals, Greencore achieved growth in value of 19.3 per cent against a market increase of 9.4 per cent. Its US convenience foods “made considerable progress” in the period, Greencore said. Patrick Coveney, Greencore’s chief executive said that the performance of its ready-meals division as “very good” while the sandwiches division was “solid”. Its Yorkshire pudding and cake units saw sales soften but the harsh winter weather of December and January boosted its soup products.

Irish produced honey was found to be a healthier choice than imported honey because it contains lower levels of the chemical hydroxymethylfurfural (HMF), according to a recent scientific study carried out at the Limerick Institute of Technology. While HMF is naturally present at low concentrations in most foodstuff, the heat treatment involved in processing honey can lead to elevated concentrations of the chemical. commercially processed honey undergoes heat treatment to prevent or delay crystallisation or to make it easier to package and make it more aesthetically pleasing. Heat treatment trials showed that local Irish honey maintained levels of HMF well below EU limits while all the other honeys exceeded the upper limit of 80mg/kg in the same conditions. “The EU has set an upper limit of 40mg/kg of HMF in honey, while honey which originates from tropical climates are allowed levels of up to

80mg/kg,” said Saoirse Houlihan, who carried out the work. “Our results show that the local artisan honey had the lowest levels of HMF and was significantly below the EU limit of 40mg/kg, while the two honeys of international origin were at the upper limits of the 80mg/kg EU limit.” Houlihan used Irish honey sourced in a health food shop and from a beekeeper in Co Clare. The international samples were a household name and supermarket’s own brand range.

10 specialized trade shows under one roof Cologne, 8 – 12. 10. 2011 |



new contacts than you have business cards. Around 6,500 exhibitors will present the world’s entire range of food and beverage products to you and about 150,000 other visitors. No other trade fair will provide you with more inspiration, business ideas and networking opportunities.

Buy your admission ticket online now and save up to 42 % ! International Business Media Services Ltd. 4th Floor, 205/207 City Road London EC1V 1JN Phone +44 20 7566 6340 Fax +44 20 7566 6341


OOhh so good!! Eating chocolate could be associated with a one-third reduction in the risk of developing heart disease, a study from the University of Cambridge suggested. Researchers from the Department of Health and Primary Care analysed the results of seven previous studies involving more than 100,000 participants. For each study they compared the group with the highest chocolate consumption against the group with the lowest. Presenting the results, Dr Oscar Franco said the studies did not differentiate between eating dark or milk chocolate, but included the consumption of chocolate drinks and desserts as well as chocolate bars. Dr Franco and his colleagues said “the highest levels of chocolate consumption were associated with a 37 per cent reduction in cardiovascular disease and a 29 per cent reduction in strokes compared with lowest levels.” However he stressed the studies were all observational in type and so other reasons for the reduction in disease could not be ruled out. Previous research has shown the benefit of chocolate on health due to its anti-inflammatory and antioxidant properties. These include reducing blood pressure and improving the effectiveness of insulin which, in turn, helps to slow down the development of diabetes. Asked to define the optimum dose of chocolate to bring about cardiovascular benefits, Dr Franco said his study was unable to quantify this. He called for further research to be carried out to test his findings and warned it was too early to rewrite guidelines for healthy eating and lifestyle. He also suggested that initiatives to reduce the current fat and sugar content in most chocolate products should be explored.

June 2011 5


€2.1m for Executives C&C’s top three executives received €2.1 million in total in their second full year at the helm of the company, according to the drinks group’s annual reports. C&C chief executive John Dunsmore saw his total package increase by 6 per cent last year to €989,000. Stephen Glance, the company’s chief operating officer and finance director, received an 8 per cent increase. His package increased from €669,000 to €724,00 last year. Strategy director Kenny

Nieson was awarded €405,000 in total. None of the three executive directors was awarded a bonus during the year. Some €732,0 was paid in total to the company’s seven non-executive directors. One 51 chief executive Philip Lynch received €85,000, €20,000 of which related to his work as chairman of the company’s remuneration committee. C&C’s current management trio - all former executives at Scottish & Newcastle -

Drivers ditch cars Drivers are opting to leave their cars at home with sky-high fuel prices contributing to a gloomy retail landscape. Plummeting fuel and furniture sales contributed to the worst fall in retail sales seen since 2009. New figures form the Central Statistics Office show retail sales dropped another 3.9 per cent. In April compared with the same month last year - an annual fall not seen since December 2009. Sales were down 0.8 per cent

6 TGm

month on month. With petrol above €1.50 a litre and diesel also a at record highs, drivers are buying 12 per cent less fuel than they were a year ago - backing up an AA survey which found people are thinking twice before making unnecessary journeys. Economising only goes so far to help, however, as the astronomical prices mean people are still spending almost as much on fuel as they were a year ago.

joined C&C in late 2008, following a period of falling sales at the company. Results for C&C published earlier this month showed a 17 per cent rise in operating profit

to €105 million for the year ended February 2011, boosted by a strong recovery in the company’s cider sales in the UK and international markets.

Retail sales declined in April, according to new data from the Central Statistics Office. The seasonally adjusted value of core retail sales, which excludes the volatile motor trade, was down 0.3 per cent compared to March. By volume the monthly decline in core retail sales was 1 per cent. This difference between value and volume is accounted

for by the return of consumer price inflation. The underlying trend reflects continued acute weakness in consumer demand owing to a range of factors including a flagging labour market, tax increases, the paying down of high debt levels and the limited availability of credit. Business groups called for action to be taken to help support the struggling retail sector.

Retail sector struggle


Revenues fall at Britvic Ireland

Revenues at soft drinks group Britvic Ireland declined 5.3 per cent to Stg£18.9m on a constant currency basis in the 28 weeks to the end of April 17th as it continued to feel the effects of the recession on consumer spending. Britvic, whose brands include Ballygowan and Club, said the Irish market remains “challenged”, particularly sales of its products in pubs.

8 TGm

Its volume was down 7 per cent at 106 million litres but its average realised price per litre rose by 3.9 per cent as the company pushed through price increases. This was Britvic’s first price rise in Ireland for some years and reflected the increased cost of sugar, tin and other items. Britvic incurred restructuring costs in Ireland of Stg£7.5 million in

the period relating to a rationalisation plan that reduced its headcount here by 100. There are now 630 staff employed across Britvic Ireland. Andrew Richards, managing director of Britvic Ireland, said the market remains tough but “one or two channels are stabilising”. Sales to the licenced trade remain “very difficult...they were down year on year”, he said.

Britvic said its stills portfolio “performed well, especially the key brands of Robinsons, Fruit Shoot and MiWadi”. Earlier this month, Britvic agreed to acquire drinks wholesaler Quinn’s of Cookstown from C&C. “This will allow us to be an all Ireland wholesaler and also give us significantly increased access to the licenced trade in Northern Ireland,” said Richards.


Independent supermarket closes There are now four supermarkets in Nenagh and it’s a small enough town. The German multiples have been taking more of the market....

A well known independent supermarket which has been operating in Nenagh, Co Tipperary, for almost 40 years is to close with the loss of 70 jobs. O’Connor’s, which opened in 1975, had to cease trading following the failure of refinancing and restructuring attempts. Rory O’Connor, whose father Joseph started the business, said competition, particularly from large German supermarkets, and a fall in spending had led to a drop in trade. “There are now four supermarkets in Nenagh and it’s a small enough town. The German multiples have been taking more of the market, but people’s spending power is just gone. The universal social

10 TGm

charge in particular had an instant effect.” The rescue plan for O’Connor’s hinged on property values and the willingness of banks to “take a longer-term view” in relation to the repayment of loans. But it emerged that these issues couldn’t be resolved, O’Connor said. While it is regrettable that the closure took place it was clear that there were no longer options left to the business. “We were advised that to continue on would result in reckless trading as we would be taking in stock that we couldn’t pay our creditors for. So we couldn’t do that.” O’Connor said he was very sad about the loss of so many jobs and that everything had been done to try to keep the business afloat.


€100m for sale of S.C.

€150m site plan for Beamish

Cork City Council has sought further information from Heineken Ireland and BAM Contractors on their plan to develop a €150m heritage quarter on the site of the former Beamish & Crawford brewery in Cork. Cork City Council had been due to give a decision on the project, which incorporates a 6,000 capacity event centre. Instead, however, it has sought further information, giving the applicants six weeks to respond to a number of queries. Heineken Ireland corporate affairs manager Declan Farmer said it had

already worked with council planners in “an open and engaging way” and would continue to do so. Heineken Ireland and BAM Contractors, a wholly owned subsidiary of Dutch giant Royal BAM Group, applied for planning permission for the project last December and throughout January briefed the public on their proposals for the 1.8 hectare site. The project, called the “Brewery Quarter”, features a mixed scheme of shops, bars, restaurants, an eightscreen cinema, exhibition areas, 46 student apartments and a viewing

tower, as well as the event centre. The entire area is highly historic as it is near the site of the current St Fin barre’s Cathedral, where St Finbarr founded a monastery in the 6th century, while in 2004 archaeologists found evidence Vikings had built a colony near the South Gate Bridge. The Beamish & Crawford site is also historic in that brewing began there in 1690, and up to its closure in May 2009 it was the oldest continuously operating brewery in Ireland.

Avestus Capital partners, the Dublin-based property investment firm which took over the asset management business of Quinlan Private, has sold the Mall of Sofia in the Bulgarian capital. The shopping centre has been purchased from Avestus and GE Real Estate by London private equity fund manager Europe Capital for more than €100 million. The sale generates a gain of more than €20 million to be shared equally by Avestus and GE, according to a source close to the Irish property company. The partners invested €80 million to acquire the property. The beneficiaries of the deal include Irish clients of Avestus, whose principals co-founded Quinlan Private with financier Derek Quinlan. Avestus and GE Retail Estate acquired a 50 per cent stake from AVIV and Israeli cinema operator, CCI, for about €37 million in August 2005. They purchased the remaining 5 per cent when the centre was built in May 2006, taking their investment to €80 million. The shopping centre, which is 254,000 sq ft in size, has more than 130 stores. Avestus will continue to manage the property following the sale.

June 2011 11


Iceland A New Beginning





In 1970 Iceland sprang to life when Malcolm Walker and another bored, young retailer decided to open a shop in an attempt to make their fortunes. They raised initial capital of just Stg£60 to pay one month’s rent and opened the very first Iceland in Oswestry, Shropshire in November 1970. In those days, before domestic fridges and freezers became commonplace, Iceland specialised in selling loose frozen food. 1975: The business really took off when Woolworths fired the founders from their day jobs in February 1971, and they were able to devote themselves to developing the Iceland concept full-time. By 1975 there were 15 Iceland stores in North Wales and the North West, supported by a cold store in Rhyl. 1979: Iceland progressively evolved away from loose frozen food, opening its first purpose-built freezer

12 TGm

centre at Stretford, Manchester, in 1978, and developing its own branded products. In 1979 the company opened a brand new cold store and head office at Deeside, Flintshire, where it has been based ever since, and by 1980 it had grown to 37 stores. 1984:Expanding through new store openings and the acquisition of smaller chains, Iceland had 81 stores by 1984, when it became a public company through one of the most successful flotations ever seen on the London Stock Exchange. The initial public offering of just £8 million worth of shares brought in applications with cheques totalling over £900 million, making it an amazing 113 times oversubscribed. 1989:Iceland had been steadily acquiring smaller freezer centre chains but late in 1988 it went for The Big One, making a fiercely contested bid

for its much larger, southern-based rival Bejam. Victory was secured by the narrowest of margins and Iceland took control in January 1989, creating a truly national chain with 465 stores. By 1995 Iceland had 752 stores and had clocked up an impressive 25 years of consistent profit growth. It now began to feel the effects of more intense competition as superstores were permitted to open on Sundays for the first time, and progressively extended their weekday opening hours. Under the leadership of founder Malcolm Walker, the company staged a successful fight-back based on a massive programme of innovation. This included the introduction of a still unique free, national home delivery service, and the development of a wide range of new products.

