e t r t o e l F m o r f h Fres
In this months issue 2 NEWS
4 ONE OF THE BEST KEPT SECRETS
6 HIGH STREET SPENDING DOWN
8 COOLEY BRINGS POITIN OUT OF SHADOWS
- CHEWING GUM
TGM FOCUS TGM FOCUS
- GRANOLA BARS
END OF THE ROAD FOR IRISH CHICKEN
12 TRANSITION COMPLETE 14 HOW MANY VEGETARIANS ARE THERE OUT THERE? With numerous groups pushing meatless Monday or other campaigns, the Vegetarian Resource Grou (VRG) wondered how often Americans are eating vegetarian meals. 18 BUSINESS CONFIDENCE WEAKENS 22 TGM FOCUS
- FROZEN FOODS
M.D/Editor: Deputy Editor: Bsn. Dev. Managers: Contributors:
36 INCREASED OPTIMISM The results of the annual Bord Bia industry survey showed increased optimism among food and drink manufacturers. 40 TGM FOCUS
42 TGM FOCUS
- FRUIT & VEGETABLES
44 DUAL SUPPORT FOR GALA RETAILERS Gala, through it’s association with the Stonehouse buying group, has access to buying power in excess of €2 billion. 48 WINNERS ALL THE WAY With 265 stores under its belt, the Barry Group see plenty of room for expansion.
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: email@example.com firstname.lastname@example.org www.todaysgrocery.com
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.
Bacardí a Winner
The Brand Activation Award celebrates the most creative and well thoughtout sponsor activity for 2011’s music festivals throughout both Ireland and the UK. The Arena contained a stage built into the house facade, flanked by two cabana inspired bars. In the centre of the Arena stood El Coco, a replica of the palm tree which stands outside theBacardídistillery in Puerto Rico. This year’s activiation also included a comprehensive online campaign centred on Facebook activity. Bacardi brought to life a series of online ‘likes’ as chosen by Irish Bacardi fans. The annual UK Festival Awards are an opportunity for the public, media and music industry (Ireland & UK) Throughout July and
August, fans were asked what they would like to see at Electric Picnic; from favourite music to choice of cocktail and from concierge on-site service, to what closes the party. The Awards were presented in a gala ceremony in Londons Roundhouse. Uniting the entire music industry under one roof for one night, this event is a unique opportunity to honour and recognise those who invest colossial amounts of work and creativity making music festivals happen throughout Ireland the the UK. Bacardí has been a supporter of music in Ireland for well over three decades. In that time, the brand has been involved in sponsoring many events and creating stand-alone Bacardí properties of its own. Whether it is the
sponsorship of Electric Picnic or Sea Sessions, a partnership with Black Eyed Peas, the creation of one-off events or simply providing new and exciting music to our Facebook fans – music and events remain at the top of Bacardí ’s sponsorship and marketing activations. Commenting on the nomination, Tiernan O’Morain, Market Development Manager for
Bacardi said: “We are delighted with Bacardí Ireland’s Award at the Festival Awards We created a destination venue at Electric Picnic that festival goers wanted to spend all weekend at. The Bacardi experience was an authentic idea stemming directly from Bacardi rum’s heritage, which helped deliver against a genuine consumer need.
One of the best-kept secrets
Moy Park, the poultry company based in Craigavon, has a turnover of almost €1.2 billion and is one of the largest privatesector emloyers on the island, and the biggest in the North. Nigel Dunlop, Moy Park’s managing director, will sell about 1m turkeys this Christmas. Moy Park, owned by the giant Brazilian Marfrig Group, is the big bird of the irish poultry industry. It empolys 10,500 people, with 4,500 of those based in Northern Ireland, where it has four plants. The rest of its staff are split across its nine other operations in England, Holland and France. Moy Park supplies mainly chicken products to all the large-scale retailers in Ireand and Britain, and most of the big ones in Europe. It entered the turkey business in 2010 when it bought Ballymenabased O’Kane Poultry for Stg£25 million. “In terms of public profile, we’re quite an understated business,” said Dunlop. “It’s in our nature. We’re one of the Irish and British food industry’s bestkept secrets.” In October, Moy Park reported sales for last year of Stg£921m, with pre-tax profits of almost stg£28m. Dunlop, a former executive at the tobacco company Gallaher, which makes Benson & Hedges and Silk Cut, has restructured the company since taking over the top job from industry legend Trefor Campbell in 2008. A few months after replacing Campbell, Moy
Park was bought by Marfrig from OSI, a US food group, in a deal worth up to €690m - Marfrig operates in dollars. More than half of Moy Park’s revenues come from sales of fresh poultry to retailers, with most of the rest derived from its food service division, which sells to restaurants, including McDonald’s. It also has a convenience foods business. Moy Park is supplied by 800 farms - 500 of those in Northern Ireland - and although most of its sales are under the retailers’ private labels, Moy Park is the biggest-selling chicken brand in the south. It even has its own chichen stud farm. “We have a whole separate strand to our business, where we breed the grandparents of the chicks. Those birds are then sold to other poultry processors, where they become the parents of the chicks. We’ve got 20% market share for this in Europe.” Starting out Dunlop applied to Gallaher, then a small UK cigarette manufacturer, as a management trainee. He rose to become its director of operations. Dunlop was a member of Gallaher’s main board when it was bought by Japan Tobacco International for Stg£7.5m in 2007. He got a call from Moy Park which was loss-making when he arrived, as the company struggled under the weight of the commodities spike that has forced up prices for its chicken feed. Dunlop embarked on a
We have a whole separate strand to our business....”
“root and branch reorganisation of the business”, changing its suite of products using a “category” approach, such as the meat-free and bakery category, the coated products category, and the ready-to-eat category. “It’s just the way I have to do things. I have to chunk things up into smaller pieces,” he said. “The different divisions have their own responsibilities for finance, marketing and administration. That gives people ownership of their own area. They all report to the parent company at the top of the group. It is more structured.” As most of its products are sold under private supermarket labels, Moy Park is light on brands, although Marfrig is now pushing Seara as its global food products brand offering. Marfrig and Seara are sponsors of the 2014 football World Cup in Brazil. Dunlop says this will also provide opportunities for the Moy Park moniker. The company is aiming for organic growth over the next few years, “although it has to be profitable
growth”, says Dunlop. There are no more acquisitions on the horizon, but the company could be “opportunistic” if something comes along.
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
High street spending down
More bad news expected from the office of national statistics on high street spending Figures due out from the Office of National Statistics are expected to show retail figures down on the high street. The Confederation of British Industry anticipates November sales figures to be considerably lower than last year. With the weather set to take a turn for the worse and more people feeling a pinch in their pockets,online shopping is set to surge as people look for good deals. Consumer spending fell in real terms this October. The total sales value rose overall marginally, by 0.6 per cent, but this was offset by inflation, which has risen to around 5.2 per cent, showing growth to be stagnant. Further figures revealed, dire results for the high street as, clothing and footwear sales volume fell by 2.1 per cent compared to the same period last year, this is the largest fall since April 2008. However, online trading increased its share of total retail sales to 9.6 per cent – its largest ever. The number of high street casualties is expected to rise this month as more household names and leading corporations are still suffering. Recent reports have shown profit warnings issued by the British retailers are at alarming levels. Kevin Flood, CEO of social shopping leader Shopow said, “While many stores are still struggling to grow in the on-going difficult climate, we see an
appreciation of online retail increasing and so we’re seeing innovation, with many start-ups focussing on enhancing the bargain hunting and online researching experience for customers.” Social shopping has emerged as an exciting trend
in online retailing as many high street stores look to engage consumers. It involves the use of social networking to share recommendations, share discounts, post reviews and ask for advice on products before purchase. Regular web shoppers
are now empowered to talk about their purchases in an honest way. Social shopping with Shopow enables shoppers to use their trusted networks to make informed decisions but also makes online shopping more interactive and enjoyable.
FRESHNESS WRAPPED UP
Cooley brings Cooley Distillery, the European Distiller of the Year, has launched a new range of Poitín products to showcase the traditional Spirit of Ireland. The origin of distilling in Ireland dates back over 1,000 years. Before there was Irish whiskey there was Poitín – a clear Irish spirit famous for its alcohol strength. In homage to this ancient Irish Spirit, Cooley Distillery, Irelands only independent whiskey distiller, has released an Origin series of Poitín products to revive the traditional Spirit of Ireland. Poitín was traditionally distilled in a small pot still and the term is a derivative of the
Irish word pota, meaning "pot". Normally distilled from barley grain or potatoes, it is one of the strongest alcoholic beverages in the world and for centuries was classified as illegal in Ireland. Poitín is one of the most long-established spirits in the world with a rich and varied history and is exclusively associated with Ireland. Jack Teeling, managing director of Cooley Distillery commented, “Poitín is at the origin of Irish spirits and Irish whiskey in particular. Over the years its has been demonised because it was illegally produced and the end product lacked consistency, quality and
Poitin out of Shadows credibility. “We have produced a quality Poitín product using ancient techniques in our award winning distillery allowing consumers of today try this ancient Irish spirit with confidence as they are getting a high quality product.” Cooleys’ first Poitín release is triple distilled in small copper Pot Stills from a traditional Irish Pot Still recipe of malted and unmalted barley. Bottled straight from the still with no maturation produces a surprisingly smooth spirit even for one that is bottled at 65% abv. Poitín like any quality white spirit lends itself to be consumed in a variety of ways, neat, with water, with mixers and as a component of cocktails but due to its alcohol strength it
Poitín is at the origin of Irish Spirits and Irish whiskey in particular.... We have produced a quality Poitín product using ancient techniques in our award winning distillery...”
should be enjoyed in moderation. “As Poitín is basically un-aged Irish whiskey spirit and we hope to revive the Poitín as a national product. A lot of other countries around the world celebrate and market their national high alcohol spirits. Brazil have Cachaca, Greece Ouzo, Bulgaria Rakia and the Czech’s have successfully revived
Absinthe after it was effectively outlawed for over 75 years. We want to bring Poitín out from the shadows and let Irish people have a national white spirit they can be proud of,” continued Teeling.
Consisting of only 1,800 bottles this small batch release will be initially available through the Celtic Whiskey Shop and Dublin Airport as well as through good independent offlicences.
November 2011 9
Grumpies launch stress free Christmas dinner
A Cornish gourmet pie company is celebrating its first Christmas in business with the launch of two products specially created for the festive season. Launceston based Grumpies of Cornwall have developed a stress free alternative to the traditional Christmas dinner with a handmade turkey, cranberry and stuffing pie, and a roast vegetable, stilton and chestnut version. Co-founder of Grumpies, Trevor Shea said: “We’ve spent six weeks developing this pie and we’ve tested so many trying to get it right that by the time it comes to sit down with my family and enjoy my Christmas dinner, I think I’ll enjoy roast beef! “In all seriousness, now that the pies are ready to go, we’re looking forward to hearing the feedback of our customers.”
Grumpies duo Mark Carne and Trevor Shea will also be showcasing their pies at events around Cornwall in the run up to Christmas. The first chance for the public to try the new pies is in Fowey on Saturday 26 and Sunday, 27 November for the annual Christmas Market. “We’ve developed these products with our chefs and we thinks it’s important that we get out there ourselves and introduce them to our customers face to face.” The following weekend they will be at St Ives Christmas market on December 3 and Bude on December 4. After their success at the Falmouth Oyster Festival, Grumpies are returning to Falmouth for their final Christmas market appearance from December 15 - 18.
Reflecting on their first year in business, co-founder Mark Carne says: “We’ve been massively encouraged by the response of the general public to these pies. The feedback we’ve had has been extremely positive. The challenge we’ve got now is to make these pies easily available to our fan base.” All Grumpies products are made to the ethos of ‘serious about food’ and contain the best local ingredients, including local vegetables, Cornish ale and meat. Looking ahead to next year, Carne says: “We are going to continue trying our very best to increase the number of outlets from which these pies are available. We’re also going to be working harder than ever in the kitchen. As well as a completely new range of products, we’re also
going to make a gluten free pie as we’ve had several requests from customers.” All Grumpies products are free from artificial additives, preservatives and processed ingredients, to create a product with a home cooked quality. The pies can be purchased in selected delis and farm shops around Cornwall or online. Grumpies of Cornwall are serious about food. From their bakery in Launceston, they produce a range of six pies using the best available Cornish ingredients including local vegetables, Cornish ale, and meat from a prize winning nearby butcher. Grumpies also avoid artificial additives, preservatives and processed ingredients to create a product with a home cooked quality to it.
The unique freshly baked taste of Brennans has once again reaffirmed our status as Ireland’s number one bestselling bread. In fact, as Ireland’s favourite family bread we’ve retained retained our ranking ranking of number three in the Checkout Checkout Top 100 Brands. Brands. So, to get your sales onto a proven winner, make sure you stock Brennans.
TRANSITION COMPLETE TR AN SITION
n his first day at ceo of Morrisons in March last, Wicklowborn Dalton Philips stood on the stairs in the main hall of Morrisons’ Bradford headquarters to address 2,500 staff. Back then, he was a surprise appointment - experienced internationally, but an unknown in UK retail. Like other chief executives, he made the usual commitment to staff that his door would always be open. Philips, who lives in York leads a company that holds a 12 per cent share of the UK’s supermarket trade. In doing so, it has concentrated on food, rather than drifting into non-food goods. “We are incredibly verticallyintegrated. There isn’t a retailer like us anywhere else,” Philips says. “We have our own slaughterhouses, we have our own bakeries, we have our own cooked-meat plants. We bought a flower business earlier this year.” Despite higher sales and a rising share price, Philips like other retailers, is coping with major changes in the shopping habits of customers, who are cutting their cloth to cope with falling incomes and pessimism about their own futures. “We’re noticing a real change in consumers behaviour. A third of our customers get to the end of the money, they have nothing left over,” he says. “Half of our customers who go into a shop check the price on every single item that they put into the basket. They look at the price and they do the mental maths of whether they are going to put it in their baskets.” Until 2010, Philips says British consumers “shopped around a budget”; now they “shop to a budget”. One customers recently sent him one of her receipts from a Morrisons shopping trip that totted up to €117 exactly. Tougher times are changing everything in supermarket retailing. Customers now spend 20 per cent
longer shopping as they check prices, they are buying ingredients for more home cooking and shopping patterns differ widely in each week on the month. In the past, the first week in the month after pay day “rose like this”, says Philips, gently raising an arm in the air. Now the curve in the first week “is like this”, he goes, raises his arm dramatically upwards. “You’re seeing a big shop at the beginning of the month when people have money, and then towards the end of the month you are seeing it really slow down,” he says, with credit card sales declining sharply. “So we are having to change how we promote during the month, with big bulk deals like soap powders and staples at the beginning of the month. Towards the end of the month there is no point putting a bulk offer of detergent because people don’t have the money.” Gloomy economic times are nothing new, but this one is different,
Philips believes. “I suppose the difference now is that people don’t really see an end in sight. People who are tied to budgets are thinking: ‘How am I going to make ends meet.’ The middle classes see themselves only going one way. “We had 2008, obviously, and we were in a recession then but people’s disposable incomes weren’t coming down,” he says. “But we have had since the biggest drop in a generation since then.’ Traditionally strong in fresh food, Morrisons last October launched its “M Kitchen” range of signature dishes, prepared with Michelin chefs. At the same time, its entire 11,000-strong range of products is being progressively updated. Equally, Morrisons is adapting to the UK’s ever-changing demography. “We have to be able to target our range to the communities. Back in 2004, before he arrived, Morrisons, with 100 stores, took over
Tougher times are changing everything in supermarket retailing. Customers now spend 20 per cent longer shopping as they check prices....
Safeways, with 400. It was a problematic marriage that led to a series of profit warnings and culminated in the departure from Morrisons of its founder. He was replaced by Marc Bolland, who later went on to lead Marks & Spencer. Philips had previously been chief executive for the Galen Weston-owned Brown Thomas for two years before moving to Canada as chief operating officer of Weston’s Loblaws operation, the largest food retailer in Canada. Acknowledging that the integration of the businesses was difficult, Philips, however insists. “As it turned out, it was a fantastic acquisition, a great acquisition, because we got this footprint now that we didn’t have.” Historically Morrisons has been a north of England company, though it has spread south. Still, there is much room to grow. “There are seven million households that don’t have a Morrisons in their trade area. There’s
a lot of white space for us. We have a 12 per cent market share, one that has grown every month this year. So there is a big opportunity there to take the offer and predominantly, but not exclusively, that is in the south of England,” says Philips. He is coy about Morrisons’ interest in frozen-food retailer, Iceland. Morrisons is one of six firms, including Asda-owner Walmart, and a clutch of private-equity firms, to show interest in the controlling stake in Iceland, which is being sold off by two Icelandic banks.
