Realising Ireland’s agri-food potential
Simon Coveney: We need to maximise demand for Irish food.
IRISH food companies are bringing their goods to overseas markets at a time of unprecedented opportunity, according to Minister for Agriculture, Food and the Marine Simon Coveney.
While the peak prices paid for most food categories in 2011 may dip in 2012, soaring demand for Irish food and beverages should not wane significantly. In just 12 months, the value of agri-food exports has jumped from €8 billion to almost €9bn, keeping the sector on track for the €13bn end-of-decade goal projected in the Food Harvest 2020 report.
FH2020 is the agri-food sector’s blueprint for export growth. It is a document created by the coming together of food sector stakeholders, including farmers, processors and all the relevant institutions.
FH2020 contains 55 tasks, each with a target and a deadline.
Responsibility for marketing, processing efficiency, on-farm production and strategy tasks rests with the likes of Teagasc, Bord Bia, milk processors, co-op boards, Enterprise Ireland, ICOS, the Irish Dairy Board, state bodies, farming groups and even banks.
Simon Coveney chairs the high level implementation committee on Food Harvest 2020. He is confident that the agri-food producers’ own determination and the growing demand for Irish product will continue to prove that the goals in FH2020 are realistic.
“I am very optimistic for the sector. The demand for the food that Ireland produces is soaring. Overseas consumers are drawn to Irish food because of our reputation for quality.
“There is huge demand for sectors like beef, lamb and seafood. We need to maximise that demand for the benefit of the Irish economy. We only have to look at the 13%-14% growth of the last 12 months up to almost €9bn in exports to see the scale of the opportunity.
“There are also challenges. We need to be preparing for the removal of milk quotas. We need to find new markets in Africa, Asia and other parts of Europe for the dramatic increase in milk volumes. Food commodity prices were also very high this year.
“That said, we have a food sector that is starting from a very good place, based on very solid foundations. A lot of these expanding food companies have been around for a good few years, and have good strategies in place.”
Mr Coveney said farmers have been upskilling and have gained from discussion groups such as the dairy workshops hosted by Teagasc. The department has also set aside €5 million to fund similar discussions for the beef sector.
This is where the farmer’s role comes in under FH2020. While farmers’ sign-up is implied in all 55 tasks, their three key commitments are participation in national herd health programmes, implementation of bio-security protocols for all stock movement, and the adaptation new genomic technologies into their breeding programmes.
We can also expect consolidation among dairy co-ops to cope with the need for increased milk processing. Mr Coveney says companies such as Kerry Group, Glanbia, Carbery, Dawn Meats and Kepak are leading by example, growing profits overseas through new added value ventures such as nutritional foods and drinks.
“For the likes of Carbery, success is not just about selling drinks, it is about selling sports drinks, and it is about buying a food flavouring business to add value to the group’s activities.
“For Kerry Group and Glanbia, it is about added value products like nutritional drinks. All of these companies are still functioning as efficient dairy co-ops, but they are growing through their diverse activities, research and development and expanding into new markets.”
Mr Coveney was in Algeria recently with the Irish Dairy Board as part of a drive to develop new markets. Also, Bord Bia marketing executives are to be placed in Brazil, Russia, India and China.
Earlier this year, the dairy board and Teagasc launched a dairy innovation centre in Teagasc Moorepark, with the express goal of converting all of the post-quota era milk into more easily exportable products such as new cheeses and powders.
Most of the companies featured in these pages are smaller in scale than exporting giants like Kerry and Glanbia. However, their goals and routes to market are similar, and they enjoy the same supports from state bodies such as Bord Bia.
“I do feel I have an obligation to drive growth in this sector. This is a sector that can get people sitting up and shake off some of the negativity that is out there,” said Mr Coveney.
“The sector is producing jobs. If you ask food scientists leaving UCC, they will tell you that they have great opportunities.
“The number of young people applying for agricultural colleges increased by 27% this year. That clearly says that a lot of people believe they can build meaningful careers in the agri-food sector. The challenge for us now is to ensure that we deliver on the sector’s huge promise.”
* THE agri-food sector in Ireland contributes a value of €24 billion to the national economy, generates 6.3% of gross value added and provides 7.4% of Irish employment. That rises to 10% when processing is included.
The sector employs 150,000 people. It includes about 600 food and drinks firms throughout the country that export to about 140 markets worldwide. The agri-food sector (including agriculture, food, drinks and tobacco) accounts for 8% of GDP, with primary agriculture accounting for 3% of GDP.