1998: Among Iceland’s many world firsts in the late 1990s were the development of a complete own label range free of GM ingredients, under the ‘Food You Can Trust’ banner, and the launch of a nationwide home shopping service. Iceland also led the UK food retailing industry in removing artificial colours and flavours, which had been eliminated from all its own brand products by 1999, along with artificial preservatives where this was possible without compromising customer safety. The company also developed a partnership with the Cancer Research Campaign to promote the health benefits of eating more frozen vegetables. In 2000 Iceland made a recommended offer for Booker, the UK’s largest cash-and-carry operator, with the aim of exploiting buying and other synergies between the two businesses. Booker’s top manager Stuart Rose was appointed chief executive of the enlarged group, while Iceland’s Malcolm Walker was scheduled to become non-executive chairman. But shortly after the deal was completed, Stuart Rose left to head the Arcadia fashion chain, where he made a fortune before moving on to Marks & Spencer. 2001: Into this management vacuum stepped new chief executive Bill Grimsey, who had built his City reputation at the Wickes DIY chain following the departure of its previous management team as the result of a financial scandal. Within weeks of joining Iceland, he and his new finance director Bill Hoskins – also from Wickes – claimed to have identified massive problems. These plunged the business into a £120 million loss after an amazing £145 million of exceptional items – an extraordinary reversal of fortunes for a group operating in inherently stable industries, which had recorded a profit of £32 million in the first six months of that financial year. Malcolm Walker and many of the senior managers who had built the Iceland business were forced to leave the company. 2003: Renamed The Big Food Group in February 2002, the combined Iceland-Booker business struggled under its new management, despite the launch of a grandiose

The key to this success was a strategy of making the business simpler, and refocusing on its traditional strengths

recovery plan. (Click here to read the saga of 'The one, two, three, four, five year recovery plan.) For Iceland, the declared ambition was ‘to dominate high street food retailing through a renewed focus on core customers and frozen food’. The reality was a steady decline in customer numbers and sales, while costs – including senior management rewards – escalated. Profits never recovered to historic levels and were supported only by the release of provisions made in 2001. (Click here to see how the release of provisions found to be 'not needed' boosted profits in 2002-2004.) The company therefore faced growing difficulties as these neared exhaustion towards the end of 2004. 2005: In February 2005 The Big Food Group’s shareholders accepted a recommended offer from a consortium of investors that made it a private company once more. Shareholders received only a fraction of the value the business had enjoyed on the stock market at its peak. The group was subsequently split into its main component parts and Iceland placed under the management of Malcolm Walker and other senior executives who had been ejected in 2001. The new team returned to find a company in crisis. Sales were running


at minus 10% on the previous year, having declined every year since 2001. Over the same four years overheads had escalated on a massive scale, with head office employee numbers growing from 800 to 1,400 and a further £16 million being spent on the services of external consultants. The product range had expanded chaotically and prices were well out of line with the market. Morale was at an all-time low and the company was in such a precarious financial state that suppliers could not even obtain credit insurance. 2006: Sales began to rise steadily every week during the new team’s first year Image of inside an Iceland store back in charge, as customers returned to the stores. By the end of the financial year to March 2006 like-forlike sales were running 20% up yearon-year, making Iceland the UK’s fastest-growing food retailer. An independent customer satisfaction survey, conducted around the same time, also identified Iceland as the country’s fastest improving retailer. Instead of the massive loss anticipated at the time of the takeover in February 2005 the business achieved a satisfactory operating profit, while the cash position was transformed to give Iceland a healthy balance sheet. This permitted the launch of a major investment programme to improve neglected stores, and to turn the previous management’s unsuccessful convenience store formats back into traditional Iceland freezer centres. The key to this success was a strategy of making the business simpler, and refocusing on its traditional strengths. Through this, Iceland rapidly became recognised once more as the UK’s natural destination store for innovative, valuefor-money frozen food. The introduction of round sum pricing made it easy for customers to budget, while the unique home delivery service provided a vital helping hand to busy mums. By Christmas 2006 like-for-lke sales were growing at 15% for the second year in a a row and Iceland was proud to take on sponsorship of ITV’s flagship show, ‘I’m A Celebrity.. Get Me Out of Here!’

June 2011 1 13






2007: The results for the financial year to March 2007 demonstrated that Iceland had been restored to robust financial health, generating cash and recording an operating profit of almost £100 million. Continued strong sales growth throughout the year was driven by innovation across the whole range of frozen food under the Iceland brand, while costs remained under tight control. The 2007 staff survey and mystery shopper programme highlighted the massive recovery in morale since the dark days of 2004/5, with managers now feeling valued and the whole team demonstrating a real passion to make things even better. In recognition of their achievements, Iceland took all 682 of its store managers to Disneyland, Paris for two days in October for a fun-filled and inspirational annual conference. 2008: As Iceland’s strong sales and profit growth continued into 2008, the scale of the economic challenges facing British shoppers became ever more apparent. Iceland responded by reinforcing its long-standing reputation for great value and constant innovation with a range of product launches. As well as providing truly outstanding value for money, the company continued to win recognition for the quality of its innovations, with Iceland Chinese Takeaway Duck in Plum Sauce winning a Gold Award for best new poultry product of the year from the British Frozen Food Federation, while the Indian Takeaway Tandoori Chicken Masala won the Frozen Food Savoury Award in The Grocer Own Label Excellence Awards. There were awards, too, for Iceland’s successful store managers at their annual conference in Liverpool: the Iceland Oscars, a black tie extravaganza featuring the Manchester Camerata Orchestra, opera, pyrotechnics and a live performance by Girls Aloud. 2009: The year began with the announcement that Iceland had agreed to buy 51 stores from the receivers of Woolworths, massively accelerating the current year’s planned store opening programme. Iceland will now open 70 new stores this year throughout the UK, from Fraserburgh in the north of Scotland to Exmouth in Devon, creating some 2,500 new jobs.

14 TGm

The company also plans to open a further 20-30 new stores in 2010. This is Iceland’s fastest rate of expansion since it bought Bejam 20 years ago. In March Iceland was recognised in the annual Sunday Times 100 Best Companies to Work For survey as one of the 20 best big companies to work for in the UK. In June the company announced record sales and profits for its financial year to 27 March 2009. Like-for-like sales were up 16%, making a total increase of almost 45% over the four years since Malcolm Walker and his team returned to the business in 2005, and taking total sales over £2 billion for the first time. Operating profit increased by 41% to £135.7 million and net profit before tax by a massive 84% to £113.7 million. From rock bottom four years ago, morale had soared to give Iceland some of the best ratings in the country for employees feeling cared for and motivated, proud to work for the company and excited about where it is going. Small wonder when, in fulfilment of a pledge made at the 2008 managers’ conference to reward another good Christmas performance, almost 800 of the company's store, regional and area managers spent five days at Walt Disney World Resort in Florida for their annual conference in September. See more on A Great Place to Work. 2010: Iceland again achieved record results for its financial year to March 2010. Total sales grew by 10.5%, including a like-for-like sales improvement of 4.3%, while EBITDA increased by 11.2% to £184.2 million. A total of 74 new stores were opened during the year, on schedule and on budget, representing the fastest rate of expansion by the group since the acquisition of Bejam in 1989. Customer numbers continued to grow, aided by the build-up of the Bonus Card loyalty scheme, while independent mystery shop results confirmed further improvements in store standards and customer service. Continued strong cash flow reduced net debt to £7.6 million by the year end, when the company repaid its old debt and replaced it with an unsecured revolving credit facility

which will generate annual interest savings of over £2 million for the future. However recent newspaper reports confirmed a ‘beauty parade’ of financial advisors strongly linking Morrisons with a Stg£1.5billion swoop of Iceland. Malcolm walker is still the favourite to get his hands on the company he founded. One source confirmed that Morrisons was “seriously looking” at Iceland after its owners officials responsible for the winding up of Icelandic bank Landsbanki put its 67% stake up for sale earlier this month. But he added that Iceland ceo Walker, who has a 25% share of the business and would be entitled to match any offer, would end up triumphant.


Iceland is a very strong model that suits the climate...we would also see ourselves as a mainstream supermarket.

"You have to ask why a trade buyer would want to go through a very expensive and timeconsuming bid process, with all the due diligence and anti-trust issues, only for Walker to come in, match the bid and walk off with it." The sale was likely to be a long, drawn-out affair with the bidding process not officially kicking off until September, followed by months negotiating regulatory hurdles, he added. Morrisons is not the only supermarket understood to be running the slide rule over Iceland's 776 stores. Asda has been linked to a deal, while Sainsbury's is believed to be interested in some sites. Most experts believe competition concerns would prevent Tesco from acquiring more

than a few stores. The source's comments were echoed by Walker himself. The Iceland founder was bullish about his chances of retaining control of the business, while dismissing those of his rivals. "This speculation about Sainsbury's being interested in a break-up; they can clear off, they'll never get a look in," he blasted. "I am not about to give all my competitors our numbers, but where is the value in a break-up? There is inherent value in this business. The number being quoted in the papers is Stg£1.5bn that is €£3m per shop.It sounds a lot if they are just going to convert them into something else. And why would potential buyers pay a top price just for sites?" Most experts believe a trade bidder such as Morrisons would have

no interest in retaining the Iceland fascia or frozen discounter's operating model, which, along with the issue of Walker's remaining stake, would also discourage them from bidding. UK supermarket group Iceland is releasing its FY11 figures amid speculation that either Asda, Morrisons or even Waitrose are poised to make a Stg£1.5 billion bid for the chain. While total sales have not been released just yet, RBS estimates LFL growth of the retailer is +2.1 per cent and total sales probably up 3.5 per cent to Stg£2.5 billion. According to media reports, Asda appears to be the most likely suitor for Iceland, and has appointed Lazards to help it prepare its bid. Morrisons is also expected to enter the fray with its own offer, while Waitrose also hasn’t ruled out taking over some Iceland stores - as its chief executive, Mark Price, admitted recently, “I think whoever gets it we’d be happy to work with, if the shops fitted our demographic. But we wouldn’t go in on the basis we’d be the major party.” Malcolm Walker, Iceland’s chief executive, could also be in the running - he currently owns 25 per cent of the business and made an offer to take over the chain last year.

June 2011 15






The Irish Perspective While Irish shoppers are aware of Iceland from its UK ads and celebrity endorsements, most would have been unaware that it has returned to Ireland after leaving 5 years ago. it is now planning to open more than 40 new stores across the Republic by the end of 2014. AIM Group which holds the master franchise for the chain in Ireland has appointed Tom Keogh as chief executive of Iceland. There are currently 200 people employed but AIM Group is planning to increase its number of employees by 2,175 before the end of 2014. Tom Keogh, who took over the role of ceo several months ago, started his career in retail when he was 19 and joined Dunnes Stores as a trainee manager. Originally from Enniskerry, Co Wicklow, Keogh eventually became branch manager in various stores around the country. After leaving Dunnes, he went on to hold a number of senior management roles with ADM Londis and the Musgrave Group, as well as becoming chief executive of the Gala retail group. The AIM Group, which is based in Robinhood Industrial Estate in Walkinstown Dublin, was set up 20 years ago by Irish-based businessman Naeem Maniar, and has built itself up from a small, local wholesale company to a national wholesaler. In the last couple of years, the company has branched into retail, with its biggest move being the takeover of the Irish master franchise for the Iceland supermarket chain in 2008. It has since opened stores in Finglas, Ballyfermot, the Ilac Centre in Dublin’s city centre and on the Navan Road. According to Keogh “We have already talked to a number of people who have properties where we want to place stores. There will be quite a vigorous roll-out of stores in the next two to three years.” The investment in these stores is around €1 million each and the company is predicting a total spend of between €35 and €50 million in capital expenditure over that period. But why did Iceland leave Ireland before? According to Keogh Iceland pulled

16 TGm

out of the Irish market due to internal issues. “Pulling out of Ireland in 2005 was more of an internal business decision than a commercial situation. A new management team had been brought in and they had tried to change the model away from a frozen food retailer to a general retailer and the business wasn’t performing and was losing money. They started diversifying into different products like toys, newspapers and magazines. The original owners of the company went

back in and said anything that wasn’t core had to go. Ireland wasn’t core, they didn’t have a base here and it was taking time and personnel away from where the issues were in the UK,”Keogh explained. “Iceland is a very strong model that suits the climate, and it won discount supermarket of the year in the UK in the past couple of months,” said Keogh. “We would also see ourselves as a mainstream supermarket. Frozen food

Tom Keogh ceo is Iceland’s market, but if you go into an Iceland store now you buy anything that you can buy in a regular supermarket. It’s not just about frozen food, although it is a huge part of it and Iceland has it down to a fine art.” The company is using many Irish distributors and suppliers for the Iceland stores. “There are also opportunities for Irish manufacturers to supply the Iceland group,” said Keogh. “More than €50 million is spent by Iceland

buying products in Ireland for its UK stores, and this is going to grow. It has close to 800 stores and has a turnover of €2.2 billion, so it is a massive company. We will certainly be encouraging Irish companies and manufacturers to get involved with the company.” The AIM Group recently opened a homeware value store, called Homesavers. This will be the first of between 15 and 20 stores focused on homeware and electrical goods.

“We have gone aggressively into this market, with value-driven retail outlets,” said Keogh. “We have buyers who are travelling the world so that we can get value at every opportunity. We have offices in China and buy directly there as well.” The groups has also opened three discount stores called€2 Stores, in Rathmines, on the Navan Road and on Moore Street. The company plans to open 50 of these across the country over the period of this plan.



Supermarkets enjoy biggest increase The convenience store industry is static in terms of total numbers, but within the sector there are a number of dynamic changes taking place.

Despite the convenience format being widely trumpeted as the fastest growing and most dynamic grocery store offer, this year's figures show that the sector enjoying the biggest increase in outlet numbers was the supermarket format, with the Big Four Tesco, Sainsbury's, Asda and Morrisons and the discounters completing significant store developments. But that doesn't mean the multiples weren't active in the small store sector as well. Nearly three new Tesco Express outlets were opened every week last year as the chain added 145 outlets, an annual expansion rate of more than 15%. Despite being a sector in decline in recent years, unaffiliated independent c-

18 TGm

stores remain numerous, with more than 20,000 still operating. In fact, the reduction in numbers of 3.4% is the slowest rate of decline for five years, suggesting that the stronger stores are enduring and are continuing to meet their customers' needs. Net recruitment into the symbol sector from the unaffiliated sector also fell, with the total number of symbol group stores growing by 2.9%, a marked slowdown compared with the 7.8% increase experienced in 2009-10. Within symbols, Booker's Premier has overtaken Spar to be the biggest symbol group by store numbers. The wholesaler has been particularly effective in recruiting stores to its small

'Express' format, more than doubling membership numbers to 463 at the time the survey was completed. Nisa and Mace also proved particularly successful in signing new members to their fascias. The supermarket channel saw the greatest increase in store numbers of any of the major grocery retail sectors, up 4.8% to 8,545. The Big Four multiples all increased their estates in the past year, but there was also a noticeable increase in outlets with a strong discount offer, with B&M Retail, Poundland and Wilkinson all opening significant numbers of new stores. Within the forecourt sector, consolidation of ownership is continuing with a decline in the number of independent

operators and a growth in the sites under the ownership of dealer multiples. Traditional retail specialists continue to decline, with a marked drop of 4% in the number of CTN outlets. Both large chains and independent CTNs saw a reduction in store numbers, demonstrating once again that the broader range available within the convenience store format is generally proving more appealing to shoppers. The specialist off licence channel has seen a succession of large chain collapses in recent years, but store numbers stabilised during 2010-11, supported by growth in the Bargain Booze estate and a recovery in the number of independent off licences.

