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I.D. Help stub out under-age smoking. It is an offence to sell tobacco products to anyone aged under 18. To help retailers comply with the law, the Office of Tobacco Control has developed a DVD which explains your responsibilities and those of your staff. There is also signage available which can be displayed in store along with information guides for owners, managers and staff. These guides are available in English, Irish, Chinese and Polish. You may order a DVD and retailer resource pack by calling us on 045-852700. Alternatively both the signs and the guides can be downloaded from www.otc.ie

Let’s keep our children smoke-free


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DECEMBER/JANUARY 2009

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IN THIS MONTHS ISSUE....... 2 NEWS

36 FRUGAL TIMES

6 THE EMPEROR’S NEW CLOTHES

38 RECKITT

One of the most prominent trends that has emerged from the economic fall-out is the rush by Irish consumers to Northern Ireland to shop, and shop some more.

42 THE GOOD THING ABOUT RECESSION 46 MEATY ISSUES

18 RUNNING SCARED OF DISCOUNTERS

58 FIRING LINE

- DEFYING THE GLOOM

Aldi and Lidl may be kings of the hill in Ireland but there is competition for the untouchable discounters elsewhere. 20 LARGO THRIVES 22 CHANGING HABITS

M.D/Editor: Deputy Editor: Bsn. Dev. Managers:

24 THE INTERESTING THING ABOUT SAINSBURYS

Contributors:

Sainsbury sure gets into the news here quite a lot for a multiple that has nothing whatsoever to do with the ROI. Its stores have been among the main beneficiaries of the Irish shopping pilgrimages across the borders.

Circulation: Design:

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THE HOUSEHOLD MARKET

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THE TEA MARKET

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THE COFFEE MARKET

34 BEER-ING UP

Frank Madden Ruth Timmins Niall P. Madden Sarah Griffin Emma Maguire Tomas O’Brian Margaret Corry 90% Proof

Todays Grocery Magazine, The Mews, Eden Road Upper, Dun Laoghaire, Co. Dublin Tel 2809466 (6 lines) web: www.todaysgrocery.com email: info@todaysgrocery.com editorial@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 off-licence 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.


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USE BY DATES news

The nineties seem to be back in so many ways. We’ve had a brief flirtation with the grunge fashion of the early part of the decade , recession is up and coming and now it seems food scares are all the rage. Is 2009 about to be the new 1997? Well let us hope not. For a long time now we’ve been fairly prissy about protecting food from salmonella, e-coli etc and rightly so, But as is always the case there have been extremes. People have gone to obsessive compulsive levels in arranging food in the right order in their fridge lest a single drop of anything get in contact with the wrong food and we collapse on the

consumers to take seriously the use-by-dates and make sure their fridges are kept at the optimum temperature. New studies show that the number of cases of listeriosis has doubled since 2001 and risen by 20% in the last year alone. The majority of instances are usually in the over-sixties and almost all are considered to be food-borne.

from salmonella and E-coli put together. In 2005, the figures in the UK estimated there were 170 deaths from

These include pre-packed sandwiches, salads, cooked sliced meats, smoked salmon, soft cheeses and

It is believed that there are now as many deaths from this disease as those from salmonella and E-coli put together. spot once we eat it. Some experts had even opined that we had taken the best before sell by date guidelines a touch too seriously and that give or take a day or two was harmless. However, health experts in the UK are blaming a serious rise in the potentially deadly disease listeriosis on people consuming chilled ready to eat food products that have been in the fridge for to long. Concerns about the spread of the disease have become so significant a new hygiene awareness programme is being called of in the new year encouraging

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According to one expert; “A lot of work has been done to eliminate listeriosis, but over the last few years it’s started going up again. There is a dilemma; we don’t want to panic people, but at the same time we need to say, if you are at risk you need to be careful.” The disease is renowned for being particularly unsafe for people with reduced immunity chiefly the elderly, pregnant women and those suffering from illness. The increased prevalence of the Listeria bacteria is also of interest to medical experts. It is believed that there are now as many deaths from this disease as those

the disease. In the Nineties there was an increase in listeriosis among pregnant women and advice was issued that they should not eat pate or unpasturised cheese. According to health experts; “Listeriosis is fairly rare but when it does occur the death rate is quite high. It does not appear to be a problem in the manufacture of products, so it looks as if it comes from what people may be doing at home.” The main problem is that use-by dates are not adhered to in chilled readyto-eat foods in which studies show that Listeria can thrive.

pates. A new UK study stated; “The majority of cases of human listeriosis appear to be sporadic and foods associated with transmission are predominantly ready-toeat, with extended (usually refrigerated) shelf life capable of supporting growth of L.monocytogenes (Listeria). Consumers have been advised to keep their fridge temperature at below five degrees C and to follow storage instructions. They are also advised to consume food before its use-by date, and once opened eat within two days.”


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TESCO AND THE WORLD news

to this from their higher priced own label and branded products’. A spokesperson for Tesco Ireland said the problem was that consumers viewed the discounters products as branded products. He said the launch of Tesco’s new range was designed to defend Tesco’s patch as obviously the discounters are becoming increasingly popular during these times. Its not just in Europe that Tesco will have a battle. In the US, Wal-Mart is planning to open its new small-format market side grocery stores in southern California as well as on Arizona in an attempt to defend its turf against Tesco. The largest US retailer

job applications that if successful it could be one of over 1,000 of the stores and create over $10bn in sales. It has also developed a new brand for the stores and it is expected to use the stores to emphasise the quality of its own brand grocery products. Both Tesco and Wal-Mart claim that their formats are aimed at providing fresh food and prepared meals to what now seems a quite dated concept of ‘timestarved customers’’ given the current economic climate in the US, Wal-Mart appears to be aiming at a more high service aspect than Tesco. This will involve preparing food in-store as opposed to ready packed fresh food. The smaller-sized stores

This all seems a far cry from the Irish market where groceery retail gets political but largely in relation to price hikes and that’s it. Perhaps, in perspective, Tesco is sitting pretty after all. Tesco’s supermarket price war has worked to some degree in Ireland in response to the credit crunch. Its potential has petered off at this stage however, as consumers are quick to see that behind the bells and whistles the bargains are all talk no substance, in most cases. As consumer’s abandon its lower quality range on offer for Aldi and Lidl, something is afoot in Europe, according to a JP Morgan analyst. James Vasquez, head of European Food Retail and JP Morgan told investors that Tesco’s strategy of placing its value lines against the discounters in price comparison advertising would not get off the ground as well in Europe. He claimed that most consumers are aware that food inflation was good for

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supermarkets but damaging for the more traditional multiples who have to cope with the fall-out from consumer’s changing shopping habits. JP Morgan claimed that Tesco’s gross margins would fall as it reacts to market share losses by investing in higher quality products to fight the hard discounters as the ‘Tesco Value brand is no longer proving effective in the fight against hard discounters die to its lower quality’. Earlier this month, Tesco launched a better quality range in the UK to complement the Tesco Value range, mimicking what is already taking place over here. This, according to JP Morgan signals something ‘tantamount to a price investment also, we suspect since shoppers should switch

has also applied for a liquor licence for a small store that is planned as part of a retail development in San Diego. The location will be just two miles from a newly opened Tesco Fresh & Easy store in the neighbouring city of Vista. Wal-Mart is set to open the first of four 15,000 sq ft Marketside stores in the suburbs of Arizona by the end of December also in areas that have been targeted by Tesco’s US format. It is also going ahead with new stores for northern California, with several hundred placed in the state, as well as in Arizona and Nevada, supported by two distribution centres. Wal-Mart continues to describe its Marketside stores format as a pilot although it has suggested in

are likely to offer an opportunity to escape the public planning and environmental approval processes required for its massive Supercentres, as they’re called stateside, which have been reportedly used by union-led political opponents to slow its plans in California. Wal-Mart Watch is an anti-Wal-mart campaign funded by the union SEIU for service workers in the US and it has warned its supporters to be on the look-out for what it calls the new ‘stealth’ Wal-Mart stores. This all seems a far cry from the Irish market where grocery retail gets political but largely in relation to price hikes and that’s it. Perhaps, in perspective, Tesco is sitting pretty after all.


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THE EMPEROR’S N


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A lot has been written about how Irish consumer’s are responding to the economic fall-out of recent months. Great oratories have been omitted about the switch to the discounters. Debates have raged about the reality behind special offers and own brand labels. However, one of the most prominent trends to have emerged is the rush by Irish consumers to Northern Ireland to shop, and shop some more. The media has jumped all over this story. We have read of great swathes of winding traffic chocking through border towns, crazed Irish shoppers sitting in traffic jams under the auspices that shopping in the North is akin to finding the pot of gold. There is a certain psychological pattern that seem to have overtaken some consumers. One where people read of the bargains up North and so feel they are missing out on something if they too do not head for the border. And so the ‘myth’ is perpetuated. However, nobody is talking about the alternative. Very little has been written about why Irish retailers aren’t up in arms, beseeching shoppers in eye catching adverts about the bargains they can offer. Indeed, where are our public representatives outlining why it is in everyone’s interest and pocket to stay put and shop south of the border? Many Surveys have been compiled by different agencies and organisations outlining the savings that can be made going up North but many of these are conflicting. The Irish Farmers’ Association (IFA) published the most realistic survey to date. It conducted a survey of supermarkets in Dublin, Dundalk and Newry and found that less than €2 separated the price of a basket of staple food items in these stores. the goods cost €37.99 in Sainsbury Newry; €39.77 in Tesco

Dundalk and €39.60 in Dunnes Stores in Dublin. The survey claims that the overall cost of travellng from Dublin to Newry is €30 when petrol, food and tolls were included. That means that shoppers are saving no money and petrol, tolls and other journey costs mean its actualy costing them more. Going up North feels like a large nightmare. AA Road watch reported long tailbacks on roads into Newry and other Northern border towns at the weekend as shoppers from the Republic crowd up North. The normal journey time from Dublin to Newry doubled on recent Saturdays to over three hours and the car parks of the main shopping centres in the town were filled to capacity. Some political and business leaders have feebly called on shoppers in the Republic to show ‘patriotism’ and shop locally. Others have warned of job losses. It is hard to imagine the public has a lot of time for what the current government calls ‘unpatriotic’ given the events of recent months. More pressing is the threat to retailers on the border counties of Monaghan, Cavan, Donegal, Leitrim and Louth. Breaking down the retail structure of each of these counties reveals some very interesting data. From a retail perspective, Monaghan is represented by two multiples, 32 symbol stores, 36 garage forecourt

and independent outlets and 52 convenience and newsagent stores, with two specialist off-licenses. The population of Monaghan is 55,816 and the weekly spend on food and drink and tobacco is €3.5m. In Donegal, there are seven multiples, 90 symbols (50% are represented by the top four), 95 garage forecourts and impendent retailers and 36 convenience/ newsagent stores as well as and 4 specialist off licenses. The population is 146,956 with a spend of €9.5m on food and drink per week. Leitrim is represented by one multiple, 24 symbols, 38 garage forecourts and independent retailers and 18 convenience and newsagent stores, with one specialist off license. The population is 28,837 and the weekly spend is €2.02m. In Cavan, there is four multiples, 63 symbols, 48 garage and independent retailers, 74 convenience/ newsagent stores and 5 specialist off licenses. The population is 63,961 and the weekly spend is €4.1m per week. Louth has seven multiples, 81 symbols, 48 garage forecourts and independent retailers, 87 convenience/ newsagent stores and 11 specialist off license. The population is 110,894 and the weekly spend is €7.3m.

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Collectively almost €27m is spent per week in these counties. Sainsbury is reporting gains of 1.6% up from 0.6% since cross border traffic began, one could assume that at least 50% of that comes from these border counties which is an estimated healthy €6m. Perhaps this UK multiple may yet consider stepping over the line to establish an operation given that there appears to be a niche available. Without any great effort they’ve managed to attract €12m a week from south. Imagine what the could do if they turned up the heat. There are other realities including , for example, how the commuter counties of Kildare, Meath and Wicklow have suffered the largest increases in job losses in 2008. At first glance this may not seem linked to the Northern story but the reality is many retailers are suffering in these counties and little if any attention is being paid to it. Labour Party spokesperson on social and family affairs Roisin Shorthall commented;

appears to be pulling out all the stops for their counterparts and cracking down on banks who are tightening lending into the sector. No similar moves have been made here for small to medium businesses and there is a lot that the Irish government can do to help retailers and keep Irish shoppers south of the border. Many believe there is a persuasive logic to backing small business in the current recession. Entrepreneurs, business people are by their very nature problem solvers. Nobody goes into business to fail and they will cross oceans of effort to make it work, and this is most important in recessionary times when confidence is most needed. Consider this, a recent KPMG report showed that smaller companies, those with fewer than 10 employees have the most optimistic view of the coming year, despite the fact that they have the least support and are under extreme pressure. Only 25% of those surveyed had a negative outlook, compared to 40% of larger companies, however, were three

depending on it to pay my wages or a supplier.” Mark Fielding, ceo of ISME, the small business lobby, says emergency

“We wrote to the Irish banks to ask would they access it, and we received letters back in November saying they had met with the EIB. But they do’t want to touch it because the margins are low” “These figures are shocking and require urgent intervention. Many of those living in the commuter belt where the increases are highest are people who have recently moved into new houses and are carrying heavy mortgages.” The interesting thing is that many of these job losses are not of the big headline grabbing sort, they are relatively small layoffs ‘10 jobs here and 20 there, in small and mediumsized companies‘. Shorthall echoed the sentiments of many stating that the government needed to start treating raising unemployment as the ‘national emergency its fast becoming’. Part of this means promoting the Republic as a better place to shop in a joint effort with multiples and symbols. In the same way small to medium sized businesses, which includes many retailers, feel the government increase on VAT is at an inappropriate burden at a time when money is tight and unemployment is rising. By comparison, the British government

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times less likely to invest in people than large companies. The survey also indicated that access to credit is the biggest concern for 20% of small businesses, compared to 9% of large companies. At the start of the year, only 3% of the small companies blamed access to credit as their main bone of contention in the recession. Over half now say it is more difficult to get credit, compared with the start of the year when 19% believed the same. One retailer aptly summed up the feeling of many small and medium businesses in the Republic saying that they did not create the banking crisis yet they are ultimately paying the price. Another small businessman stated; “My overdraft has been reviewed and been reduced by my bank. They are still lending to the big boys but pulling the plug on the small operations. It’s not such a big issue for me because we take cash every day. I only use the overdraft for maybe three months of the year so I’m not being as affected as badly. But what if I was

lending for small and medium enterprises is available from the European investment Bank but the Irish banks, ‘need to get off their backsides and access it’. He says; “We wrote to the Irish banks to ask would they access it, and we received letters back in November saying they had met with the EIB. But they don’t want to touch it because the margins are low.” There is an incredible amount of misconception about exactly who is travelling North and those who want to try and keep shoppers in the south need to be made aware of this. The idea that lower income families are the ones travelling is a false one, according to research. According to TNS, householders from the South who are travelling up North are in the AB upper social class with children and usually under the age of 44, which translated into language that matters to retailers in the south - the most important target market.