Agri-food exports are expected to grow from around €9bn now to €13bn by 2020, with an associated jobs lift on the processing side. The vast majority of new jobs will be with indigenous food companies, many of which are either owned by farmers or are tightly aligned to partners in farming.
Below are pen pictures of just some of the many soaring agri-food companies to give some idea of the scale of the growth opportunity open to Irish agri-food, a sector in which family farms and once modest co-ops have grown to become global leaders in their categories.
* KERRY GROUP is a world leader in food ingredients and flavours for the food and beverage industry. Annual sales are over €5bn. Headquartered in Tralee, Co Kerry, the group employs more than 20,000 people globally. Listed on the Dublin and London stock markets, Kerry Group has a market capitalisation of over €4bn.
* GLANBIA employs 4,300 people. In 2010, it achieved almost €160 million profit on revenues of €2.6bn. In a strong year, the company has seen profits grow by up to 50% annually. Formed in 1997 from the merger of Avonmore and Waterford Foods, it has operations in Ireland, Europe, the US and China, with joint ventures in Britain, the US and Nigeria. The group now reports under four operating segments: US Cheese & Global Nutritionals; Dairy Ireland (Dairy Ingredients, Consumer Products & Agribusiness); Joint Ventures & Associates; and Other (including Property, a small dairy operation in Mexico and Pigmeat, which was disposed of in March 2008).
* COUNTRY CREST is a business owned by Michael and Gabriel Hoey, situated in Lusk, north Dublin, on farms over 2,000 acres. As part of its environment philosophy, Country Crest includes a wind turbine, water recycling, and a wildlife pond. The company aims to be energy self-sufficient by 2015. Country Crest produces 75,000 meals a week.
* GREEN WAY is a busy hub of about 25km in radius, which is home to 75% of Ireland’s retail food distribution. Neighbours of Country Crest, the Food Central park in Fingal, Co Dublin, is home to the likes of Keelings, Donnellys and Brakes. Between them, these three companies employ 1,000 people. The park is also home to waste management, renewable energy generation, water harvesting and management and shared services companies. The hub could potentially grow to 5,000 jobs in the coming years.
* PERNOD RICARD recently invested €100m into the Irish Distillers plant at Midleton, Co Cork, creating 60 jobs. In the past year, sales of Jameson Whiskey alone totalled 3.5m cases to 120 countries worldwide and Irish Distillers’ aim is to triple sales of Jameson to over 9m cases by 2020. Since 2000, total Irish whiskey exports have increased by 60% and Irish whiskey is one of the fastest growing spirits categories in the world.
Based: Kilnagrange Mills, Kilmacthomas, Co Waterford.
www.flahavans.ie
Product range: Porridge oatlets, flapjacks, new quick organic and microwaveable products
IN BUSINESS for over 200 years, privately owned porridge specialist Flahavan’s achieved a turnover of about €15 million this year.
Led by sixth-generation family member John Flahavan, the company’s oats products are sold in virtually every grocery outlet in Ireland.
The Flahavan’s range accounts for about 65% of all cooked oats products sold in Ireland.
Capitalising on a healthy breakfast trend among weight-conscious consumers, the company has seen its profits grow by 10%-15% in recent years. Steady growth is also expected for new Flahavan’s products such as Quick Oats, Multi-Seed Porridge, Oaty Flapjacks and Microwave Quick Oats Portable Porridge, among others.
“The domestic market is performing very well,” says Flahavan’s sales and marketing director John Noonan. “People are interested in porridge for health reasons. The domestic market is responsible for 85% of our sales. It is vital for us that we make sure the home market is good before we start looking at exports.
“We have been available in Northern Ireland since 1995, and in the UK since 2003, and growing steadily in both markets. At around this time last year, we began trading in the US.
“Both Northern Ireland and the UK are contributing to the bottom line, and we see breaking into the US as a three to five-year project. The US porridge retail market is valued at $1.2bn [€900m]. Ireland has a good image and reputation for food, and Ireland as a source of oatmeal is something that is of interest to them.”
Flahavan’s puts a lot of focus on its R&D efforts, maximising the knowledge of its 52 experienced employees. Its latest new products include Quick Oats and Quick Oats Organic, Real Fruit Porridge, and the packaging of individual breakfast-size portions into sachets and portable items such as the Microwave Quick Oats.
All of these have been a hit with consumers, who have warmed to the blend of quality and convenience.
“We have had very few failures over the years,” says John. “We devote a lot of time and attention to the quality of what we produce. That may work in overseas markets.