JL B_Y[dY[ H[d[mWb m_j^ › Pfli Zljkfd\ij ZXe i\e\n k_\`i KM c`Z\eZ\ › <oZclj`m\ kf GfjkGf`ek i\kX`c\ij › 8 dljk _Xm\ gif[lZk ]fi [i`m`e^ ]ffk]Xcc

9@CC G8P


@K& :I<;@K :8


=K :8I;J

:8I ;J







8 @EK<IE


9 ;<




› =fi dfi\ `e]fidXk`fe ZXcc lj kf[Xp

E 8C :8CC@

:Xcc GfjkGf`ek fe (/0' )' +) )' kf jg\Xb kf X jXc\j i\gi\j\ekXk`m\


Musgrave Profits Up M U S G R AV E



Musgrave Group increased its profits by 3 per cent last year, despite a 3 per cent fall in sales. The grocery and cash and carry group reported overall sales of €4.4 billion, with pretax profits arriving at €72 million. The company also paid down debt of €59 million and ended 2010 with net cash of €21 million. Turnover fell in all of Musgrave’s geographical markets last year, although the Irish market was the worst hit.


n the Republic, where Musgrave operates the SuperValu, Centra and Daybreak symbol groups, the group’s turnover declined 3.6 per cent to €2.6 billion. In the UK, where its brands include Londis and Mace, sales fell fractionally to €1.57 billion. In Spain where the group is eyeing expansion opportunities, they fell 2.6 per cent to €185 million. “It is a good set of results when you think of the context, particularly the economic crisis in Ireland,” said Chris Martin, Musgrave group chief executive. The retail and wholesale group, which includes “not being greedy” in its list of corporate values, implemented “significant” price cuts in the early part of 2010 in line with deflation in the grocery sector. “Since the start of 2011, prices have been edging up, which is a function of higher prices for commodities such as cocoa and wheat, which are having an impact on things like pasta, cereals and chocolate,” said Martin.

Our view of the market is that it will remain tough.”

Chris Martin

20 TGm


““Customers are now facing into the next phase of the recession with rising fuel prices, higher taxes and uncertain employment prospects,” said Martin. “Our view of the market is that it will remain tough.” Musgrave’s retail partners secured combined sales of €6.5 billion in 2010, down 1.5 per cent. In Ireland, Centra retailers invested €7.6

million in new stores and refurbishments, with further investment of €17.3 million expected in 2011. There are now 468 Centra stores in the ROI and 82 in NI.Musgrave’s SuperValu retail partners invested €23 million in new stores, extensions and refurbishments with further investment of €16.7 million expected this year. The group said the

introduction of Real Rewards, a SuperValu loyalty card, had been a success, with the card used in 55 per cent of sales. There are 192 independently owned SuperValu stores in the Republic and some 41 in NI. The Mace brand was relaunched in Northern Ireland last year, with more than 50 stores openings,

leading to the creation of 110 jobs. In Britain, more than 200 retailers joined the Londis brand, taking the total number of Londis stores to 1,784. Musgrave also operates 192 Budgens stores in Britain. Martin added that the group had no plans for further redundancies, after 150 jobs losses in Ireland last year.

June 2011 19


Call for clearer labelling

€4m pretax profits for Petrogas

An estimated 1,500 lives could be saved each year in the Republic if food manufacturers were compelled to label clearly products which have high sugar, salt and fat content, the annual conference of the Irish Medical Organisation was told. Prof Anthony Staines from the school of nursing at DUCU said there had been a voluntary agreement between a number of major players in the food industry and the Food Safety Authority of Ireland to reduce the salt, sugar and trans fatty acid content of their foods over the past few years but progress on making reductions had been too slow and it was time now to make it mandatory through regulation. “It has taken much too long to do this and we need to bite the bullet,” he said. He said high levels of salt consumption were a major cause of high blood pressure, stroke and heart

22 TGm

disease, leading to hundreds of unnecessary deaths each year. He added that food companies were profiting from these foods but not covering the costs of consequences of their actions. “The food industry profits and the rest of us pay the costs,” he said. Current food labels were of little use to the average busy mother doing her best to feed a family on a limited budget, he said. They are designed to be helpful if you have a PhD in nutrition, he added.

Motorway services station operator Petrogas, the company behind the Applegreen chain, made a pretax profit of €4 million in the year to the end of June 2010. Applegreen is part of a consortium that holds a public-private partnership (PPP) contract with the National Roads Authority (NRA) to build and operate six motorway service areas. It received a government grant of €35,000 in 2010. Three of the motorway service areas have not opened. The Superstop consortium was formed in October 2009 as a partnership between

Applegreen, Top Oil and the now liquidated building group Pierse Contracting. The Petrogas group, which operates 65 service stations in the Republic, employed 515 people in the UK and Ireland last year, up from 387 in 2009. Some 445 of the jobs are in retail. The group has 11 per cent of the motor fuel market. Its annual review shows that it also sells 173,000 cups of coffee every month. The group also holds the master franchise in Ireland for Wimpy restaurants; however, this does not form a large part of its total business.

Congress focus on retail markets

As global retailers look for new growth opportunities and focus on international expansion strategies, the 2011 World Retail Congress will bring together a powerful line-up

of emerging market experts. The Congress, which will meet in Berlin in September this year, will include specific sessions on the leading retail growth markets such as China, India and Brazil. The sessions will see leading retailers from key markets sharing their experience and knowledge. These industry specialists will be joined by over 100 leading retail executives who will speak on today’s core issues as chosen by some of the top names from across global retailing.


Suppliers/retailers need to work more closely Procter & Gamble’s chief customer officer Bob Fregolle was in Dublin recently to address a conference. In essence, his message was that suppliers and retailers need to work closely to get through the recession and prevent the tug-of-war that often exists. P&G’s stable of brands, includes big names like Gillette, Oral-B, Pampers, Ariel and Duracell. Most of these have been on promotion in Irish supermarkets since 2008 as retailers try to draw in cash-strapped shoppers. Fregolle is not a fan of

this practice. “In the short term, these promotions can trigger volume and sales. But long term, they tend to erode brand equities and loyalty, not just for suppliers but for retailers.” Fregolle describes it as “shopper promiscuity” and said it would inevitably lead to less money being spent on “innovation” and product development. “It’s a trade off.” P&G is a significant employer in Ireland, with about 750 staff employed at manufacturing facilities in Nenagh and Newbridge and in support functions in

Dublin. Most of the product is exported. Fregolle said sales in Ireland rose by a single digit percentage last year and its market share

increased, but there has been margin attrition. “We’re cautiously optimistic that the future will be better for us than what we’ve got now”

In the short term, these promotions can trigger volume and sales. But long term, they tend to erode brand equities and loyalty......

Brian O’Driscoll

24 TGm


Whose Name Over The Door? W HOSE





Simon Burke Musgrave, the owner of SuperValu, is understood to have made an approach to buy Superquinn, the upmarket chain. Superquinn’s board, however, is opposed to an immediate sell-off of the company founded by Feargal Quinn and sold for €450m in 2005. The prospect of a deal may hinge upon the attitude of Superquinn’s banking consortium of Allied Irish Banks, Bank of Ireland, and Danske Bank, which are believed to be owed up to €250m by the consortium of

26 TGm

property developers and corporate financiers who own it. “The board has not sought a buyer and is focused on implementing a new business plan,” said Superquinn. “But the board would have to consider any meaningful approaches made by potential buyers, even if they arrive unsolicited.” Musgrave said it would not comment on ”rumour and speculation.” It is understood to have made a previous unsuccessful bid to buy Superquinn’s trading business, not

including its 24 properties, for about €150m in 2008. Superquinn says it recently concluded a two-year funding deal with its banks, after the lenders endorsed a two-year business plan that is expected to involve a fresh round of redundancies. Superquinn’s latest market share figure has slid to 6.4% from 6.9%, while its rivals have all increased their share. Simon Burke, former chairman of Superquinn, who left in February, remains a shareholder in Superquinn but has been replaced by fellow investor Kieran Ryan. Since Select Retail Holdings bought it for €450m from Feargal Quinn in 2005, Superquinn’s management team has been dogged by upheavals. Since SRH bought the business it has lost a chairman, two managing directors, an operations director, its head of trading, a purchasing director, a human resources director and two marketing directors. Simon Burke, who brought a top class retailing pedigree to the property-dominated SRH line-up, has decamped back to London where he has taken up directorships at the BBC and pubs chain Mitchells & Butlers. In his absence, his former boardroom colleagues have been busy. More change, it seems is on the way. Last month, Superquinn’s latest management team, led by former Dunnes Stores executives Andrew Street, sealed a deal with its lenders for a far-reaching new business plan that was a precondition for continued support for the group. Now the entire company has come into play. The Superquinn board, which has struggled to keep pace with its bigger rivals during the recession, has fielded an approach for the business, believed to have come from Musgrave Group. A private equity house is also believed to be interested. With Superquinn’s propertyfocused shareholders under pressure elsewhere, the company is facing another huge round of cost cuts under the watchful eye of its banks.


Is Superquinn set to change hands yet again, and can Street, its new chief Executive, restore it to its former glory? In 2008, Superquinn appointed Goldman Sachs to advise it on a sale of the business. Superquinn said at the time that Goldman interest from outsiders was uninvited, and that the business was not for sale. Superquinn recently made a statement that the board “has not sought a buyer.” That same statement could easily have ben made three years ago. Sources believe that the 2008 bid also came from Musgrave, which was prepared to offer about €150m for the trading business on its own. SRH would have remained

landlord for its 24 stores. The deal never happened, but Cork-based Musgrave has now come back for a second bite of the cherry. Corporate finance sources highlighted four main options now facing Superquinn’s board. The first is to reject a sale and continue the status quo. But with its rivals clicking into a higher gear and the market set to stay in the doldrums for years to come, this may not appeal to the SRH shareholders, who have other business interests. The second option is to sell the entire chain to either Dunnes Stores, headed by Margaret Heffernan, or Musgrave, headed by Chris Martin. Geographically, Musgrave would be

the best fit as it is under-represented in Dublin, where Superquinn is strongest. However, Superquinn’s sites are mixed bag of large and small formats: many are too big for a SuperValu, while others are too small for a Dunnes. The third option is to break up the company and sell it off piecemeal, similar to the way H Williams was sold in the 1980s. Dunnes and Musgrave could go head to head for the best sites. This option is unlikely to appeal to its bankers, who might struggle to realise value on a break up. Some of its supermarkets are worth just a fraction of the boomtime value upon which its borrowings were raised.

June 2011 25






The final option is to keep the Superquinn trading name, which could then be franchised out by SRH to ensure a continuing revenue stream to pay down some of its €250m debts. everything else could be flogged to Musgrave. Other potential bidders include British multiples Asda, Sainsbury’s and Waitrose, which observers say would be the best for the Superquinn brand. Waitrose headed by chief executive Mark Price, has reportedly been scouting for sites in Northern Ireland and its parent, the John Lewis Partnership, is interested in the Irish market. With the Dunnes family still firmly in control, Superquinn remains the only real opportunity for an outsider to build scale in the market. Senior management are believed to be opposed to as they think that once the new business plan is implemented, the company will see a significant turnaround over the next 18 months to two years. But its banks may have other ideas. When asked if its lenders supported delaying sale, the company would only say: “The banks and the board are agreed that the current focus on the company’s management should be on improving the value of the business through successful implementation of the business plan.”

28 TGm


Andrew Street

The banks and the board are agreed that the current focus on the company’s management should be on improving the value of the business through successful implementation of the business plan.”

Implementing that plan may be Street’s most pressing task. Sources say that while it was signed off by the banks in recent weeks, implementation began months earlier and a “€5 million benefit” and already accrued to the business, presumably by way of cost cuts already implemented. The plan has set detailed targets for every part of the business, and most of the measures are being front-

Chris Martin loaded into 2011. A central plank of the plan is to reduce the pay bill for management - shop-floor staff will also do well to escape unscathed. Under the new plan, it is unclear if the company will be able to hold its side of the bargain. Street earned his spurs at Dunnes Stores, which has a famously frosty relationship with workers’ representatives. In the meantime, Superquinn must deal with its resurgent rivals, who are leaving the chain behind. Figures released by Kantar Worldpanel Ireland show that Alid, Lidl, Tesco and SuperValu are all gaining share at Superquinn’s expense. One retail source says the move towards cheaper own-label goods has hurt Superquinn, as it is less able to compete in this area than its rivals. Kantar says own label goods now account for 5% of the market. Another source says there is still a slight “culture clash” in the firm between those managers loyal to Feargal Quinn’s way of doing things and those who have embraced SRH. In terms of generating a big profit for its owners, the franchise has certainly passed its sell-by date. The banks, owed between €200 million and €250m, will ultimately decide what name will hang over the door.