November 2011 13
V E G E TA R I A N S
How many vegetarians are there out there?
With numerous groups pushing Meatless Mondays, Tofurky Tuesdays, or other campaigns to cut back on meat one meal or day per week, the Vegetarian Resource Group (VRG) wondered how often Americans are eating vegetarian meals. In order to find an estimate, VRG commissioned Harris Interactive to conduct a national telephone poll. Seventeen percent of Americans stated that they "don't eat meat, fish, seafood, or poultry at many of my
meals (but less than half the time)" and 16 percent don't eat these foods at more than half of their meals (but not all the time). Thus, one-third (33%) of the country are eating vegetarian meals a significant amount of the time (in addition to committed vegetarians), which certainly bodes well for companies producing vegetarian foods. In a 2008 VRG national telephone survey, 40 percent of participants said when eating out they often order a dish without meat, fish or fowl. For folks
trying to get a handle on the population very interested in vegetarian foods, though not vegetarian, the Baltimorebased VRG estimates that the figure to be range between 30 percent and 40 percent of the country. Among the highlights of survey, methodology for which appears below, approximately 5 percent of the country said they never eat meat, fish, seafood, or poultry. About half of these vegetarians are also vegan, meaning that they also don't eat dairy or eggs.
Methodology The survey was conducted by Harris Interactive by telephone within the United States on behalf of the Vegetarian Resource Group between March 30 and April 3, 2011 among a nationwide cross section of 1,010 adults (aged 18 and over). Figures for age, sex, race, education, region, number of adults in household, and number of telephone lines were weighted where necessary to bring them into line with their actual proportions in the population. In theory, with probability samples of this size, one could say with 95 percent certainty that the results for the overall sample have a sampling error of plus or minus 3 percentage points. There are several other possible sources of error in all polls or surveys that are probably more serious than theoretical calculations of sampling error. They include refusals to be interviewed (e.g., non-response), question wording and question order, and weighting. It is impossible to quantify the errors that may result from these factors. How Often Do Americans Eat Vegetarian Meals? 6% One meal per week 4% One full day per week 17% Many of my meals, but less than half the time 16% More than half my meals, but not all the time 5% Never eat meat, fish, seafood, or poultry 48% Thus we estimate this is the audience for good tasting vegetarian foods that fit individual needs 48% Say they eat meat, fish, or poultry at all my meals (The remainder didnâ€™t know, refused to answer, or said none of the above.) Never Eat Meat, Fish, Seafood or Poultry Male Female 5% 6% One meal per week 2% 5% One Day per week 13% 20% Many of my meals, but less than half the time 15% 17% At more than half my meals 2% 2% Never (though not vegan) 3% 2% Never eat meat, fish, poultry, dairy, eggs Don't Eat Meat/Fish/Seafood, Or Poultry At More Than Half Of My Meals 16% Total 15% Male 17% Female 17% Northeast 16% Midwest 17% South 13% West
November 2011 15
Potential pitfalls of vouchers
Shoppers planning to buy vouches as last-minute Christmas presnts are being warned about the potential pitfalls. The National Consumer Agency has published a list of tips to help peole get the best value from such gifts. The voucher industry is worth about €300 million annually in the Republic but up to 25 per cent of all vouchers sold each year are never cashed in either because they expire before consumers get to use them or they are lost or simply get forgotten about. This means about €75 million is wasted annually on vouchers which never get used. The agency asked all people buying vouchers to check the expirty dates on them and the terms and
conditions before making any purchase. Research conducted by the agency found that 36 per cent of consumers plan to buy vouchers this Christmas but almost a third never check the expiry date while a smaller number again loook at the terms and conditions in any great detail. “For many last-minute shoppers, a gift voucher is a popular present as they give the recipient flexibillity and choice,” the agency’s chief executve, Ann Fitzgerald said. “However, many vouchers have expirty dates - some last just six monthsand maybe less if it is from an online deal set, so it is important to check these time limits before you buy.” She also reminded people that if they buy or get
An organic food company, was among the companies found to have breached the Advertising standard Authority of Ireland’s code of conduct over the past three months. Organic dairy company Glenisk was rapped on the knuckles for a claim made by a consumer in an online ad that organic food was “100 per cent safe” and another statement fromt he same consumer that organic food was free from
pesticides. The authority said it condsidered the reference to “100 per cent safe” was a claim rather than an opinion and that Glenisk was required to substantiate it. It also said while the pesticides organic farmers are allowed to use are “naturallyy occuring”, they are still pesticides, so claiming organic food is free from pesticides was misleading.
Food ads breached standard
a gift voucher and the company goes into examinership, liquidation or receivership, they are treated as an “unsecured creditor”, and may not be able to redeem the vouchers
and urged people to redeem vouchers as soon as possible. The agency said people who received vouchers this year should contact the retailer if the expiry date is not clear.
TP buys Capespan Fruit Distributor Total Produce has increased its stake in South African fruit exporter Capespan. The move comes as Capespan announced it was in negotiations which, “if successfully concluded, may have a material effect on the price of the company’s securities”. The developments comes a few months after two other shareholders in Capespan embarked on a
bidding war for South Africa’s biggest fruit exporter. While Total Produce could potentially bid for Capespan, another possibility could Zeder, an investment company which specialises in agricultural assets. Total Produce indicated in September it was pursuing investment opportunities in both new and emerging markets.
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
KFCC > @E
@K& :I<;@K :8
:8I J ;
@C< KFG L
=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\
Business confidence weakens
Exporters’ order books remain resilient in the face of turmoil in the euro zone and slowing overseas economies, according to the Irish business and Employeres’ Confederation (Ibec). The survey shows that business confidence weakened in the Republic over the last three months. However, the study also shows that exporters are in a better position than businesses that only trade in the domestic economy. “The ongoing turmoil in the euro zone has clearly taken its toll on Irish business over the past three months, but the outlook for exports remains fairly strong as order books of this sector are
particularly resilient,” said Fergal O’Brien, the organisation’s economist. “Overall, business confidence levels have fallen sharply since the autumn, however, with the majority of businesses now having a negative outlook for both the wider economy and their own business situation.” The survey shows that all major exporting sectors are positive about the next quarter. Both the food and drink and information technology industries expect export sales to increase over the next three months, the survey shows. Overall 24 per cent of the 400 businesses surveyed expected to increase their work forces
Overall, business confidence has fallen sharply since the autumn.... all major exporting sectors are positive about the next quarter
over the next three months. Howeveer, overall business confidence in the Republic remains weak. The survey shows that confidence fell to minus 28 this quarter from minus 13 in the previous three-month period. Business people are even more downbeat about the next quarter, with
confidecne reading at minus 29. A minus figure int he survey indicates that Ibec received more negative than positive answers to each issue raised in the survey. The greater number, the more negative responses it received. The results are based on responses from 400 Ibec members.
$$$ W ]h[Wj d[m hWd][ e\ fheZkYji \eh _ji h[jW_b[hi Fec`e\ >`]k :Xi[ Xccfnj lj\ij kf jg\e[ fec`e\ fi `e Xep f] Fe\+XccËj +#,'' i\kX`c gXike\ij%
8ccfnj Zljkfd\ij kf gXp ZXj_ fe k_\ `ek\ie\k% Pfl [feËk e\\[ X YXeb XZZflek fi Zi\[`k ZXi[%
:ljkfd\ij ZXe gXp ZXj_ ]fi fec`e\ XZk`m`k`\j% K_\i\ `j ef e\\[ ]fi X YXeb XZZflek# X Zi\[`k ZXi[ fi ]fi g\ijfeXc [\kX`cj kf Y\ \oZ_Xe^\[%
:Xcc GfjkGf`ek fe (/0' )' +) )' kf ^\k k_\j\ ^i\Xk gif[lZkj `e pfli jkfi\ kf[Xp nnn%gfjkgf`ek%`\
Glaxo poised for sale
Bottom of the list? Spare a thought for the State’s supplieres. The recent proposal to increase the cap on the maximum size of supermarkets operating in Ireland is the latest in a number of proposed changes that may ultimately affect primary producers and suppliers to multinationals. While the proposed changes to Retail Planning Guidelines will first and foremost have an impact on small retailers, which are already struggling to complete with large, often out-of-town supermarkets, its impact may be felt further down the supply chain.
While the prospect of more international supermarkets entering the Irish market may be good for competition - and for consumers as prices are forced down - there is a fear that suppliers will bear the brunt of price cuts. Similarly, the news of the forthcoming two percentage point hike in VAT is bound to affect suppliers. The fear is that supermarkets, is absorbing the price increases, will turn to supliers to make up the difference. Suppliers already face huge demands in attempts to get their products on supermarket shelves.
€15m for half share Total Produce the fruit distributor will pay up to €15 million for a half share in Dutch fruit distributor Frankort & Doning Beheer Venlo and its subsidiaries. The irish company has agreed to pay an initial sum of €6 million for the stake, with additional sums of up to €9 million dependent on the company’s performance over the coming years. Frankort & Koning Beheer Venlo, which operates primarily in the Netherlands, Germany and
Poland, recorded turnover of €296m last year and has booked an average profit after tax of €2.7m over the last three years. The deal is subject to regulatory clearance. Ceo of Total roduce Carl McCann said the acquisition would help to increase his company’s presence in key European markets. The deal comes less than a month after the company upped its investment in Capespan.
One of America\s biggest buyout firms is close to clinching a €1.8 billion deal to buy top healthcare brands from Glaxo Smith Kline, which employs about 1,500 staff at its plants in Cork and Waterford. Thomas H Lee Partners, backer of companies such as Dunkin’ Donuts, has emerged as the frontrunner to buy products including Alli, the weight-loss pill, Solpadeine, the painkiller, and Nytol, a sleep aid. The buyout firm has experience of the pharmaceutical sector, as one of its current
investments is Warner Chilcott, the drug developer. Glaxo wants to sell the portfolio to concentrate on a smaller number of international consumer brands, including Panadol, Sensodyne and Lucozade. It follows the example of other large consumer goods companies, such as Unilever and Procter & Gamble, which have cut their ranges in recent years. Glaxo, one of the world’s largest drugs companies, hopes to wrap up the bidding by the end of this year.
Aryzta record rise in revenue Food company Aryzta maintained its full-year guidance as it reported a 9.6 per cent rise in revenue for its food business, helped by acquisitions. However, underlying revenue growth was slightly down on the previous quarter, with the Zurichbased company posting a 4.4 per cent rise in uderlying revenue, compared to a 4.7 per cent increase in the last quarter of its 2011 fiscal year. Recently acquired companies Honeytop, a British flatbread business, and Canadian company Maidstone Bakeries, contributed 6.7 per cent in revenue growth. “We have not seen any significant change in the
Owen Killian trading environment since September,” said Owen Killian, ceo. Revenue in Aryta’s Food Europe division, which represnts about 46 per cent of group revenue and includes the Cuisine de France brand, rose by 92. per cent in the quarter to €316m. Aryzta’s North American business, which accounts for about 47 per cent of revenues folllowing two major acquisitions in 2010, increased by 9.1 per cent in the quarter to €327.1m.
Frozen Foods Frozen Pizzas The frozen pizza market is one that has shown strong growth in the last few years, and is a market that has prospered in spite of the declining economic situation, which has gripped the country in recent times. Indeed, many might say it has performed well because of the current economic climate in a way, because now a lot more people are staying in rather than going out to eat. Frozen pizzas offer plenty of convenience for Irish consumers, as they are easy to cook, they don't take too long to prepare, and they are relatively cheap as well. In a study undertaken by Mintel in March 2007, the following findings were discovered: “The pizza market is showing strong growth, of 6% over the last year, driven by the performance of the chilled sector. Pizza has traditionally been seen as a convenient, quick to cook and easy to clean up option”. For anyone who has managed to sample the taste of frozen pizzas in the past, they will probably be hard pressed to disagree with this notion, and the growth level mentioned has continued to carry on in a similar vein. Other chilled packaged foods have also experienced good growth in the past. However, since 2008, as the full extent of the economic decline began to take effect, certain categories within chilled packaged foods experienced a slow-down in line with the general tightening of consumer discretionary spend. Convenience does remain important to a lot of Irish consumers, but it was always inevitable that their would be a reduction in spend and the greater need for value would impact on the choices that consumers make. Some would probably expect that pizza would suffer the same problems, yet pizzas have shown remarkable resilience during this sticky period, and are currently performing at a pretty decent level considering the challenges they (and other markets) are presently facing. The ease-of-use and selfcontained nature helps to make pizzas the ultimate convenient product, while it also remains popular with cash-
strapped consumers, who can see the potential value that pizzas offer as a meal option from a money point of view. While value is clearly very important in enabling manufacturers to sell their brands, probably the biggest factor behind frozen pizzas' current strong position is the increase in at-home dining occasions, as this has created far bigger scope for more indulgent pizza products as well as the more standard ones. With staying in effectively becoming the new going out, the pizza and bottle of wine combination is becoming ever more common in Irish households. This option is, of course, also available in Italian restaurants across the country, but crucially they are also far more expensive as well, which would explain why many people are going for the former option as opposed to the latter. Great strides have also been taken in product development in pizza in the last couple of years, which has resulted in a number of consumer needs being answered, ranging from health to premium ingredients and different recipes. Within the frozen pizza market in Ireland, there are five big brands who, between them, have a 90% share of the market overall. There is a considerable amount of competition between these brands, and those who are up at the very top of the pecking are usually made to work hard for their position. Owned by British company Northern Foods, the Goodfella's brand was first launched onto the Irish market in 1993. Now, 17 years down the line, Goodfella's has firmly established themselves as the number one pizza brand in Ireland. Goodfella's have always put great passion into the way that they create their pizzas (which are suitable for all ages and gender), and from the very beginning they set out to ensure that their products are more desirable to consumers than similar products provided by other brands and, so far, it appears to be working. What helps them in being so
successful is the way that they have created a number of sub-brands, each of which provide for a certain consumer need and/or want. These sub-brands are Goodfella's Delicia (Thin Stonebaked); Deeply Delicious (Deep Pan); La Bottega (Premium Ciabatta); Solos (Individual Stonebaked); Friday Fever (Large 11.5 Inch Stonebaked) This vast choice shows the diverse range that Goodfella's offers to their consumers. All of Goodfella's pizzas in Ireland are produced in their facilities in Naas, Co. Kildare and also in Longford, where they presently employ a total of 508 employees. Goodfella’s launched the New Ultimate Takeaway Pizza in November. Extensive research was carried out to ensure that Goodfella’s deliver the perfect authentic takeaway pizza. Unique recipes created from generations of experience, improved base made with quality ingredients and dusted with semolina to give a rustic, authentic look. The launch will be supported with a mixture of heavy weight through the line media. As a leading manufacturer of frozen food products in both Ireland and the UK, Green Isle foods are noted as a strong supplier of all things frozen. Being a part of the same Northern Foods' plc that houses Goodfella's, Green Isle Foods has experienced stellar growth over the last decade, and currently has an impressive portfolio of big brands in their artillery.