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Many of those travelling North are seeking alcoholic drink bargains and this may have played a part in the fact that food, beverage and tobacco sales in the South were down 2% in September last compared to the previous year. The shoppers may say they are travelling up North to take advantage of grocery bargains but in reality many are buying alcohol. The amount of alcohol being transported across the border may also help explain why bar sales were down 9% for the year as shoppers chose to stay home and do their drinking there. Up until now, government’s calls for Irish shoppers to show patriotism by shopping in the Republic have failed to move consumers in the right direction. Another tactic is clearly required to genuinely convince people not to waste their time up North. Another reality which has failed to be pointed out is that many of the drink that is being bought has less percentage volume than is available in shops down here, so the it is a hollow bargain. Yet this simple little fact is not being pointed out by those who should care the most. Where is NOFFLA? Where is the LVA; the powerful publican lobbyists who can change law with the right pressure. Why is this same pressure not being amped into campaigns to convince Irish booze shoppers to stay put and buy Irish? The shoppers travelling to the North are twice as likely to have kids and according to TNS one of the main reasons for this is the price of nappies and baby wipes. As a consequence, households of five or more people are 78% more likely than average to shop up North. The surge in Northern Irish shopping has seen Asda and Sainsbury’s increase their share of the grocery market in the Republic by 150% since 2007, up from 0.6% to 1.6%. In addition, the trend seems to be continuing upward. TNS show that 6.4% of households in the Republic shopped up North in October 2008, with 25% of all households in Connacht, Donegal, Cavan, Monaghan and Donegal doing their shopping at least once across the border in October. Irish retailers are now feeling the squeeze and the outlook for 2009 is not great. Trade credit and insurance costs are rising which factors on deals available at much worse terms than in

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The Irish economy needs Irish consumer money now but few are convincing them of the reason to spend on Irish soil previous years. Perhaps most worryingly, cash flow is a major problem. Consequently, retailers are engaging in aggressive discounting and it is not uncommon to witness larger than normal discounts in desperate efforts to bring in cash. Figures released by the Trade Credit Brokers (TSB) show that overdue accounts in business are up about 400% on this time last year. The TSB’s commercial director, Celine Caulfield commented on the figures, saying; “Defaults on accounts have led to a real element of uncertainty in the market. Suppliers are aware of the funding difficulties that exist and as a result they are shying away from providing products to those businesses that can’t guarantee repayment. There is a distinct lack of confidence between debtors and creditors at the moment which is obviously not conducive to a vibrant and buoyant market.” However, she claims there are ways to promote supplier confidence. She continued; “Suppliers want to know that they are guaranteed payment in any eventuality and the principal methods of showing this are bank guarantees, trade credit insurance or up-front cash payments. Although some sectors are experiencing difficulties, credit insurance can still be secured for a significant number of clients - securing which will encourage supplier confidence - and in turn they will be willing to provide larger quantities of produce.” There is a certain perception from retailers in Northern Ireland that prices in the south are extremely high in comparison and shoppers will keep travelling North as a consequence. One Northern Ireland retailer explains the length and distance Irish shoppers are prepared to travel. He said; “They are mostly from Dublin and Meath but we have had people from Tipperary, Limerick and Cork at 11.30

this morning. Yesterday afternoon the car park was completely full . Newry is the new benchmark. I was talking to shoppers this morning and they say they are determined to come North having heard those [unpatriotic] comments.” Another Northern Retailer comments; “It is cheaper here, That is why everyone is coming. In Dublin, prices are very, very dear. It is three or four times cheaper here for the same stuff.” Another said; “The South has lost the run of itself with the Celtic Tiger. But I think prices are inflated in Dublin and they will have to come down.” In another interesting twist, Irish retailers, large and small are reportedly sourcing their supplies in Northern Ireland and the rest of the UK. As consumers continue to flock up North, food industry sources are saying that the practice of crossstocking from suppliers in the UK rather than through Irish distribution channels is increasing. The practice is obviously of concern in the sector but suppliers are reluctant to speak out because they are so dependent on the big retailers. One said a number retailers are ‘completely bypassing’ the Irish operations of major suppliers by importing directly from their UK operations. Some reports are suggesting that smaller retailers are bulk buying drink and other items in the North to avail of lower prices. The Irish consumer has become a beleaguered creature of late. Battered by many years of inflated prices by Irish retailers and struck down, so to speak, by the current recession, many are looking for a genuine bargain. The irony is that there are many better bargains in shops in the Republic right now, it’s just no-one is telling them loudly enough. The Irish economy needs Irish consumer money now but few are convincing them of the reason to spend on Irish soil.


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AN INNOVATIVE COMPANY There has never been a more important time to buy Irish. However, buying Irish has never been a more ambivalent concept. For what does it really mean to buy Irish anymore. Is it just a product that has a vague Irish association but is actually produced in far flung places. The last ten years of economic prosperity has created greatness in many areas but equally it has given way to an erosion of Irish manufacturing. Yet everything comes around again and here we are once more in recession; a time for innovative thinking, a breeding ground for exciting entrepreneurial endeavour, for tapping into the zeitgeist, where provenance and authenticity steers consumer choice. 12 TGm


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Some more than others, can deftly encapsulate this cultural disposition when it matters most. Enter Rochfords Handmade Chocolates, a new Irish made artisan chocolate range produced by BR Marketing. Irish consumers attitude to chocolate has evolved beyond bars and sweets. Along with coffee, wine and cheese, handmade chocolate occupies a unique place on the Irish palette. There has been a swathe of handmade and luxury chocolates in the last number of years encircling the confectionery market taking on a mass-produced feel, becoming more mainstream, with less room for something artisan and creative. The Irish chocolate market at €544m is the 12th biggest in Europe and the UK’s biggest export market. The market share of luxury chocolate confectionery products grew by 20% in 2007. Despite the sales figures, the people want substance and validity from their food, hence the rise of farmers markets and free range and organic produce. In addition, as consumers become more aware of food quality, there is a corresponding demand to know the origin of ingredients particularly in the premium end of the market. Within the handmade chocolate sector, the optimum product is one which can sell all year round, as the market is very seasonal . Sales of boxed chocolates have increased in general and now represent a 25% share of the chocolate market, however, Valentine‘s Day, Easter, Mother‘s Day and Christmas are still the big seasonal hitters in terms of sales. There is no denying the power of chocolate, its quintessence is recession- proof, ideal when a small piece of luxury is required that does not involve a flinching credit card. Moreover, the handmade chocolate market takes this to another level, something which BR Marketing innately understands with its handmade Irish chocolates range. The company has spent the last two 2 years looking at the market to see what new Irish brand would make the most impact and decided to target the Hand Made Chocolate Market. The consumer is looking for variety and quality but there are other factors as well. According to recent consumer research, Irish consumers have shifted

Chocolate claims the largest share of the European confectionery market. By 2010, the total market is expected to accunt for over 55% of the European confectionery market. their tastes for chocolate and are now seeking more innovative flavours; exhibiting a tendency towards more luxury products spending more on individual purchases than ever before. Although trends show consumers in general are cutting back on chocolate, sales for 2007 actually see a 10% increase in value. This ‘cutting back’ has had a rather negative impact on the confectionery market as a whole but has impacted positively for the handmade chocolate market. An emphasis on health and wellbeing has seen dark chocolate take on a new precedence as its rich in antioxidant health credentials, influence sales. All of Rochfords’ chocolate range have a dark chocolate version including its Premium Truffle Selection which includes dark truffles and Dinner Mint Selection which also has dark chocolates. William Rochford with his brother

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Michael run a very successful food importing and distribution business, BR Marketing, based in Dublin for the last 25 years employing over 50 staff. They have built some very successful brands on the Irish market which have now become household names. In addition to selling in the Irish market, William sees a huge potential abroad due to the vision people have of Ireland as a place where passion and expertise inform our food industry. This is certainly true when it comes to the handmade chocolate market. Chocolate is big in Europe and there is a strong market for premium and artisan chocolates. Chocolate claims the largest share of the European confectionery market. By 2010, the total market is expected to account for over 55% of the European confectionery market. The European market is currently valued at €30bn. The top five countries in the chocolate market including the UK, France, Germany and Italy, account for 71% of the total European market size by value. In the US, 4.3% growth is accounted for through the rise in popularity of premium chocolate. It is also worth noting that 51% of the US food and drinks market is consumed outside of the home. The market is expected to experience stronger average annual growth compared to Europe reaching $33.0bn in total by 2010. Homemade produce is rising in importance to the Irish shopper. Data shows that 72% of Irish people agreed that food produced locally results in higher quality products William has worked with an award winning Irish Master Chocolatier and has developed a premium quality and fantastic tasting range of hand-made chocolates that are manufactured in Ireland and therefore guaranteed Irish. William and Michael see this as the first step in developing the Rochfords of Dublin food range both in Ireland and internationally by seeking out new and exciting quality food products to bring to the market. For the first time in quite a while , the consumer is king again and playing hard to get. Past recessions have seen an explosion of creativity and innovation from all sectors of the food and drink industry and it’s heartening to see it developing on our own doorstep.

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It has been well documented in recent times that women are drinking ever more increasingly. Several reports have reminded us that the demographic of who is drinking and why has changed dramatically over the last five years. Reports suggest that women in their thirties and forties are becoming the most irresponsible drinkers which is an reversed change from a decade ago where men were the most likely to drink recklessly. Women drink in a different way to men. Whereas men are beginning to put the glass down in their thirties and forties, women are indulging in huge glasses of wine at this age, therefore miscalculating their units and consequently putting their health at risk, according to research. The simple fact is that women are less able to metabolise alcohol in the way that men do but are continuing to drink similar amounts to men and suffering in their health as a result, say experts. A new type of female drinker has emerged in Ireland, as a consequence of the headier days of economic prosperity. These women are not the teenage binge drinkers we so easily categorize when we think of female drinking; they are a couple of generations older, with more money and drinking in different ways.

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The pub and club is not for this type of drinker. Many are drinking wine at home, over dinner with friends, presuming it harmless and filling oversized wine glasses without conscience. Research shows that men reach a peak for alcohol at 29, but women are tending to drink more as they approach middle age. Research carried out at Cardiff University states; “We found that older women were more intoxicated and the further they got into their thirties and forties, the higher the alcohol content in their blood. Men in their twenties often drank heavily, but after 29 they tend to quieten down and consume less.” Half of the women breathalysed in the study had exceeded the daily recommended six units of alcohol equivalent of two large glasses of wine. In comparison, a third of the men had exceeded their recommended daily limit of eight units. The study found that the size of wine glasses not only served in restaurants and pubs as well as those in the home are making it difficult for women to keep track of their drinking; “The big glasses in pubs now are a third of a bottle, so it doesn’t take that long to wade through large volumes without having nay idea of what they have put away.” One participant in the study sums

it up perfectly, saying; “You can go around to a friend’s house and its easy for the four of you to polish off eight or nine bottles of wine even though you are not trying to get drunk.” Wine appears to be the predominant drink when it comes to female preferences. In Ireland the market is largely consumed by women. Up to 57% of women compared with 43% of men drink wine. The annual per capita wine consumption in Ireland is 18.1-litres. The market is divided into red (51%), white (44%) and Rose (5%). Table wine accounts for 93.7% of wine sold; sparkling 2.9%, low strength 2.5% and high strength 0.9%. Irish excise duties on both still and sparkling wine are the highest in the EU. On a standard bottle of table wine excise duty in Ireland in €2.05, compared with €1.87 in the UK, €0.62 in Denmark and €0.3 in France. On a standard bottle of sparkling wine the Irish excise duty price is €4.10, compared with €2.39 in the UK, €0.93 in Denmark and €0.6 in France. Wine experts point out that as a consequence of such high excise duty the best value is obtained by trading up. Pubs lost sales if wine sales last year falling from 10% to 9% by value.