JfliZ`e^ Efik_\ie @i\cXe[ ]ff[ aljk ^fk X n_fc\ cfk \Xj`\i% >`m\ J_Xe\ X ZXcc% NXek ]i\j_ ]ff[ Xe[ [i`eb `[\Xj6 8k @em\jk E@# fli jg\Z`Xc`jk k\Xd ZXe f]]\i g\ijfeXc ^l`[XeZ\ fe k_fljXe[j f] gif[lZkj ]ifd fm\i *'' jlggc`\ij `e Efik_\ie @i\cXe[ Xe[ ZXe Xjj`jk n`k_ `ekif[lZk`fej# jXdgc`e^# d\el [\m\cfgd\ek Xe[ dlZ_ dfi\% =fi Xep f] pfli ]ff[ Xe[ [i`eb gif[lZk i\hl`i\d\ekj# fli gi\dl`d jlggc`\ij ZXe gifm`[\ X Zfdgc\k\ jfclk`fe kf pfli Zljkfd\i e\\[j%

Gif[lZ\[ `e <lifg\Ëj Zc\Xe\jk Xe[ ^i\\e\jk eXkliXc \em`ifed\ek# ]ff[ ]ifd Efik_\ie @i\cXe[ _Xj Xe \em`XYc\ i\glkXk`fe ]fi Y\`e^ ]lcc f] ÕXmfli Xe[ n_fc\jfd\e\jj% K_\ E@ =ff[ `e[ljkip `j Xcjf i\jg\Zk\[ ^cfYXccp ]fi `kj cfe^jkXe[`e^ Zfdd`kd\ek kf ]ff[ k_Xk `j \k_`ZXc# kiXZ\XYc\ Xe[ ]lccp XZZi\[`k\[% C\k J_Xe\# fli =ff[ J\Zkfi DXib\k`e^ 8[m`jfi# _\cg pfl Yi`e^ dfi\ Z_f`Z\# hlXc`kp Xe[ ÕXmfli kf k_\ kXYc\%

J_Xe\ DZ8i[c\ "++ ' ./ (.(. *,(fi m`j`k lj fec`e\ Xk nnn%`em\jke`%Zfd @em\jk E@# ;ildXcXe\ D`cc# K_\ HlXpj# E\nip# :flekp ;fne# 9K*, /HJ


‘Golden goodbye’

Sir Stuart Rose, former chairman and chief executive of Marks & Spencer, enjoyed an €9 million “golden goodbye” from the high street retailer. And Marc Bolland, its chief executive, received pay and share awards worth up to about €15.8 million last year. Bolland was not awarded his full first-year package of up to about Stg£5 million as he missed out on his full bonus because M&S did not meet its profit target in the year to March, according to the retailer’s annual report. The level of remuneration to Sir Stuart and Bolland could reignite investor ire over pay at M&S despite its new chairman, Robert Swannell, attempting to lay tensions to rest with a new, more modern, pay structure. One shareholder said the size of the payment, together with M&S’s decision to include sales growth as one of the performance criteria in its new pay plan, would “raise a few eyebrows.” According to the annual report, Sir Stuart, who as non-executive chairman from July until he stepped down in January, walked

30 TGm

away with Stg£8.1 million in cash and shares. He received Stg2.77 million in salary and bonus, with his Stg£1.26 million bonus paid in full in cash. He also gained Stg£915,000 in a share plan that was scheduled to pay out, and another Stg£4.5 million of long-term share awards that would have potentially paid out in future years, which were accelerated under “good leaver” status. Sir Stuart’s salary as non-executive chairman came under fire last year, while two years ago, he was forced to give up more than Stg£1 million of shares to avert a showdown with shareholders. Disclosures of his remuneration comes just days after he spoke out against payment for failure, and called for a review of the widening gap between executive pay and staff wages. According to the annual report, Bolland received just under Stg£5 million in salary bonus and share awards, in the year to April 2nd. This included Stg£894,000 in salary, and Stg£2.6 million to compensate him for awards he would have received at Wm Morrison.

Brewer’s success

Brewer Jan-Renier Swinkels is the seventh generation of his family to run the Dutch beer maker Bavaria, which was founded in 1719. Bavaria’s main products is Pilsner lager that is sold in Ireland, mostly on promotion in the on-trade. It is also widely available in off licences. While it has a small share of the market here, Swinkels said that Ireland is one of Bavaria’s top 10 export markets out of a total of 130 countries. Bavaria has annual sales of about 500 million globally and 70 per cent are from export markets.

Bavaria has branched into non-alcoholic beers, which Swinkels said have proven a hit in Spain and the Middle East. Swinkels started working in the family business on the production line at the age of 12 and, having graduated from college in food technology, started to work his way up the ranks of the company before being appointed chief executive chairman in 2007. The company employs 1,000 people at two breweries in the Netherlands and is proud of its independent roots.










FoodCentral New Food Park

A master plan for the development of FoodCentral, a 113 hectare food park located beside Dublin Airport has been prepared in consultation with Fingal County Council, following on from the zoning of the site as approved for food park development in the Fingal Co Council, County Development Plan 2011 â&#x20AC;&#x201C; 2017 32 TGm’s potential to deliver an environmentally attractive food park..

Located immediately beside the airport, close to Dublin Port and with excellent M1, M2 and M50 Motorway access, FoodCentral provides a strategically located gateway to Ireland’s food market for Irish and overseas companies. FoodCentral has an optimal location for receiving and producing food products and distributing them nationally from the population centre in Dublin. Approx 75% of Ireland’s retail food distribution operates from within a 25km radius of FoodCentral. Businesses currently located in FoodCentral and employing over 1,000 people include a number of

Keelings and Donnellys businesses as well as foodservice company, Brakes. The existing businesses in the food park encompass a range of growing; food related processing and packing, foodservice and logistics operations. These diverse businesses are both competitors and co-operators in a number of respects involving shared services and inter-company trade. FoodCentral aims for food and drink businesses locating within the park to foster co-location synergies and benefits. A wide scope of activities can be optimised to commercial and financial advantage. These activities include manufacturing, processing, logistics, innovation, research and development, sustainability, marketing, exhibition and administration. It is critical for the growth of the Irish food and drink industry to continually improve cost competitiveness. The vision of FoodCentral is best expressed as the development of a major food-centric business and logistics hub for the domestic and export markets that facilitates and is a catalyst for consolidation, collaboration and cooperation to enhance competitive advantage. Commenting on the park’s objective William Keeling, FoodCentral’s Managing Director said; “as FoodCentral develops with both existing and new businesses, its potential to deliver an environmentally attractive food park, harnessing synergies, sharing services, generating new opportunities and adding value to the food and drink sector can be realised in an environment which could generate up to 5,000 sustainable jobs, in a wide spectrum of activities.”


New rent policy UK chemist chain Boots has signalled a new policy on renting shops in unproven shopping locations by opting to pay a percentage of its turnover rather than any kind of fixed rent where there is uncertainty about the viability of the store. The chemist chain, which has more than 60 outlets in the Republic, has just agreed to pay 9 per cent of its turnover rather than the usual standard rent for a new store planned for the newly opened Milfield Shopping Centre in Balbriggan, Co Dublin. Other multiples are also increasingly pushing for letting terms which include an element of turnover but in most cases the terms have also included a basic rental figure. Big name traders particularly those from the UK, are well aware that shopping centre owners are desperate to attract them, particularly in the present difficult environment. A rental arrangement based entirely on turnover reduces the risk for the trader and puts shopping centre owners under pressure to continue to bring in ever more shoppers. Boots is to trade from a welllocated shop unit opposite Tesco in the Balbriggan Centre. It will have 4,500 sq ft of retail space and another 2,000 sq ft of storage space overhead.

June 2011 31

DRINKS - Intro Interesting times lie ahead for the drink industry, and not just in the next few years, but even further down the line, and into the next decade where a number of factors may come into play that will have a major effect overall make-up of the industry.

design trends, future legislation and sensory trends. Desk research is also used during this stage, with companies like Euromonitor, Mintel, Nielsen, TNS, ESRC and the National Intelligence Council being sought for their expert opinion.

At least, this is the way that An Bord Bia, The Irish Food Board, sees it, when they undertook a very detailed study that tells us how the alcoholic drinks industry may have evolved by 2025, and what opportunities it may present to Irish manufacturers.

The second Stage that they look at is Impact Assessment, which acts as a workshop to prioritise drivers with the greatest impact. As a result of a standard driver prioritisation workshop process with the Bord Bia and TFC core team, 23 drivers were prioritised from an initial list of 59.

Certainly, a study with an outline like this will immediately grab the attention of a whole host of consumers (particularly those with a deep interest in the various aspects of the industry), who will be eager to see how the alcoholic drink industry will look like 15 years from now. However, before we go into detail of how Bord Bia feel the industry will shape up during the next decade-anda-half, it is important to outline some of the principles of futures work, which makes it easier to understand where they are coming from. These principles are as follows: â&#x20AC;˘You can't predict the future unless all the variables are known â&#x20AC;˘You can identify and understand the drivers of change that will shape your future - understanding these drivers and how they connect will enable you to consider possible futures â&#x20AC;˘There are often many clues in today's world as to what the future could be - piecing these clues together will enable us to explore the most plausible futures for your industry In terms of how to judge what the future holds, three stages have been identified as being key in determining how this particular industry is going to look in the future. The first of these Stages is Trends and driver scanning, which involves conducting 14 onehour interviews, which are conducted with industry representatives and relevant experts in areas such as

34 TGm

Finally, the third Stage is called Exploring Implications which is, in many ways, the most important of these stages. It involves another workshop, which helps to identify strategic priorities, where forces of change are reviewed and refined in a one-day workshop with Bord Bia, Irish industry representatives and other experts. The implications of these forces of change were explored with the workshop participants, which helped them become more aware of the direction that the industry is currently taking at the moment. For the record, the eight forces of change outlined are: 1. Competition for Provenance 2. Mainstreaming of Connoisseurship 3. On-Trade Specialization 4. In-Home Sophistication 5. Polarisation of Retail 6. New Forces of Global Demand 7. Social Cost of Alcohol 8. Energy-Efficient Production and Distribution. Given how important these implications may well turn out to be, and how they can drastically change the industry from the way it is set-up at the moment, it is probably worthwhile to take a detailed look at these implications, and what impact it will have on the alcoholic drinks industry by 2025.

DRINKS - Intro more important where a product is processed and how much quality it has overall, while provenance in general will be more local than national, while at the same time consumers will be more sensitive to the difference between a Siberian vodka as opposed to one from the Black Sea region. Mainstreaming for Connoisseurship is the next force, and it shows that, by 2025, a more discerning attitude to alcoholic drinks will be more mainstream, leading to a decoupling of price and connoisseurship. As Billy Steel, a Beverage Manager and ex-barman at Mesa Grill, New York is quoted as saying: “The main change over the last few years is that society has created a culture that treats alcoholic beverages like food. The barman has become a 'chef'. As with food, there is now an emphasis on fresh ingredients e.g. fresh juices. 10-15 years ago this was not the case”. This sophistication amongst consumers is an interesting development that comes about because of a greater desire for personal expertise, greater scrutiny of value offered by brands, and reaction against mass brands.

Firstly, in terms of competition for provenance, Bord Bia believe that provenance will still be hugely important by 2025, as it will be more fluid and less tied to specific national geographies or heritage claims. The reasons that this may be the case is because of a greater interest in history, heritage and tradition, growing demand for local products and services, as well as democratization of high quality manufacturing. Under this force of change, it is estimated that consumers will have become jaded with near identical stories of authenticity and copy-cat provenance claims. It will also be

36 TGm

The report by Bord Bia states that, by 2025, connoisseurship will no longer be about price, meaning that, even at the value end of the market, people will expect brands to have a meaningful differentiation. They also feel that connoisseurship will be less about history and tradition, and more about the overall craft and commitment to excellence that goes into a product. As well as this, they see alcoholic drinks being a lot closer to food in the way that they are thought of and described. On-trade specialization is also expected to be a big part of the alcoholics drink industry by 2025, as the traditional notion of “going to the local” slowly becomes a thing of the

past. The on-trade will become more specialized and occasion-based, which means that brands and products will need to adapt accordingly. This can come about as a result of; Diversification of leisure interests, Increased focus on experiential consumption, and Growth of shared spaces. 15 years from now, on-trade is expected to have diversified, with these venues offering more than just a drink, and the alcoholic drink itself should work harder to be part of the experience. The next force is related in a certain way to on-trade specialization, as inhome sophistication will be powerful as the shift to in-home drinking consumption will continue, and the inhome drinking experience has drifted more closely towards the on-trade.