As champions of high quality convenience foods, Green Isle Foods Ltd. Is the market leader in a number of categories, though it does fall just short in this particular market. Their products are ideal for busy families, with their frozen pizza offerings proving to be extremely popular with groups of people. Green Isle has recently had a workforce of some 1,000 (though this has been cut by some 25%) and five state-of-the-art manufacturing plants, and over 50% of its sales comes from branded goods. However, the Company also has a substantial private label and co-pack contracts in Ireland, UK and Europe, partnering with large multiples, through to smaller chain stores, and family owned shops. They have managed to gain a market share of around 15% in the past year or two, and it is expected to stay at this general level for the next while at least. Currently ranked third in the Irish frozen pizza market, Dr. Oetker Ristorante Pizzas are quick and easy to prepare, and offer plenty of convenience for an expectant and eager Irish consumer. They currently have a strong presence in a number of different countries across the globe, covering the continents of Europe, Asia, Australia, North America, and South America. Dr. Oetker Ristorante Pizza offers a meal solution for the consumer who demands both premium quality and convenience. With its unique thin and crispy base and a variety of the finest toppings, Ristorante delivers an authentic Pizzeria flavour. It also only takes 10 to 12 minutes to cook, meaning that a customer won't have to wait too long for their taste buds to be satisfied. Dr. Oetker's Bistro range of authentic baguettes is also quite popular with Irish consumers and it is just as easy to prepare as well. With a nice crunchy outside lair and a soft inside base with delicious toppings, Bistro Baguettes are extremely convenient and are perfect for a family occasion, when a multitude of people
can sit down and sample the unique taste that Dr. Oetker has to offer.
The frozen foods market is one of the most recognisable categories in the overall Irish market, and it has managed to perform well even during the current economic climate, which has seen certain categories suffering a few setbacks to say the least. In the past year, frozen food has experienced something of a renaissance with the belt-tightening shoppers among us being particularly enamoured with frozen foods in recent times. Consumers are increasingly taking on board the widely spread message that frozen foods are as good as more expensive chilled options, which had led to an increase in sales for most types of frozen foods. On top of this, buying frozen can also help consumers to cut back on food wastage. Indeed, it was reported last year by the Irish Independent that the average person throws out some â‚Ź1,300 worth of goods each year because they are past their sell-by date. This statistic may well shock quite a few people, and now that people are becoming a lot more conscious about recycling and also how much money they spend, a dramatic increase in this figure should not be ruled out. Frozen chips is one of the sectors in the frozen foods market, and it has achieved good growth in the last few years. One major reason why they are performing at good levels is because of the convenience that is provided by frozen chips, as it is very simple to prepare and it can be ready to consume in a very short space of time. It also provides good value for money, which is something that consumers will be looking for as they try to find the best way to save money in any way they can, as their income may not be as strong as it was before. In the past, the frozen chips market has had a value of 33 million approximately, and it has managed to maintain this level heading into 2010, with a strong provision for growth
always a live possibility. Their volume has also been quite strong with recent figures of 23,700 million kilograms showing just how large a market frozen chips is. There are plenty of well-known brands in this market, with some of them being recognised instantly by consumers, with one or two proving to be synonymous with the use of frozen chips.
November 2011 23
Frozen Chips Always a well-performing and highly-regarded manufacturer, McCain has continued to dominate a very competitive frozen potato sector, and currently holds a 71% value share of the frozen oven chip market. It also has a 33% value share of the potato specialities sector. The ongoing 'It's All Good' campaign, which McCain have been working on for quite some time, has helped to reinforce McCain's reputation for making good, tasty, favourite food from the simplest of natural ingredients. McCain Home Fries are probably their most recognisable product, and they remain the number one selling oven chip in Ireland and, with a variety of cuts available in the McCain Home Fries range, it is a favourite with all the family. To build on the success of its original Oven Chips, McCain has launched a new TV campaign, which emphasises the simple ingredients that are used in their production, e.g. 'just potatoes and sunflower oil'. In potatoes specialities, McCain is currently the brand leader in the roast potatoes, wedges and shapes categories, and they are constantly delivering new innovative products, demonstrating its commitment to growing the frozen potato sector. Amongst these innovations has been the introduction of a new McCain simply Gorgeous range, which
comprises Chunky Chips and Roast Potatoes, which are basted in goose fat. 1st Choice Unislim chips and ready meals offer the Irish consumer a broad range of ready meals and frozen chips of the highest quality. As a major category leader, 1st Choice Unislim Chips are presently available in two different varieties: Original Oven Chips and Family Chunky Chips. 1st Choice's also has a core range of frozen vegetables, which are now available in brand-new consumer promotional packs. This range contains a new 750g selection that represents terrific value and includes 1st Choice Country Mix, Luxury Mix, Leaf Spinach and Whole Green Beans. This, along with their frozen chips selection, helps to being a new dimension to the freezer, but it also maintains excellent retail sales, delivering premium quality as well as ensuring that retailers' profits are kept at a steady rate. The company is also quick to acknowledge the importance that innovation and fresh ideas has in the effort to convince consumers that their brand is the best. They offer plenty of convenience, and are ready to eat
within minutes, which is undoubtedly the key to their success. Green Isle is currently Ireland's number one brand in the frozen vegetable category, and their frozen chips range is proving to be just as popular as the other products that they sell to Irish consumers. Their success has been driven by a range of variants that are available in 'Buy any two for â‚Ź2.50' range. Though chips are not part of this offer, it does nevertheless give vital coverage to what Green Isle can offer to Irish customers, and this kind of deal can lead to people looking at the other products that are on sale from that particular brand. The brand has performed extremely well over the past three to four years, during which time the brand has grown in value by some 30%. Last Christmas also saw Green Isle providing even greater value to Irish consumers with a selection of products that offers on 50% extra free attached to them. A new selection of products have been released by Green Isle, such as an impressive stir-fry range and mushy peas as well, which have proven to be quite popular since their release.
Frozen chips aren't being left behind though, and earlier on in 2010 their Oven Crisp Chunky Fries 1.5 kg product was on sale for just â‚Ź2, which was excellent value when you consider how much convenience is provided by frozen chips. The produce in the Green Isle bracket is developed in accordance with the best suppliers, and they ensure that all the vegetables that are used for their products are frozen within two hours of harvesting. No other processing is applied an all products are free from artificial flavours, colourings or preservatives.
Frozen Potato Products
Potatoes have, for a long, long time been a major part of Irish households, with families the country over seeing them as an ideal supplement for most meals. Though consumers are cutting back on a number of food products, as a result of their income being lower than it was previously, it is unlikely that the potato market will suffer as badly as other markets during this period as most people would see potatoes as more of a necessity than a luxury. For a long time, there has been a link between Ireland as a nation and
the potato crop as the number one staple item in the national diet. Indeed, until quite recently the potato went unchallenged as the most important source of carbohydrate in the Irish diet. However, in the modern era, in line with broader changes in eating habits and experience of international food tastes, there has been a steady increase from other carbohydrate based foods such as rice and pasta products. Of course, this kind of competition is quite healthy for the Irish market as a whole, but it is something that major potato manufacturers will be eager to keep an eye on. Nonetheless, the importance of potatoes in the Irish diet was highlighted in a North/South Ireland Food Consumption Survey, which found that potatoes contributed 11% of the total food energy intake, whilst providing 20% of dietary fibre and 27% of Vitamin C intake respectively. A major point made in the study pointed to the fact that there is an excessive dietary fat intake in the Irish diet, which has been linked to an increased risk of coronary heart disease. The survey also discovered that the average intake of fresh potatoes was 158g per person per day across the island. Of course, there are different kinds of potato products, namely fresh potatoes and frozen potatoes. Though frozen potatoes may not seem like the most accessible of the two, they do have a niche position in the Irish marketplace regardless. As they are, speciality frozen potato products in Ireland represent a small but developing market opportunity. Small niche markets exist to supply speciality potato products to the Irish retail and catering markets. These tend to be typically unique product offerings or specialist manufactured items e.g. croquettes, roast potatoes, waffles, hash browns, potato wedges, shapes and baked potatoes. The main frozen potato brands that can be found in Ireland include Green Isle, Birds Eye, McCain, Rita Ahern, First Choice and retailers private label. New product innovations and brand
launches have been driving the frozen speciality potato market, and the continuance of these promotions by manufacturers is arguably the key for the frozen potato market to keep on growing. Unquestionably the biggest player in the frozen potato market is McCain, who are growing the frozen potato and pizza categories by launching a new range of innovative products. They are, of course, also a very prominent member of the frozen oven chips market, where they currently hold a 71% value share. They are quite strong in this category as well though, with a 33% value share of the potato specialities sector highlighting just how formidable they are in this area. Amongst their current innovations are McCain Footballs, which are balls of creamy mashed potato, lightly prepared with sunflower oil for a tasty crunch. McCain feel that this can, with the correct application, become a firm family favourite. They also have a number of new launches, such as McCain Pizza Maximo and McCain Pizza Anytime, which appear to be perfect for sharing or snacking. Pizza Maximo's products are deal for those looking for a spicy bite, while McCain Pizza Anytime comes in three popular varieties, all of which are ideal for light lunches or after-school snacks. Though these products are part of another market completely, if they become popular, they may have the power to draw attention to McCain offerings in other categories like frozen potatoes and frozen oven chips. An already well-established selection from McCain in this market is McCain Prepared Potato range, which has been given an eye-catching new look in order to drive sales of favourites like McCain Wedges, including Lightly Spiced, Sea Salt & Black Pepper and Summer Wedges. These lines proved to be ideal for barbecues and parties in the summer just gone, and they were popular during the 2010 World Cup just gone as well.
November 2011 25
Frozen Foods Frozen Potato Products
Based in Clondalkin, Co. Dublin, 1st Choice are a fully Irish brand operating in the frozen foods market. They have been on Irish shelves since launching in the early 1980s, during which time 1st Choice have become a strong and innovative brand leader, spanning vegetables, chicken and potato products. In addition to this, 1st Choice partners with Unislim to bring low fat oven chips and ready meals to market. They enjoy a good positioning in the frozen potatoes market, and although they are probably better known for their offerings in the chips and ready meals markets, they put a big effort into their potato ranges as well. A big reason for this is the way that they view innovation with such importance, as they are constantly coming up with new and fresh ideas to make sure consumer interest in their brand does not wane. Good promotions are essential for frozen potatoes because, while it still quite a convenient meal to make, it does require a bit more care than their products do in other markets. Therefore, they need to make sure that they come up with a Unique Selling Point (USP) that will see more and more consumers investing in their frozen potato products. In a market where there are a number of major players that are all
vying for a share of the market, Potato expert Rita Ahern deserves great credit for the way that she has managed to maintain a relatively strong position in the frozen potato category. Her products have been available on the Irish market for quite a few years, but 2002 saw Rita Ahern potatoes becoming available in the UK for the first time. Rita Ahern's Traditional Irish Potato Cakes, Potato Rings and Wedges 'n' Bacon Stir Fry are billed as “a tasty and convenient” alternative to standard spuds. Rita Ahern products are made from fresh Irish potatoes for their texture and flavour to a family recipe that has been handed down from generation to generation. They only use 100% traceable ingredients and their products are also free of preservatives and artificial colourings. Their Potato Cakes and Potato Rings can be baked in the oven, but it can also be grilled or shallow fried from frozen as well. Their Wedges 'n' Bacon Stir Fry range is advertised as a meal in itself. 2003 was also a worthwhile year for Rita Ahern, as The Vegetarian Society announced that they were including their products in their 'Seedling Symbol' vegetarian approval scheme. Total frozen potatoes sector is worth almost €15m, and has grown by 17% in volume. The largest sector within frozen potatoes is Waffles, accounting for 38% of value sales. Birds Eye Waffles alone account for almost 28% of total potato sales. Birds Eye are the No.1 frozen waffles brand with 75% market share of waffles. For every 1 pack of branded competitor waffles sold, Birds Eye sell 8 packs.
Frozen Prepared Fish Products
Within the frozen section, the frozen prepared fish market is one of the strongest categories, and is currently valued at almost €45 million, which gives the brands within the market plenty of scope to expand, which is a scenario that a number of them are taking advantage of.
The category is on the rise at the moment as well, the volume sales of frozen fish having witnessed a growth of 7% according to findings that included the final 12 weeks of 2009. At present, the largest sectors within frozen fish are coated fillets with 50%, fish fingers with 22% and natural fillets, who themselves have a presence of some 13%. This category is one that is keen to promote innovation and the recent initiative undertaken by BIM/Irish Sea Fisheries Board, the State agency with responsibility for the Irish fishing and aquaculture industry, is one that is proving to be extremely beneficial to all concerned. The Seafood Circle initiative is being used to support and encourage restaurateurs and retailers to consistently deliver the highest standards of seafood and service to their customers. In total there are three categories of membership for this initiative, namely hospitality, seafood specialist and supermarket seafood counter, with a total of 175 members across the country in 2010. All multiple, symbol groups and independent supermarkets that offer a range of seafood from a wet fish counter, as part of a much greater offering of other foodstuffs, can apply for membership in the Supermarket Seafood Counter category.
The retail element of the programme is assessed by personnel in BIM who have a great deal of experience, and they are assisted in venture by independent their assessors. Applicants generally receive unannounced visits during the assessment period and report their findings to an independent approvals committee. Spot checks can also be carried out as required. This initiative is expected to continue into 2011, when the criteria for membership will once again be focused quite heavily on the quality of fish, customer service and, obviously, adherence to standard labelling and hygiene practices. For example, it is a basic requirement for membership that they carry a minimum range of 12-14 species on the wet fish counter. This is proving to be a real boost to the ever-growing frozen fish market, and the many brands/manufacturers that currently occupy it. Frozen fish is, in general, a very competitive market and a lot of work is required by brands if they want to set themselves apart from the pack. Donegal Catch is one of the big leaders in the frozen fish market, and is also currently commanding a 67% market share in the convenience sector, which is helping it to maintain its strong position as a brand leader in the frozen fish category. In keeping with the always changing consumer trends, the brand has always created plenty of excitement in the frozen fish category through the launch of innovative products, which is something that they are eager to keep going into future years, as they can't afford to let their guard slip at any point. Consumers are now becoming far more sophisticated and adventurous with their fish purchases, so it is no surprise that Donegal Catch are continuing to look for new species and recipes, which will help to recruit new consumers into the category. Although their cod and haddock products are key to the make-up of the brand, their sustained success has seen them gradually moving into less traditional species. One of these is the
Yellow fin Sole, which is lightly dusted with lemon and paisley, and also the hake, lightly dusted with tomato and basil. All the preparation that is needed for them is to pop them in the oven for 20 minutes and it's done. It is perfect for using as a main meal, or in other situations with a salad for those who are may be a little more health conscious. These two products can also be cooked on the BBQ, which obviously makes them perfect as an addition to any BBQ during the summer. Birds Eye are the market leader in Fish Fingers, with almost 80% market share. “Birds Eye 10’s Cod fish fingers”, is the No.1 Fish Finger in Ireland with Birds Eye selling 6 times more packs of fish fingers than the nearest branded competitor!** In keeping with consumer trends, Birds Eye have always created excitement in the frozen fish category through the launch of innovative products. Birds Eye Omega 3 fish fingers brought the consumer added health benefits, and more recently the launch of Birds Eye Salmon Fish Fingers has brought more ‘adult’ appeal to the sector. The latest innovation brought to the market by Birds Eye is the “Bake to Perfection” range. This new range answers 3 key consumer concerns about fish as many consumers 1) do not like to touch fish 2) do not know how to prepare fish and 3) do not like smell of fish. Birds Eye Baked to Perfection is a new range of deliciously tasty fish fillets and seafood complimented with the perfect sauce. Each variant comes with two individually wrapped portions and Birds Eye’s innovative packing technology “Bake Perfect bag” TM prevents the fish from drying out during the cooking process while preventing unwanted aroma Launched in October 2009, the Birds Eye Bake to Perfection range includes Salmon, Pollock and Prawns. Within 12 weeks of launch Birds Eye Bake to Perfection accounted for almost 30% of natural fish sales. “Bake to Perfection Salmon” is now the 3rd most popular natural fish product.
Birds Eye are now extending the range with the launch of Ireland’s most popular fish with Birds Eye Baked to Perfection Cod. This launch will be supported with a TV campaign and strong in-store activity. Young's Seafood Ltd is the UK's number one seafood supplier, and it now offers a wide range in Ireland. Fish is undoubtedly an essential part of the frozen food category, and Young's is a well-established brand within the fish category. It is a popular choice for consumers, fish is healthy, convenient and offers plenty of varieties to them. However, as consumers aren't sure how to handle or prepare fish and Young's believe that its brand breaks down the barrier that tends to exist between fish and consumers, by offering great products without any fuss. Some of the Young's products that are currently available in Ireland include: Young's Admirals Pie (number one selling ready meal in the UK); Chip Shop 2 Fish Fillets Sea Salt & Malt Vinegar (Chip Shop is the UK's fastest growing frozen food brand); Young's Best Ever King Prawns; and Young's Scampi with a hint of Lemon. The Young's brand was only launched in the Republic Of Ireland in November 2008, and Young's say the response it has received from retailers and consumers have been “fantastic”, and it is now in the process of extending this range further past 2010.