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ND WINE Tellingly, of-licences took up the slack growing from 71% to 72. In the off-trade, multiples and symbols share of wine sales is up 1% to 45% and 17% respectively. This is at the expense of the independent sector which has lost share from 34% to 32%, discounters took 6% of the offtrade. Screw cap versus corks has become a hot topic in the wine world. Ageing is the main bone of contention. The cork has a propensity to allow wine to breathe which is significant for the process of ageing a wine. No one knows how the screw cap reacts to long periods of ageing. The cork offers tradition and a proven track record. One advantage of a screw cap according to wine experts is that the wine will not be affected by cork taint. The majority of wine bought in Ireland is drunk straight within a few hours of its purchase so the ageing of wine is not much of an issue in this case. It seems that the Stelvin Closure is the best alternative to cork currently available. However, there are numerous after products underway in an attempt to find a better solution that may be successful. Increased education and exposure to wine is helping to create a more sophisticated Irish wine drinker. Brands play a key role in the market

and ultimately aid consumers buying decisions but at the more premium end consumers struggle to recognise that added value. Sustaining profitability and long term growth in this market value relies on wine being multi-dimensional, not just reliant on multi-buy promotions. Although the popularity of wine has grown significantly in Ireland since 2000, regular consumption is low when compared to the UK and other countries. However, the Irish wine market has yet to reach its peak and there are a number of current market conditions which the industry can exploit. The on-trade faces an uphill battle; Irish consumers need more incentives to venture out into pubs and clubs. Clearly lifestyle has a lot to do with it but when reality and prices hit home many consumers are opting to stay at home with friends, dinner and a couple of bottles of wine. The value sales of wine within the off-trade in Ireland are €773m, up 13% on previous figures. Wine remains a popular choice within this channel. The most popular drink consumed in the home is table wine with a percentage of 43% and 44% in ROI and NI respectively. Bottled table wine remains in the on-trade industry. The fact that more

pubs, hotels as well as traditional restaurants have combined that food/alcohol element to their business, wine should sustain its popularity as a complement to food. Irish Distillers has a variety of well known wines in its portfolio including Ernest & Julio Gallo, Jacob’s Creek and Long Mountain, Edward Dillon & Co has the Carmen Wines, Wolf Blass, Eaglehawk and Santa Julia. Diageo Ireland offers a number of well known names including Blossom Hill, Blue Nun, Lion Range, Eden Valley and Piat D’Or. C&C’s main wine brands include Black Tower, Flat Rock, Clos Du Bois and Concorde. The dynamics of how we drink has metamorphosed alongside cultural changes in Ireland. There are more middle-aged women drinking in more subtle ways, using the off-trade as their main purchase channel. Wine is the drink of choice for women.

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There’s a lot of misleading going on right now and not all of it emanating out of Dail Eireann. Supermarkets trying to lure in consumer’s who are playing hard to get are actually using misleading practices in their special offers. That’s according to a recent survey which tracked supermarket special offers for months and found that some ‘Offers’ lasted the duration, in other words they weren’t ‘Special’ at all and the pressure to ‘Buy Now’ has been deemed misleading. As consumers turn in their droves to whatever bargain they can find be it special offer or own label, they need to be aware of the traps that lay before them. Such findings are all well and good in the UK where they actually have rules and guidelines in place to do something about unfair practices. In Ireland we have precious little and that which is in place can best be described as toothless. In the UK the rules which govern such trading practices include the new government guidelines on offers introduce last may which clearly point out that as soon as an item goes on offer it should be at the higher price for 28 days in that store. The item shouldn’t, according to the UK rules, be on offer longer than it’s been at the higher price, unless the multiple displays a sign that says otherwise. The only exception to the rule is if items close to their use-by date, and let’s face it, there is only so much of this any consumer can buy without witnessing it rot in the fridge the next day. An expert on trading standards reviewed the Which? survey and found several leading multiples, some of which have operations in Ireland, were clearly breaking the rules. One multiple, for instance, had wine on offer that was at the higher price for only one week in two months. Another had blueberries on offer that were at a higher price for only two weeks before being sold at half price for six weeks. The third multiple had cherries on offer at half price which had been sold at the higher price for a mere 17 days, a month before the offer. One of the leading multiples

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highlighted in the survey commented; “It is never our intention to mislead consumers but to offer excellent value for money.” Another claimed; “We always strive to meet the voluntary guidelines and would not at any time seek to mislead customers. Your [Which?] report has highlighted a few incidences where signs had not been updated and training will be repeated to avoid this happening in future.” The findings of this survey takes on a greater resonance when all evidence is pointing at how the recession of the last six months has had a significant effect on the behaviour of consumers. All major multiples operate on a percentage margin. The practice of fake pricing allows some who practice it, to maintain these margins yet at the same time provide a point of difference either with a newspaper advert, or on the shelf with a noticeable discounted price on display. In order to outdo rivals, some multiples have been found out in. One in particular introduced a 3-bottles-forthe-price-of-2-deal across all its

product range except for fortified wine and champagnes. The practice for ‘Marking Up’ only to ‘Mark Down’ has been practised for years. The multiple pretends to be offering a great discount on a €7.99 bottle of wine, but the real price of the wine is actually €3.99. This takes on a greater relevance when it has been estimated that as much as two-thirds of all wine drunk has been purchased in a discount promotion. The two German discounters Aldi and Lidl have enjoyed a 40% expansion of trade since January 2008 which in part reflects the impact of opening more stores (up to 7% over the same time). However, this increase in business is mostly through attracting new customers or greater spend per shopper through their existing stores. The evidence is clear, for a basket of 15 items prices are on average half of those in convenience stores. Households are also turning to private label goods in greater numbers, at the expense of pricier branded products. Private label goods are on average 33% cheaper than


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NO

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It will, therefore surprise nobody, to see why the mainstream multiples are fighting for their customer base. ‘Special Offers’ have been looked at cynically before and most consumers know that nothing is ever for nothing and a bargain always comes at some extra cost, be that on quality or deception. branded goods. They are, however, still under development in some product categories such as confectionery, bakery, health & beauty and could have more growth to come. Household spending at the discounters has increased at the expense of other multiples who are experiencing pressure on sales as consumers look for a bargain in the market. The products that consumers tend to be buying in discounters are frozen, bakery and other general groceries. It will, therefore surprise nobody, to see why the mainstream multiples are fighting for their customer base. ‘Special Offers’ have been looked at cynically before and most consumers know that nothing is ever for nothing and a bargain always comes at some extra cost, be that on quality or deception.

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Aldi and Lidl may be kings of the hill in Ireland but there is competition for the untouchable discounters elsewhere. Not everyone is running scared. Ahold, the Dutch retailer said it was

RUNNING SCARED OF TH E keeping discount retailers at arms length in both the US and home market as a result of the introduction of own label products. So are there lessons for the Irish experience? 18 TGm


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The Dutch multiple has been forging ahead in its US expansion which accounts for over 50% of its revenue. Its plan has involved cutting and rebranding its prices supermarkets at a time of great consumer unease. John Rishton, ceo of the group commented recently; “Clearly the discounters will benefit in the current environment. The trick for is to prevent our customers from wanting or needing to go to the discounters and to attract customers from supermarkets similar to ourselves.” Ahold is contending with the usual market pressures. It’s net profit declined 9% to €195m for the quarter as a result of a higher tax bill and lower income from a Scandinavian joint venture. However, its operating profit rose 11% to €262m on sales of €5.8bn. The company’s retail operating margin rose to 4.9% in the quarter from 4.8% last year driven by margin improvements in the US Stop&Shop, Giant Landover and Giant-Varlisle supermarket chains. It intends to stick to a full year operating margin forecast

they were happy to rip off consumers, happy to not pass on deals to Irish consumers. A basket of 85 of the most commonly bought grocery items costs more than €182 up from nearly €168.50 last year, an increase of 8.1% . This is made all the more interesting with the knowledge that Irish households spend over 12% of their total budget on food and drink. Of course the average shopper isn’t going to follow the consumer price index on food or pay attention to food inflation percentages but in their own way consumers have been belligerently watching the price of milk rise to as high as €1.35 in some shops. Shoppers know the importance of getting value for money. We all monitor price trends on specific items and sectors but more importantly, shoppers are increasingly prepared to express dissatisfaction by avoiding retailers who brazenly increase the price of everyday items without rhyme or reason. Shoppers don’t want to understand, why should they? They simply vote with their feet, they don’t

of between 4.8% and 5.3%. The chain believes that margins should not be allowed to grow at the expense of sales. This is the reason the supermarket had accepted weaker margins in the US lately. The current strategy has involved introducing ownbrand products - an area where US retailers have fallen behind our retailers in Europe, as well as rebranding stores, emphasising value and using the own-brand products to negotiate better deals with suppliers. Rishton says; “People think it’s easy to replicate and it’s not. Any clown can reduce prices.” Aldi and Lidl have grown from strength to strength in the Irish market because they have been allowed to. Standard multiples may have been watching them grow but until recently had done little to counter their power. Now when it is obvious that all consumer’s want a bargain, all the big multiples are chasing consumers from the doors of the discounters. However, for too long during the boom times,

hang around. In fact it is more accurate to say that it is the retailer who does not comprehend the consumer. Just how tuned in are retailers to the fact that consumers will change at the drop of a hat when things get tough. There is no love lost in recession and certainly no loyalty. Through little fault of their own, shoppers have been forced to go ‘elsewhere’ for groceries. Some convenience and multiple retailers are not paying attention. This is where Aldi and Lidl have become invaluable Few will doubt at the rise in popularity of discounters. Among the many reasons these retailers have performed so well on the Irish market is the fact that Irish consumers have been ripped-off for years and were not used to a bargain. For example, Irish shoppers pay up to 15% more for food than their Northern Ireland counterparts. A basket of shopping at any number of well known multiples are consistently proved to cost more in Ireland than the same stores across the border.

H E DISCOUNTERS

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“So far we have not seen much switching to the value private label lines despite the emphasis of the supermarkets.| In some areas the difference is just a few miles such as Dundalk which borders Newry and yet the stores are still charging ore. Products such as biscuits, pet food and tins of beans are all far cheaper in the North. Its well established that in recent months the big multiples has been in open retail war with Aldi Lidl. For example, Tesco reduced prices on 1,000 products and has been making direct comparisons with Lidl’s prices in promotional adverts. In turn Lidl has fired back questioning the quality of the lower value brands of established multiples. As Ahold has realised in the States, own label items are essential during recession. In Ireland, sales of own brand grocery goods have doubled since 2000. Across the supermarket chains, research has shown that customers are opting for branded and standard own brand goods rather than premium own brand lines. Mid-level own label products seems to be fairing the best. TNS Worldpanel MD, Marie Burke says this showed shoppers were willing to drop down one level to standard private labels but she said; “So far we have not seen much switching to the value private label lines despite the emphasis of the supermarkets.” The discounter expansion is just one part of a greater pattern. Research shows that Lidl and Aldi customers are more likely to shop in another store on the same day with 53% of Aldi’s customers and 49% of Lidl’s doing so. There is no doubt that customers are saying no to premium brands. As the economy expects to worsen in the new year, mainstream multiples had better get their thinking caps on, fast.

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Not everyone is being squeezed by the current market outlook. Some companies are finding ways to thrive in these difficult trading times. Largo Foods announced in December that it had sold 15% stake to Colognebased snack food company Intersnack for €15m.

LARGO THRIVES

The Ashbourne, Co. Meath based group’s chief Ray Coyle stated that the German snack company may yet add to its 15% stake of the Irish snack firm which boasts Irish favourites Tayto, King and Hunky Dory in its portfolio. One the deal, Coyle said; “They want to buy some more shares at the same price but if I haven’t decided if I’ll do that.” The German Snack food group was established back in 1995 as a result of a merger of two of that country’s biggest snack groups and is now the biggest producer of salted snack products including Chio and Funny Frisch. The company has been doing well in recent times as its 2007 results proved. They revealed that the company’s trading profit rose by over 43% to €7.4m and its sales increased 22% to €90m. However, it hasn’t been all sailing for the snack food company. Things were less than healthy at the time of the infamous Tayto deal back in 2006 when costs associated with the

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“We anticipate growth in the market in 2009. We think more people wll be sitting in at home, they won’t be out and about as much and crisps are a relativey inexpensive item. It’s comfort food.”

€62.3m deal pushed it to the limit. Largo revealed a loss for the year to the end of December 2007 of €7.2m, compared with a shortfall of €3.2m in the previous 12-month period. Largo incurred a €4.3m exceptional charge relating to the consolidation last year of the Largo and Tayto businesses, which resulted in 140 redundancies. It also took a €3.3m goodwill pay-back charge relating to the Tayto purchase. In relation to the Tayto deal, Largo spent €8.8m on interest and other charges.