DRINKS - Intro

38 TGm


This can be caused by increasing relative cost of drinking in the on-trade, as well as greater interest in “professionalizing the home”. It is expected that, by 2025, the divide between the on-trade and off-trade will be more permeable, as traditional on-trade occasions move in-home, with consumers expecting a good deal more from an experience in-home. The polarisation of retail is another intriguing force, whereby the retail market for alcohol has polarized in two directions, namely, the rising power of value and discount retailer, as well as the growth of more niche or specialist retail models. New Forces of Global Demand will mean that opportunities for significant growth will come from emerging markets in 2025. Spirits brands will need to work harder to capture the younger consumer in traditional markets. A force that will be of great interest to a lot of people is the social cost of alcohol, as this deals with the cost of alcohol to a person's income and also their health. This is something that an ageing Western society is becoming more conscious of. This can be caused by increasing focus on healthier lifestyles, greater focus on the social cost of alcohol, and increased taxation and regulation. It is expected that total alcohol consumption will have declined, with grey markets and counterfeit markets are much bigger. Energy-Efficient Production and Distribution may also see overall energy costs becoming much higher, affecting all aspects of production. This will be compounded by the tax that carbon emitters will be required to pay. As can be clearly seen, these forces of change can have a major influence over the next 15 years, and they will have a number of implications for the Irish industry. They will offer more competition, more sophistication and more specialisation to the industry. In terms of offering more competition, it will lead to focus, differentiation and collaboration, while more sophistication deals significantly with consumer insight, branding and innovation. Thirdly, more sophistication is particularly important, as it means that the industry is able to understand your customer, they can focus where

you can win and can develop niche propositions as well. While all of this will no doubt grab the attention of most people who view it, a lot will wonder what the key message will be from all this. The key message that comes out of it is the potential value of greater collaboration within the Irish alcoholics industry. The workshops that are mentioned in these stages, as well as the onehour interviews involved in the first stage, can help people within the industry to work together for a brighter future. However, manufacturers/retailers need to realise that they are operating in a global market and facing increased global competition, which requires increasingly sophisticated marketing and distribution expertise. Irishness has the potential to deliver meaningful differentiation in a global market, though this does require a clear and consistent identity, as well as the right balance between heritage and modernity. Most of all though, collaborating in areas such as research, R&D, marketing and distribution could be mutually beneficial to all players in the market, so it comes with a high recommendation. It is necessary to note that it is difficult to predict the future, which means that all of the details mentioned within Bord Bia's report should be taken with a certain pinch of salt. Also, the future is not static, and continuous monitoring for signs of change is crucial. However, Bord Bia also say that preparing for the future is better than waiting for the future to happen, and the eight forces of change do act as a good starting point. Unfortunately, not everybody will heed this advice, and may not trust those who look so far into the future, and might have been put off by certain assertions that have been made about the alcoholics drink industry in the past. In order to reinforce their point though, Bord Bia conclude their study with a quote from John M. Richardson, as it sums up what kind of people are likely to drive this industry in the future, and those who may hinder it. “When it comes to the future, there are three kinds of people; those who let it happen, those who make it happen, and those who wonder what happened”.

June 2011 37


40 TGm


Just like most markets right across the Irish economy, the overall beer segment has just come out of a challenging year within the Irish market. However, there are a number of brands within the beer market who have shown several positive signs, which has helped them to successfully engage with consumers on a grand scale. For instance, Barry & Fitzwilliam said it anticipated growth in Corona sales to reach 10% in 2010, while Polish brand Karpackie (distributed by Comans in Ireland) have demonstrated impressive growth in the past year, helping them to become the fifth biggest selling can of lager in Ireland. Another encouraging sign came in 2010, when the Drinks Industry Group Ireland (DIGI) said that the Government’s excise reduction announced as part of Budget 2010 has helped to stem cross-border alcohol purchasing to a certain extent. A 6.4% increase in sales was recorded in the first six months of 2010. This statistic was also boosted by the decision of the UK Chancellor of the Exchequer George Osborne to raises VAT there, so hopefully this will see a continued slide in the number of people who travel across the border for beer and alcohol products. However, it isn’t all good news for this market, as reports are now beginning to emerge that due to the weak pound, consumers are once again starting to commence an exodus up north in a search for the right bargains to suit their wants and desires. Obviously, offering consumers value for money is vital in order to drive volume sales, which makes it all the more pleasing to hear that many drink companies were attempting to meet this demand with special value packs in time for the festive party season. Overall, consumption in all four alcohol drinks categories (beers, spirits, cider and wine) declined in 2009. However, it was actually cider who experienced

the lowest decline followed by beer and then wine and spirits. There are plenty of brands in the beer market, and quite a few of them will be instantly recognizable to shoppers right across Ireland. Owned by Diageo, Guinness is regarded as the principle alcohol brand in Ireland, and has been synonymous with Irish people, as well as many tourists, for a considerable amount of time. However, the second half of 2009 saw Diageo’s alcohol sales, for all of their brands, plummeting by 10% as the economic downturn continued to hit consumers. As part of their findings, Diageo said that pubs suffered the biggest decline, with sales falling by as much as 14%, with many consumers heading across the border to stock up on cheaper drink. The off-licence trade in the North shot up by more than a third, a firm indication that cross-border shopping is still extremely strong, despite the strong efforts by authorities (listed above) to counteract this. In addition, Diageo saw their net sales dropping by 9% during this period but, on the plus side, their main brand didn’t actually suffer that much, and has actually added considerable growth to this market. Statistics show that Guinness’ share in the declining beer market increased in both pubs and off-licences thanks, to a large degree, because of their massive 250th anniversary celebrations. “The hugely successful 250th celebration in Ireland, culminated on September 24, Arthur’s Day which, given the scale and impact achieved, was one of the key drivers of the market share and equity growth in this half”, a statement revealed. Guinness’ famous stout also accounts for some 32.3% of the draught beer marker in the Republic and, as of the end of 2009, it accounts for more than half (55%) of Guinness global sales.

June 2011


DRINKS - Beer have led to share gains for Diageo’s priority brands in key markets”, Walsh stated. “We are in the early stages of recovery with more encouraging signs in the emerging and developing markets”. 2009 also saw their most recent product innovation, as they came up with a contemporary new design for the Guinness draught that features a larger harp logo on its front, and in the process reinforcing the premium quality of the brand. Alongside this new can design, they also adopted a new visual identity across their four and eight can packs. This new packaging features a visual of a beautifully settling glass of Guinness, helping the brand to stand out on shelf more so than they had before. They used this new look can identity as part of the Christmas promotional packs of 2009, and they were successful enough that, by the time Christmas 2010 came around, they were extremely familiar with most shoppers in this market. Indeed, 2010 was a very interesting year for Diageo, as they started to consider the benefits of backing an alcohol-pricing proposal, which would see a ban on selling alcohol below the cost of duty and VAT. This was reported in various outlets in August of 2010, but Diageo denied that there was any link between price and problem drinking. Across Europe, Guinness sales did drop during this tricky period by 1%, but did rise in Britain by 3%, with a record pub sales increase of 7.6%. Paul Walsh is Diageo’s Chief Executive, and he felt that the last six months of 2009 was extremely challenging, but that the company would be heading into 2010 with their spirits up. “Our category leading brands, the consistency and scale of our marketing investment, successful innovation and our industry leading sales capabilities

42 TGm

Apart from sales in Ireland though, Guinness also look to exports to help increase their overall sales and, as Kieran Tobin, the chair of DIGI and director of Irish Distillers points out, Guinness “has produced good results” in this area. As Tobin also points out, this is an industry that provides quite a lot to national income, though spirits are seen as the biggest winner when it comes to alcoholic exports. “This is an industry which exports and

contributes €1.2 billion to national income in exports, primarily in spirits”, Tobin has said. Indeed, Tobin sees exports as being crucial if we are to get out of the sticky economic situation that we find ourselves in at the moment. “If we’re going to get out of this recession, verging on a depression, that we’re in, everyone agrees that it’s going to be export-led”, Tobin added. HEINEKEN Heineken are the world’s third-largest brewer and reported third-quarter sales in 2010 at the bottom of expectations, as poor summer weather, austerity measures, and low consumer confidence conspired to cap European and US drinking. The Dutch brewer also produce Amstel, which is Europe’s number three beer, but Heineken is Europe’s number one beer, and is therefore the brand that consumers identify with the most. They say that volumes in their company rose sharply in Africa, Asia and Latin America, but were lower overall on a like-for-like basis because of weakness in mature markets. Overall though, Heineken revenue rose by 13% to €4.61 billion. In addition, cost savings, changes in scope and currency profit meant operating profit grew by a mid-single digit percent. On a like-for-like basis, net profit rose by 10% to €520 million. Just over half of Heineken’s revenue during 2009 came from Western Europe, and 2010 was very much the same. However, the deal that saw them purchasing the beer business of Mexican group FEMSA should swell the share of operating profit from faster-growing markets to 40% from 32%. Christmas 2010 in Ireland was an interesting one for Heineken, as they came up with a special Christmas offer that included special edition 12 bottle packs;20 bottle packs; 8 can packs


27.2% volume share of the total lager market.

in time for the festive season, both on pack and in store.

They have a rather large marketing calendar that packs a punch all year round and they enjoy prolific sponsorships of events like the Heineken Cup, the Rugby World Cup (due to take place in the Autumn of 2011), UEFA Champions League, Oxegen and the Heineken Green Sphere Series.

2010 saw Coors Light boasting continued growth in all parts of Ireland across all channels. The most recent AC Nielsen statistics on Coors Light, released in August of 2010, demonstrated that there was strong consumer call for the brand in an ever challenging market. This was particularly true in the off-trade section, where they accounted for 5% of the total market.

The Heineken can is a favourite with consumers and holds the number one position in the off-trade, and the highest percentage volume share of canned lager in the off-trade at 16.3% volume share of canned lager. They have also introduced an initiative to celebrate the Heineken Bottle with Heineken Expression, which has traveled the country providing yet another opportunity for enjoying lager experiences. COORS LIGHT A number of brands in this market have enjoyed a decent couple of years in spite of the economic climate they are dealing with, and Coors Light is one such brand. They capped off a great 2010 with their new customized Christmas packaging and POS material, which promised to bring the Rockies to life. The new Rocky Mountain packaging was unveiled just

However, they are also now the number one on-trade bottle, as well as being the fastest growing draught lager beer in the on-trade. These specific results stem from increased activity from the brand and a fresh new look and feel for 2010, which enables their cool, rocky mountain refreshment to pubs and off-licences across Ireland. In 2010, Coors Light also introduced their first-ever on-pack promotion called Destination Rocky Mountains. This was an online venture for the brand, where hundreds of consumers competed to win the right to one of eight weekly trips to the Rocky Mountains in December with three friends. This proved to be quite successful for Coors Light, and they were helped in no end by a brand new TV commercial and outdoor creative campaign.

24 can slabs and the Heineken Draught Keg. The 5L draught is particularly popular, as it consistently provides perfect quality draught Heineken with an intelligent patented pressure system, ensuring fresh beer for 30 days after tapping. All of these Christmas activities were heavily supported by above the line campaigning, as well as a full suite of complementary point of sale for all offtrade partners. Heineken are the number one lager brand in this country, and they currently hold a

June 2011


DRINKS - Beer BUDWEISER Budweiser have been considered as the number one beer in the off-trade sector, and this was enhanced by a brand new look that they launched in 2008, which saw them redesigning their secondary packaging to maximise visibility, just in time for the Christmas period of that year.

This bold new design communicated the brand’s positioning of premium and quality, while at the same time retaining the iconic red colour that links not only the tradition and authenticity, but also the brewing heritage of Budweiser. The packaging update was released just in time for the all-important Christmas market, and has worked well for the two

Christmas periods that have followed subsequently. It has ensured maximum impact on-shelf so that it remains at the forefront of customers’ awareness at what is a crucial period for most consumers. This packaging has worked to good effect for the brand, and they had a clear vision for it at the start, which can easily be seen from the following quote at the time from Budweiser’s Assistant Brand Manager, Amy Copeland: “Over the years Budweiser packaging has always stood out and this new look will ensure that the great tasting beer inside is reflected by great-looking packaging on the outside. Since brewing began back in 1876, Budweiser has always stood for authenticity. Budweiser brew masters use only the highest quality barley malt, hops and rice and water to craft our premium beer”, Copeland remarked. Budweiser also have pack formats that suit pretty much every occasion for the festive period, whether it be small gettogethers, or big gatherings during the

44 TGm

part season. The new packaging design was part of an overall campaign, which Budweiser hoped would reinforce the commitment to quality, something they have always held dear. The campaign appeared across television, outdoor and press, and the current signs would indicate that it has worked extremely well for Budweiser.

DRINKS - Cider 2009 was a difficult year for the drink market, as it saw overall consumption in all four alcohol drinks categories (beer, spirits, cider and wine) declining. However, Cider was the category that was least effected, as it experienced the lowest decline, closely followed by the beer market, putting them in an excellent position to build in 2010 and 2011. As was reported by market analyst Mintel during 2009, cider has â&#x20AC;&#x153;enormous potential to transcend its summer popularity and be drunk all-year roundâ&#x20AC;?. Men aged 18 to 44, in particular, are the most likely to want cold served drinks regardless of what the season is. As well as this, launches in recent years like Bulmers Pear and WKD Core have helped to generate renewed interest in this category. Cider has also benefited in recent years from the concern over binge drinking, as this has revived the market for low-alcohol drinks, which has grown 12% in value since 2006. While lager does tend to dominate in this regard, cider sales are also beginning to pick up, in a large part due to the introduction by cider brands of refreshing new tastes to fit the summer mood, such as Bulmers Pear, which has been heavily marketed. Noreast have also introduced distinctive new cider blends through the launch of Aspall Suffolk Cyder varieties in the Republic of Ireland. Plenty of innovation is also occurring right across the drink market, with plenty of launches in the cider sector, as well as the spirit and beer markets, which bodes well for the future. Certainly, the innovation in the cider market has helped it to grow substantially, which was well needed as it had experienced volume decline during 2008, and had a market volume share of 8.2% during the same year, well behind spirits at 19.5%, wine at 22.7% and beer at 49.6%. This has been addressed in the past couple of years, and cider is faring a lot better, with a few brands leading the way as the category looks to achieve growth.