November 2011 27
Frozen Foods Frozen Prepared Meat Products
A number of leading brands in the value-added meat category have been delivering dramatic, double-digit sales growth and have been attracting a loyal customer following for the last few years and, with the continuing rise in popularity of frozen foods, this can be expected to continue. The frozen meat category can, at times, be a difficult one for consumers to get their head around though. For instance, the term frozen beef (which is, of course, a major member of the meat industry) can often evoke images of unappetizing chunks of rock-hard meat hanging in a butcher's freezer, but it is a much more complexed term than that. It can also refer to irresistible barbeque beef brisket, boneless ribs, top-quality steaks and hamburgers, which are able to offer the quality, taste, convenience, variety and value that are all common factors for the most successful of frozen foods. Indeed, the category is quite broad and diverse to the point that many company executives are not entirely certain how to label it. Some say "Value-added Meat", while others plum for "Chilled Provisions". In the past, it has also been termed as "Meal Solutions", and there are still those who go with this one as it describes the wide range of meat products for multiple occasions being offered to retailers and consumers. Exports are very important in this market and, in total, all combined beef, sheep meat, pig meat, poultry and livestock exports total an impressive €2.584 billion. Ireland, with its mild temperate climate for growing grass, forms the basis of the thriving meat & livestock sector. Beef exports, which saw a 7% growth rate in 2008, accounts for 2/3 of all meat and livestock exports. Exports of 483,000 tonnes, mainly to Britain and continental Europe, amounted to €1.686 billion. 90% of Ireland's 1.6 million slaughterings are exported, making Ireland the largest net exporter of meat in the northern
hemisphere. Ireland is proud of its export approved processing plants, as they have 34 in total, all of which have a reputation for being modern and dynamic. Ireland currently has 4.3 million hectares of farmlands and, of this total, 80% is grassland, which gives the country a distinct competitive advantage when raising cattle for beef. This means that their chances of exporting meat is quite good, with 2008 showing that they had exports that were up to the value of €166m, making Ireland the second largest exporter of lamb and sheep meat in the EU. Irish sheep flock totals 6 million head, including 3.1 million breeding ewes. The pig meat business in Ireland is also strong, and is currently valued at over €1 billion. It is a technically progressive, highly efficient industry with 4 processors accounting for 90% of all production. All of these factors help frozen meat to be a vibrant market and, as a consequence, the main brands in the market can come into their own. With a current market share of around 35%, Big Al's is the number one brand in the frozen convenient meat market, and that is expected to continue to be the case moving forward down the line. Of course, this is a tough time economically speaking, but sales of frozen foods are continuing to grow in the current economic climate, so there is plenty of room for certain brands to take advantage. During this time, Big Al's are focused on developing products that meet changing consumer expectations. While traditionally frozen meat products have been available in ready prepared formats such as burgers or nuggets, certain new products like Big Al's Mini Fillets, Sweet Chilli Mini Fillets and Fajita Strip offer consumers the opportunity to prepare meals for the whole family like curries and stirfries straight from the freezer. It is clear that Big Al's currently have a strong grasp of the frozen meat market, and they have a very real presence in other parts of the Irish marketplace as well. They are currently
providing the poultry category with a major boost with their modern meal products, and they are offering retailers the chance to reach out to those who may not have purchased traditional frozen convenient meat in the past. The key though to the frozen meat category, and by extension to Big Al's as a brand, is convenience, especially in terms of preparation and storage. This helps to make meals easier to cook each time, and Big Al's say that they are also delivering retail benefits such as adding 14% value to the frozen convenient poultry category, and they seem to be succeeding in bringing new members to the frozen convenient meat sector, which will always be a big priority for the company. Quorn is another fine addition to the frozen meat market, and acts as an excellent alternative to the more recognisable brands that currently occupy this category. At the heart of all Quorn products is a special ingredient, made from a nutritious member of the fungi family, called mycoprotein. Mycoprotein is a great source protein and fibre which is also low in fat, low in saturates and low in calories, which makes it rather desirable for health-conscious consumers. As well as that, it contains no cholesterol or trans fats at all. This is why Quorn products are always generally lower in fat, saturates and calories than their meat equivalents. Quorn products are not just good for you, as they are also tasty, versatile and easy to prepare.
Quorn have a wide range of products that are suited to any level of culinary expertise. Whether it be mince or fajita strips, or topped escalopes and picnic eggs, there is something for everyone to enjoy. Quorn mince and Quorn pieces can also be used in a host of popular dishes such as spaghetti bolognese, stir-fries and chilli con carne. Quorn can also be bought as a ready meal, which can used by those who are a little short on time. Quorn cottage pie can act satisfactorily as an alternate to its meaty cousin, and there is also a rich and rewarding Quorn lasagne that can be enjoyed as well. There is a lot of interest in the health benefits that can be provided by a diet that is rich in mycoprotein, and particular the role than it can play in lowering cholesterol and controlling someone's appetite. Quorn is very strong in the United Kingdom as well and, just like here, it is seen as the leading mycoprotein brand. In terms of Ireland though, it is probably more popular in Northern Ireland than it is in the Republic, as it currently holds a market share of 36% in the meat market there. Just like Quorn, Weight Watchers From Heinz offers a healthy solution in the frozen convenient meat market, which is something that more and more people are going for these days. It also has an advantage over Quorn in this category, as it would be more recognisable to consumers across the country. They are currently the leading brand in the frozen ready meal sector with 76.6% value share of healthy
frozen ready meals and 23.5% value share of the total ready meals market, which is valued at â‚Ź17.2m. Manufactured in Dundalk, Weight Watchers are also the leading brand in the healthy eating sector, with their range of frozen ready meal continues to drive the frozen ready meal category with convenient meal solutions that has something all consumers, who are looking for a healthy lifestyle, but are, at the same time, hoping to avoid a compromise on taste. They have a number of products that are quite well-represented in the frozen meat category. These include Chicken Tikka Masala, Ocean Pie and Tomato & Basil Chicken, which can offer an extensive range of popular recipes to shoppers. A number of additions to their range in the past year or so have added the quality and reliability that they offer, and it is expected that it will add significantly to their presence in this category.
Frozen Prepared Poultry Products
The past 12 months has been an interesting one for the Retail Chilled Ready Meals Market, in terms of overall value and volume in particular.
Estimates up to March 21st of this year show that the market has a value of around â‚Ź38.72 million euro, which is a 10.2% fall in value from where it was 12 months ago. However, the volume of product sold rose by some 4.4% over the same period, which would suggest that insiders should have plenty of cause for optimism as the market moves forward in the next couple of years. As a whole, this market is a very unorthodox one, as 72% of the products are sold under private labels. This tells that it is a market where innovation and creativity plays a major part, with every small label getting the opportunity to make their mark. It is not a sector that is ever likely to be dominated by big-name brands, though the current stranglehold that private labels have in the chilled market may not last forever. Within the Chilled market, there are plenty of sub-categories, which are well known to consumers, and one of these is the Chilled Poultry sector, which is quite popular in both the Republic Of Ireland and Northern Ireland. Sales and growth has been quite strong in the poultry market, and even now, they remain to be pretty solid.
November 2011 29
Frozen Prepared Poultry Products However, consumers have been concerned in recent months about the level of imported poultry goods that have come into the country, and feel that certain sectors should be supporting local foods rather than relying on goods from other countries outside of the European Union. In a study undertaken by Irish safe food agency Safefood, it was revealed that 54% of consumers are concerned about the importing of food from nonEU nations. There were also 43% of people who are concerned about the importing of food from other EU countries. There are a number of concerns that have been raised in this report, such as poor regulations and/or standards of food production in other countries (48% voiced concern), poor quality (28% of those polled) and fear of contamination (24%). 60% of people were concerned about imported fresh meat, the food group that appears to have more people worried than any other one. Unfortunately, meat/poultry is only slightly behind on 57%, which means that there are plenty of things for manufacturers to consider as they try to improve the market in the future. A return to the production of indigenous
products would make for a far more reliable item that would be bought by even more people than it is now. Not all of the brands in the poultry market are taken from Ireland, and there are a number of companies across the country that are leading the way by offering Irish consumers the opportunity to buy freshly-made poultry fresh from their manufacturing plants. Birds Eye are the No.1 brand in frozen Poultry, with over 43% market share. Birds Eye are the No.1 Kids Poultry Brand, with 59% share and the No. 1 Adult Poultry brand with 46% share. In the last 6 months, 7 of the top 10 selling frozen Poultry products were Birds Eye products. The No. 1 selling poultry product in the last 6 months (sales €) is Birds Eye Chicken Dippers 24’s. Birds Eye have continued to innovate throughout 2010 with the launch of the successful Goujons and Southern Fried Chicken Wings range. Birds Eye have also brought true innovation to the Poultry category with the launch of the new Birds Eye Baked to Perfection Chicken Fillets range. Extending the concept from the massively successful Fish range, new Birds Eye Poultry Baked to Perfection is a range of succulent chicken breast fillets complemented by herb infused butter sauces and wrapped in real foil Bake Perfect bags which locks in all the flavour. The range will come in four tasty variants – Chicken Chasseur / Garlic & Herb / Red Wine & Mushroom /Tomato & Basil. Based in Craigavon in Northern Ireland, Moy Park is a major poultry processor, and with the penchant amongst consumers in the Republic to travel up to the North to engage in cheaper cross-border shopping, it has, like a lot of other manufacturers based in the North, managed to sell well throughout the 32 counties of Ireland. Cross-border shopping has dropped off in the last year or so ever so slightly, but Moy Park is widely available in the Republic at present, so it certainly has a strong presence in the market regardless. It strengthened further in the past couple of the
months with their purchase of the family-owned O'Kane Poultry business for a deal worth in the region of £26 million. Running an operation from Ballymena, Co. Antrim, O'Kane Poultry was founded in 1932 by the late W.P. O'Kane and, right from day one, it strived to the highest standards of product quality and consumer care whilst offering the consumer value for money. They have been a major supplier to both the retail and food service sector, supplying brand and own-label products to blue-chip companies throughout the UK and Ireland. While there is always a degree of skepticism when a family-owned enterprise is bought out by a big-name manufacturer, judgment should probably be reserved on the pros and cons of this idea until it is up-andrunning, as it could turn out to be a good move for both parties. People will, of course, by concerned that O'Kane Poultry will lose its identity as a result of this deal, but it is also possible that their business may improve as a consequence of falling in under the Moy Park bracket. For certain brands/manufacturers, it is not easy to gain a strong position in the poultry market, which makes the 14% value that Big Al's has added to the poultry category all the more impressive. Big Al's are, in general a very well-constructed brand, and they currently enjoy a 35% market share in frozen convenient meat. As sales of frozen foods continue to grows in the current economic climate, Big Al’s remain focused on developing products that meet consumer expectations, which are always changing as time goes by. Big Al's modern meal products have reinvigorated the poultry category, and have in the process offered retailers a unique opportunity to reach current non-purchasers of more traditional frozen convenient meat. The key to their success in this category is the convenience that they offer, in terms of preparation and storage, and making meal times
easier. As well as adding value to the poultry category, the biggest positive that can be attributed to Big Al's is the way that they have managed to entice those who have not previously purchased any frozen convenient meat into purchasing their products.
Frozen Ready Meals
Since the turn of the century, there has always been a strong competition between different markets in the Irish economy, and none more so than between the frozen and chilled foods markets. Indeed, in many parts of Western Europe, the competition between these markets are extremely strong and who the stronger of the two will be as we look forward down the line is very much up for discussion. Within sectors such as ready meals and pizza, the frozen market has experienced something of a revival in recent years, thanks in no small part to a greater emphasis on quality by leading manufacturers. Alongside this, price-conscious consumers are now recognising the value for money that can be provided by frozen foods as the country tries to battle through an economic crisis. As a result, growth is now beginning to level off across many parts of the chilled food industry, which has seen the likes of the frozen ready meals market benefiting in ways that go well beyond their expectations. However, it isn't all plain sailing for the frozen ready meals sector though,
as consumer research carried out in the United Kingdom indicates that, for a large of selection of the population, quality and choice is still believed to be much higher for chilled foods compared with frozen. For example, research carried out for Bord Bia, the Irish food promotion agency, by Kantar Worldpanel shows that the combined chilled and frozen market for ready meals at retail level in Ireland is worth €59.34 million. However, other estimates, by Leatherhead Food Research has estimated that the value of the market is approximately €63 million. Kantar Worldpanel also estimated that the frozen ready meals market in Ireland was worth some €20.64 million in the year up to 21 March 2010. This represents a fall of seven per cent in terms of value, with volume declining by one per cent. This is something of a set-back for those involved in the market, but it should be pointed out that this represents a significantly better performance than that recorded by the chilled ready meal category. During the same period, the chilled ready meal category suffered a decline of around 10%, which has seen the value of the market dropping to €38.7 million, further closing the gap between the two. It was also discovered in these findings that both purchase frequency and price per kilo fell by seven per cent. While the fall in price per kilo may not be that big a concern, it is to be expected in the current climate, the purchase frequency is something that certainly is a worry, and the various manufacturers in the frozen ready meals market will have to come up with some innovation or mechanism to address this issue. Of products sold, 61% were branded with 39% sold as a private label. The proportion of frozen ready meals sold on offer fell from 22% to 20.9%. Again, though this represents another decrease for the market, frozen ready meals are still performing quite healthily, and it has actually benefited in a way as a result of the economic downturn, due mainly to the
value and convenience that it offers consumers, who are trying to tighten their purse-strings. There are a number of brands that are quite popular in this category, but there is one in particular that has an especially powerful position. Heinz are unquestionably the leading brand in the frozen ready meal sector, with their Weight Watchers from Heinz range being one of the main reasons for this. They have a value share of 76.6% of healthy frozen ready meals, and a 23.5% value share of the total ready meals market, which is valued at €17.2m. Manufactured in Dundalk, Weight Watchers is also a leading brand in the healthy eating sector. They also offer an extensive range of popular recipes such as Chicken Tikka Masala, Ocean Pie, and Tomato & Basil Chicken. Once a quite powerful player in the frozen ready meals market, Birds Eye's market share in this category declined significantly around the turn of the century, as a result of the increased competition from Heinz, and the own brand labels. This is something that they have found it hard to recover from, as Heinz continue to dominate the market, and even though they still have a worth of around 10% in the frozen ready meals market, this is still a relatively low percentage when you consider the reach they once had on the market. Birds Eye operate in this category with the brand name Walls, which offers a complete meal range for consumers. In addition to complete meals, they also have a variety of meal centres in their fish range. Birds eye products are imported from the UK and distributed in Ireland by Clayton Love. Nestle's existence in the frozen ready meals market is represented by a brand called Findus which has, along with the Lean Cuisine brand, helped them to gain a 5% share of the market overall in the past few years. They also have a New York Takeout (Chinese meals) under the Crosse & Blackwell brand name. Findus products are produced in and imported from the UK.
