Oliver Moore: Glenisk conversion path into organic
I agree that Glenisk as a company is associated with organic and it’s my intention that we will continue to be.
It’s a reputation I’m proud to say we have earned by overcoming what seemed at times to be insurmountable challenges down through the years. We have been engaged in an ongoing campaign to recruit new organic farmers for the best part of 20 years. It seems that we are always chasing supply.
Our volumes have doubled in the past six years and once again, the lack of a viable supply of organic milk threatens to seriously impede our growth. We’ve redoubled our recruitment efforts over the past 12 months trying to figure out smarter ways to support in-conversion farmers.
We’re offering five-year contracts with fixed pricing for the first two years for half of their milk, and advice and admin support; we’re also helping farmers with the investment in infrastructure.
What we haven’t been able to do, to date, is to take their in-conversion milk as we’ve had no outlet for it. The new Greek range will hopefully provide that outlet for farmers considering transition, but seeking to enter into an immediate partnership.
I see the Greek Protein range as a way to meet a genuine and growing consumer need, while also providing an outlet for the in-conversion milk so we can work more closely with prospective organic farmers to increase their number in Ireland — and secure the viability of our organic business into the future.
This new range represents only a fraction of what we produce. We will launch new organic products — one is scheduled for launch this Autumn with a number of others in development. If anything, our commitment to organic has increased as we continue to see it as our Gold Standard. As for logos, we simply don’t want to mislead. Organic, to me, is a hugely powerful, meaningful symbol, I would never allow its standard to be denigrated by Glenisk.
The price per litre paid by Glenisk for organic milk has increased very significantly in recent years, but the low take-up of new entrants to organics is about much more than price. Even as far back as 2006, consumers were telling us that they wanted to buy organic but did not accept that they should pay a very hefty premium for doing so.
Glenisk has continued to pay a premium for organic milk as conventional prices spiralled, against a backdrop of ongoing recession and consumers seeking savings. Something always has to give in these situations. Of late, the increased interest we are seeing in organic dairying demonstrates to me that the Quota Regime was the single biggest factor in acting as a blocking mechanism for new entrants.
We are moving from a quota regime to a supply contract arrangement and we are taking volatility out of 50% of a new entrant’s supply for the initial two years. Organic Farmers are feeling more secure and I’ve no doubt that they are also taking further reassurance from the fact that Glenisk is one of the fastest growing brands in Ireland, and a leading light in Irish supermarkets.