46 TGm


BULMERS While many beverages are consumed during a certain time during the year, Bulmers are a cider brand that has become an all-year round drink of choice for many consumers. For over seven decades now, Bulmers has been produced from a base in Annerville, Clonmel, and it is currently the number three brand in the low alcohol drinks (LAD) market, with periods such as Christmas and the New Year acting as peak key selling periods. Indeed, Christmas 2010 was a very important period for Bulmers, as they offered the following selection of value party packs that their many users could avail of: •Bulmers Original 18 x 500ml can party pack •Bulmers Original ‘8 for the price of 7’ x 500ml can pack •Bulmers Pear ‘6 for the price of 5’ x 500ml can pack •Bulmers Light ‘6 for the price of 5’ x 500ml can pack •Bulmers Berry ‘6 for the price of 5’ x 500ml can pack As a way of reflecting the current economic climate that Irish consumers have to deal with, all of these packs offer consumers a discount versus standard retail prices, which acted as a real incentive for shoppers to choose Bulmers as their drink of choice for the holiday season. This Christmas campaign was also accompanied by the much-anticipated return of their acclaimed TV advertisements, which are shot on location in Clonmel, and were shown throughout the month of December in both TV and outdoor formats. Never one to rest on their laurels, and wait for the end of the year to come about, Bulmers were also busy during the Spring of 2010, with the February product launch of their new Bulmers Berry range. Bulmers Berry is a new fruit cider, which has entered what is a largely

untapped (but growing) market with considerable potential behind it. It possesses a unique blend of 17 varieties of apple, similar in many ways to the firmly-established Bulmers Original. It is fused with the finest selection of blackcurrants, raspberries and strawberries, making Bulmers Berry a premium and natural product, maintaining the distinctive character of the normal Bulmers selection.

the Magners brand that they use to market the company’s cider outside of Ireland.

The launch of this exciting new product line was supported by heavyweight national TV, outdoor, online and sampling campaigns. To keep in line with a recent move towards undergrowth, Bulmers adapted an underground theme for the launch, which was run in association with Secret Wars, who were continuing the Undergrowth Movement Secret Wars events right across the nation. Interestingly, this also represented the first time that Bulmers rolled out a PR, online, viral and word mouth campaign before the actual launch of the mainstream ATL activity took place in the summer months. Bulmers Berry is currently available in Pint Bottle and Longneck in the licensed trade and 500ml cans in grocery, with a RRP that is at the exact same level as that of Bulmers Original. Amongst the promotional activity associated with the launch of Bulmers Berry was a campaign that saw them joining forces with both Spin 1038 and Spin South West to find the best undiscovered DJ talent that there is. The top Dance DJs from both stations formed a judging panel for this competition, which catered for all interests including Hip Hop, R’ n’ B, Indie Rock, House, Trance, Techno and Dubstep. This is a very useful marketing ploy for the brand, and this is something that Bulmers have been extremely good at, with the various events that they sponsor bringing them to the attention of people across the globe. One such event is the Magners League rugby competition, where Bulmers avail of

June 2011


DRINKS - Cider Now in its fifth season, the Magners League is now regarded as one of the leading tournaments in the world of rugby. 2010 was a particularly good year for Bulmers from an Irish perspective in this competition, as the inaugural Magners League Grand Final was played at the RDS, Dublin, between Leinster and Ospreys, in front of a sell-out crowd. In addition to this, the first-ever competitive rugby fixture at the redesigned Aviva Stadium was a Magners League encounter between Leinster and Munster on October 2nd, watched by a Magners League record crowd of 50,645. The sponsorship of local competition is also important to Bulmers, and 2011 will see them entering their 20th consecutive year as title sponsors to the Bulmers All-Ireland Cup and Shield competitions. The 2010 final took place in September at Castlebar Golf Club, and was one of their most successful years to date. This competition is organized by the Golfing Union of Ireland, and is one of the most coveted tournaments in the inter-club calendar, being regarded as the biggest amateur golfing competition in Europe and included Irish golfing star Padraig Harrington as one of their competitors in his days as a young amateur. 2010 also saw Bulmers sponsoring the Live At Leopardstown music festival, which featured acts like Fun Lovin’ Criminals, Mundy, Aslan, Duke Special, Paul Brady, Delorentos, Alabama 3, Sharon Shannon Big Band (featuring Shane MacGowan) and many more. Bulmers Light also looked at ways of increasing the profile of their company in 2010 by teaming up with well-known Irish fashion retail brand, A|wear, to support a series of customer events in stores nationwide. Samples of Bulmers Light were offered to customers in Dublin’s Henry Street and Grafton Street; Wexford, Waterford; Cork and Galway. These particular events were

48 TGm

promoted in-store and via social media; print advertising and PR, with shoppers enjoying shopping discounts, as well as makeovers and goodie bags. WKD Ireland’s current best-selling PPS brand is WKD, and they are now branching out into the cider market with the launch of their new WKD Core selection. This is a new apple cider that was launched in July 2010, it is intended to bring a new dimension to the highly successful WKD range, and it is also hoping to shake up the cider market in Ireland at the same time. WKD Core is packaged in 500ml green bottles, and can be found on-shelf, but also in chillers, next to ciders, in both on and off-trade. It offers a refreshing taste, which consumers can choose to drink with or without ice, which is the sort of choice that will get consumers interested. The launch of WKD Core was met with an eye-catching outdoor advertising campaign, in addition to promotional sampling in pubs around the country. In general, the brand has been heavily supported, and seems to have grown fast in the months that have followed its release. Until now, WKD has been seen mainly as a brand of alcopop, which was produced on a worldwide scale by Beverage Brands. The United Kingdom is probably where the brand is most prominent, and it is heavily marketed there with the slogan ‘Have you got a WKD side?’ (as in, Have you got a wicked side?), and is also sold in many countries in mainland Europe. It was ranked by AC Nielsen in 2006 as the number-one UK ready-to-drink brand, and the move into the cider market should be of extreme benefit to them in ensuring that they stay ahead of their nearest competitors. DRUIDS Druids Celtic Cider is another popular brand in the Irish cider market, and is produced by Aston Manor Brewery in Trimbleton Lane, Birmingham.

However, in spite of this UK base, the Republic of Ireland is where it is probably most popular, with young people in the areas of Dublin and Cork being particularly interested in the brand. It has attained this popularity largely due to the high alcohol content that it has, but also because it can be purchased at a relatively low price. A typical can of Druids Cider would contain around 6% alcohol by volume, and also possesses sulfites, which are a group of naturally-occurring compounds used as preservatives in fruit-based food products. It also contains 285 calories per 500 ml, a considerable amount for a beverage of its kind. The Druids brand is the biggest growing cider on the Irish market at the moment, and is currently in the number two position overall, behind the clear leader in the Cider industry, Bulmers. It offers a top quality recipe, designed specifically for Irish consumer tastes, and will continue to offer value €1.59 per can, but it is also on promotion during the summer at six cans for €8, when it tends to perform best. Druids seem to have attained cult status amongst certain student groups, who are attracted by the cheapness of the products that they supply. They have a very simply, but very direct, motto which is as follows: “This premium, full flavoured Celtic cider has been inspired by divine fruit of the ancient druids and captures the magic of apples, harvested at the point of ripe perfection”. This motto has been extremely important to them down through the years, and has helped them in their efforts to constantly produce top of the range products for their many buyers.

DRINKS - Spirits Spirits is a lively and vibrant member of the drink industry and, by 2012, it is expected that spirits consumption in Ireland will have increased by 10.99% to reach 3.11 million cases (or 37.3 million bottles) from a period dating back to 2008. These findings, which were conducted in a Vinexpo/IWSR study, also revealed that the Irish drank 2.68 million 9-litre cases of spirits in 2007, which was 26.6% more than in 2003, which shows the kind of increase in popularity that spirits have had in recent times. With 1.1 million cases consumed in 2007, which was up 45.3% compared to 2003, vodka was the leading tipple in Ireland during this time in terms of volume, and cover around 40% of this market alone. It has been forecasted that, between the years of 2008 and 2012, that vodka consumption will have grown by almost 17%, with the consumption of all spirits in Ireland growing by 11%. Thus far, it looks like it will come pretty close to reaching these figures, though the next 12 months will be extremely important for this market, as it will for many others. Gin consumption actually lost a considerable amount of ground between 2003 and 2007 (dropping by some 15%), but it is expected that volume will have stabilized come 2012. It is also expected that rum will have regained 10.5% between 2008 and 2012 to reach a volume of 147,000 cases by the end of the period, which could return them to the consumption level of 2003. These are, of course, difficult times for a lot of businesses, and this market is no different. The Christmases of 2008 and 2009 saw independent off-licences suffering as people traveled across the border which, on top of fierce competitions from supermarkets, saw sales drop by some 40% for these offlicences. 2010 was no different, as supermarkets

50 TGm

still pose a major problem for independents, which means that it is important for consumers to take advantage of any promotions or merchandising material from the brands during the holiday season sales, in particular. In this regard, spirits are among the most versatile products on the drink market. The cocktail culture continues to grow, as does the popularity of flavoured drinks, so spirits are in a rather healthy position at the moment, something that the major brands have sought to take advantage of. ABSOLUT VODKA As the fourth best-selling premium spirit worldwide, and the number one brand of premium vodka worldwide, Absolut Vodka is an extremely popular choice with Irish consumers. Originating from Sweden, Absolut Vodka is a premium vodka that was first introduced in 1879 by Lars Olsson Smith, whose face appears on each bottle of Absolut Vodka in the 126 markets that it is available in around the globe. Absolut Vodka has a natural hearty taste, which is a quality that embodies what a vodka is supposed to be i.e. a spirit that is smooth but still accentuates any potential cocktails without disappearing into the mixer. It forms a perfect base for creative drink mixing, but is also it more than adequate as a beverage that can be enjoyed neatly or on the rocks. Indeed, Absolut Vodka is the brand that has pioneered the flavoured vodka category and, over the past 25 years or so, they have strived to create bold and creative flavoured vodkas. This has enabled them to come up with nine Absolut flavours, which are currently available in Ireland. Included amongst these flavours are the likes of Absolut Citron, Absolut Raspberri and Absolut Kurant.

Flavoured vodkas such as these have helped to energise a wide variety of cocktails, such as ‘Absolut (Absolut Citron, cosmopolitan’ cranberry juice, orange liqueur and lime juice), ‘Absolut citronic’ (Absolut Citron, tonic water and a slice of lime), as well as ‘Absolut high heel’ (Absolut Kurant, crème de cassis, lemon juice and blackcurrant). Absolut citronic is particularly important, as it is positioned as “a refreshing cocktail that is ideal for any summer get together with friends or family. Simple to make, this cocktail sets the tone for an Absolut great summer”. With so much variety to choose from, consumers would be well advised to find further information on their website


Christmas 2010 was an interesting one for Absolut, as it saw them tweaking their iconic bottle design by modifying the finish of the glass for a limited time period. It consists of numerous prisms that enable them to break and reflect light, Absolut Glimmer (as it was known during its release) is an enhanced version of the Absolut bottle, and helped to add an extra shine to the festive period. Absolut have had previous special edition offerings, such as Absolut Rock Edition, Absolut Masquerade and Absolut Disco, which shows how creative Absolut have been in the past, and it is important to note that all of these offerings have been popular with both trade personnel and consumers alike.

a half-bitter German schnapps with a unique blend of 56 herbs and spices, making it ideal to be served chilled, with the new phenomenon of mixing it also an available option. Sales of Jagermeister were up 10% for the first quarter of 2010, so it is clear that it is a very big seller in this category, and one that should continue to grow. Barry & Fitzwilliam have also welcomed two new additions to their product line in the shape of Tia Maria and Disaronno. Tia Maria is a hugely

popular coffee liqueur worldwide, thanks largely to its mixability in cocktails, with coffee or in desserts, or mixed with milk and ice as a luxurious long drink. Disaronno has been described as a ‘cool’ brand, as it possesses a unique square glass decanter and a smooth almond flavour. It also contains a secret recipe, which is believed to include the pure essence of 17 selected herbs and fruits with an infusion of apricot kernel oil.

BARRY & FITZWILLIAM Barry & Fitzwilliam are one of the major distributors in the spirits market, and they offer a wide range of premium spirits to consumers right across Ireland. Included amongst their portfolio are the likes of Teachers Scotch, Courvoisier Cognac, Rémy Martin Cognac, The Famous Grouse Finest Scotch Whisky, Jim Beam Bourbon, Vladivar Vodka, Boru Vodka and Stolichnaya. Another one of the brands under their guard is Cointreau, which has been described by Barry & Fitzwilliam as a cook experience on ice with a warm afterglow, surrounded by the scent of oranges while maintaining its elegant French heritage. It is seen as the perfect partner for cocktails, particularly useful for adding to a margarita, while it also makes 7Up a longer drink than it normally would be on its own. Jagermeister, the famous German schnapps, also appears to be a popular choice from the Barry & Fitzwilliam cannon, and it is a huge seller in the shooter market, especially among student trend setters, which is helping the brand to grown internationally. It is

June 2011


DRINKS - Spirits However, one of Barry & Fitzwilliam’s most impressive brands is Stolichnaya, which they believe is one of the best everyday spirits on the market when it comes to taste, price and availability. The red label is the flagship of the brand as a whole and is available right across the country. This vodka, which originates from Russia, is distilled four times from wheat and rye, mixed with artesial water from the Kalingrad region, and is filtered through quartz, sand, activated charcoal and woven cloth before being bottled at 80 proof. The Barry & Fitzwilliam Company regards Stolichnaya as a great example of what to expect from good vodka from Russia and, priced at around €24.99 a bottle, is quite easily affordable to a lot of people across Ireland, and represents excellent value for money.