November 2011 31
Frozen Foods Frozen Vegetables
As mentioned in numerous places elsewhere in this publication, the frozen foods category is a particularly important one for the Irish economy, with the levels of imports and exports that are recorded by the category having a major bearing on how the economy is viewed as a whole. Exports are crucial in this day and age, and with a number of indigenous frozen food items currently available on the Irish market, it is clear to see just how important it can be as a food category. Frozen vegetables is one of the sub-categories that falls in with the frozen food market, and they have proven to be quite popular at times with Irish customers, as they can see the nutritious qualities that vegetables, whether they be frozen or non-frozen, can provide. What helps to make frozen vegetables so useful for consumers though is that, as well as being relatively cheap, they are quite simple to cook and it doesn't take long for the meals to be fully prepared. The convenience category has provided the frozen vegetables market with plenty of competition in recent years, but ready-to-cook products have shown extremely strong growth, and they are now really putting the pressure on the convenience category. Frozen vegetables, especially, has shown some strong growth, and has benefited greatly from a 'new image' marketing that has managed to keep existing customers interested, as well as enticing some new ones. This 'new image' is focused on locked-in nutritional goodness, replacing the old perception of frozen vegetables as second rate versions of fresh products which, of course, is clearly wide of the mark. As well as being a general part of a family meal the whole year round, frozen vegetables are also known as being part of a Christmas dinner, with many people taking peas along with the traditional turkey and ham. For many though, Christmas dinners had become very expensive, which means that it is no surprise to hear that the
price of a Christmas dinner in 2009 had fallen by an estimated 30%. Deflation and cut-throat competition between retailers has helped to bring this about, and it is believed that, last year, a Christmas dinner for a party of 10 would only cost €117, compared to €160 during the Christmas period of 2008. The price of frozen vegetables, during this period particularly, fell by some 10%, and Irish households were able to pay €5.40 for a 3kg pack of frozen peas, as opposed to €6 the year before. Fresh turkey fell by some 5% across butchers' counters as well, while customers are also plumping for a 5kg bird over the 7kg range, which had been popular in recent years. While it is reasonable to suggest that this drop in price for frozen peas would be seen as a set-back for retailers, the fact is that this development has been welcomed by consumers, so it was certainly a smart move be manufacturers to reduce their prices, especially around the Christmas period. A number of brands in the frozen vegetables market have proven to be quite popular, and have managed to separate themselves from similar manufacturers/brands. The total frozen vegetables market is worth approx. €26m. With 27 % share of total sales value, Peas is one of the largest sectors of Frozen Vegetables, along with Single Variety Veg (also 27%). Mixed Veg is the next largest sector, accounting for 18% of sales value.
Birds Eye are the No.1 brand in frozen peas, with 57% share of total Peas sales value Birds Eye frozen Peas are worth over €5m a year!**. The top 3 selling frozen vegetable skus are all Birds Eye Peas! Birds Eye, producers of the freshest, tastiest frozen peas, is relaunched its vegetable range under the new Field Fresh range - a delicious and healthy collection of frozen vegetables guaranteed to make any meal mouth-watering. Birds Eye’s Field Fresh range, will incorporate frozen favourites Garden Peas, Petits Pois, Steam Bags and Soya Beans also offer a wide variety of tasty vegetables bursting with flavour and essential vitamins. Frozen within hours of picking to retain their freshness, all vegetables within the new Field Fresh range are packed full of nutrients right up until the moment you eat them. Vitamins are locked in at the point of freezing to ensure there is no deterioration in quality or nutritional value. Only Birds Eye has the Field Fresh guarantee - they pick and froze their Field Fresh vegetables on the same day and their experts are on hand to ensure that only the very best vegetables are selected. Fresh vegetables can lose much of their essential nutrients between the time they are harvested and the time they are consumed and research has shown that Birds Eye Frozen Green Beans retains up to 45% more vitamins than Fresh Green Beans. Birds Eye Field Fresh vegetables also helps to prevent wasting money by
saving consumers from having to throw out fresh vegetables which deteriorated or “gone off” as Birds Eye Field Fresh vegetables retains its freshness and are convenient to use straight from the freezer. Birds Eye, Ireland’s No.1 Frozen Food brand with 18% value share is supporting the new Birds Eye Field Fresh vegetable range with a massive marketing campaign including TV, radio, press, outdoor and in-store activation. Green Giant has the unique position of being both a member of the canned vegetable market and the frozen vegetable market. Though they may well be best known for their canned vegetable range (for instance, they are the market leader in the sweetcorn market), their frozen vegetables selection is still quite popular and instantly recognisable. They are owned by the General Mills corporation in Minnesota, which has a current annual revenue of $14.7 billion dollars. As well as Green Giant, they also house brands like Old El Paso, Cheerios, Yoplait, Cheerios and Lucky Charms, so it is quite clear that they are a force to be reckoned with. However, the Green Giant product is also sold under the Le Sueur brand, though the latter is not particularly well-known to Irish consumers or, indeed, consumers in Great Britain for that matter. Green Giant has benefited down through the years from some smart marketing, with a succession of television advertisements (showcasing a giant green puppet) proving to be
very useful in promoting the name Green Giant to nationwide shoppers. One of their most recent advertisements came in 2005, when The Jolly Green Giant (as he has become known) starred in a 2005 Mastercard commercial entitled 'Icons' along with nine other mascots from other companies (including Pillsbury Doughboy and Count Chocula, who are also the ambassadors for General Mills products) having dinner. Though their sales have had their ups and downs in the past few years, they have nevertheless remained quite steady, and they are expected to maintain a strong share in the frozen vegetables for a while longer at the very least. Long seen as a family favourite in Ireland, the Green Isle brand is leading the way in growing the frozen food category. Viewed by Irish consumers as delivering trusted “good food” values, and developing consistently good quality products, the Green Isle brand has got the range and variety to cover all side-of-plate needs. Green Isle have recently introduced a new look across the range and this is proving to be a success with consumers and retailers alike. Green Isle has enjoyed the position as Ireland's top brand in the frozen vegetable category for quite a few years now, and their success has been largely driven by their range of 14 vegetable variants, which have become widely available in a 'Buy any two for €2.50' range. The brand, like a lot of those
available in this market, have performed well in the past few years, even though the economic climate has suffered a number of setbacks. The last three years has seen the brand grow by 30% in value, while last Christmas saw them offering up to 50% extra free on a number of their products. They have introduced a succession of new products such as a stir-fry range and mushy peas, which thus far have proven to be a huge draw for consumers. Green Isle works alongside the best suppliers, and ensures vegetables are frozen within two hours of harvesting. No other processing is applied and all products are free from artificial flavours, colourings or preservatives. Overall, about 30% Green Isle Foods production is sold in Ireland, with the remaining 70% of the produce being exported.
November 2011 33
Largo shows profit
Raymond Coyle Irish crisp maker Largo Foods increased its profitability last year despite a €4 million decline in turnover. Latest accounts for Largo Food Exports Ltd show that the company increased its pretax profit to €2.56 million in 2010 from €1.96 million in the previous year. Turnover declined to €84.1 million from €88.2 million in the period. The company had an operating profit of €10.1 million in 2010 compared with €9.9 million in the previous year. Its bottom line performance was boosted by a combined €4 million reduction in the cost of sales and net operating expenses, and a €1 million decline in its exceptional costs. Largo chief executive and majority shareholder Ray Coyle said the reduction in turnover was the result of its decision to cease producing own-label
crisps for the UK market. “There was no money in it,” he said. “So we lost about €8 million or €9 million in sales, but we increased our branded sales in Ireland by to 8 per cent.” Coyle said Largo’s turnover this year would increase to about €95 million. “Our exports are up by 35 to 40 per cent, primarily driven by Velvet Crunch in the UK. Sales in Ireland are up about 4 to 5 per cent.” Largo closed 2010 with accumulated losses of €12.4 million, down from €13.8 million in the previous year. Earlier this year,the company restructured its borrowings. Loans of about €66 million with Bank of Scotland and Rabobank were replaced by a shareholder loan with German company Intersnack, which increased its stake in the business to 40 per cent as part of the transaction. This new loan is at a significantly lower interest rate for the Ashbourne-based firm nd will yield a “savings of €3 million a year” in interest costs, said Coyle. “We now have the chance to grow the business by 10 to 12 er cent in Ireland,” he added. Largo’s interest costs amounted to €6.6 million in 2010, down above €300,00 from the previous year. The company sells about 4. million packets of Tayto in Ireland every week. other brands include Hunky Dory and King.
New jobs for Bord na Mona New jobs were recently announced at Bord Na Móna headquarters at Newbridge, Co Kildare. Bord na Mona is to create 91 jobs as part of a €6 million investment over the next three years, including a grant of €860,000 from Enterprise Ireland. Bord na Mona chief executive Gabriel D’Arcy said, “Innovation is about changing the whole organisation around its strengths and capabilities and focusing those on he markets and the customers.” The result was to enable Bod na Mona “to be more cometitive and indeed, more enduring”, he added. The announcement is part of Bord na Mona’s innovation programme that has already seen recruitment commence for 20 high-tech positions, which are expected to be filled by March 2012. The 92 jobs announced are in addition to these 20
positions. Enterprise Ireland is supporting the work of the innovation division of Bord na Mona in a number of high-technology growth areas such as clean technology and carbon reduction. Bord na Mona also announced a new strategy to collaborate with and mentor start-ups and small and medium enterprises in the midlands. The 20 jobs currently being recruited are skilled and graduate positions in business, science and IT. The additional 92 jobs will be in R&D, engineering, science and business and will comprise graduate and skilled positions. the total value of this R&D programme is €6 million, which represents a 50 per cent increase in Bord na Mona’s R&D spend over the previous three years and an intensification of its transformation effort.
Multimillion seizure Customs officers backed up by gardai have made a multimillionn euro seizure of cigarettes following an intelligence-led search of a premises in Co Monaghan. The smuggled haul of nine million Presidentbrand cigarettes has an estimated retail value of €3.8 million. The officers swooped on a large shed used as a warehouse at Clontibret, about five miles from Monaghan town and a
Once again top of its class, Tipperary Natural Mineral Water has scooped 3 international gold medals at the British Bottlers Institute (BBI) Awards in London. This brings the total since 1989 to an impressive 10 Gold Medals. This highly prestigious
short distance from the Border at South Armagh. An official said the cigarettes were smuggled into the country in a 40 foot container labelled “Sports socks” at Dublin Port. The container arrived at the port on a ship from Malaysia via Rotterdam before being moved to Co Monaghan. The swoop is believed to have followed a tip-off and subsequent surveillance operation in the Monaghan
BBI Competition for Waters & Soft Drinks has been running since 1965. The panel consisted of Seven judges all based in the UK and in the ‘Natural Mineral Water Blind Tasting Class’ they awarded Tipperary Water the following:
area. Revenue authorities estimated the seizure represented a potential loss of €3.2 million to the Irish exchequer, and they have said the seizure is part of a strategy to combat a huge wave of tobacco smuggling. The latest seizure brings to over 100 million the
number of cigarettes seized by Customs so far this year. Collectively these hauls represent a potential loss of up to €45 million to the exchequer.
GOLD MEDAL - CLASS A – Tipperary Natural Mineral Water – Still • GOLD MEDAL - CLASS B – Tipperary Natural Mineral Water – Sparkling • GOLD MEDAL – CLASS E– Tipperary Flavoured Water – Peach • The award ceremony which had the largest turnout ever took place on Thursday last at a Gala Dinner in Vintners Hall in London when the THREE
Gold Medals were presented to Peter Cooney, Manager, Tipperary Water Cooler Division. Commenting on the Award Marie Cooney, Director said “We are proud in our 25th Anniversary year to accept three more Gold Medals and we will continue to be active in producing a quality natural product at our source in Borrisoleigh, Co. Tipperary.” Tipperary Water, a family run business, is part of the Gleeson Group of companies.
A Taste for Gold
November 2011 35
he results of the annual Bord Bia industry survey, completed in late December 2011, showed increased optimism among food and drink manufacturers across all categories. In total, 85% of exporters viewed the prospects for their business in 2012 as good or very good. This compares to 70% in 2010. Almost two thirds of respondents rated their business prospects as much improved/improved compared to a year earlier. In terms of sales prospects, 69% of respondents, compared to 64% in 2010, stated that they had increased their sales forecasts for the year ahead. According to the exporters, the Export Performance by Sector principal drivers behind this increased optimism include: securing new customers (86%); new product Sector 2010 2011(e) % offerings (71%); new markets – change geographical or channel (66%); improved competitiveness (59%) and Meat & Live Animals 2,520 2,795 +11% better price prospects (31%). Dairy & Ingredients 2,273 2,665 +17% In terms of challenges, 81% cited Prepared Foods 1,375 1,540 +12% difficulty in passing on increases in input costs, compared to 70% in Beverages 1,152 1,220 +6% 2010. However, difficulty in securing Seafood 371 420 +13% price increases showed a slight Horticulture& Cereals 193 210 +9% decrease from 75% to 69%. Some 71% listed the focus by consumers on value for money, compared to 65% in 2010 as a prices resulted in the value of Irish by The prospects for the meat & concern and competition between 3% to reach an estimated €210m. livestock sector in 2012 remain retailers fell from 59% to 52%. A stabilisation in export availability broadly positive with a tight supply The strength of the sector is further and ongoing strong prices for lambs situation both in Ireland and across endorsed by the impressive led to the value of Irish sheepmeat Europe expected to help maintain employment records – some 42% of exports rising by 10% to reach strong returns for beef exports. Feed respondents stated that they had €180m. price developments will play a critical increased full-time staff numbers over Lower live cattle and sheep exports role in both the pigmeat and poultry the last year with a further 46% more than offset strong pig shipments sectors while after more than a decade maintaining numbers in full time and despite stronger prices prevailing, of decline some recovery is anticipated employment. the value of livestock exports is in the volume of sheepmeat estimated to have declined by 16% to exports.poultry exports rising. Meat & Livestock €205m.
The combined value of meat and livestock exports grew by an estimated 11% to €2.8 billion in 2011. Increased export revenues were recorded for beef, pigmeat, sheepmeat and poultry, which offset reduced exports of livestock. The value of beef exports is estimated have jumped by 15% or over €200m during 2011 as lower volumes were offset by a strong increase in cattle prices. A rise of 9% in export meat plant pig supplies combined with a rise of 9% in average pig prices helped to boost the value of Irish pigmeat exports by18% or almost €60m. Stronger poultry volumes combined with a modest increase in
(l-r): Alan Cotter and Michael Carey
The prospects for 2012 remain generally positive with global demand likely to be sustained at levels well above historical averages.
Dairy Products & Ingredients Overall, it is estimated that the value of dairy exports increased by 17% to exceed â‚Ź2.66 billion, helped by stronger prices reflecting strong global dairy demand for much of the year and higher milk production in Ireland. For most products, European prices increased by 10% to 15% during 2011 with the strongest increases evident in powders and butter. Global prices showed similar trends. The Fonterra auction price for WMP increased by 7% in 2011, which followed a rise of 40% in 2010. Milk output in Ireland increased strongly throughout 2011 as a combination of good grass growth and high prices boosted output. For the 10 months to October, deliveries were running 6.5% higher. However, deliveries slowed down considerably over the autumn months and for the year a rise of 5% in output
is anticipated. All export destinations showed strong growth, led by other European markets, which increased by almost a third to â‚Ź880 million. This leaves the region accounting for a third of the total. Exports to International markets also performed well, helped by strong shipments to China, South East Asia, the Middle East, Africa and the United States. The prospects for 2012 remain generally positive with global demand likely to be sustained at levels well above historical averages. If global stocks begin to build, it will put some downward pressure on prices, although overall market fundamentals remain sound in many regions. The greatest uncertainty exists within Europe given recent economic developments. Following a strong increase in output during 2011, the early months of 2012 are likely to see reduced Irish milk output.
November 2011 37
markets emerge to replace lower sales to some traditional destinations. Much will depend on economic developments, particularly in the euro zone, which will have a strong influence on consumer spending. Despite the current economic situation, consumers in many parts of the world seem to be still willing to purchase premium spirits. The sector faces challenges in the form of ongoing high raw material prices, pending legal changes relating to excise on wine based creams and changes to trade classifications for Irish creams. Seafood
The market environment for Prepared Food manufacturers remained competitive throughout 2011 However, the strong cost focus within the sector and an ever increasing focus on product development and expanding the range of customers and markets served helped the sector deliver a commendable export performance. Overall, export values of products covered under the prepared foods category increased by an estimated 12% to â‚Ź1.54 billion. Exports of consumer ready products recorded a rise of 7%. The strongest performing categories during the year were value added dairy, meat based products and chocolate confectionery. These helped to partly offset a difficult environment for other categories. The improved efficiencies evident among Irish manufacturers leaves them in a better position to compete in key markets. However, ongoing high commodity prices, promotional and currency pressures allied with economic uncertainty and accompanying austerity measures, seem set to create a challenging marketing environment for prepared food manufacturers in 2012. However, the strong drive by manufacturers to adapt existing products and develop new ones to meet changed consumer shopping requirements and diversification to a broader range of markets should help export values.