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LAR G O

Commenting on current trading levels, Coyle stated; “Our sales will be up about 6% this year and our bottom line will be positive.” Adding that Largo should be in a position to ride out the recession, he said; “We anticipate growth in the market in 2009. We think more people will be sitting in at home; they won’t be out and about as much and crisps are a relatively inexpensive item. It’s comfort food.” The Tayto deal though lauded at the time, left Largo paying a debt of €78m. Despite this, Mr. Coyle is still satisfied they went ahead; “I’ve no regrets. It gives us scale and volume. We always reckoned it

Whatever about the Tayto experience, the Largo experience is proving feisty in the face of recession, planning, innovating and mostly refusing to cow down to market trends, creatng its own instead. would take two years to turn it around and consolidate the businesses.” At recession times, keeping a close eye on costs is key to riding the storm, something which he says will be top of the list for the group; “We’re continuing to look at ways to cut more costs. We’re trying to get more benefits from our buying.” The company will invest €9m in marketing this year and he hopes to bring the business into the UK where the group owns a small operating plant

THR IVES

in Barnsley. Other plans include brining Tayto to Libya where he has signed a 50-50 joint venture with a local company. He comments; “I’m going there in a few weeks….There’s an opportunity there. I think Tayto could do well in North Africa.” One of the more unusual expansions Coyle is planning is opening an animal sanctuary beside his crisp factory in Co. Meath. He is hoping that the recession will have passed on by the time his sanctuary opens in May 2010. To date, he has landscaped 60 acres of land beside the factory and plans to put 18 species on view as well as shops, restaurants and children’s play areas. In addition, he has dug out a lake for the park which will have a rustic feel. Tours of the crisps factory will be included in the facility. Coyle has had a herd of buffalo grazing the area for a number of years and plans to add bears, snow leopards, pumas, birds or prey and other wild animals to the mix, as well as a pet’s corner and a 3.6 km walkway. He says; “We’re hoping to get 150,000160,000 visitors a year but we might do even better.” “We might call it Hunky Dory Way or the Tayto Experience.” Whatever about the Tayto Experience, the Largo experience is proving feisty in the face of recession, planning, innovating and mostly refusing to cow down to market trends; creating its own instead.

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Despite our pioneering anti smoking regulations, over one million Irish people smoke up to 15 cigarettes a day. The Irish now rank sixth worse for the amount of cigarettes smoked per day. The findings came from an EU survey and places Ireland sixth behind countries like Malta, Bulgaria and Greece to name a few. Although Ireland’s reputation for controlling smoking habits through strict legislation, people are still sticking to the habit. And the current global recession is not stopping them either. In the UK cheaper brands are appealing to the budget conscious consumer. All of which, of course, is good news for tobacco manufacturers.

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n addition ,Ireland has lost its number one spot in the EU for tobacco control measures falling behind the UK. The slip in ranking is being blamed on the lack of a tobacco price rise back in 2005, leaving the price of cigarettes below that of the UK. Our legislation although ground breaking at the time has not kept up with adjusted smoking demographics, according to the experts such as Professor Luke Clancy, director general of the Tobacco Free Research Institute. He recently said; “We need to keep a focus on young people so that we can help them not to start smoking and encourage others to quit. Budget price hikes help and a ban on 10 packs has also been useful but there is still a great deal more work to be done to demoralise smoking.” Levels among female Irish smokers were higher than the European average and lower for men. Countries in the survey were ranked on control measures including price, public smoking bans, information campaigns, smoking cessation programmes and advertising bans. The figures show that by March this year almost 24% of the population smoked, but this rose as high as 30.8% among 25-34 year olds. Smoking is still a habit consumers are choosing and perhaps there is exacerbation during hard economical times. Smokers on a budget are on the radar for the UK’s big tobacco manufacturers a habit which could soon be picked up in the Irish market. As consumer spending slows to an all time low, Gallaher and Imperial Tobacco are focusing on the low end of the market with price cuts and cheaper brands. Imperial has 46% of the market with cheaper brands such as Lambert & Butler popular right now. The company has also launched JPS Silver which will sell for £4.21 for a 20 pack. In response, Gallaher is also on a campaign to reduce prices on its budget brand Sterling by 7% to £4.20 a pack. The company stated; “Gallaher recognises that the market may be set to down trade during the credit crunch with consumers looking to make savings on their purchases. Budget cigarettes in the UK are those which are priced below £4.60 and the market has been growing strong over the last number of years.” The budget sector accounted for

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CHANGIN G

The fact that smoking habits are up and budget cigarette brands are on the rise is further proof that we have entered a clean slate of shopping and retailers need to be very sharp tostay ahead of the consumer.

HABITS

10.5% of total sales. This compares with 6% three years ago. The figure is expected to rise to 12.5% by the end of the year. Imperial Tobacco stated; “This accelerated growth is a result of the recent economic downturn. Rises in fuel and food costs have encouraged adult smokers to down trade.” Naturally, cheaper cigarettes will not go down well with anti-smoker campaigners who regard budget cigarettes as a step in the wrong direction. The reality is the cheaper cigarettes generally keeps poorer people smoking. However widespread concerns over the economic outlook have forced all consumers to rethink what they buy and if there are alternatives. This is expected to last for some time to come. The budget cigarette is as likely to perform well on the Irish market as it is in the UK. Consumer attitudes are changing in a way we have not seen in decades. Own brand grocery items have doubled in the last eight years. According to TNS, since the beginning of 2008, there has been a marked consumer change in trend with shoppers now switching out of the premium branded items on sales in supermarkets. TNS research that over €6,100 is spent annually per household in this country on groceries. In addition, a it found a basket of 85 of the most frequently bought items now costs more than €182, up from €168.50 last year, an 8.1% increase. Other habits are also changing Sunday trading is down and trading on a Monday is up 40%. The fact that smoking habits are up and budget cigarette brands are on the rise is further proof that we have entered a clean slate of shopping and retailers need to be very sharp to stay ahead of the consumer

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THE INTERESTING THING ABOUT

SAINSBURY

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Sainsbury sure gets into the news here quite a lot for a multiple that has nothing whatsoever to do with the Republic of Ireland. Its stores have been among the main beneficiaries of the Irish shopping pilgrimages across the borders. Irish shoppers who have never entered its doors are bringing news back south of the wonders of the store like it represented the promised land, it’s aisles paved with gold.

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Ever since the Dunnes/Asda story first began circulating many have taken a look at what UK stores are not in this country and which ones may eventually filter in. Sainsbury has been mentioned frequently in the past amid ‘Dunnes for sale’ stories but they have always failed to materialise. The chain itself has a mild recognition among Irish shoppers mainly through Jamie Oliver TV ads that show the ‘cheeky chappy’ chef parading its wares with genuine smiles. Hence its reputation as a kind of ‘British Superquinn’ has floated across our consciousness. Back in November 2008, Justin King, J Sainsbury’s head man was surely leaping for joy and smiling with sheepish smugness at the news that his multiple chain was outperforming Tesco during the height of recessionary times. No mean feat, as it defied many UK analysts cynical that of all the multiples that might fall in this economic downturn, Sainsbury may be the unlucky one. He claimed at the time; “We are working hard for consumers. We are working hard to win them over, we respond to their needs and they reward us. Our like for like sales figure of 3.9% in the last six months is bigger than the biggest retailer in the UK and I think that is quite something.” Four years ago, Sainsbury was sitting an ok-ish, but still underachieving, third behind Tesco and had been unable to shift upwards - until recently that is. As Tesco delves into its war chest, it has curbed its internal sales budget in the UK and Ireland and is now planning for an estimated 2% underlying sales growth in 2009 while Sainsbury is holding strong at 3% to 4%. Granted, Tesco expanded underlying sales 3.7% in the 26 weeks to August 23, Sainsbury has gone one better by achieving 3.9% in the weeks to October 2008, and in tougher times to boot. Tesco had taken another hit to Sainsbury with market share down 0.4% points to 30.9% in the three months to November against a year earlier, while Sainsbury stayed firm and unchanged at 15.9%. One JP Morgan analysts quipped;

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“I think everybody has been a little bit surprised at how robust Sainsbury’s trading has been in the first half. The company seems very pleased with the ranging and quality of its own brand products, which gives customers enough flexibility to trade down within Sainsbury rather than going elsewhere.” King’s big initiatives last year involved the ‘feed your family for a fiver’ campaigns which many Irish TV watchers would have seen throughout 2008. The campaign featured Jamie Oliver creating cheap dishes of meatballs and spaghetti on a budget and his ‘switch and save’ campaign which encouraged consumers to lose the branded goods such as Finish dishwasher tablets, Fairy washing up liquid and Heinz ketchup in favour of Sainsbury’s own brands. Moreover, Kind increased promotions with almost a third of items on offer across the store against a quarter in 2007. He also managed

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to augment underlying operating margins to 3.13% against 2.88% in 2007. However, analysts believe that Sainsbury’s rise to the top has less to do with Tesco and more to do with its upmarket counterparts Waitrose and M&S. TNS data showed that M&S implied growth in November was down 2.5%, while Waitrose in even less off position at 0.3% over the same month last year with an industry average of 5.5%. As Sainsbury’s burrows into the territory of the aforementioned upmarket retailers, Tesco is losing its shoppers to those down the line, according to analysts; “There is some pressure from those retailers that have a stronger value perception - Aldi, Asda and Morrison.” The response by Tesco’s top man, Sir Terry Leahy has been to rebrand Tesco as ‘Britain’s largest discounter’ with the launch of cheaper goods across 2,000 of its UK stores in an

effort to see off the threat of the hard discounters. The range which began as 350 lines in September is now running at 400. In the UK, Tesco has also been asking suppliers for better deals as well as cutting internal budgets. For the Christmas period, according to reports, the retailer wrote to 300 of its non-food suppliers in the UK telling them it was planning to make them wait 60 days for payment instead of 30 days. However not all analysts have full faith in Sainsbury’s, with one claiming; “As the economy slows further I still harbour worries about how robust Sainsbury can really be.” Irish shoppers become As accustomed to a taste of Sainsbury on their travels across the border, perhaps it may encourage the retailer to take a peep inside the Irish market - one day soon.


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HOUSEHOLD MARKET This month TGm focuses on the household care market. Like tea and coffee it is constantly evolving and shifting in accordance with consumer trends and patterns. For the last number of years the household market has been driven by immense innovation. Disposable income and a desire for convenient cleaning dominated the products consumers wanted to buy during the last five years. Hence there was a great wave of all-in-one products capable of a number of jobs rolled into one tidy product. These products clean, kill germs, smell nice and are conveniently packaged, encompassing a time saving solution to cleaning for busy consumers. This spate of innovation is set to change however, as darker economic days are upon us. The priorities of consumers have shifted radically since the first rumblings of recession in summer 2007. Its effect has been to send consumers in a spin of bargain hunting and choosing own label and cheaper brands in general , particularly in the household cleaning sector, in order to save money. For many consumers the quality and price of own brand labels is preferable during hard times. In addition, the higher quality of own label household cleaning products has been improving with each passing year and has meant that the larger branded labels have had to fight all the harder. For once it seems that innovating out of a problem may not work. Its value, value and more value that consumers are after and if branded products are not offering genuine special offers that are infallible, they simply turn their attention to own label. Tricky times ahead for the household cleaning products market. Although 50% of women are out working, 70% claim they are left to do most o the cleaning household chores and this is encouraging a shift to a little and often approach to cleaning. Household cleaning is still seen as a chore as

people generally feel they don’t have enough time to spend cleaning the home; this is underlined by the fact that they would rather be doing something else. The Irish household care market experienced slightly stronger growth after two years of stagnancy. The most important product segment of household care – laundry care – faced decline as a result of competition from the multiple sector as well as the greater influence of lower prices at discounters. Equally, other key categories like toilet care, dishwashing products and aircare continue to show confident sales growth. Dishwashing products showed a significant turnaround in performance, augmented by a flurry of new product development (NPD). This mature market has been revitalised by value-added detergent tablets, such as Finish 5-in-1 Powerball and Fairy Active. The years of economic prosperity have had a positive effect on the household care market. While consumers had greater discretionary income levels, there is less time to spend on household chores. As a result the market as a whole witnessed a wave of all-in-one products capable of doing more than one cleaning job at a time, including killing germs, smelling nice, extra cleaning strength, conveniently packaged and of course, premium priced. Equally, home improvements have been one of the most popular trends of wealthy Ireland. Manufacturers were therefore creating innovative and value-added cleaning solutions. This has been the case in the market for some years but there are challenging times ahead as global economies, including Ireland’s, struggle in recession and consumers’ priorities come into sharp focus.

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Suddenly, consumers will question the need for an all-in-one super brand name when a supermarket own label equivalent can do the job but more importantly at a fraction of the cost. Big name brands are undoubtedly facing pressure from own label household care products as value takes on a new important role on the slimmed down shopping list. Unilever Plc, Procter & Gamble (Manufacturing) Ireland ltd and Reckitt Benckiser Ltd have maintained their top three positions. All three leading players continue to invest in marketing and NPD to sustain their shares in the rather mature marketplace. However, unsurprisingly the own label share gain remains tops with each of the top multiples claiming to have increased penetration of own label household care. Own label benefits from the consistent belief from shoppers that that the quality of own label is exactly the same as premium priced brand equivalents. Ireland has one of the highest birth rates in Europe. The years of strong economic growth have meant that young and professionally qualified Irish consumers stayed at home, while an increasing immigrant population was attracted to living here. This created an increase in the number of households and a higher spend amongst the population which has helped to push volume and value growth in household care. There is expected to be a slowdown in growth over the next few years not just because of recession, but as manufacturers struggle to conjure up new products and major innovations. Rather than product launches that focus on physical attributes and functionality, NPD will increasingly focus on more abstract and intangible properties such as fragrance and colour. Air care currently focuses on these areas and is expected to see the strongest value growth as a result. There have been many important improvements on traditional household care products assisting unpleasant toilet and floor cleaning. With this in mind, manufacturers have focused on improvement of products that are honed to make the most hated household chores easier. The introduction of ‘Bucketless’ mopping systems, designed to replace the traditional Mop & Bucket approach to cleaning has been a significant development in the household care market. Consumers who are loathe to cleaning floors with spill-prone buckets and unsanitary mop heads have gladly traded up to these new systems.