Jameson thing’, focused on outdoor, online, premium lifestyle print and leading national broadsheets. Interestingly, it also delved into the outdoor media sector during this period, which included a 3D special 48 sheets and new ‘metropole’ sites, which were used to further enhance the campaign. In the off-trade, this particular aspect of the campaign was supported with special window displays. Jameson was available during this festive season in single bottle cartons and a gift pack, which featured a Jameson hip flask, a very popular venture by the company. One of Irish Distillers Pernod Ricard’s other whiskey brands include the likes

JAMESON/POWERS Jameson is the world’s number one Irish whiskey, and has been regarded as the number one value and volume spirit at Christmas, whilst earning upwards of 53% in shares of Irish Whiskey sales in the past few years. Christmas 2010 was a lively one for the brand, as they were supported by on and off trade with high visibility point of sale. Their off trade Christmas offerings included a new single bottle carton and gift pack, which featured two Jameson tall glasses. The smooth taste of Jameson meant that it was possible for consumers in this category to enjoy their Jameson drink neatly, on the rocks in a cocktail or with a mixer, making it the perfect drink for all celebrations during the busy Christmas period. Jameson are distributed in Ireland by the number one spirits and wines supplier, Irish Distillers Pernod Ricard, who are always working closely with retailers and publicans to get the most from spirits and wine in the run up to Christmas. For instance, September of 2008 saw the launch of the new Jameson advertising campaign ‘It’s a

52 TGm

of Powers, who have had a number of successful advertising campaigns in the past few years under the banner of ‘Pure Gold’, featured in both outdoor and print nationwide. This enabled consumers to buy Powers single bottle carton and gift pack (featuring two premium Powers tumblers) in off trade, offering plenty of convenience for whiskey enthusiasts.

DRINKS - Wines There has been strong growth in wine in recent years, and market data identifies changing consumer tastes as being one of the main reasons for this. Indeed, according to figures that were gathered by the Irish Wine Board, volume sales in the wine market increased by around 81% between the years of 2000 and 2007, with significant growth during 2007 of 6%, which represented an increase of half a million cases from the previous year. Obviously, with huge increases like this, there is going to be something of a leveling off, but the wine market is still performing pretty well, and is in a solid position to push forward during what is a very difficult time for a lot of sectors. There tends to be certain times of year when wine, and alcohol in general, can benefit in terms of sales, and Christmas is seen as a key peak trading time for many wine brands right across Ireland. For instance, Red Bordeaux and similar, cabernet-based styles are traditionally very popular at the busy Christmas period, while big white styles like wooded chardonnay from Australia and California offer plenty of weight and complexity for white wine drinkers around the nation. However, Christmas is also an important occasion for sparkling wines and Champagne, with excellent strides being made to produce quality products worthy of special celebrations in many new world regions. They are also aiming these products at customers who may be attracted by great value prices, and it is with a similar vein that port, sherry and fortified wines are coming into their own during the festive periods, as manufacturers are examining ways of broadening the target market for this industry. Many are looking to grasp the attention of younger consumers, and with a number of key brands continuing to perform strongly (as well as showing astute innovation), this may well happen.

54 TGm

ARNISTON BAY Arniston Bay are a very important brand in the Irish wine market, and they further enhanced their reputation by moving towards a more modern, contemporary style in 2009 with the introduction of a number of new varieties, as well as a new screw cap closure and an evolving label design, which reflects a more premium position for the brand. This proved to be extremely important to the company, as they had also introduced a few new blends during 2008 in the shape of Chenin Blanc Chardonnay, Pinotage RosĂŠ and Cabernet Sauvignon Merlot. This gave Arniston Bay more confidence that they could drive consumer demand heading into 2010, and they are currently in a good position to improve further into the latter parts of 2011 and 2012 as well. This new screw cap packaging, which can be found on a vast variety of Arniston Bay products, replaced the existing flange packaging, a feature that had been part of their bottles for a long time. Research revealed a number of reasons as to why consumers preferred the screw cap to the flange packaging. These included: convenience, freshness, resealability, and also the potential to eliminate the risk of cork taint and oxidation, which has quickly become a major issue for the industry in recent years. The summer of 2009 also saw the brand offering an on pack consumer offer, which acted as an excellent way to further drive growth in what is becoming an ever more competitive market. Free charms, a method to help consumers to identify individual wine glasses, were made available with every purchase of Arniston Bay, with a total of six charms being on offer.


Fraser in Dundrum, which is worth up to €1,000. This particular prize includes a shopping gift certificate of €500, a make-over with the make-up brand of the winner’s choice, while the lucky entrant was also able to avail of pampering treatments in the Clarins Skin Spa, and a luxurious Clarins hamper.

This promotion enjoyed a strong shelf standout, thanks in no small part to some strongly branded point of sale materials. This was something of a unique offer, which was set-up as a way to encourage consumers to try the wines they have on offer and, of course, to increase sales. Another sharp innovation in recent years from Arniston Bay has been their pouch ranges, which are light, convenient, easy to carry, and easy to pour packaging formats, which have proven to be popular with a number of consumers who are on the go, and should continue to grow in the next 12 months or so. They are ideal for picnics, music festivals and a number of other outdoor activities.

Finally, to top everything off, the lucky winner was able to enjoy a cool glass of Blossom Hill itself. This proved to be very popular with consumers, and shoppers can expect more offers like this from Blossom Hill in the future. Their neck-collars can be seen on their Merlot and Sauvignon Blanc, but have also been viewed on a Wimbledon ‘Special Edition’ White Zinfandel bottle, which featured an image of a tennis ball.

The following comment from Rosemary Lyster, marketing manager at Findlater Wine & Spirit Group from 2009, is a sharp indication as to how Arniston Bay have been performing in recent years, with the Irish market being one of their strongest areas.

2009 also saw Blossom Hill rolling out their new International Range, which was formally introduced at the press launch of Ladies Day in July of that year. This new range comes from countries around the world, including a Shiraz from South Africa and a Pinot Grigio from Italy.

“With new packaging and strong marketing support, we are confident that these changes will be successful in driving sales and attracting new customers to the brand in 2009. Arniston Bay is one of the best-selling international brands in the United Kingdom, the Far East and parts of Europe, and has proved very successful on the Irish market”, Lyster stated.

As is apparent from their classic range, the international selection is derived from a single grape variety, offering a pure, intense fruit aroma. Only the highest quality fruit selected, meaning that the fullest and finest expression of each variety is made available. LINDEMANS

BLOSSOM HILL Blossom Hill, who is manufactured by Gilbeys, has gone from strength to strength in recent years, and 2009 saw them becoming the number one wine brand in Ireland. This was a massive achievement for the brand and, to celebrate this feat, Gilbey launched ‘The Blossom Hill Summer Season’. They have also acted in the past couple of years as the official wine of the acclaimed Wimbledon Tennis tournament and, closer to home, as the sponsor of Ladies Day at the Failte

Ireland Dublin Horse Show in August of 2009. In celebrating these events, and no doubt future events to come, Blossom Hill offered a neck-collar promotion that has given consumers the chance to glam themselves up during ‘The Blossom Hill Summer Season’. Some of the offers that have been on sale during these campaigns include the likes of a ‘Pure Indulgence Day’ at House Of

Recognised around the world as one of the best wines when it comes down to value-for-money, Lindemans Bin 65 Chardonnay is renowned for providing consistency and quality to consumers in many different areas. Lindemans was founded in 1843 when Dr. Henry Lindeman planted his first vines at Cawarra in the Hunter Valley. His passion for wines had been very much maintained by the company today, in both the winery and the wine bottles themselves.

May 2011 47June 2011


DRINKS - Wines The Lindemans Bin range offers generous flavours and a contemporary, easy-drinking style, which combines easily with food, as well as many other social occasions, to deliver maximum enjoyment from the very first glass to the very last. This particular range includes, apart from Bin 65 Chardonnay, Bin 95 Sauvignon Blanc, Bin 45 Cabernet Sauvignon, Bin 50 Shiraz and Bin 35 Rosé. The Lindemans Bin range has been on promotion in the past couple of years, during the summer months, with up to 25% off the normal retail price of €10.99. 2008 saw Lindemans pioneering the increasingly popular low-alcohol wine sector in Ireland with the introduction of Lindemans Early Harvest Semillon Sauvignon Blanc, Shiraz and Rosé, which contain just 9% alcohol. With a wine that is 25% lighter in alcohol and calories, it delivers crisp, light, easy drinking, and fresh fruit flavours in a very formidable style. Lindemans Early Harvest has just five points per bottle, which compares favourably to the seven points that can be found in a standard bottle of wine. This has enabled Lindemans to work closely with Weightwatchers in their effort to give consumers a great alternative that won’t compromise on taste and will, in addition, deliver the quality and enjoyment that consumers have come to expect from Lindemans. WOLF BLASS As one of the leaders in the Australian winemaking business, it is no surprise to see that Wolf Blass is continuing to move forward as we now move into 2011. Having been founded in 1961 with a tin shed in the Barossa Valley, with the dream of a better life spurring on its founder, Wolf Blass has progressed to become one of the world’s greatest wine producers. Since 1966, Wolf Blass, has received over 4,000 awards, as well as accolades at top international wine shows.

58 TGm

Included amongst their honours is the ‘Jimmy Watson’ Trophy, which is Australia’s most prestigious wine award, with Wolf Blass having secured it on no less than four occasions. Most recently, in 2008, Wolf Blass were honoured with the International Red Winemaker of the Year award at the International Wine Challenge (IWC) in London.

One of their most popular ranges is the Wolf Blass Yellow Label selection, where they offer premium single varietal wines from South Australia, which epitomizes the quality and consistency that consumers have come to expect from Wolf Blass. The Wolf Blass Yellow Label Sauvignon Blanc is a bottle that is new to Ireland, and it provides a refreshing alternative to the Yellow Label division.

Blooming record for Bord Bia N


Bloom, Bord Biaâ&#x20AC;&#x2122;s gardening, food and family festival now in itâ&#x20AC;&#x2122;s fifth year, has been its most successful yet. Bloom attracted almost 90,000 visitors to the 70 acre site at the visitors centre in the Phoenix Park Dublin over the June Bank holiday weekend. 60 TGm


new Bord Bia Food Village. Celebrity Chef Neven Maguire presented the President with a hamper of artisan produce from the Food Market. Speaking at the event Aidan Cotter, CEO, Bord Bia said “Over these last five days the spirit that had lifted the nation in recent weeks was once again in evidence among almost 90,000 visitors who came to witness and applaud the magic and creativity of our garden designers, of our artisan food producers, and our craftsmen and women who remind us of the richness of resource that resides within and around us.” A total of 78 medals were awarded on the first day of the show to garden designers, nurseries and floral artists and the international judging panel commented that the gardens were some of the best they had seen in the history of the event. The overall large garden category award went to To The Waters Edge, a visually striking garden featuring a sunken seating area, designed by Oliver and Liat Schurmann, Mount Venus Nurseries, Dublin. Visitors to the show over the 5 days were encouraged to vote for their favourite garden and

today the Peoples Choice award went to An Adventure with Thumbelina designed by first-time Bloom designer Jack Harte, New Ross, Co.Wexford. The new Bord Bia Food Village was a key attraction at this year’s show, bringing all of the food aspects of the show together in one central location for the first time. Exhibitors reported that the new feature was a phenomenal success providing them with an opportunity to showcase brands, interact with new and existing customers and sell large quantities of products.

President of Ireland and Patron of Bloom, Mary Mc Aleese and her husband, Senator Martin McAleese visited Bloom to mark the closing day of the event. President McAleese spent one hour at the event visiting the showgardens, meeting the designers and members of the public. The President addressed a large crowd at the Chefs Summer Kitchen, part of the

June 2011 59



•Percentage Share of Total Grocery

Dunnes Stores return to growth

The latest grocery market figures from Kantar Worldpanel in Ireland, published for the 12 weeks ending 15 May 2011, show Dunnes Stores has increased its market share for the first time since August 2009. Dunnes Stores has posted sales growth of 1.4% and increased its market share from 23.6% last year to 23.7% for the same period this year, following 21 months of stagnation. David Berry, Commercial Director at Kantar Worldpanel Ireland explains: “The return to share growth for Dunnes Stores has been fuelled by strong sales in traditional areas such as frozen food, household cleaning,

62 TGm

biscuits and confectionery. By using the strong presence of leading brands in these areas the retailer has been able to drive sales. “Dunnes Stores has also benefited from a dedicated customer base. Over this period it has regained its position as the retailer with the most loyal shoppers, demonstrating the importance of returning customers in this market.” With value at the top of the shopper’s agenda, Aldi and Lidl continued to be the main beneficiaries of growth during this period. Both retailers posted record share performances, powering ahead with double digit value sales growth of 27.7% and

10.6% respectively. Aldi increased its share from 3.4% last year to 4.3% and Lidl built on last year’s 5.6% share to achieve 6.1% of the market. Elsewhere, Tesco grew slightly ahead of the market and posted an increase in market share from 27.1% last year to 27.3% for this period. SuperValu continued to perform slightly behind the market this month, dropping market share from 20.0% last year to 19.6% for the same period this year. Growing speculation about the future ownership of Superquinn has done little to halt its sales decline, with a loss of market share from 6.8% last year to 6.2% this year.