The global market for Irish beverages improved during 2011, despite ongoing economic uncertainty, pressure on price levels and intense competition across most major categories. A strong focus on new product development and increased volumes to emerging markets helped to boost trade. Overall, exports are estimated to have increased by 6% in 2011 to reach almost â‚Ź1.22 billion. The growth in the value of exports was led by whiskey, which continued to show strong double digit growth while cream liqueurs, beer and cider showed more modest growth. Exports of nonalcoholic beverages increased in 2011, with water and coffee performing particularly strongly. The prospects for Irish beverage exports in 2012 remain largely positive for 2012 with further good growth anticipated in whiskey exports while cream liqueurs, beer and cider are also expected to grow as new
The value of Irish seafood exports showed strong growth in value during 2011 despite volumes falling by a fifth. All categories of seafood put in strong export performances as reduced lower volumes of many species were offset by higher prices and a greater spread of export markets by the sector. Overall for the year, the value of seafood exports is estimated to have increased by 13% to an estimated â‚Ź420 million.
The herbs and spices market is one that tends to rely on good imports and exports quite a bit in their quest to gain prominence in the overall Irish market. Given the current economic situation that Ireland presently finds itself in, the need for imports, especially, is higher than ever. Unfortunately, the import of herbs and spices are relatively small and are decreasing in value and volume as the years go by. This means that opportunities are limited for developing country suppliers, which is something of a worry for a lot of countries across the globe, Ireland included. The herbs and spices market is certainly a good distance off being one of the biggest markets in the Irish economy, but they do, nevertheless, garner an extremely niche position in the marketplace, and they do provide a very suitable alternative for Irish consumers. Herbs, such as Irish Moss (Chondud crispus) and Arrowroot (Maranta arundinacea) are used extensively in a number of common foods that can be easily found on grocery shelves. Irish Moss is normally subjected to a rendering-purifyingbleaching process to produce carrageenan that is used as a bulking and thickening agent in dairy products, beverages and also sauces. Arrowroot, which has a high starch content, expansive quality when added to water and sticky binding nature, is used frequently in bakery products, usually as a gluten-free ingredient for glutenfree dietary needs. It is plain to see then that there are plenty of uses for herbs, as well as spices and, with so many Irish consumers looking for supplements to go with their main meals, there is certainly plenty of room for this market to maintain its current position, as well as expanding it in future. Currently, there are a few brands in this market that are making waves, and are showing the other members of the category the way forward. Established since 1933, Goodalls has gone on to become one of Ireland's most recognisable herbs and spices
brands, and look like they are set to maintain this strong position as we enter into the 2010's. They are renowned for their high quality herbs and spices, as well as their colourings and flavourings. Goodalls offers an extensive range of herbs, spices, salts and peppers to cater for even the most adventurous of consumers, which gives us some sort of indication as to how they have gained the popularity that they currently hold. For the record, their most popular varieties are also the most poplar herb, spices and peppers in general. They are: 8 Herbs; 12 Spices and 3 Peppers. They are a wide and far encompassing brand, as they also include products in the categories of Liquid Seasonings, Olive Oils and, of course, Colourings and Flavourings. Though they have a wide variety of products available in their portfolio, Goodalls are still well aware that consumer boredom may kick in after a while if you keep offering them the same products year after year. For this reason, Goodalls are always looking for new varieties that will keep consumers happy, and will keep the Goodalls products coming off the shelves in the months and years that follow. Therefore, Irish customers should expect a lot more innovations and promotions from Goodalls as time goes by. The Goodalls range is owned and distributed by the Premier Grocery Products Ireland Ltd Company, who have their offices in Dublin 15. Premier Foods are one of the major manufacturers/distributors in Ireland, and they house a number of top brands such as Ambrosia, Sharwoods and Mr. Kipling, so Goodalls are certainly in good hands. Schwartz is another herbs and spices brand that has a strong presence on the Irish market, and it is one that has a very strong output across the world as well. The brand was first established back in 1889 by William Schwartz, who was the son of a German immigrant, in Halifax, Canada. William E. Schwartz, the son
of the founder, was the very first person in Canada to sell pure spices. From these early beginnings, there was always a great emphasis placed on quality, and William Schwartz worked hard to convince people that it was better to buy pure, top quality products in small quantities that poor quality in bulk. From England he imported the first bicycle with pneumatic tyres and travelled throughout Nova Scotia selling his spices. The past 25 years has been an interesting period for Schwartz, as they were bought out by McCormick and Company, Incorporated, who are the world's largest producer of herbs, spices, seasonings and flavourings. However, following rationalisation within the United Kingdom, the McCormick branding was phased out and replaced by Schwartz. Most of their herb range is available throughout Ireland, with flavours like Basil, Chives, Bay Leaves, Bouquet Garni, Coriander Leaf, Dill and Mint being regular fixtures on Irish shelves and, subsequently in Irish households as well. The Living Flavour brand is fast becoming one of the most favoured ones in this market, and it comes from a family that is in the third generation of its family. George Long first set-up Oakland Nurseries in the 1920s, a market garden business based in Rathgar, South Dublin, which grew vegetables, herbs, bedding plants and cut flowers and supplied them to the Dublin wholesale market, as well as to local shops and residents living in and around Rathgar. Then in 1979, his son Joe and Joe's wife Edna took over from the retiring George, before their sons, Mark and Joe Junior, joined up in 1990. Launched at Easter 2009, Living Flavour and its business has been reorganised around the Living Flavour herb range. A key benefit from this reorganisation has been the ability of the company to anticipate and plan for herb production well in advance of delivery dates. This hadn't been the case with the previous flowering-plant-
based business. In the short time since Living Flavour was launched, sales volume has already increased by 50% and the management are now confident that the sales have the potential to increase four-fold, and are forecasting a turnover of some â‚Ź2-2.5m for 2011. This would represent a massive achievement for the brand, and even though it remains to be seen if they will actually gain this turnover, they certainly appear to be on course at the moment. In addition this, and this next factor is significant, the new brand is commanding a much higher profit margin right across its fresh herb product range. The rationale for this brand project was that the company could add more customer value for shoppers and user experience by creating a brand that was both recognisable and distinctive. In so doing, the company sought to decommodotise this strongly growing and high-margin sector of the vegetable-food retailing area. Though these things always have the potential of going south, Living Flavour certainly appears to be fulfilling the above criteria thus far, and they are showing that it is possible in the current climate to introduce/reintroduce a new product onto the market.
November 2011 41
Fruit & Vegetables
The Horticulture Industry is an important sector in the Agri Food Industry in terms of output, trade and local employment. The annual value of the farmgate output of Horticulture is €370ml. This is made up of edible horticulture crops valued at €320ml and amenity horticulture crops (eg plants & flowers) valued at €50ml. The key fresh produce crop categories include: Potatoes, Field Vegetables, Glasshouse (Protected) Food Crops, Mushrooms and Outdoor fruit crops. The potato continues to be Ireland’s most important crop in terms of area grown and volume produced. This year it is estimated that over 11,000 ha of potatoes were grown. It has been a good growing year with increased yields and good quality reported. A combination of good yields at home this year and a poor potato harvest in a number of European countries particularly in Eastern Europe and Russia has opened up the opportunity for potato exports from Ireland into these markets. The Field vegetable production area is 4,600Ha with farmgate output valued at €70ml. The production area has remained relatively stable over recent years but there are less growers involved indicating a trend of consolidation within the sector. The key crops produced include Carrots, Cabbage, Broccoli, Cauliflower, Parsnips and Swedes. Glasshouse (and protected crop production) has a farmgate value of €50ml from 382ha of production. Strawberries, Lettuce and Tomatoes are the key crops produced in this sector. The outdoor fruit sector is dominated by Apple production which has an output valued at €6ml. The Mushroom Sector has a farmgate value of €100ml with 80% of total production going to the UK market. Despite the challenge of currency fluctuations the sector has continued to perform well and the Irish Industry has firmly established itself as a key supplier on the UK market. With the exception of mushrooms who have a significant export market the domestic fresh produce market is
the most important market for the fruit and vegetable sector. The retail market is the key market outlet for fresh produce. According to Kantar market research the retail market for the total fresh produce category was valued at €1.16bn to the year ending October 2010. While both value and volume measures are back modestly on 2009 figures, data for the last quarter (ending in October 2010) has show both value and volume figures moving back into positive growth when compared with the same quarter in 2009 which maybe an indication that growth is coming back into the fresh produce category. The other notable market for produce is the food service market. The Food Service Sector has had a challenging time with less people eating out now than in recent years and the subsequent affect this has on the demand for produce. The fresh produce sector has a number of challenges to manage. These include improving and managing competitiveness particularly in the context of potential suppliers from other lower cost base countries. The marketplace is now very competitive with ongoing promotional activity exerting downward pressure on market returns. In addition buying
power has consolidated to a small number of key buyers. The economic downturn creates its own challenges with the impact it has on demand for products. Currency fluctuations in the context of Sterling can impact on mushroom exports and the potential import of produce into Ireland. Fresh Produce has a key benefit in that it is widely recognised as a critical element in a healthy balanced diet. It is widely recommended that each person should be consuming at least 5 portions of fruit and vegetables per day. Recent Bord Bia research indicated that only 45% of adults claimed to be eating the correct 5 portions per day. This would indicate that there is an opportunity to increase the consumption and sales of fresh produce in Ireland. Consumer promotion and school campaigns to highlight the key health benefits of consuming fresh produce will contribute to this effort. While the Irish Fresh Produce Industry has a significant market share for key produce lines in season opportunities still exist to increase market share for certain lines. The highlighting of the availability of local supplies of fresh produce with good environmental credentials is viewed positively by consumers. Opportunities will exist in niche markets such as local sales to farmers markets and supplying the organic market. Bringing innovative and new products to the market particularly where they provide convenience at good value points will also offer opportunities.
NEW Lighting g your your fire has h never never ver e been been easier! ea e Ideall for f lighting open fires & stoves Simple Simp ple & quick tto use Just add a a any ny solid fuel tto o creat createe a beau utiful full fire fire in minutes minut utees beautiful Clean, Clean, n o odourless dourless a and nd eeco co friendl friendly ly For For more more information visit:
bordnamonafuels.ie/firemagic bordna amonafuels.ie/firema agic
R E TA I L E R S
‘Dual Support’ for Gala Retailers Gala is an Irish-owned, premium, convenience Group, established in 1998 and employing over 3,000 people across both its retail and wholesale operations. The Gala Group has 284 stores in Ireland, of which 202 are Gala franchise stores. Through the company’s association with the Stonehouse buying group, it has access to buying power in excess of €2 billion. Support for Retailers Central to the Gala business model are its retailers. In 2011, Gala Retail Services’ number one priority was to support its retailers country-wide. Gala has been assisting its stores with expertise on generating cost savings, developing new structures in-store, overall financial planning, store assessments and strong value-focused promotions, developed to increase footfall. In 2012 Gala intends to continue its ‘hands on’ support for retailers,
helping stores to ensure that they’re in a robust position for future growth, alongside the Gala Group. Value for Money Proposition After a period of consolidation and focusing on supporting its dynamic group of retailers, Gala hopes to increase the number of Gala stores in Ireland in 2012. Support for Retailers Gala has a value-for-money retailer proposition, which is perfectly suited to
the current climate. A dual support model for retailers offers a unique service to stores. Gala wholesalers can respond quickly to changes in the marketplace, whilst Gala Retail Services focuses on building the Gala brand, developing new concepts for stores that add real value, and building structures to ensure best standards in retailing. Gary Desmond, CEO of Gala Retail Services, explains: “Gala’s business model is well placed to attract new retailers in today’s climate.
The Gala model has been extremely well received over the past few years with 24 new retailers joining the Gala Group in 2011....We have ambitious plans for the next few years.”
“Highly competitive members’ fees, combined with the dual support, enables retailers to benefit from lower costs and the ability to react quickly to consumer demand.” “The Gala model has been extremely well received over the past few years, with 24 new retailers joining the Gala Group in 2011. ”Yes, we’ve lost a few retailers along the way, however we now have a robust group of dynamic retailers who are all committed to excellence in retailing. We have ambitious plans for the next few years.”
Building the Gala brand From a marketing point of view, Gala’s focus in 2011 was on driving awareness of Gala, through its sponsorship of Nationwide on RTE and the Irish Language Media Awards, and building an online community via facebook. Gala also continued its progressive rebranding programme following the introduction of the fresh and modern new-look identity for Gala stores. Gala plans to have this completed by 2013. In addition, rebranding is now more affordable, enabling all stores to avail from the many benefits that rebranding delivers. Reasons to Rebrand to Gala in 2012 Gala is a young, vibrant convenience Retail Group that prides itself on its professional and quality group of retailers. It’s imperative that when the shoppers visit Gala, whether it be in Cahersiveen or Clones, that they enjoy a cohesive GALA shopping experience. With the strength of the Group behind them, each store is encouraged to take a personalised approach, which is tailored to what its customers require. Gala retailers see this benefit in their bottom line and it’s one of the Gala USPs that enables retailers to maintain a sense of independence. Support and training of new stores is key to Gala's success and its phased approach ensures consistency across the Group. Phase One is to educate new
retailers on setting up their store. Gala advises new shop owners on their location, size, exterior planning and design, interior design, layout and equipment, sourced from recommended suppliers. Once these logistics have been finalised, Gala Retail Services’ personnel offer support with the implementation of features such as contract management, category management, fresh food department set-up, merchandising, staff training and store openings. Phase Two focuses on the ongoing support and services provided by the Gala team, such as business planning, financials, turnover advice, customer service support and promotional activity. Technology support is also offered online with the G.R.O.W. website for Gala retailers. Gala is looking for progressive and forward-thinking retailers, who strive to deliver exceptional standards. Excellent customer service, combined with solid business acumen could make you a ‘Gala’ retailer that can grow with the Gala Group.
Contact Gala Retail Services on 045 910 066, @ <http://www.gala.ie> www.gala.ie or via facebook.com/galaretail
November 2011 45
12 Dundrum Business Park Dublin 14
Tel; Fax: Web:
01 296 6000 01 296 6002 www.gala.ie
Group Name; Private Label:
GALA RETAIL SERVICES
Gala own label
MANAGEMENT: Chairman: Chief Executive: National Sales Manager: National Dev. Manager:
Liam Peters Gary Desmond Peter Flanagan Michael Oâ€™Shaughnessy
Tel: Fax: Web: Group Name; Private Label: Cash & Carry: Delivered Business: Wines & Spirits:
BWG Foods Ltd PO Box 1470 Greenhills Road Walkinstown Dublin 12 01 409 0300 01 450 3660 www.bwg.ie
BWG FOODS LTD Spar, Mace, Family Value, Chefs Kitchen Value Centre, XL, Xpress Stop Spar, Spar Express, Eurospar, Mace BWG Wines & Spirits
MANAGEMENT MD Spar: MD Mace: MD Wholesale: Marketing & Comms Director: Head of Fresh Trading: Head of Ambient: Spar Marketing Manager: Eurospar Market Manager: Marketing Manager Wholesale:
Peter Kealy Willie O’Byrne John Moane Suzanne Weldon Daniel O’Connell Jean Watson Caitriona Hayes Caitriona Cousins Margaret McLaughlin
Upper Quartertown Mallow Co Cork
Tel; Fax: Web:
022 30100 022 30171 www.barrygroup.ie
Group Name; Private Label:
Homestead, Costcutter Own brand
MANAGEMENT: Managing Director: Commercial Director Head of Sales & Marketing: Buying Manager:
Jim Barry John McAllen Norman Lenihan Denis Cronin
Winners All The Way
With 265 stores under its belt, the Barry Group see plenty of room for expansion, and the company remains on the lookout for acquisition opportunities within the wholesale sector. This potentiol is mirrored by the companyâ€™s proposals for its central distribution centre in Mallow. The current facility is 150,000 sq ft and the Barry Group is sitting on planning permission for an extension of 55,000 sq ft. However, for the present the Group is focused on getting the best out of its retailers, one store at a time. November 2011 49
W INNER S
Inaction is not an option in this climate... Costcutter retailers know that to survive and succeed they need to adapt their businesses, embrace new innovations, and respond to customer needs and trends.”