As a result more traditional floor cleaning products have experienced a decline following the success of easier to use floor cleaning systems. Manufacturers also saw a gap in the market for similar devices to make toilet cleaning less of a chore for consumers. Toilet cleaning is understandably the least favoured household chore for consumers and there are valid concerns about the possibilities of germs on the toilet brush. Disposable, refillable, replaceable and flushable cleaning devices have emerged as a consequence which means consumers can operate cleaning efficiently and thoroughly without worrying about lingering bacteria. Similar advances have been made on perceived ‘dull’ household cleaning products such as wipes, fabric fresheners, car fresheners, liquid cleaners, gel cleaners, 3in1 cleaners. The relevance of innovation to most household care manufacturers is underlined by the fact that for some companies up to 40% of revenues come from products that are no more than three years in the market. New products coming on the market in the future are likely to include solutions to cleaning problems many consumers may not have even considered, such as cleaners which seek out ‘invisible’ stains and laundry products that not only protect from lime scale build-up in washing machines but also in clothes. Such higher margin new products are backed by some serious advertising spends. For instance, Reckitt Benckiser revealed that it’s already substantial marketing budget increased by 10% over the first half of 2008 or more than 13% of its revenues. Household fresheners are the largest growing sector of the household care market. The market is being driven by technological advances notably in the time release segment and the evolution of a wider range of formats. Marketing initiatives seeking to elevate the status of the air freshener to lifestyle accessory have also helped further premiumisation. The challenge for manufacturers is to ride the change that is putting pressure on consumers to improve their green credentials. Although the market is continuing to innovate and invest in marketing spend, there is no doubt that the credit crunch combined with the rising cost of fuel, food and power has left many consumers keen to reduce their usual brands benefitting own label and discount brands. [Source; Euromonitor]

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TEA AND COFFEE MARKET

This month TGm has decided to also Focus on the inimitable appeal of the tea and coffee markets. Ubiquitous, yet traditional, saturated but innovative, both tea and coffee continue to reinvent as culture demands it. For the tea market we have seen a resurgence in popularity. After a decade long fascination with coffee and all its superfluous accoutrements, tea has once again come to the fore. Perhaps it is the credit crunch that has made us reconsider the take-out coffee or perhaps it is a more subtle cultural shift where a return to recession has flung us back to basics. And not necessarily in a bad way. Consumer’s are undergoing a feng shui of their expenses. And this cleansing of bad habits brings with it a longing for what came before. Yes, luxurious take-outs were great; opening up and exposing the Irish to the world of the coffee bean to a nation limited by stewed brews be they coffee or tea. However, there is something in the air that is taking us back to a simpler time, excluding the stewed tea of course, we can never go that far back. Yes we will have our organic green tea and cappicinno but let’s make it at home. That’s the message that tea and coffee manufacturers have received loud and clear and have provided consumers with a sparkling array of choice. As for coffee, few could have imagined decade ago how

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much we love coffee. How rapidly assimilated coffee has become in our daily habits. The intrinsic desire for a coffee to jolt us into our day is as Irish as stout and potatoes. Irish consumers have been exposed to the potential of coffee through the ubiquity of coffee bars. Now this is replicated in the home. Good, robust, flavoursome coffee is in demand and will remain recession proof, as long as we can save by preparing it at home. Tea and coffee are staples of the Irish diet. They are as required as bread and milk. As long as quality and innovations remain a priority for manufacturers, both markets should consistently thrive. Despite the ubiquity of coffee shops, tea plays a central role in Irish life. Ireland has the highest per capita tea consumption in the world at 3.2 kg per head per year. The quality of tea drunk in Ireland is also the highest in the world and is still rising. Rising disposable incomes have given many consumers means to afford higher quality products in recent years. Sales of speciality tea continued to drive value growth meanwhile, extra spending on premium lines compensated for stagnant volume growth.


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TEA AND COFFEE MARKET Brands focused on developing and marketing decaffeinated blends that compared in taste and quality to regular tea, and the strong growth rates experienced by these products is testament to their quality. The Irish public is discerning when it comes to tea with regard to taste, leaf appearance and quality. Prior to the Second World War most of the tea bought in Ireland was purchased in the UK, either in the London Auction or privately. This all changed after the war. Rationing ended and tea was price controlled and allocated to the Irish wholesalers in proportion to the amount of tea the country had purchased between January 1936 and June 30 1939. Tea is the biggest supplier of the flavonoid antioxidant in the Irish diet. An average cup is virtually calorie free and is a good source for hydrating the body. Herbal tea has become very popular in connection with consumers’ pursuit of health and well-being. In fact, it is hard not to find innumerable herb blends from all the major tea brands. Reasons for the explosion of the herbal tea market are numerous. Primarily, there is a health trend that is pushing consumers towards products that are free from caffeine, sugar and fat, a claim that tea has always been able to make, but there is also an environmental ‘green think’ aspect which is motivating consumers to purchase allnatural products, with no flavourings, preservations or additives. Many young people are turning their back on traditional teas in favour of exotic new herbal, fruit and speciality teas. It seems traditional teas will have to lose its ‘staid’ image to remain popular as sales of herbal and fruit tea rose by 30% and speciality varieties like Green tea continue to surge. Up to 70% of people aged over 65 and over drink traditional tea at least twice a day compared with only 38% of 15-24 year olds. But young people appear to be sipping exotically flavoured teas, many of which don’t contain caffeine. The overall decline of the market, which researchers say is partly due to prices being cut in discounts has been curbed by consumers turning to speciality, herbal and fruit teas. However, despite falling popularity, standard tea bags still make up for over 60% of the total market with herbal and

fruit teas accounting for an estimated 27%. Green Tea, which is high in antioxidants, is increasingly popular. Equally, white tea is expected to make its mark as a fashionable new health tea drink. Overall the tea market has become more segmented with some varieties being marketed for their health benefits and others for their anti-stress value. Barry’s Tea has a long established reputation and heritage as Ireland’s leading tea blenders. The company’s teas are also selected from the best tea estates in the world from India, Kenya and Rwanda. Its varieties include Gold Blend, Green Blend, Classic Blend, Decaf and Herbal Teas. Lyons Tea is Ireland’s biggest and best loved brands and has been in existence since 1902. Lyons Original Blend is a blend of the finest teas in the world. Its other brands include Gold Blend, Gold Blend Reserve, Kenya Blend, Green Tea and Decaffeinated.

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TEA AND COFFEE MARKET The speciality coffee range is expected to increasingly expand beyond cappicinno, the leading product. Producers are expected to shift focus further into other instant speciality varieties such as mocha and latté as consumers become more accustomed to speciality coffee blends. Premium hot drinks are viewed as indulgent treats and affordable luxuries, which consumers are often prepared to pay more for. For a long time, image and lifestyle choices in Ireland were viewed as more important than ever with the accent firmly on youth, sophistication and fast paced living. Coffee with its energy-providing properties, as well as its refined continental image has sat well with the rising professional class in Ireland. The boom in Irish coffee drinking over the last decade was fuelled by a huge 80% growth in specialist coffee shops since 2001. Coffee is increasingly a favoured drinking option for many consumers. Despite being a mature market, there are lots of new product activity encouraging consumers to trade up to premium sectors with convenience revitalising the roast and ground sector through on demand pod machines. Over the past few years, the complexion of many a main street across the country changed as coffee shops took up position on every street corner. The metamorphosis in Irish coffee habits has been as rapidly developed. As house prices rose, so too did our appreciation of coffee. These days the traditional desire for coffee is beyond what it was in the 80’s and 90’s – a rather bleak blend of brown granulated liquid. Today it’s all double espressos, frappacinnos and lattés. However, as the hazy days of economic boom fade into distant memory and recession takes a reality bite into our little expensive habits, takeaway coffees on the way to work will surely be culled. Put another way, consumers are already replacing their morning takeaway Americano with homemade blends poured into silver hot mugs. As most Irish coffee drinkers will not want a return to the bland old days of bad coffee there should be no reason to compromise on the quality of coffee we drink. Hence there is an opportunity for coffee manufacturers to fine tune their coffee blends to the same standard as a coffee shop takeaway. Consumer expectations and demands have all fuelled the growth of coffee over the past few years which have widely expanded the choice and variety of the market. Standard formats of coffee are faltering in the face of consumer preferences for variety and innovation. Instant standard coffee registered the slowest of any coffee category. Despite this, standard formats continue to characterise the industry in Ireland with instant coffee continuing to represent the bulk of total off trade coffee value share. The speciality coffee segment is expected to increasingly expand beyond cappuccino; the leading product in the segment. Producers are expected to increasingly expect to shift focus further into other instant speciality varieties such as mocha

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and latte over the forecast period, as consumers become more accustomed to speciality coffee blends. Growth in coffee pod volumes appears limited at present and availability through off-trade channels remains poor – the format will bear scrutiny over the forecast period, according to the trade, as consumer tastes become more sophisticated and ownership of single-serve machines gradually increases. Research shows that Bewley’s is the most popular brand of coffee and machine purchased by companies in Ireland


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today. Bewley’s has been exploring, sourcing and roasting coffee for over a century. It is a leading supplier in offices, café’s, restaurants and 4 and 5-star hotels across the country. The company is also strong in fresh coffee. There are some 3,000 cups of Nestle coffee drunk every second. Needless to say the Nescafe range of instant coffees are a market leader in Ireland with many favourite varieties including Nescafe Original, Nescafe Gold Blend, Nescafe Black Gold, Nescafe Decaff and Nescafe Alta Rica to name just a few in its repertoire.

The Kenco Coffee Company has been coffee experts since 1923. The Kenco range offer quality choice and convenience for every potential hot drinks occasion by providing a host of well loved branded favourites, including Kenco Instant Coffee. Robert Roberts is a leading coffee roaster in Ireland. Its brands include Java, Kenyan, Colombian, Fair-trade Decaffeinated among others. Its latest edition to the range if Robert Robert’s Panama Boquete – a medium bodied estate coffee with a honeyed sweetness and a crisp extra finish.

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In recent years some sectors of the drinks industry suffered from poor sales while others soared. Wine, in particular has enjoyed increased penetration as consumers hit the off-trade and forsake trips to the pub. 34 TGm


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In this forgoing, beer and stout has suffered. However, as the economy continues to flail, new trends are emerging reflecting how uncertain times are at the moment and how difficult it is to predict consumer behaviour in recession times. SABMiller, owner of Miller Genuine Draft and Grolsch claims that drinkers are once again bucking trends so out of sync with those from just a few years ago. The beverage group’s chief executive Graham Mackay pointed out the changing consumer patterns evident in the beer market, despite the global downturn. He said; “They seem to have taken the brunt of the global crisis on the chin.. Consumer spending growth has slowed materially.” Several trends have been reverted according to Mackay’s observations including the obvious benefits of consumers ‘trading up’ to more pricey beers, a practice that is on the way out; “We see the shift to premium halting.”

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Some of this decline has been attributed to the brewer’s unusual tendency to organise raw materials forward for up to two years which has prevented it from benefiting in any way from the recent drop in raw commodity prices such as oil.

Several trends have been reverted according to Mackay’s observations including the obvious benefits of consumers ‘trading up’ to more pricey beers, a practice that is on theway out.

He also claims that some of the more developed markets have seen people reverting to mainstream beer brands. For instance in the US more traditional beers are becoming popular once again while in South America, a trend for homemade alcohol is on the increase. In South Africa, drinkers have begun what he calls ‘trading down’ to mainstream brands like SABMiller’s Castle and in Peru, a cheap beer brand Trujillo has been launched as a ‘commodity price fighter’ as rivals attempt to compete on price. The profit margins of big brewers like SABMiller and others has been hit by a combination of factors. Clearly the decline in consumer spending is not helping but combined with costly raw materials like glass and aluminium, and sales volumes growth has slowed altogether. A decline in European and South American margins has impacted on the group’s overall profit margin in the six months to end-September, despite its

announcing a 28% increase in pre-tax profits to $2.02bn and a 4% rise in sales to $11.2bn. One analyst pointed out that SABMiller’s first half results were ‘reasonably solid’ despite the fact that European margin declines were ‘most unexpected. Some of this decline has been attributed to the brewer’s unusual tendency to organise raw materials forward for up to two years which has prevented it from benefiting in any way from the recent drop in raw commodity prices such as oil. As a consequence, as many commodity prices have dropped, particular in agriculture, SABMiller continues to pay above average for glass. Europe is the largest contributor to the brewer’s profits and lager sales volumes increased 2%, compared with a 12% rise previously. Poland is the biggest market for group in Europe, where the overall beer market grew by a measly 1% compared with 8% last year.