“We have just re-launched in the UK, where our new packaging is built around Irishness and our Irish origin. Our research shows that people in the UK identify Irishness with high quality. We also discovered that most English people presume that the porridge in their stores comes from Scotland.
“Our product has an unique taste and we want to promote our Irish origins.”
The new Multi Seed Porridge range comes in three formats — Quick Oats microwaveable sachets, 10x 40g; Portable Porridge Pot, 40g; and Multi Seed Porridge Bag 600g.
Also worth a look Flahavan’s Wacky Winter Woolie app, which is available on Flahavan’s Facebook page facebook.com/flahavans, a bit of Yuletide fun with photos of people in winter woolies.
Based: Kinsale, Co Cork
bluehavenfoodco.com
Product range: Hotel, catering, wholesale, hampers & food gifts; Seafood Chowder, Soups, Fish Pies, Patés
BLUE HAVEN owners, the Fitzgeralds of Kinsale, have plans to leap from €2 million in turnover in 2012 to €10m within a few years.
Having functioned very successfully as a hotel, the Blue Haven’s evolution into a food manufacturer, caterer, exporter and online vendor has been a model success story. Its sales grew by 200% since it began three years ago.
The business employs 115 people between its Kinsale premises and its production facility in Little Island. The company will unveil a new production plant in the new year.
Presuming its award-winning Seafood Chowder and Kinsale Fish Pie are successful in Musgrave’s Budgens chain in Britain during 2012, it will be the start of a phenomenal scaling up for the group, which has also lined up an unnamed Britain retailer.
“We are focusing on the export market for our seafood chowder,” says Blue Haven’s Cormac Fitzgerald, who also heads up Fitzgerald & Partners auctioneers.
“We grow our produce in our own gardens, and use all local suppliers. Our unique selling point is that we make everything ourselves.
“We expanded the business three years ago, and all our growth has come in the last 16 months. We grew by 12% in 2011. We hope to grow by 25% in 2012. My strength is in accounting, but thankfully we have a team of creative foodies around us who are getting the food product right.”
The Blue Haven’s reputation for seafood excellence is long established, but it is matched by the excellent branding plan. Any food business reading this story should visit the online store for a lesson in branding, packaging and selling skills.
As well as accessing the British market with help from Bord Bia and Enterprise Ireland, Blue Haven also sells large volumes with BWG Group, Tesco, Dunnes, Superquinn, Pallas Foods, Fresh, Irish Rail, Kylemore, Fallon & Byrne as well as Supervalu and Centra nationwide.
Based: Tramore, Co Waterford.
www.chiabia.com
Product range: Whole & Milled Chia seeds, organic bread mixes, nutrient bars
HEALTHY chia seed food producer Chia Bia expanded into the British market at the start of December. As it starts 2012, about 90% of its output will be export-oriented.
The company, which is working with German distributor GranoVita, is already selling well in Holland & Barrett’s 600 health food stores across Britain.
From February or March, the company’s products will be in Zuma restaurants and Chia Life outlets.
Although it has concentrated on the British market, Chia Bia also sells via its partners in Slovakia, Malaysia and the US. Online export sales are also growing at its packing facility in Tramore, Co Waterford.
Chia Bia was established in 2009 by Barrie Rogers and Ray Owens, who saw a gap in the health food market for chia seed. Chia contains the highest plant-based source of omega 3. It is also high in fibre, protein and antioxidants. Interest in Britain is growing.
“There are about 3,000 health food stores in the UK versus around 280 stores in Ireland,” says Ray.
“We also have some sales in the Far East, Asia, Eastern Europe and the USA. We are also doing a good bit of R&D and new product development, and we hope to get listings with the multiples in Ireland in the new year. We have nine products now, and two more in the pipeline for February.
“Chia is the plant with the highest level of omega 3. It is high in fibre, protein and anti-oxidants, which helps reduce any inflammation-based health problems. It doesn’t really taste of anything, so you can add it to any meal, cereal or smoothie drink.
“We also have products such as seed mixes, organic bars and bread mixes.”
Chia Bia employs seven people full-time, with up to three seasonal roles. Revenues jumped by 300% this year. Barrie and Ray will be attending Bord Bia’s Marketplace 2012 event in February. They will also attend the Natural and Organics Show in London.
They expect the company to double or even treble in size next year, leading to extra employment. Given that the raw chia seed has a shelf life of two years, the company can aspire to reach further remote export markets than producers of more perishable foods.
When Rogers and Owens formed Chia Bia, the seed was gaining popularity in America but had yet to reach Europe. Now, the global focus on diet and health is creating a very real window of opportunity for “superfood” producers like Chia Bia.