Jim Barry At the Group’s recent Costcutter conference Jim Barry, managing director of the Barry Group laid out the challenges for the coming year. “Inaction is not an option in this climate,” he said. “Our Costcutter retailers know that to survive and succeed they need to adapt their businesses, embrace new innovations, and respond to customer needs and trends.” “Smart thinking is key to survival in this business,” he added. “As retailers, we must continue to push the boundaries and raise the standards for quality and customer care across our business. We must identify new ways to increase turnover and margins by introducing new product lines, be open to new ideas, and, above all, focus on delivering an unrivalled customer experience” Innovation has long been part of the Barry Group. 1996 saw the
Mark and Tara Malone, Costcutter Bray Co Wicklow Winner Express Store of the Year
Mr & Mrs Peter Gaughan, Costcutter Balla Co Mayo Winner Foodmarket Wine Department of the Year opening of Quik Pick, the group’s first franchise. Today the Group has 135 Costcutter outlets; the off-licence chain Carry Out and BuyLo, Ireland’s first domestic discounter. New initiative such as energysaving concepts to reduce the overheads for operators; new changes to store specification and the roll-out of a new initiative that allows retailers to order solid fuel as part of their ambient delivery, are being put
forward by the Barry Group are new instore concepts that have been jointly developed between the group’s store design department and suppliers. Offering fuel during the winter months is a new direction for the Barry Group. “A lot of businesses dabble in fuel sales, but we feel we can bring a professional approach to the category, creating a dedicated point-of-sale offering, reasonable pricing and
Tomas Moore, Costcutter Hospital Co Limerick Winner Off-Licence of the year
promotions for the customer,” said Barry. “We also believe fuel sales will bring more people in store, and we may see additional benefits in incremental sales.” Fresh produce is another area in which the Barry Group has performed ahead of the market, with the group having invested in ensuring that it can deliver quality produce at the right price. Barry believes that in these tough times people tend to get consumed by negativity. “But in reality, people need to stand back and look at the opportunities that are out there. That’s what I want to instil in everybody that works for us - a ‘come out fighting’ attitude and a ‘can do’ attitude. It all starts with getting people motivated.” One of the Group’s core strengths is the close relationship it maintains with its franchisees, under the Costcutter, BuyLo, Quik Pick and Carry out banners. Most of all the focus has been on staff empowerment, ensuring that all staff in the group are dedicated to the same goal. It’s a work ethic that has been in lace since James A. Barry, Jim’s father, first established the company in 1955, and it is arguably even more relevant today. “I’m a firm believer that you cannot achieve what you want unless your staff are fully motivated and aligned to your way of thinking,” says Barry.
November 2011 51
W INNER S
Aaron Massey, Costcutter Rathfarnham, Dublin 14 Winner Foodmarket Store of the Year
Tom Liddy, Costcutter Roslevan, Co Clare Winner Supermarket of the Year and Best Fresh Produce Display
November 2011 53
Group Support Office, Johnstown Naas Co Kildare
Tel; Fax: Web:
045 837 960 045 876 353 www.londis.ie
Group Name; Private Label:
Londis own label
ADM LONDIS PLC
MANAGEMENT: Chairman: Chief Executive: Oâ€™Riordan Group Marketing Manager:
Leo McAuley Stephen Ruth Norton
Head Office (ROI):
Musgrave Group Musgrave House, Ballycurreen Airport Road, Cork
021 480 3000 021 431 3621
Belfast Harbour Estate 1-19 Dargan Drive Belfast BT3 9JG
048 07 8710 048 907 8701
MANAGEMENT REPUBLIC OF IRELAND: Managing Director: SuperValu Sales Director: Centra Sales Director: Marketing Director:
Donal Horgan Ciaran Levis Michael Morgan Ray Kelly
MANAGEMENT NORTHERN IRELAND: Divisional Managing Director NI: Business Development Director: Sales Director SuperValu & Centra: Sales Director Mace:
Nigel Briggs David McLaughlin Nigel Maxwell Graeme Kerr
MUSGRAVE RETAIL PARTNERS Group Name: Group Private Labels: Centra/Supervalu own label November 2011 55
Mace c/o BWG Foods Ltd PO Box 1470 Greenhills Road Walkinstown Dublin 12
01 409 0300 01 450 3660
BWG FOODS LTD
MANAGEMENT: Managing Director: Sales Director: Business Develop Manager: Marketing & Communications Director: Fresh Food Services Manager:
Willie Oâ€™Byrne Alex Banahan Seamus Robinson Suzanne Weldon Elaine Clohosey
Head Office: Tel; Fax:
PO Box 1470, Greenhills Road Walkinstown, Dublin 12 01 4090300 01 4503660
Group Name; Group Private Labels Cash & Carry: Delivered Business: Wines & Spirits:
Spar, Mace Value Centre, XL Stop & Shop Spar, EuroSpar, Mace, Nearbuy BWG Wines & Spirits
BWG FOODS LTD
MANAGEMENT: Managing Director Spar: Managing Director Mace: Managing Director Wholesale Division: Operations Director: Marketing/Communications Director Sales/Retailer Advisory Serv. Director: Retail Development Director:
Peter Kealy Willie Oâ€™Byrne John Moane Graham Walters Suzanne Weldon Malachy Hanberry Declan Ralph
Mace Sales Director: Trading Director: Head of Fresh Trading: Head of Ambient Trading: Trading Managers:
Alex Banahan Simon Marriott Daniel Oâ€™Connell Jean Watson Edel Flood Orla Jones Aidan Lambe Deirdre Lee Barry McDonnell Joe Wogan Senior Trading/ Promotional Manager: Michael Noonan Category Management: Jane Ryan Head of HR: Peter Donohue Head of IT: Veronica Sullivan Retail Technology Manager: Fergal Kinnane Spar National Sales Manager: Colin Donnelly EuroSpar National Sales Manager Nigel Scully Value Centre Commercial Manager: Stephen McNulty
November 2011 57
Chewing Gum The Chewing Gum market has shown itself to be a good area for innovation in recent times, with manufacturers exploring different possibilities in relation to both flavour and experience. Product development in the past couple of years has led to the inclusion of exotic flavours and combinations, as well as a number of different textures such as gels, which are sometimes all used within the one product. There has also been recent innovation concerning the development of products with a dental care purpose, and this has proven to be particularly popular. Koncept Analytics published a report on the global chewing gum market, viewing it as 'a high growth confectionery segment'. It found that one of the major factors driving the growth of the chewing gum industry has been the higher consumption of sugar-free gums. Indeed, the segment has grown some 4% above the overall growth of chewing gum markets globally over the past couple of years. The well-being category is regarded as being another chewing gum category, and is currently recording an approximate annual growth of around 15%. This subcategory is based upon functional items offering health and wellness benefits, and will go some way towards appeasing those who have questioned how much benefit can be derived from consuming chewing gum. The chewing gum industry has been recognised for quite some time as being a duopoly market, with Wrigley's and Cadburys controlling more than 60% of the market share. Of these two, Wrigley's is undoubtedly the market leader globally, but Trident, the chewing gum brand controlled by Cadburys, is also performing admirably in the UK market. However, in spite of this dominance, there has been a growth in the mints market sector of the chewing gum industry, driven by the use of sugar-free and soft and chewy variants. A number of new products have made their presence felt in this area including Trebor Extra Cool Mints, Mentos Soft and Chewy, as well
an Extra Ice Sugar Free Mint which has been developed by Wrigley. It is quite clear that chewing gum is very popular amongst Irish consumers, and there are certain reasons why this is so. One possible reason is in relation to where chewing gum products are placed in convenient stores. Chewing gum tends to be stored, alongside confectionery and snacks, beside the checkouts. Given that shoppers will end up spending at least half of their time in the queue when they go shopping, they will at some point come across the area where chewing gum is being sold, and may be tempted to buy it. The global gum market is in a healthy state at the moment, and it is expected that, by 2012, it will have a value of €13.5bn, which would represent a 17% increase from more recent positions. There are a number of brands and manufacturers that help to make this gum market so popular around the world. As mentioned already, Wrigley has a major share of the of the chewing gum industry in Ireland, with Wrigley's Extra being their best-known brand. It is currently the largest sugar confectionery brand in the Republic Of Ireland, and is currently worth over €26.6 million. It also has a 67% value share of the gum category. The mints category in Ireland is currently worth €16.1 million, and Wrigley's have helped to refresh this category with their Extra Ice Mints in a tin range. Since it was launched, Extra Ice Mints has helped to drive brand growth within the mints category in Ireland. For instance, from the period of June 2008-February 2009, the value share in Extra Ice Mints has grown from 7.3% to 8%. They are currently available in a premium packaging format, a sleek and extremely stylish tin. The two main flavours for the product are Peppermint and Spearmint, which are aimed at delivering excitement to the premium segment of the mints category. The price of New Extra Ice Mints are set at €1.35 and contain 33 sugar free mints. Research has shown that younger consumers, who do not traditionally buy mints, like this product.
Wrigley's currently has a 35% share of the worldwide gum sector. Though Wrigley's is the most recognisable chewing gum brand in Ireland, there are still of plenty of other chewing gum brands that are well-established with certain Irish consumers. Airwaves is one of these brands, and has been regarded as the second best-selling chewing gum brand in Ireland. With a new and improved longerlasting flavour and a vibrant new packaging, the brand is now currently worth an estimated €7m. This has helped to make it work so well, but it also has benefited some strong marketing innovations. Cadbury also have a strong position in the chewing gum market, with their Trident brand growing in popularity in the UK, while also being a familiar name in Ireland as well. For instance, as recently as 2007, Trident had a 12.5% share of the market in the UK. Cadbury has a 24% revenue share in Britain & Ireland, which means that all their products, including Dairy Milk, Flake Crunchie, Bassetts, Maynards and, of course, Tridents have a good strong presence on the market in the Republic Of Ireland, Northern Ireland, England, Scotland and Wales. Cadburys have an estimated worldwide gum market share of 27%.
Granola Bars When someone mentions the term 'Granola Bars', it might seem peculiar to some people, as they might think of it as an obscure or niche market that they would not readily recognise. In fact, this is a more than reasonable assertion to make as this term is not actually used that often, even by some of the key manufacturers in the category. Kellogg's are one of the manufacturers of granola bars who often refrain from referring to it as such, and instead prefer to use the term “cereal bar” and “snack bar” when talking about their products. It is also important in defining granola bars that people are aware of a similar bar known as a flapjack or muesli bar, which has existed primarily in Germany and the United Kingdom but is now available in many others countries including Ireland, as this will help people to develop a greater understanding of the kind of product that people are dealing with. “Granola Bars” were invented by Stanley Mason, a lecturer of innovative thinking at the University Of Connecticut School Of Education, who also came up with such inventions as the squeezable ketchup bottle, microwave cookware and selfheating shaving cream. Since then, they have become popular as a snack, and are usually identical to the normal form of granola in composition, but they tend to differ vastly in shape. Instead of a loose, breakfast cereal consistency,
granola bars are pressed and baked into a bar shape, which results in the production of a more convenient snack, making it ideal for consumers who are on-the-go or looking for a quick filler to get them through the day. The countries that granola bars tend to be most popular in are the United States and Canada, as well as parts of Southern Europe, Brazil, South Africa and Japan. However, Granola has also recently began to expand its market into India and other southeast Asian countries as well, so it is clear that this category is one that is becoming a worldwide one at this stage. There is also a particular variety of the granola bar available on the market as well, and this is described as a “chewy granola bar”. In this form, the time during which the oats are baked is either shortened or cut out altogether. This means that the bar has a texture that is chewier than that of a traditional granola bar. 2009 was an interesting year for the granola bar category as, for the very first time, the Research and Markets website announced that they would be introducing a report for the market entitled the “Breakfast Cereals Market Report 2009”. This, and a number of other findings, found that the breakfast cereals market will continue to prosper in the long term, given the fact that it has a healthy image and the products within the market tend
to be rather convenient. Health and convenience have been the two major trends that influenced the food and drinks markets since the late 1970s, and it is expected to remain this way up until 2019. The makers of granola bars/cereal bars have been criticised in the past for the amount of sugar and salt content that were included in their products, but they have addressed this by reducing the sugar and salt levels in their products, and thus reinforcing the positive image of the market with fortified and premium products. It isn't all good news for the category though, as market growth has been slow in value terms during the past couple of years with the economic downturn continuing to cause problems for people. Because of this consumers are likely to move away from premium and organic products onto cheaper alternatives. Nevertheless, there is still plenty of room for brands to grow in this market, and some of them are doing just this. There can be no denying that Kellogg's is one of the top brands when it comes to the granola bar category, as they have a number of products in their portfolio, which are available to consumers nationwide, as well as worldwide. They tend to sell pretty well too which is not surprising as many of them are linked to very popular breakfast cereals, which are bought by many consumers in
Ireland and are considered to be part of Irish people's daily routine. Examples of this are Kellogg's Corn Flake Crumbs, ÂŻKellogg's Rice Krispies Treats Original Bars, Kellogg's Special K Bars (in various flavours) and Kellogg's Pop Tarts. Not all of Kellogg's Granola Bar range is currently available in Ireland, which makes sense given both the size of this country and also the fact that the market for it wouldn't be able to sustain all of their products. Nevertheless, they still maintain a very strong position in the market with what they have available. Their Special K selection is particularly strong, with the likes of Special K Strawberry Bars providing a rich flavour in a 90 calorie snack bar. It provides a rewarding cereal taste, and its lightly sweetened icing makes what is quite a simple bar a delight to digest. Kellogg's Nutri-Grain is also very well-regarded, and comes in a number of different flavours to help suit the different tastes that many consumers possess. Included amongst these are Apple Cinnamon, Blueberry, Cherry, Mixed Berry and Strawberry, so there is something for everyone to enjoy. Indeed, Nutri-Grain are the overall market leaders in the cereal bar market, with a total market share of 38%, so they do plenty of good business for the company, who run their Irish operation out of a base in Barrow Street, Dublin. Nature Valley have a major presence in this category, and they have played a major part in the makeup of the granola bars category as they are the brand that first created the category in 1975. They have been major pioneers of the category since then and they continue to do so with the introduction of their new Chewy Granola bars in 2002, which provides an excellent combination of taste nutrition with a naturally flavoured yogurt coating. It combines the goodness of whole grains with the health benefits of calcium, and are perfectly suited to consumers who are looking for natural, real food energy to fuel their
active days, and they are available in two flavours, Strawberry Yogurt and Vanilla Yogurt. Nature Valley produced plenty of promotions for the introduction of their Chewy Granola Bars worldwide, with quite a bit of it being visible to an Irish audience, who are at this stage quite familiar with the brand of Nature Valley, which is positioned strategically beside the main cereal brands in most supermarket and grocery stores across the country. Among the promotions that they had at the time were print advertising campaigns that support the product launch and appeared in a number of magazines from December 2002 to January 2003. They also provided over seven million samples at various health clubs and PGA Tour, USTA and Running USA events which, although they took place in America, would be very familiar to Irish people so it would have been able to translate across the Atlantic quite easily. The makers of Nature Valley are General Mills, and they are the leading global manufacturer and marketer of consumer foods products, with annual worldwide sales of $13.5 billion. They have a global brand portfolio that includes Betty Crocker, Green Giant, Haagen-Dazs and Old El Paso, all of which are readily available on the Irish market and are equally as important to the business as Nature Valley is.
