Farmer’s gains are in the bag after switch to crisp-making

A Tipperary farmer looking for diversification ideas has cornered 2% of the Irish market and built up an estimated €1.5m in sales just two years after embarking on a hand-made crisp enterprise using his own potatoes, writes Trish Dromey

NEW crisp on the shelf, O’Donnell’s has captured a 2% share of the Irish market and is expected to achieve sales of €1.5 million this year.

This is quite an achievement for company founder Ed O’Donnell, who switched from farming to crisp-making two years ago — despite the fact that his plans to build a manufacturing plant on his family farm near Clonmel were swept away in the tide of recession.

In setting up O’Donnell Crisps in 2009, Mr O’Donnell identified a gap in the Irish market for handmade artisan-style crisps.

The company’s products are made with potatoes from his own farm and include cheese and onion crisps flavoured with Mount Callan Farmhouse cheese from Clare, as well as salt and vinegar crisps flavoured with cider vinegar produced by Tipperary apple-grower Con Traas.

These crisps are now being sold in Tesco, Dunnes, Supervalu, Spar, Centra, Londis and Mace stores around the country.

“We are selling over 60,000 bags of crisps a week and we have sales in Northern Ireland and are exporting a small amount to the UK and to Holland,” says Mr O’Donnell.

It all began with the realisation, back in 2006, that handmade crisps were not being manufactured here but were being imported. At the time, Mr O’Donnell was looking for a way to diversify the income of Seskin Farm in Kilsheelan, where he kept cattle and grew grain.

He took a very direct approach to market research.

“I went to over 200 stores around Ireland looking at crisps, talking to shop managers and owners and finding out which were the popular flavours,” he says.

Having established that there was market opportunity for a premium quality handmade crisp, in 2007 he approached his bank, which responded favourably to his proposal to build a crisp manufacturing facility on his farm.

He then enrolled in a two-week crisp-making course at Ohio State University, as well as researching the snack industry in Germany.

But by 2008, all possibilities of getting funding for a new plant had evaporated.

“I had invested time and money in this and spent two years on market research. I was determined to make it work, so I decided to outsource production,” he says.

Having searched for a company with the capacity to produce handmade crisps to his specification and using his potatoes and ingredients, Mr O’Donnell signed an agreement with Largo Foods.

After that, he pushed ahead and developed two varieties of crisps, tested them on focus groups and got a company to design suitable packaging.

Along the way, he got some funding from the local Leader group, also getting assistance from Bord Bia, which put him in touch with buyers and distributors.

In June 2010, the first packs of O’Donnells Crisps came off the production line and were sent out to Supervalu and Centra stores around the country.

“We signed a three- month exclusive deal with Musgrave, which meant we started by selling nationwide into 600 stores, and this got us off to a strong start,” explains Mr O’Donnell.

By the end of the year, O’Donnells Crisps were also selling in Londis, Spar and Costcutter shops and the company then began targeting speciality food stores.

Mr O’Donnell says it’s been hard work but that the interest has been good and the sales better than anticipated.

“We got 1.6% of the Irish market in the first year and were very happy with this. This year we have stared selling in Dunnes, Tesco and Superquinn; sales are up 140% on this time last year and we now have 2% of the market. We expect sales of €1.2m or €1.5m for 2011,” he adds.

Recent developments include the launch of a chilli-flavoured crisp and a family-size pack.

With an eye to expanding production and developing exports to Britain, Mr O’Donnell is now making plans to double the number of potatoes planted next year.

“This year we planted over 40 acres and produced 900 tonnes — using both Lady Rosetta and Sassy potatoes, which are very suitable for crisps.”

Although times are hard and the crisp market is very competitive, he’s optimistic about the company’s future and says that at some point he will look again at his plans to build a crisp factory on his farm.

“If sales keep going the way they are going, we will consider it in three years,” he says.

Picture: Ed O’Donnell’s plans to build a manufacturing plant on his farm were scuppered by the recession so he out-sourced production.