Grocery inflation is at 4.9% for the 12 week ending period 15 May 2011, down from 5.4% in the previous period. *This figure is based on over 75,000 identical products compared yearon-year in the proportions purchased by Irish shoppers and therefore represents the most authoritative figure currently available. It is a ‘pure’ inflation measure in that shopping behaviour is held constant between the two comparison periods – shoppers are likely to achieve a lower personal inflation rate if they trade down or seek out more offers.

The Nations ‘Sweet Heart’ Kevin Ginty

Tubs Sweets, a new confectionary company based in Rathnew Co. Wicklow, have grown from a simple idea to rolling out Tubs Sweets to all 110 Topaz Forecourts in a deal worth €750,000 and stocking all 26 Superquinn stores in a deal worth €500,000. The company is lead by Wicklow man Kevin Ginty. After losing his business early last year due to the

downturn in the economy and desperately seeking new opportunities Ginty spotted a small plastic tub on the kitchen table and the Tubs Sweets concept was born. Kevin Ginty is delighted to be supplying both Topaz and Superquinn, “This is an amazing opportunity for a start-up company like Tubs Sweets. The company was developed from a simple concept –


tubs are a handy and portable packaging option so why not put sweets in them! Superquinn was the first retailer I approached and it was fantastic when they agreed to roll out the Tubs brand in every Superquinn store in the country just three months after the concept was realised. In the early days I did everything myself and just under a year later I now have 20 staff in my factory in Rathnew and merchandising on the road”. Michael Keenan, Confectionary Buyer from Superquinn said, “Superquinn has had great success in our trading relationship with Kevin over the last 12 months with sales continuing to grow. This success has been achieved by a combination of a professional direct to store service from Kevin and his team and the continued appetite amongst our own customers to support Irish products and Irish suppliers. At Superquinn we take pride in supporting Irish producers and look forward to working with Kevin and the team in the future”. Judy Wilson, Category Manager, Confectionary from Topaz said, “We were instantly struck by these charming packages of ‘sweets in tubs’ and felt our customers would be equally so. We were also impressed by Kevin’s own work ethic and positive ‘can-do’ attitude. The Tubs are not long in our stores and already the sales are phenomenal with the demand for the product increasing all the time. As a 100% Irish owned company we, at Topaz are very keen to support home-grown initiatives and we encourage other businesses to do likewise. We are delighted to sell Tubs Sweets through our network of 110 shops and look forward to working with Kevin and the team in the future”. Tubs Sweets supplies 60 different variations of sweets including fizzy jellies, cola cubes, bon bons, fudge and marshmallows to name a few. All tasty treats are packaged in handy Tubs for easy transportation whether you’re in the car, on an outing or bringing a gift.

June 2011







Drombeg inspires new business venture

Gerard McCarthy In 2007, John O’Connell, Denis McCarthy and Gerard McCarthy were struck by a new business idea. An exciting joined business venture that would see them apply their local knowledge and their individual entrepreneurial skills. The idea resonated with all three men – a premium spirit made locally in West Cork, created using local spring water and utilising a unique proprietary oak

64 TGm

wood maturation method. Aimed at both the domestic and export markets, this new premium drink would embody the sincere and hopeful spirit of camaraderie, conviviality and celebration. And the name…? Having grown up in Union Hall, just a short distance from one of Ireland’s most magnificent archaeological structures, the brand name was easily chosen – it had to be Drombeg.

That very week in late 2007, John, Denis and Gerard set about establishing Drombeg Premium Irish Spirit™. Just over three years later, the three friends (who have known each other since childhood) are thrilled that their extensive research, planning and preparation has culminated in the launch of Ireland’s newest premium drink product. With a lucrative

distribution deal now in place, these innovative West Cork entrepreneurs are confident that all their hard work has certainly paid off. John O’Connell, says that while it’s been an arduous and challenging journey at times, their decision to launch their own product has unquestionably been worth the long hours and the tireless perseverance.

“When you start a new business or launch a new product, you definitely expect it to be a demanding process. In our case, it was particularly demanding - we set ourselves extremely high standards and we wanted to get the product exactly right. For example, we were keen to ensure that our product stood out in the competitive international marketplace. We wanted to create unique selling points that would give us a distinct competitive advantage. There are numerous big players in today’s drinks market – it was vital for us to differentiate Drombeg Premium Irish Spirit™ by developing a fantastictasting product and focusing on brand


When you start a new business or launch a new product, you definitely expect it to be a demanding process. In our case, it was particularly demanding...”

provenance and heritage. That’s why we took the time to choose the imagery and branding that fits best with our product and will appeal to our target market. What’s more we now have our very own proprietary oak wood

maturation method. Using local West Cork spring water, we’ve introduced a unique production and oakaging process that offers a distinct character and flavour. The result is the exclusive taste of our Drombeg oak wood-

matured Premium Irish Spirit. During the product development cycle we worked with some of the premier industry experts who were incredibly impressed with the smooth, subtle and distinctive smoky flavour that we’ve achieved”, John explains. A recently-confirmed distribution agreement with Cork-based distributor, Barry & Fitzwillliam Ltd, means that the Drombeg label is becoming a familiar sight at a growing number of select bars and off-licences throughout Ireland. Furthermore, export distribution agreements for continental Europe and North America are expected to be secured over the coming months.

(l-r): Johnny O’Connell’ Ger and Denis McCarthy

June 2011




Open for Business The Philadelphia Wholesale Produce Market (PWPM), home to twentysix fresh produce merchants in a 700,000 square foot fresh produce wholesale facility, is proud to announce that the new market, located at 6700 Essington Avenue in Philadelphia, PA officially opened for business. “We are thrilled to be officially operating in our new market,” said Sonny DiCrecchio, CEO of the Philadelphia Wholesale Produce Market. “The years of planning and building have certainly been challenging, but in the end, we have a one of a kind facility that is open and ready to service customers.” The new Philadelphia Wholesale Produce Market provides high quality, fresh produce to customers within a 500-mile radius. With a state of the art cold chain management system in place, the facility maintains temperature effectively, thereby supplying customers of the PWPM with fresher products and a longer shelf life. “The delayed move to the new market simply provided the merchants with an opportunity to further plan logistically for a smooth transition,” said John Vena Jr., Philadelphia Wholesale Produce Market board member and president of John Vena Inc. “It was great to see the expression on our client’s faces yesterday as we opened the doors to the new facility. It is a day that we will not soon forget and I’m honoured to have been a part of this historical day.” The previous market,

66 TGm

located on South Gallowa closed on June 2, 2011. The merchants of PWPM welcomed proudly customers inside the first and largest fully refrigerated wholesale produce market in the world on June 5, 2011.

The World’s Largest Fully Refrigerated Fresh Produce Wholesale Market Officially opened. The Philadelphia Wholesale Produce Market (PWPM) is the future of fresh in wholesale produce distribution with an extended history serving customers within a 500-mile radius with high quality fresh produce. The 700,000 square foot facility provides customers with the freshest produce, in the most efficient manner at competitive prices.



Moy Park shareholder sues

A shareholder in the group behind the Moy Park poultry business is suing the company and its other owners, members of the Carton family, for allegedly breaking the terms of its original €4 million investment. In 2004, Gharion a company owned by businessman John Gilroy, paid €4 million for a 40 per cent stake in Carton Group Holdings, owner of the Moy Park poultry business, which is one of the biggest operators in its industry with sales of €168 million a year. Over the last two years, Gilroy and the Cartons have been in dispute over a planned sale of the business, payments to family members who are not involved in the company and a €600,000 loan from its pension fund to a number of the directors. At a brief hearing the High Court was told arbitration efforts had failed and that Gharion is claiming that the shareholders’ agreement has been breached to the point where its rights are being suppressed. The Carton Group wants the case referred back to arbitration. Charion and the Carton Group originally agreed the company would be sold in 2009 and that both parties would make every effort to boost its value between 2004 and that date. However, Gilroy, who is one of the company’s directors, and Gharion claim the Cartons have resisted this and continue

68 TGm

to run the company as a family concern. According to Court documents, Gilroy is also concerned at a number of other issues. In 2006, directors and shareholders, Vincent Carton and Justin Carton, borrowed €600,000 from the group’s pension fund. Gilroy did not find out about this until August 2007. The money has since been repaid. The Cartons borrowed it to fund their share of a €1 million capital investment required to combat the impact on the business of the avian flu outbreak in 2006.

The group has also continued to pay around €220,000 a year to members of the Carton family who are not involved in the business. Gilroy was aware that one such family member was receiving payments from the company when Gharion originally invested, but did not find out about the others for some time. Carton Group has yet to make an ex-gratia payment to a group of workers laid off as a result of the closure of one of Moy Park’s hatcheries in Carrickmacross, Co Monaghan, in 2007, and

could be facing legal action. Gharion’s action is against Carton Group Holdings and Vincent, Justin and Elizabeth Carton. It is understood they believe that, as a result of a number of developments outside the company’s control, it would not have been possible to sell the business at a profit in 2009. Charion wants the Court to order the Carton family to sell their stake in the business to it or to buy out its 40 per cent stake.


Le Crunch Heroes

Over 4,000 primary school students from 520 schools around Ireland made a poster or created a figurine of sporty Le Crunch Bunch character using one of the six varieties of Le Crunch apples as well as other healthy foods. The children’s creations had to promote healthy eating, active lifestyles and nature. A panel of judges selected three finalists in

each category. Photos of their entries went on display in Dunnes Stores grocery outlets during March and the shopping public were invited to vote in-store for their favourites. As an added incentive all voters were entered into a free draw to win a luxury weekend break for two at Inchydoney Island Lodge & Spa. The winner is Martina Venneman, Galway. Daniel Corbel,

158 Seafood sector jobs

President of the French Apples Marketing Commission, said, “The objective of the competition is to instill in the next generation a sense of responsibility, of environmental stewardship, so they can understand how their choices affect themselves and the world around them. It is very rewarding and inspiring for us to see, through the wonderful creativity and

talent displayed in the entries we receive each year, that this message is getting through loud and clear”. Pictured above are: (l-r): Maurice Coffey, Asst Mgr, Dunnes Stores, Ashbourne; Claire Coleman, Le Crunch; Toby Clarke-Carr, Age 9 - 10 category winner; Phil Osman, Fruit & Veg Mgr, Dunnes Stores; Leila ClarkeCarr, winner's sister.

Minister for the Marine Simon Coveney has approved State aid for a seafood processing initiative which is expected to create 158 new jobs. The aid of €1.7 million has been approved as part of a total of €7.4 million investment in seafood processing, Coveney said in Killybeggs, Co Donegal, recently. AtlanFish in Donegal, Rockabill Shellfish in Dublin and Fastnet Mussels in Cork are among the companies targeted for the coastal initiative. A “focused expert group” is to identify a series of opportunities in what was the largest Irish seafood port on the west coast, which has been hit by EU quota restrictions.

June 2011



A lesson in making crisps! After spending five years studying agriculture in the UK, Ed O’Donnell, a 28-year-old crisp maker, came home to Kilsheehan, Co Tipperary, in 2006 with a plan to tackle the challenges of farming. “We were coming towards the tailend of the boom and farming looked bleak. Prices were low. Young people were drifting towards building sites but I saw how people in the UK were building on their commodities. “I firmly believed there was a niche market for a gourmet, hand-cooked crisp made from my own potatoes.” The O’Donnell family has been farming since the 1700s, and the idea of making their own crisps posed a radical departure. O’Donnell’s parents felt that crisp making was something you couldn’t do. Rather than give up on the idea, O’Donnell would quietly slip away to do market research. Visiting over 200 shops and pubs around Ireland, quizzing shop managers and scanning their shelves to compare the prices, flavours and bag sizes. “I had no bags, no samples, nothing,” he said. “At the time I thought I was wasting my money but it was probably the best thing I could have done.” With his resolve boosted, all he needed was to learn how to make crisps. He found what he wanted online: a crisp-making course at Ohio State University. For two weeks, from 8 to 8, O’Donnell sat alongside representatives from multi-million dollar snack manufacturers in the US, most of whom were there to refresh their understanding of a particular technical aspect. The lone foreigner constantly raised his hand, enquiring about every aspect in the process, from ground to bag; the technical issues, the nutritional analysis the processing, the oil temperature. At home while the O’Donnell family were warming to his commitment, still, a factory was a tough sell. O”Donnell turned to the banks and potential investors, seeking €1.7 million to set up production and storage facilities at home on Seskin

70 TGm

Farm. the response was blunt. “No chance,” he recalls. He approached Largo Foods, the same manufacturer in Meath that makes Ireland’s main commercial brands and asked whether they could make crisps to O’Donnell’s specifications.Largo Foods agreed to do so. After six months of developing the look of the bags and holding focus groups in Cork and London, O’Donnells crisps launched in June

2010 with two flavours - cheese and onion, salt and vinegar - in 50g bags, gradually expanding to 125g bags with a hot chilli flavour launching soon. Employing a team of six, O’Donnells claims 1.5 per cent of the crisp market, shifting 27,000 bags a week to Irish outlets such as Centra and Londis as well as stockists in London and Vienna. So far the business has covered its costs and loans, and it aiming for a profit in its third year.

Today's Grocery Magazine June 2011  

Today's Grocery Magazine June 2011