November 2011 61
Swizzels Matlow is the UK’s largest family-owned independent sugar confectionery business and one of the few confectionery companies to still manufacture sweets in the UK. Swizzels Matlow have been manufacturing family favourites since 1928 producing over 200 different products in 7 different children’s categories; Variety Bags, Chew Bars, Lollipops, Compressed Sweets, Sherbet, Stickpacks and Rainbow Drops. We see ourselves as a “One Stop Shop” for Children’s confectionery products, with vast experience in what is an ever changing and demanding market. Swizzels Matlow (Ireland) have been operating from Tallaght in Dublin for over 35 years, and have established a significant presence within the wholesale and Cash and
Carry business nationwide, while also achieving a strong distribution presence within multiples and symbol retail for our grocery and count line confectionery brands using third party agencies. Swizzels Matlow produces a wide and varied range of grocery bags which includes our popular sharing bags; Bumper Bag, Lots of Lollies, Chew Crew, Mini Me and Spooky Tub. Our grocery bags have increased by +14% in value with the increasing trend of snacking with friends or on the go. We produce a wide range of chew bars which includes our famous New Refresher Bar Original and Strawberry, Drumstick Bar, and Stinger Bar to name a few. Our Chew Bars are popular with all ages and perfect for including in children’s party bags. Also included in the range are three stickpack chewy sweets consisting of New Refresher Original and Strawberry and Drumsticks. These products make ideal lunch box fillers. Lollipops are an important category for Swizzels Matlow where we produce a vast array; including “Lickable Double Lollies”, “Lickable Drumstick Lollies” and “Lickable Fruity Pops”, these are now available in a 40% Free bag format providing consumers with variety and value for money. These are perfect for sharing and keeping the whole family happy. Swizzels Matlow has been producing Love Hearts since 1954, with the brand continuing to grow over
this period, with YOY value growth of +13%. This iconic and nostalgic product continues to engage with kids of all ages with love heart messages including: Love, Cuddle Me, Be Mine, and Kiss Me etc.. Over the years Swizzels Matlow have extended the product range to include 15c Love heart Lipstick, 35c Love heart Dip, as well as the favourites 35c Giant Love Heart Roll and 25c standard Love Heart Roll. Our Sherbet products comprise of 25c Double Dip, 35c Love Heart Dip and 20c Rainbow Dust and are popular during the spring months and a Spooky Dip was launched for Halloween extending the product usage and consumer journey. Rainbow Drops are one of Swizzels Matlow earliest product with production starting in the 1930’s this remains a much loved and unique product in the marketplace. BULK RANGE Most of our product range is also available in Bulk 3kg bags; this range has been extensively re-launched in 2011, to include the following products: Mini Love Heart Rolls, Drumstick lollies, Fruity Pop, Variety Mix, and well and a range of boiled products, Crystal Mints, Fruits, Barley sugar, Butterscotch. This range is ideally suited to “Pick n Mix” as well as Old World Sweet shops which are reappearing, as consumers look to relive their childhood memories.
GUMS Swizzzels Matlow produces a wide range of Jelly Gums under the brand name “Fun Gums” This range is available in the following format: Acetate tubs 2c, 5c, as well as barcoded bags from 20c to 35c This range includes the following well known product: Pigs Mugs, Jelly Babies, Fun Mix, Fizzy Cola, Strawberry Tarts, Fried Eggs, Milk Bottles, Teeth and Brush, Mushrooms, Juice Lips. Halloween Halloween is becoming a very important season for sugar confectionery as the trend for Trick or Treating and Halloween parties grow. Swizzels Matlow had a strong Halloween in 2011 with sales up +16.7%, products that performed exceptionally well were our Spooky Trick or Treat Tub along with our core
lines such as Bumper Bag with sales up +28%, Lots of Lollies +33% and Chew Crew +24%. Swizzels Matlow, Halloween king produced a range of ghoulish delights. The range included special treat bags and tubs of their perennial favourites including Love Hearts, Drumsticks, New Refreshers and Fruity Pops. The new big bags for hungry trick or treaters or families to share at parties, included the Trick or Treat Lolly Mix, Monster Treats and Spooky Trick or Treat Mix. Sweet shop favourite Mega Drumsticks, got a Halloween makeover with a new black and orange wrapper, while the Double Dip became Spooky Dip with a new blackcurrant flavour that leaves tongues black! festive snowflake and ribbon packaging has been designed to attract seasonal shoppers and convert traditional chocolate eaters. The Christmas range is perfect for stocking fillers.
Scooby-Doo! Last year Swizzels Matlow secured the manufacturing licence from Warner Brothers to produce a collection of Scooby-Doo! treats. The selection includes a Chew Bar Apple & Cherry, Gruesome Gum Bag and Fiendish Fizzies Roll embossed on the front and the back with well-known catchy Scooby Doo phrases including Jeppers! The fizzy, chewy collection offers grown-ups and kids alike fearsome fun all year round. Christmas Swizzels Matlow launched Christmas gift tubes placing some of their most iconic brands into 120g Christmas tubes. The range consists of Mini Love Hearts, New Refreshers and Drumstick Lollies. The products
Interesting Facts •The company has been trading in the confectionery sector for over 80 years •The company offers retro sweets and a range of Love Hearts gifts on www.lovehearts.com •2.75 billion Love Hearts are produced every year, that’s enough to stretch 1.5 times around the world. •5000 tonnes of chew products were made last year, that’s the same weight as 1,100 elephants •Enough Rainbow Drops were made last year to fill 25 Olympic sized swimming pools •Swizzels Matlow produced enough Jelly Bags last year to fill the Manchester United stadium 238 times over. •The number of Fizzy Wine Gums made last year by Swizzels Matlow weighed the equivalent of four London Double Decker Buses. (All figures quoted in here are from Nielsen on a MAT ending 29.10.2011)
November 2011 63
Mr Perks Comes to Town!
Communers in Dublin’s busiest rail and bus stations got a great little perk in their day when they were handed a free bag of goodies as they left the stations by a team of young people in top hats led by an oversized Top Hat character. Inside the bags were a free bottle of Lucozade Sport Raspberry, Silvermints (yes, Steve’s back!), Irish Pride bread slices, Low Low Cheese Spread, Kellogg’s Rice Krispies Square Totally Chocolatey Orange (limited edition), Kellogg’s Special K Double Milk Chocolate bar as well as discount coupons for travel with Irish Rail and Bus Eireann. Commuters were both surprised and delighted to be at the receiving end of such a bounty just for doing what they do every day – passing through the station. They were mostly aware that Mr. Perks would be coming to town through the extensive advertising campaign on outdoor and especially transit media. But when they saw what they had for them there was genuine delight. Mr. Perks is the brainchild of Bravo Outdoor Advertising, Ireland’s largest supplier of Outdoor Advertising through bus, rail, roadside and retail advertising panels. It’s an unusual departure for a company in their space, but as Michelle Murray of Mr. Perks says ‘It’s just a matter of us trying to maximise the potential from the CIE contract that we hold. Previously this fantastic audience – 57% ABC1 and over 100,000 journeys a day – wasn’t really accessible in a planned way.
One station would let you host activity whereas another wouldn’t and the cost varied wildly. What we’ve done is to make this plannable and easily accessible for brands so they can include it with confidence in their brand plans.’ Commuters on the launch day were encouraged to give their feedback through an online survey. Apart from confirming they wanted Mr. Perks to come back, they rated the products in the bag according to a five point scale and identified other items they’d love to see in the bag. ‘The key differentiator with this approach is that we’ve moved sampling from being ‘a bit of an irritant’ to something that is genuinely sought out and valued by
commuters. This means that participating brands are benefiting from a feelgood factor that is not normally present. Apart from the shared cost that makes it more affordable, this is the key benefit of the Mr. Perks approach. ‘The benefits of sampling as a marketing activity are well-established. Our findings tell us that as much as 81% of consumers said they would try a product after receiving a sample. It has obvious benefits for a new product, but it also serves as a reminder to lapsed users of just how good your product is and repositions your product on their agenda.
‘Times are certainly tough out there but we think Mr. Perks will be successful because he’s delivering on the zeitgeist but doing it in a way that is fun, not depressing! So we’re actually looking forward to 2012, as weird as that sounds!
C HICK EN
End for the Road for Irish Chicken
When was the last time you ate an Irish-produced chicken? Or do you know? Chicken is the popular meat in Ireland, and on average each of us eats about 30kg of it in a year. But while we tuck into our lunchtime chicken-pesto wrap, we’re usually unaware that the meat inside is most likely to have come from Thailand or Eastern Europe. Our love of a bargain has pushed imports of chicken sky high, with about 200 million imported fillets entering the Republic of Ireland yearly (this includes chicken from Northern Ireland). And while the amount of chicken we eat is rising, the price is falling, making it hard for Irish farmers to stay in business. Under current food-labelling laws, it’s also impossible to know where much of our chicken is coming from. Irish farmers say this raises questions about the quality of what we’re eating. In recent months, high levels of imports coupled with the rising cost of animal feed have increased pressure on Irish chicken farmers, who get as little as 58 cent for each chicken they farm. Cavan farmer Alo Mohan feels that while the supermarkets slash prices on chicken to bring consumers in the door, it’s leaving farmers hanging on a knife edge. “The problem is that the price of animal feed has risen and many chicken farmers are now working at a loss,” he says. The Irish Farmers’ Association estimates that poultry farmers get less than 10 per cent of the retail value of a whole chicken, the processor gets 35-40 per cent and the retailer typically comes away with more than 50 per cent of the retail price. It’s this slim margin for farmers that is having an effect on the immediate future of Irish poultry and the 2,500 jobs in the sector here. “I have farmers I’ve helped arrange credit for as they are under severe pressure, and when they hear the figures that supermarkets are taking
out of this country, it sticks in the back of their throat. They are milking us out of it,” says Mohan. David Owens from Bord Bia says: “There is pressure definitely at the moment; chicken is the most discounted of all meats. Supermarkets use it as a promotional tool and a loss leader to sell other
goods. Unlike other meats, chicken has risen in volume of sales but at the same time, it’s falling in price.” In the past 10 years, three chicken processors in the Republic have closed, and for the farmers that raise birds for the remaining five plants, it’s a difficult time. Two years ago, Cappoquin Poultry
Supermarkets use it as a promotional tool and a loss leader to sell other goods. ..Unlike other meats, chicken has risen in volume of sales but at the same time, it’s falling in price.”
in Waterford survived closure after new investors stepped in. Ned Morrissey produces broiler chickens for the Cappoquin plant, which has now cut its output of chicken by a quarter. “When animal feed prices rocketed a few weeks back, the processors went to the supermarkets for a price increase but they wouldn’t help us out. Now people at the plant are working part time in order to keep their jobs. There’s 160 jobs at the factory alone and it’s critical for west Waterford that this business survives.” At the Cappoquin plant, financial controller Tom Vaughan admits it’s a tough time for processors and farmers alike. “Animal feed went up from €270 a tonne last year to €370 a tonne now, while the supermarkets are selling chicken cheaper and cheaper. If the consumers were prepared to pay an extra euro on whole chickens, it would sort it all out.” Some, such as Superquinn and the Supervalu group, source almost all their chicken from the Republic of
Ireland. In the case of Tesco, almost 70 per cent of its chicken is from Northern Irish plants owned by the giant Brazilian meatpacker Marfrig, which recently bought the Moy Park and O’Kane poultry brands. “We met with Tesco to try and get them to sell more chicken from [the Republic] – if they bought all their chicken from the Republic it would mean 1,000 or more jobs but they said they don’t distinguish between the Republic and the North,” says Alo Mohan. According to Tesco: “All of our fresh poultry is sourced from two suppliers on the island of Ireland, supporting over 5,000 jobs.” However consumers may at least take comfort from the fact that Moy Park chicken from Tesco is quality assured by Bord Bia. For shoppers, Bord Bia Quality Assured Chicken is easily identified on packaging, with either a Northern Ireland or Republic of Ireland sticker. However, the situation can be unclear with loose chicken fillets sold by independent butchers or other retailers. These fillets are often imported but give no information to the consumer on where they are from. According to the Food Safety Authority of Ireland (FSAI), failure to label this chicken leaves consumers unaware about some of its qualities as imported poultry is often flushed with carbon dioxide, which artificially extends the shelf life of the meat. In December last year, the FSAI issued the results of a survey into the quality of raw chicken sold loose in butchers: 8 per cent did not provide a sell-by date and at least 23 per cent of butchers provided a use-by date that was unrealistically long for the product to remain unspoiled in the consumer’s fridge. John Hickey from the Association of Craft Butchers of Ireland says his organisation cannot vouch for the safety of chicken on supermarket butcher counters or in independent retailers. “We are frequently audited by the Department of Agriculture to
show the sources of our product. There should be tracability for the consumer and we have systems in place for our members but not all of them are at this point.” The other big threat to the future of Irish chicken is in restaurant kitchens. David Owens of Bord Bia points out that “over 90 per cent of chicken used in restaurants, sandwich bars, work canteens and the like is imported”. Once this chicken arrives in the EU and goes through any kind of processing, it is labelled on the packaging as “EU product”, though much of it is from outside the EU. Chicken sold loose in restaurants or sandwich bars is rarely labelled. When it appears on a food counter or restaurant menu, consumers are often unaware of where it has come from – by comparison, the country of origin for beef has to be listed by law. Dr Alan Reilly of the FSAI knows the situation only too well. “If you walk by a sandwich bar early in the morning you’ll see the boxes arriving in from Thailand – they have Thai processing plant stamps on them.” There may be nothing wrong with Thai chicken, but the distance it has to travel can cause problems, according to Reilly. “First of all, [Irish chicken is] going to be fresher. The longer the food chain, the more things that can go wrong; if you have a commodity travelling through several countries and value being added in each country, by the time it gets to the consumer the risk is increased.”
November 2011 67
You don’t have to travel as far away as Asia to encounter problems in the food chain. Recent Dutch research shows that some antibioticresistant “superbugs” found in humans may be obtained directly or indirectly from chicken meat. Dutch meat has been found to have more antibiotic residue than anywhere else in Europe, prompting Roel Coutinho, director of the Dutch National Institute of Public Health and Environment, to warn “the use of antibiotics in the poultry sector must be strongly reduced”. A recent league table of antibiotic use in livestock saw the Netherlands topping the list of European countries, according to the Journal of Antimicrobial Chemotherapy. Farmer Alo Mohan says that the requirement for Irish farmers to operate to stringent food-safety standards is frustrating, when some imports may not meet the same standards. “In Ireland there are high standards for stocking levels in sheds, animal welfare and slaughter of birds. We only give antibiotics if a post mortem on an animal points to an infection in the flock. But the foodservice sector here buys foreign chicken, and we don’t know what goes on outside Ireland.” With consumeres wanting a bargain and businesses under pressure, why should restaurant owners pay more for Irish chicken over cheap imports? Jo Macken, the man behind Dublin’s Jo’Burger restaurant and pop-up chicken venture Crack Bird, says that sourcing
Carving up the cost of a chicken With farmers’ costs rising and the price of chicken in the supermarket falling, the Irish Farmers’ Association estimates the retail value of a whole chicken is broken down as follows: <10% goes to the farmer 35-40% goes to the processor >50% goes to the retailer foreign chicken is a false economy. “It’s two-pronged for us; we want to support Irish food and we also want quality. I don’t know what’s in some foreign chicken so I’d rather get it from Cootehill in Cavan and support Irish jobs. It’s part of the way we run our business.” Vincent Carton, who owns the Manor Farm brand, employs 700 people and has 150 farmer suppliers. He feels that consumers wouldn’t eat imported chicken if they knew where it was from. “Twenty years ago Ireland supplied 100 per cent of the chicken we ate. If we didn’t import so much chicken we could grow the sector to get back to that point where we all eat Irish product.” For consumers under financial pressure, the temptation to buy the cheapest chicken on offer is understandable, and for farmer Ned Morrissey it may already be too late. “I can’t see a future for any growers or processors here, as the supermarkets are pushing down the price and we’re competing with really cheap imports in food service. If consumers changed to buying only Irish chicken, we’ll still have a future farming it. But if not, I can’t see it continuing as it is in Ireland.
What to look for when buying meat With so many different sources of meat, what should the consumer look for when buying chicken? Bord Bia Quality Assured Chicken labels on packaging means the meat complies with their food safety, traceability, welfare and production requirements at every stage from the farm to the consumer. Most chicken sold is Ireland is conventionally farmed – as opposed to free-range or organic chicken, which must comply with stricter standards on animal welfare and sourcing of chicken feed. This meat is labelled “organic” or “free-range” and is generally more expensive. Chef Richard Corrigan has publically derided Ireland’s non-freerange chicken. The Irish poultry industry’s response was that, compared to antibiotic use in other EU countries and imported chickens from outside Europe, their product – even when it’s from an “intensive” system – is of high quality. So are imports safe? Second to the UK, most chicken imported to Ireland is from the Netherlands, which is still the biggest user of antibiotics in livestock in Europe. Recent research there found links between antibiotic resistance in humans, especially relating to urinary tract infections, with the high levels of antibiotics in Dutch farming. An EU audit recently found “very low levels of controls” on non-EU meat products entering Europe and found no clear understanding of correct food-safety responses to possible alerts in relation to imported meat. Production standards outside Europe may not match those within the EU, but even within European countries, practices differ.