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Christmas 2008 was a frugal one for retailers. The first hairy season after a long line of abundantly propserous ones. Despite entering a new year, many analysts believe that the pattern set by shoppers in Christmas ‘08 is one that will continue throughout 2009. Retailers are having a bad year and its only one month into it. A hangover from a poor Christmas, and many are predicting a Dickensian year ahead. Spending had been falling every month of last year with the exception of January 2008. Post our first recessionary Christmas for over two decades, consumers who have been treated less than fairly by many retailers over the last decade are hardly feeling that sorry for them now. According to a recent spending survey, shoppers spent an average of 5.3% less for Christmas 2008 than they did the previous year. In 2008, the average household spend was €1,354 with a generous €688 being spent on gifts, €422 on food and €264 on partying and socialising. The survey also showed that 14% of consumers bought their Christmas treats in the discount stores of Aldi and Lidl twice the amount they did in 2007. Cheap everything was the name of the game throughout Christmas ‘08 and consumers sought the dicouters and own labels in order to save a little cash a long the way. Aldi and Lidl certainly have been kept busy this year and were going to

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great lengths to please its Irish Christmas shoppers and can be in no doubt that recession time it its time. In the run-up to Chriustams, Aldi sealed its reputaiton as the discounter that leaves change in your purse with its range of upmarket items at downmarket prices. In additon, it increased its stock of Irish products including Bord Bia approved dry-aged steaks, selling for 30% less than other similar products in other stores. Its Christmas brochure also included free-range Irish chicken and Irish cheese boards for €6. It was also selling frozen whole goose for €24.99, part-boned pheasant stuffed with pork and apple topped with a bacon lattice for €10.99 and whole

Canadian lobsters for €9.99. These goods are hardly the down market wares of a down market store. Lobster, pheasant, cheese boards and free-range Irish meat is the stuff of farmer’s markets and more upmarket stores selling such foods at premium prices. However, Aldi has been quick to point out that such upmarket stock is not a sudden move by the German retailer. Tony Baines, Aldi’s head of buying for Ireland and the UK points out that he and a number of executives flew into Ireland and broke a long-held reclusive persona at the store by laying on the charm thick and fast. He says that Aldi is attempting to create a ‘broad-church’ appeal, with


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the goal of making ‘the luxury affordable’. If such a thing could be packaged and sold it would be worth millions to the store, and indeed it is. Affordable luxury has seemed an extremely ambivalent and distant concept to Irish consumers who have had to pay for their lifestyle choices for over a decade now. Baines also points out that; “The UK and Ireland have led the Aldi world in its area and some of its sister companies in Germany and Austria for example are starting to follow us as we have shown how we can encourage customers to buy everyday products but also products of a premium nature.” However, Baines rapidly points out that although its store is making waves in recession times, it is not the ideal economic time for any retailer and it is not jumping for joy at the prospect of worse times ahead. Baines says the discounter chains is; “Very conscious that the recession is not a good time and we don’t want to be seen to be making hay while the sun doesn’t shine. We are very keen to offer the customer a benefit to come to us when they have less money in their pocket.” The reality is that the gap in price between major multiples and the discounters has narrowed in recent months however there is still a difference of €13 on an average basket of goods between cheapest and dearest. However, even the discounters are going up in price even if it is still less than any of its more established multiple rivals. Lidl is the cheapest supermarket, charging more than 33% less for a basket of goods, than its dearest competitor Dunnes Stores. A survey revealed that Lidl charges €39.68 for a basket of 34 goods, compared with Dunnes Stores which had a €53.14 value for the same goods. The most interesting thing about this survey is that competition appears to be concentrating on the own-brand sector with the difference between the multiples and the discounters narrowing. This is largely to do with the multiples now directly competing with Aldi and Lidl on own brand goods due to increased publicity around lower prices offered by the discounters, influencing price conscious consumers to split their baskets and seek out the best value. However, it is still interesting to note that the price gap between the multiples on a basket of 72 branded

Consumers have become aware that special offerse and promotions are to be viewed witha certain cynicism and are often used on discretionary goods rather than the staples that we rely on for the weekly shop.

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goods tightened, There was only a 0.3% price difference between Tesco, Dunnes and Superquinn. Such evidence only reinforces consumer’s belief that they need more competition and therefore choice. While retailers had been increasing the numbers of special offers and promotions over the last few months of last year, generally speaking we are not seeing a long term drop in the staple branded goods in shoppers baskets across most of the bigger multiples. Consumers have become aware that special offers and promotions are to be viewed with a certain cynicism and are often used on discretionary goods rather than the staples that we rely on for the weekly shop. Christmas 2008 has been a landmark moment for Irish retailing. Shoppers have aired on the side of caution and kept a tight control of their purse strings. And why not, when Aldi and Lidl are offering the best for less. What we have seen in the month of December should be heeded by multiples as the way ahead for shopping in 2009.

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G THE GLOOM Bart Becht, ceo of Reckitt Benckiser is a ‘clear benefits’ man. For instance removing a stain, soothing a sore throat or easing a headache, these are the easily defined functions in a product he prefers. Products like Vanish, Strepsils and Nurofen appeal to this straight sense of marketing; selling something with objective benefits. And being this aware of a company’s manifesto pays off, with a 10% rise in underlying sales buffering all the gloom of the current economic gloom. So what’s the secret behind Mr. Becht’s success. TGm finds out Economic recession has many dashing for cover. It also brings out unpopular demands in some companies under the guise of responding to market conditions. For instance, one large multiple has been putting pressure on suppliers to alter their payment terms extending them from 30 to 60 days, which the opinionated Bart Becht believes could cause a lot of damage to smaller companies. For its part, the multiple in question says that it is a precautionary move and not without sensitivities towards small suppliers. Becht says; “The question is if in the long term they drive small suppliers out of business. That is the key question and it might happen.” Well put. Becht is as vocal when discussing one of Reckitt’s most profiled rival, Unilever. On the subject of the recently appointed chief executive, Paul Polman, he believes there is a

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struggle ahead for the former Procter & Gamble man; “It is a challenging job no question about it.” There were rumours abound earlier in the year, that Becht may be interested in taking on the challenge of heading up Unilever after Patrick Cescau retired. However, the Dutch man is adamant he was never interested in the job; “Why would I go to Unilever - to prove what? To run a bigger business? But it will not be nearly as much fun because you would have to radically change the culture.“ On changing an ingrained company culture he says; “It is very difficult . Look at British Airways. You think is it a state-owned company or a nonstate owned? I can’t even remember when that was but has the culture even changed? I am not sure it has - it is very hard to change a culture in an organisation. It is the hardest thing to change and it takes the longest.” Rivals aside, Becht has had his hands too full building up Reckitt’s business to impressive levels. Reckitt has been growing for the best part of a decade and shows no sign of slowing down and the proof is in the profit with underlying sales up by 10%. It has been the second best year from a growth point of view since the 1999 merger. However, after a good run for the last years, is it only down hill from here? Analysts feel there are two obstacles to sustaining its growth levels.

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And the secret ingredient to Reckitt’s success?...... ‘very proactive, very passionate, very actionoriented’. Sounds like the perfect Reckitt product. The first, according to an RBS analyst is to do with its pharmaceuticals division. Reckitt’s has the exclusive licence to manufacture and distribute Suboxone, a drug used in opiate addition. This exclusive rights to the drug in the US expire in September next year and in 2016 in Europe. This may result in the loss of over £208m in revenue and £120m in operating profits. The analysts suggests; “Because it has been so successful over the last three or four years, mathematically you will be looking at pretty modest growth for 2010. Lowsingle digit earnings per share , rather than the double digit it has so far delivered.” The second potential obstacle is more obvious and one which affects every company trading right now -

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economic conditions; “If the economic downturn gets worse, and consumers are under pressure, you would expect to see that manifest itself in some shape or form, although I would still expect Reckitt to outperform the market.” In response to these concerns for the company’s continued viability Becht says; “There is a dip before it finds something else. There are some products in the pipeline, but most of these come to market in 2015 or beyond.” Household and personal care are where it is at for Reckitt’s at present, as is the case with most consumer goods companies. On suggestions of buying into a businesses from Johnson & Johnson, GlaxoSmithKline or P&G, Becht says industry consolidation only occurs ‘once every 20 years, so I don’t spend much time on that’. On the economic turbulence and a running scared consumer Becht’s attitude is reasonably nonchalant. As Unilever admitted earlier in the month that it is losing market share to supermarket own label products, Reckitt’s remains confidently undisturbed. Becht opines; “If you want to save 10% on you shopping trip the easiest way is to go to a cheaper store, not by going to buy a cheaper brand.” Yet even this confident chief executive is not impervious to the realities that lie ahead in the market. He admits that overall market growth is going to slow but he believes he will still out grow the competition. His strategy? Reckitt expects to keep placing new products on the market including, among others, chewable Nurofen and cooling Strepsils. In the last three years Reckitt has spent £3bn in recent years adding brands such as Nurofen and Clearasil. He says; “Health stuff makes up about a third of the shop, it might be a bit bigger, yes it could be, it could very well be. So it should naturally be a bigger part of the business going forward.” And the secret ingredient to Reckitt success? He describes in three phrases; ‘very proactive, very passionate, very action-orientated’. Sounds like the perfect Reckitt product.


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an anything positive come out of the tremendous about face in prosperity we’ve seen emerge before our eyes since the summer of 2008? Will 2009 be more of the same, or worse? Dastardly predictions for our future as consumers; bottoms falling out of our trousers and panic ‘unbuying’ have been our cue for several months. So much so, in fact, that the world is starting to resemble some vividly sketched apocalyptic scene from a satirical 50’s comic book; up close drawings of panicked people with their hands clutched to their heads, twisted mouths struck wide in terror as the hideously drooling ‘monster recession’ tears down some generic main street flattening all in its sight. Not many haven’t jumped on the hyperbole and hysteria bandwagon. But perhaps this is just a phase some of us can choose to ride out from the sidelines. If we stand a little back for a moment and observe what’s happening we can see that already trends are reflecting a cultural shift from the fall-out of recession 2008 and not all in a bad way. Even at this early stage, ‘going out is the new staying in’, anything ‘bling’ or giving the appearance of excessive luxury is entirely uncool, getting familiar with the local Lidl has eschewed bespoke grocery shopping, digging through one’s wardrobe for last year’s cashmere jumper and boyfriend jeans is preferable to dropping a several hundred in BT2’s and who isn‘t enjoying the calmness of it all? The calmness of not spending; what a concept. There is a collective sense of back to basics which is permeating the mood of the Irish consumer in ways we have not seen for decades. This back to basics has been absorbed like some rapid osmosis. A recent study about children’s behaviour has given us some refreshing antidotes to the years of ‘pester power’ which tormented every Irish parent. Pester power is fairly self explanatory whereby a child would effectively nag its cash rich, time poor parent for what it wanted, particularly

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during the supermarket shopping expedition. This was cunningly tapped into by marketers who aimed many children’s products at mother’s under the influence of tyrannically spoilt, child-care reared label savvy ‘children‘. And a lot of money was spent and made under the influence of pester power. Health Behaviour In School-aged Children (HBSC) is an international study involving 41 countries and backed by the World Health Organisation. The study was comprised from a collection of data retrieved from thousands of school children aged 10-17. Dr Saoirse Nic Gabhainn, principal investigator for Ireland believes we have stumbled on a new type of child experience; “We have done three separate surveys, in 1998, 2002 and 2006. We cover the standard health behaviour like smoking and drinking and cannabis use, bullying, food intake and

physical intake.” She continues; “And in addition, we look at health perceptions - whether children think they are happy, how they report their quality of life, how they feel about themselves.” The good news for weary parents is that the findings reflect positively on the attitudes of children, for once, and some will be hard for marketers to respond to in the future. For instance, says Dr. Ni Gabhainn; “The really obvious one is that smoking is down; that has been a big change. Bullying and sweet eating are down. While tooth brushing and physical activity are up.” In the study positive attitudes to spending time with family and friends have become so prevalent among the surveyed children that they are spending less time on the internet and having more actual contact with people;


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clear pattern. It’s not a sort of a pattern, it’s a ‘we-have-the-evidence’ pattern.” The study’s finding seem at odds with advertising featuring misunderstood kids and parents who don’t get them. Perhaps after all, the marketers haven’t been paying attention and pester power has had its day. However, those wily marketers don’t stay out of the loop for long. If the 2008 US election taught us anything it was the power of targeting young people on the net. Obama’s strategy for pulling the youth vote was based almost entirely on campaigning online and forging a way in electioneering. Confectionery manufacturers have caught on too, particularly in the UK as a way to beat those pesky laws which ban advertising snackfood to children on TV. Companies such as Nestle and

In the study positive attitudes to spending time with family and friends have become so prevalent among the surveyed children that they are spending less time on the internet and having more actual contact with people;

“Children who spend a lot of time with their friends are exposed to increased behaviour but they also get a lot of benefits from it in than they are learning abut social behaviour and they get a lot of immediate feedback about who they are and what’s appropriate.” Dr. Ni Gabhainn continues; “For children who have elevated rates of electronic communication with their friends - telephone, e-mail and texting - their rates of risk behaviour are reduced as we would expect but their rates of happiness and reported health are also reduced.” In a far cry from recent times, the study found that children value their

relationships with parents, even during those tricky ‘I hate you’, ‘I’m an emo’ years; “Traditionally, a lot of parents think that when children hit 14 they no longer have much influence but they do. Parents have underestimated in even older adolescents lives. The quality of the relationships with parents and teachers does have a protective effect. We can see that children who have good relationships with their parents are much less likely to be involved in in risk behaviour, in fighting smoking, drug taking.” Dr. Nic Gabhainn concludes; “It’s a great experience to be able to show them punitively - it’s a very

Coca-Cola are getting round such bans by targeting social networking sites like Facebook and Myspace. A survey found that other food companies like Mars and PepsiCo are also using the sites. The UK’s communication regulator, Ofcom banned snackfood makers from advertising to kids on TV. The survey found that up to 84% of adults wanted regulations to ban similar adverting on the net. Revealingly, the survey found that the top 20 websites on which snackfood companies advertised were among the most popular with children. Youtube came out as the top site for 15 year olds, with Facebook, Myspace and Bebo strong favourites as well. Coca-Cola also advertise on online game sites like Miniclip.com. Advertisers either post banner advertisements on social networking sites or set up pages to allow kids to join and become fans or ‘friends’. Members receive text messages and emails about special promotions and new products.

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Mars has a Myspace page which has a radio station which allows listeners to win Mars planets. Mars Skittles has a Facebook page which allows children to play online games. It boasts more than 100,000 fans as does Smarties. Coca-Cola also has a Youtube channel for Fanta. In their defence, PepsiCo declined to comment. Coca-Cola said it didn’t target kids under 16. ,Mars and Nestle said that they did not market to children under 12, and Facebook and Myspace had age limits of 13 and 14. Although this trend has been around for a while, targeting social networking sites like Facebook is relatively new. The Obama ‘08 campaign will forever be remembered for exposing this genre as a

event, like collapsing economies. And it is often that simple. For instance, who would have thought that advertising on TV would ever have become obsolete. Experts researching the genre are informing us that the TV advertising market could completely collapse by 2020. For at least a decade TV has seen something of a mess to many people. One only has to read any Sunday newspaper’s TV review to see how irrelevant and unsatisfyingly ill-tasting TV is to many viewers. Despite the odd exception, TV mostly comprises loud, fast, visceral ‘turn the camera on each other’ shows which of course have certain mass appeal but also maddeningly turn many, many others away. This divisiveness makes it hit and miss for

For now at least, and even just before economic collapse, consumers ceased the living to shop compulsion........one can spin and spin for a long time and it appeals in a giddily brief way but eventually we spin out, fall back and catch our breath. penetrative marketing tool. It is one trend that is possibly recession proof and reaches beyond the amount of cash we have in our pockets. What clearly has changed though, according to the HSBC study is that kids are not necessarily buying into the whole advertising for sweets thing anymore. If, as the study found, kids are in fact interacting more with real people and listening to and co-operating with parents then they are less susceptible to the lowest common dominator of snack food ads be they on the internet or not. A new responsible, calm and agreeable child is emerging and this may, perhaps be one of the good things about recession that is here to stay. Everything has a sell by date including how we advertise. Sometimes it just stops working and not always because there is such a fast turnover in cultural gimmickry. Often the collective mood of the people takes a shift in response to a particular global

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advertising. And revenues are falling at an unprecedented level, according to research. The value of conventional TV ads is facing a drop of 83% in the coming decade. For advertisers, the prediction is referred to as ‘radical fragmentation’ which could see the value of conventional or ‘linear’ TV advertising that is, ads broadcast in the run of a scheduled programme - fall greater than ever before. For now at least, and even just before economic collapse, consumers ceased the living to shop compulsion. This strung-out phase of cold turkey began in January 2008, when nobody bought any cars. It would be ridiculously false to write that anybody adores economic disaster and 2009 will bring more difficulties. However, one can spin and spin for a long time and it appeals in a giddily brief way but eventually we spin out, fall back and catch our breath. And good things happen in a recession.


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MEATY ISSUES M E AT Y

ISSUES

In December, as Supermarkets across the Republic, Northern Ireland and the UK cleared their shelves of Irish pork products, Irish meat producers were facing down the barrel of a gun, so to speak. After closing the book on the food scares of the Nineties, many had thought the regulations and thoroughness consumers demanded from their food was enough to ensure safety. However, the quality of bi-meat products such as sausage rolls and meat pies has come in for scrutiny prior to the pork scare, forcing the issue of whether we can ever take our eye off the ball when it comes to meat. 46 TGm


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M E AT Y

The December pork scare centres around the €590m pork industry, particularly bacon, sausages, rashers, ham and other pork products produced since October 2008. Fears spread that pig farms particularly in border counties may have been contaminated when pigs were found to

a decade to recover from BSE and Mad Cow’s disease. Two factors are different this time out. Firstly, the economy is at its weakest for decades and secondly, Irish consumers have evolved their eating partly as a consequence of the food scares of the nineties, partly because of obesity scares and partly as

For too long we have seen the value own label lines of some of the retailers compromise on quality and this will have to change. Budget items ironicaly, such as sausage rolls ofen contain as little as 6% pork. The quality is low yet multiles are increasingly marketng these lines as they compete wth one another. contain dangerous levels of potentially cancer causing dioxins. . Authorities here and in the UK reacted quickly removing products at a cost of €125m to the Irish industry. As most of the pork industry is exported the damage to the industry is severe and of course could not come at a worse time for Irish trade. Food scares have the ability to decimate entire industries and the damage control may never fully impact. For the Irish beef industry, it took the bones of

a cultural belief that, essentially, we are what we eat. Since the start of the new century, when economic prosperity was at its height, Irish consumers eating habits changed. Influenced by increased international travel, more disposable income, a desire for a certain ‘boholuxe’ lifestyle, authenticity and ethics and interest in health and well-being, food has taken on a new dimension in

ISSUES

this country. Farmers markets have been the perfect reflection of these changes, a path beaten by the burgeoning organic industry of the early nineties. Purity and quality suddenly became a necessity for consumers and this soon outlasted any notions of ‘vanity lifestyles‘. It has become part of the shopping experience to smell the produce, feel for ripeness, buy in season, check for used-by dates, note salt, sugar and gluten content and spot a rip-off at ten paces of the supermarket shelf. Irish consumers are now adept at grocery shopping, so much so that manufacturers and retailers have to be very awake to pull a fast one. So how will this new consumer react to a food scare in the noughties? One may assume that many will perhaps continue to purchase organically and not worry so much. However, these are hard times. Despite the innate desire for quality consumers are looking to cull expenses from the grocery shopping list where possible, and will more than likely forgo pork products altogether. Added to which, recession has a stranglehold, retailers are flinched, banks are unwelcoming and 2009 has been forecast in Dickensian black and white. The pleasure Irish consumers have taken in shopping has already been hit by recession., Footfall is way down, retailers are grappling and sweaty pilgrimages are being undertaken to the North in the hope of a better bargain. Will this calm down in the new year? One expects it will. The last dash for a blow out will have taken place and consumers will settle into recession and start to reason without the need for knee-jerk treks to the North, understanding that the tank of petrol used relegates any savings made in the first place. Shaving a few pence and buying sensibly will come into being into 2009. Few if any 2009 cars will be seen on the road in January. In fact one of the first indications of tough times ahead at the beginning of 2008 was the lack of new cars on the road compared with previous years, when brand new cars were spotted on the road as soon as the 1st and 2nd of January. Own label is already creeping up everyone’s shopping list particularly for household, health and beauty and pet food. Manufacturers will have to fine tune and improve on existing lines as they become the mainstay of shopping trips.

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For too long we have seen the value own label lines of some of the leading retailers compromise on quality and this will have to change. Budget items ironically, such as sausage rolls often contain as little as 6% pork. The quality is low yet multiples are increasingly marketing these lines as they compete with one another. A recent analysis of low cost foods found that in addition to sausage rolls, fisherman’s pies with 9% fish and square cheese slices with a mere 11% cheese. These products have instead been fleshed out with ingredients such as water, animal fat and sugar. The same accusations have been made against many cheap meat products with lower end items dissolving into water as soon as cooked. However, these type of items help the multiples

with a bit of fish.” This rather unappetising array of ingredients is what consumers have come to expect from low value own label ranges and they remain unappealing to large percentages of the shopping population. In these bleak economic times where consumers want to save money, they naturally look to own label ranges for alternative savings. However, many consumers have come too far down the good food road to buy much less savour a pie made from water and gelling ingredients or a sausage roll consisting of emulsifiers, they might as well shop for food in the local hardware store. Good quality and healthy ingredients have been promoted by all quarters from celebrity chefs to

towards Irish industry, manufacturers and retailers will have to think and act fast to nurture the Irish economy once more. Irish consumer agencies and government task forces need to make it clear to Irish shoppers that spending in Northern Ireland is bleeding the Irish economy when it needs a massive transfusion of Irish cash. They will have to clearly point out how little savings are really being met and promote Irish savings. Is there any real savings made by travelling through choked up border towns when concisely broken down or is it just an illusion created by the media? These questions need addressing by our leaders who need to show strength and confidence to a clearly disillusioned shopping public. The latest food scare brings all of

to undercut discounters Aldi and Lidl who in many cases have higher quality food than the bigger supermarkets. On the poor quality of many low-value products Professor Tom Sanders, head of nutritional sciences at King’s College comments; “This is cheap, second-rate ingredients masquerading as real food. They are heavily processed foods using added fat, water and sugar. People tempted by the low prices should carefully look at the labels.” The main ingredient for example in processed cheese slices is whey powder, a bi-product of cheese making, followed by vegetable oil, milk proteins and emulsifying salts. In the average low value packet of frozen sausage rolls, the main ingredients is water, followed by wheat flour and vegetable oil, with added pork fat, salt and emulsifiers. Many value -end fish pies contain almost two-thirds less fish at just 9%. The main ingredients are mashed potatoes, and water with added fish stock and gelling ingredients such as pectin. Professor Tim Lang, professor of food policy at City University London says; “It’s about expectations. You would expect a fisherman’s pie to be mostly fish. If it contains mostly potato with 9% fish it should be called a potato pie

government bodies and perhaps what the low value own label lines can’t offer consumers can makes themselves from scratch in their own kitchens. Cooking has had a resurgence again and despite the time poor years of late, the appeal is still there. Cooking from scratch can not only save the penny’s, it can also assure quality and safety. Irish manufacturers may look to increasing their presence in own label lines and should use the recession as an opportunity to expand into this area. In order to keep the shoppers out of German discounters and going

these ponderings and questions to the fore because the public is dealing with the familiar in unfamiliar times. Ireland is an altered country to the one in the early and mid-nineties. Back then, the fall-out was catastrophic and changed the way we looked at food forever. We are now living those changes. How we react to this scare may be entirely different than before based on the cultural shifts that have taken place over the last decade. Back then we ate to live. Now we live to eat. Lets keep it that way.

....How we react to this scare ma be entirely different than before based on the cultural shifts that have taken place over the last decade. Back then we ate to live. Now we live to eat.

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O P T I M I SAT I O N

Energy and commodity costs will be higher in the first two decades of the 21st century than in the 1980s and 1990s. That’s according to some of the world’s largest consumer Goods groups. The costs of food and other items are unlikely to change or decrease significantly even though we have seen some energy costs such as oil hit new record lows. So how are the world’s biggest consumer goods company’s coping? TGm finds out.

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Alan Lafley, ceo of Procter & Gamble the period of low costs is over for quite a while. He also opined that demand was being driven by growth in China and India, which could induce further price rises, “to the extend that price rises are driven by demand, they are going to be higher, yes”, he said. Food Inflation has been spiralling since the beginning of 2008 and although the crisis in global economies throughout the rest of the year has brought inflation in general lower this is an artificial position as commodity prices are going to continue to spiral keeping prices of food up. According to a senior Nestle executive, Luis Canterell; “You will not see over the next years commodity prices return to previous levels of even two or three years ago. There has been a fundamental shift.” Nestlé which has Shredded Wheat, Kit-Kat and Bonio dog food in its portfolio has dealt wit the increased costs through the year by passing on price rises of up to 15% across its range of 160,000 products as well as cutting costs within the business. Other companies are keeping prices the same but reducing the quantity of goods in their packets. Lafley admitted that his company has been engaged in “size optimisation”, for example, putting fewer Pringles crisps in a can so that it can pass on rising costs without increasing the price.. Structural changes in the world economy means that the previous trend of long term decline in the cost of food is over. Professor John Beddington, Gordon Brown’s chief scientific advisor said; “I think we’re going to have to expect to have - throughout the world and not just in the UK b- higher food prices.” Professor Beddington also believes that although prices may dip on falling commodity costs the fast rise in world population will keep the pressure upwards. It is worth noting that world population is rising at an estimated 6 million a month. Innovation may offset same of the pressures, however, according to Beddington; “The set up of the agricultural world came as a consequence of the first green revolution. Now we need a second green revolution in order to improve and address the imbalance between demand and supply. I think this will happen.”

Lafley has written a book called The Game Changer about how businesses leaders can drive innovation. In it he points out; “It will stimulate more innovation as we try to develop more value. A lot of good things are going into using less energy. It is a case of necessity being the mother of invention.” It’s not just the world’s biggest companies who are encouraging size optimisation, some of the world’s biggest retailers are at it too. WalMart, the world’s biggest retailer, and perhaps an eventual entrant to the Irish market, is pushing its suppliers to reduce the amount of packaging they use and no doubt its not the only one. However, the practice requires a shift in buyer’s behaviour, say the experts. It’s greener but most importantly for those in business it saves money. To support its drive to reduce packaging across its global supply chain by 5% by 2013, the supermarket chain is assessing progress made by its suppliers in reducing the impact of packaging materials. Hundred of suppliers have now entered details of their products into the system, which rates packaging according to factors from the amount of greenhouse gas created by its production to the effectiveness of shopping in pallets and containers. One supplier, for example, will start using new cereal boxes that will use 20% less packaging. In addition, Wal-Mart has introduced new rectangular milk containers at its stores which allow trucks to carry 7% more milk per journey but it has faced criticism that

O P T I M I SAT I O N

the bottles spill more easily. Ro counter this, the chain has cleverly introduced in-store demonstrations in milk pouring. One Wal-Mart expert is Matt Kistler who overseas sustainability for the company and believes that the chain has the power to lead its customers towards new product concepts; “I think Wal-Mart is prepared to lead more with what we think the customer is going to want, versus, just and only, providing what they are currently buying. We can be a little bit further out in design, and in what the consumer will need in the future. We are experimenting and seeing what is possible.” However, perspective brings reality and the amount of packaging actually being redesigned to deliver improved sustainable and excess cost is still quite low. Sustainability is noble in its many forms, however, nobody should forget that what matters to both consumers and suppliers is cost savings be they on the supermarket shelf or in the supply chain. One supplier comments; “If I can take a dollar and take three packages out of it rather than one package, I’ve extended my ability to sustain my business. And the environmental benefits derive as a kind of secondary consequence.” The high price of shopping, manufacturing, supplying and selling are not going to drop in the next ten years. Innovation is the only way forward. The sustainability of everyone’s business as well as a heads up for the environment seems to be a happy coupling. As long as everyone is gaining, be it savings or green kudos, the innovations will forge ahead.

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Seriously Healthy

Flahavans is constantly developing its product range to meet the ever-changing needs of the Irish consumer for a healthy and convenient

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breakfast. With 64.5 per cent share of the hot oat cereal market, Flahavan’s product innovation ensures it is Ireland’s number one

porridge maker. As part of its successful Quick Oats range, Flahavans has added two new easy to prepare organic products -

Organic Quick Oat Sachets and Organic Portable Porridge Pots. These single serving microwavable options provide a quick, warm and nutritious breakfast, which releases energy in the body throughout the cold winter mornings. Simple preparation in just three easy steps helps make a breakfast full of taste, warmth and goodness. Flahavan’s Quick Oat Sachets 8 x 35g box with a reusable liquid measure is ready in just 2 minutes while Flahavan’s Organic Pot, available in a 40g serving, can be made by simply microwaving or adding boiling water and is ready in just 90 seconds. The cool-tothe-touch exterior makes the organic pot a truly portable product ideal to enjoy in the office or home. People are choosing to eat organic porridge as it provides a healthy and nutritious alternative to cold cereals with the added benefit of the natural goodness of 100% organic wholegrain oats. High in fibre with no added salt, sugar or artificial flavourings, colourings or preservatives, these new products are as natural as nature intended.


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€10,000 PERSIL IRISH FASHION AWARDS 2009

Pat Kenny, Ann Conmy from Sligo winner of the 2008 Persil Irish fashion awards with her winning outfit modeled by Baiba Gaile and Celebrity Chef Ainsley Harriot on the Late Late Show

This is the 10th year of the Persil Irish Fashion Awards; their high profile offers young and talented design students an important platform to showcase their designs on a national level. The prize money gives them an opportunity to invest in their careers and design work. Irish fashion designer Peter O’Brien and stylist Catherine Condell together with Carmel Breheny from Marks & Spencer were unveiled as the new judges for The Persil Irish Fashion Awards 2009. Speaking at the launch Peter O’Brien commented, “I am delighted to be involved in a fashion competition that pushes the next generation of Irish designers. I believe that when you reach a high level, the measure of your success is duty bound to send the elevator back down to others”. Currently in its tenth year, the hotly contested

award is the largest fashion design competition in Ireland. It is a once in a lifetime opportunity for young fashion design students hoping to make their mark in today’s competitive market ,and with a first prize of €10,000 is a great boost to their budding fashion careers. The brief for this year’s competition is to celebrate Persil’s 100th Birthday in 2009. We want students to think about the word Centenary and their take on 1909 -2009. How fashion has evolved, perhaps old meets new with a slightly different twist. The garmet is for summer 2009 and must be machine washable. Speaking at the launch, Dermot Walsh, Marketing Manager for Persil stated ‘2009 marks our 10th Persil Irish Fashion Awards and is also hugely significant as Persil celebrates its 100th birthday. Over these 100

years Persil has been tough on stains but gentle on clothes and skin. To help us celebrate our 100th year the judges agreed the very inspiring idea of building the significance of ‘Centenary’ into the brief. This will make for a rewarding challenge for all of our entrants, as we are extremely proud of our long tradition in Ireland. We are also delighted to have Marks & Spencer as our new partners for 2009, and know that Your M&S brings a new and exciting dimension to the awards’. All the entries will be assessed and critiqued in areas such as workmanship, design skills and potential to develop a career in fashion. The judges will also be looking for individuality and an understanding of today’s fabrics and current fabric developments in relation to machine washing. The grand final is on the Late Late Show this April 2009

with the overall winner receiving €10,000 from Persil. The eight finalists outfits will be showcased in selected Marks & Spencer Stores during May 2009. Carmel Breheny, Marketing Manager for Ireland, Marks & Spencer said that...” "Next year is a big year for M&S in Ireland, as we celebrate 30 years trading in the Republic of Ireland. To mark this milestone, we are delighted to lend our support to The Persil Fashion Awards. Over the last three decades we have brought incredible collections to Irish customers, including collaborations with many high profile designers including Orla Kiely, Matthew Williamson and most recently PatriciaField. We really look forward to searching for Ireland's upcoming design talent".

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SUPERVALU CORK WINS EDWARD DILLON OFF-LICENCE AWARD Edward Dillon once again proudly sponsored the Supervalu Off-Licence of the Year Awards which took place at the Clontarf Castle Hotel, Dublin. The event, now in its 16th year was a great success with 30 finalists short-listed from around the country attending the awards. SuperValu Fermoy was crowned the overall winners of the Edward Dillon SuperValu OffLicence of the Year Award 2008/09, fending off competition from runnersup SuperValu Middleton, Co Cork, SuperValu Kanturk and SuperValu Wexford Town. The stores were judged on a range of criteria including overall appearance and standards across the off-licence, planogram implementation and compliance across Spirits, Wine and Beer. Judges also took into account implementation of promotions, innovative Spirit/Wine displays as well as customer focused and qualified staff. Speaking of the association, Andy O’Hara, Sales Director of Edward Dillon said “We are very proud to be once again

(l-r):Michael Riordan & Michael Louis from SuperValu Fermoy, winners of the Edward Dillon SuperValu Off-Licence of the Year Award 2008/09, receiving their plaque from Brendan Macken and Ciaran Levis, Musgrave Retail Partners and Andy O’Hara from Edward Dillon associated with the SuperValu Off-Licence of the Year Awards. Following the success of last year’s event the competition was closer than ever this year. I would like to congratulate all of the finalists, who have excelled in this competition. Hopefully next year the decision to name the winning store will be even harder to make, and we look forward to the continued success of the awards for years to come”.

(l-r): John Pearson and John Mooney

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The judging panel consisted of independent Marketing Consultant, Michael Simpson and independent business consultants Carthage Conlon and John Leahy. The over-all winner of the SuperValu Off-licence of the Year Awards, along with the three runners up stores will enjoy a fantastic trip to Chile, where they will have the opportunity to visit the Carmen Winery and Vineyards.

Oonagh Gildea and Morgan Hennelly

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List of finalists Cork SuperValu: Cobh, Co Cork; Mallow, Co Cork; Carrigaline, Co Cork; Skibbereen, Co Cork; Mill Road, Middleton, Co Cork; Ballincollig, Co Cork; Courthouse, Fermoy, Co Cork; ,Frankfield, Co Cork; Strand Street, Kanturk, Co Cork.

(l-r) Noreen Twohig and Niall O’Keeffe; Mark Kilbride and Fionnuala Kavanagh

Kerry SuperValu Castleisland, Co Kerry; Dingle, Co Kerry; Listowel, Co Kerry; Tralee, Co Kerry; Kenmare, Co Kerry Galway SuperValu Moycullen Co Galway; Clifden, Co Galway; Barna, Co Galway Waterford SuperValu Dungarvan, Co Waterford; Morgan Street, Waterford

(l-r) Avril O’Hara; Theresa Morgan, Ann Griffin Marie Simpson

Wexford Supervalu St Aidans Shopping Centre, Wexford Town’ Main Street, Gorey, Co Wexford Tipperary SuperValu Limerick Road, Nenagh, Co Tipperary Longford Supervalu Hazelwood Shopping Centre, Longfor, Co Longford Louth SuperValu Ardee Co Louth Monaghan SuperValu Carrickmacross, Co Monaghan Clare SuperValu Killaloe, Co Clare

(l-r) Gareth and Daria Hamilton; Martha and Michael O’Riordan; Lisa Twohig Dublin SuperValu Deansgrande, Co Dublin; Ballbriggan, Co Dublin Sligo SuperValu Tubbercurry, Co Sligo Wicklow SuperValu Greystones, Co Wicklow

Catherine Kerwan; Catriona O’Connor and Laura Whiston and Carol Carley

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Food group Glanbia said that its businesses were performing in line with expectations despite signs that consumers were becoming “increasingly value-conscious.” However, it also said in an interim management statement to the stock market that lower consumer demand due to the changing global economic environment meant it would undertake a rationalisation programme across its business, which will have an exceptional cost of €16 million this year. Glanbia, which comprises an Irish consumer foods operation and an international cheese manufacturing and nutritions ingredients group, said the market remained “ challenging” in its Irish division but that it was trading “ satisfactorily” in the second half of the year. • An Irish cheese-manufacturing company has claimed it is facing losses of more than €10 million because it was supplied with a defective rennet made by a Dutch company, resulting in cheese with a “soapy aftertaste and an offflavour.” Carbery Milk Products Ltd, Ballineen, Cork, has brought its action against Carbon Chemicals Group Ltd, with registered offices at Ringaskiddy, Co. Cork, which supplies food ingredient for use in food manufacturing, and against DSM Food Specialities BV, with registered offices at Delft, The netherlands, which makes food ingredients. • Heineken Ireland is at the centre of a copyright dispute with an Australian trade union which claims the firm used copyright pictures on a website to promote its links with the Oxegen music festival. The Media Entertainment and Arts Alliance, an Australian union for journalists and photographers, has formally lodged a complaint with the brewer over the use of hundreds of pictures that it sourced from the Flickr website and other sources. Heineken is a major sponsor of the music festival and the pictures in question appeared on a related website, heinekenmusic.ie, in June and July. While it has denied any copyright breach, Heineken has offered a full and final settlement” of €15 per picture, for what it described as “the inconvenience caused in having to write to us. • The Griffin Group, which operates 17 Londis stores in the greater Dublin area, plans to create More than 200 jobs after signing a deal with Subway the US sandwich franchise. The group has opened three Subway outlets in its shops in recent weeks and plans to have ten outlets within months, according to Seamus Griffin co-owner of the group. Griffin said the move should help to insulate the company from declining consumer spending. • Cadbury, the world’s second-biggest chocolate maker, said sales growth was slowing in North America and parts of Europe, with consumers cutting back on visits to convenience stores and retailers destocking their shelves in

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an effort to preserve cash. • Wholesale distributor and cash and carry company Mangan Bros Ltd, which was acquired by the BWG Group earlier this year, returned pretax profits last year of €5.5 million. Earlier this year, Ireland’s largest food wholesaler, BWG, which operates the Spar and Mace groups here, acquired its Enniscorthy-based rival for about €40 million. The Mangan group operated the Mace franchise in the west of Ireland, as we as the Vivo and Xpress Stop covering some 250 retailers in total in the west of Ireland. Maxol, The Irish-owned oil firm, more than doubled its profits to €13.1m last year, despite a fall in sales as the firm scaled back its home heating oil businesss. Maxol owns 100 filling stations and has supply agreements with a further 150 forecourts which operate under the Maxol brand. The company is owned by the McMullan family, who shared a dividend of €1.2m from the business last year. • Some 1,300 jobs will be created when a new multi-million euro shopping complex opens in Waterford in three years. Plans for the €280m Newgate Centre were approved by An Bord Pleanala. The ambitious scheme will be the biggest in the city with see over 50 retail outlets. • US sandwich chain Subway plans to open more than 100 new outlets in Ireland serving up a possible 1,300 new jobs over the next two years. The convenience sandwich store is trying to get a bigger share of the estimated €426m takeaway food market. The brand has taken a bite out of McDonald’s business and become the country’s largest fastfood outlet. • The C&C Group is examining plans to launch a pear cider in the next 12 months. The new cider is being considered as part of the strategic operating review of the company, led by Philip Lynch, its non-executive director. The move was prompted by the success of Kopparberg, the Swedish pear drink, in Ireland and Britain. Kopparberg is distributed in both countries by a joint venture led by Barry Connolly and Davin Nugent, two Irish entrepreneurs. Separately, C&C is in talks with Miller about the possibility of taking over the brewing and distribution of the American company’s products in the Irish market. The licence to brew and distribute Miller here is held by Beamish & Crawford, now owned by Heineken. • A sugar company is seeking multimillion-euro damages, including punitive and aggravated damages, for losses allegedly sustained as a result of Irish Sugar plc’s abuse of a dominant market position during the 1990s. Gempack Foods Ltd (GFL), which was established in 1992, sustained the losses over the years 1993 to 1999 as a result of various abuses by Irish Sugar, the High Court was told. Once the abuses were halted by the European Commission, Gempack’s business came back on track. Today it employs 69 people and has a turnover of €28.7m.


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Today's Grocery Magazine January 2009  

Today's Grocery Magazine January 2009