“This year we saw sales increase domestically in the 300 health food stores around Ireland and we are pushing into the pharmacy market,” says Ray. “We hope to increase market share and brand awareness dramatically in 2012. With our UK sales growing in Holland & Barrett, we are even able to pass on reductions in operating costs and thus reduce prices to consumers.”
Based: Enniscorthy, Co Wexford
www.killowen.ie
Product range: Specialists in premium artisan yoghurts.
Produced on family farm in Wexford using milk from their own herd.
BORD Bia’s Marketplace 2012 in February could signal a significant departure for Killowen, whose premium yoghurt range seems ideally placed to attract interest from overseas buyers.
Killowen’s all-natural probiotic yoghurts contain no additives, no colourings, no flavourings and no preservatives. All of the ingredients come from the grass-fed herd on Nich-olas and Judith Dunne’s 200-acre Green Valley farm in Courtnacuddy, Enniscorthy, Co Wexford.
Their popular range is available in a selection of Dunnes and Tesco outlets and some other smaller outlets in Dublin. They also supply own brand products for Superquinn and Aldi.
The Dunnes hope to begin a nationwide listing with Musgrave in 2012. At present, yoghurt accounts for about 20% of the Dunne family’s dairy output, with the rest going to Wexford Creamery. If buyers at Marketplace 2012 like Killowen’s unique flavour, the business could really take off.
“The business has been going very well since April,” says Pauline Dunne, sister of dairy farmer Nicholas and the sales and marketing force behind Killowen.
“The two previous years were tough, but we’ve really doing very well since we began the new listings with Dunnes and Tesco.
“At present, we’re largely confined to the south-east, but we hope to go nationwide in 2012. We will be doing a lot of weekend tastings in the new year to get to meet the customer directly.
“Things are tight and people are conscious of getting value for their money. Our products are not cheap, so tastings help to get people get to know what Killowen is all about. We also find that people are very much into supporting Irish products.”
Killowen is also bringing out a number of new products in the new year. Some involve glass jars, and some a base with fruits such as strawberry, raspberry, blueberry and lemon curd.
Eddie O’Neill of Teagasc Moorepark is helping with the product development. Killowen will also be looking at new packaging and innovations such as new desserts, cream cheese and other dairy products.
Having launched the Wexford Food Network with 45 other local food companies, and having enjoyed success with the Bord Bia Vantage programme, the company is expecting a lift in turnover in early 2012.
Based: Ballyvourney, Co Cork
www.follain.ie
Product range: Fresh Irish fruit preserves, marmalades, jams, relishes and &salsa from 100% natural ingredients.
IRISH consumers are seeking out food products that carry the Love Irish Food logo, according to Laura Hewson, brand development manager with Cork-based preserves producer Folláin.
While value for money is paramount, many Irish consumers also clearly want to support local employment. Folláin has certainly noticed an upturn in sales for its natural preserves, marmalades, relishes and salsa.
Laura says: “When people shop, they are looking for the Love Irish Food symbol. Being a member has stood us well. We have enjoyed sustained growth in tough times.
“Folláin has been producing premium jams for almost 30 years. People really like our traditional, old style Irish jams more than ever because they want a natural product with zero added sugar or salt.
“In 2012, we will also look at export markets, and new product development with new flavours such as gooseberry, blueberry and loganberry. All of our new products will be driven by the same natural ideals.”
Founded by Peadar and Máirín Ó Lionáird in 1983, Folláin is based in Ballyvourney, in the heart of rural West Cork. Máirín and her friend Eithne Uí Shiadhail began making a chunky grapefruit marmalade, based on a 100-year-old Irish recipe handed down by Eithne’s grandmother.
Folláin — the Irish word for “wholesome” — now employs 15 staff in its state-of-the-art factory, built and equipped to the highest quality standards.
Folláin traditional Irish preserves are available from Tesco, SuperValu, Superquinn, Dunnes Stores and independent outlets nationwide.
Folláin is committed to sourcing as much fruit as possible from local Irish suppliers including Keelings, Clarke’s Fresh Fruit and The Apple Farm.
Peadar Ó Lionáird says: “Irish consumers are actively seeking out Irish producers and suppliers, because they want to support local jobs and reduce food miles wherever possible.”
In 2011, Folláin bought soft fruit to the value of €500,000 from Irish suppliers.
“This investment will definitely increase in 2012 — providing, of course, the crop is as good as this year’s,” says Ó Lionáird.
Based: Timoleague, Co Cork
www.ummera.com
Product range: Smoked organic salmon, chicken, duck, Organic Gravadlax
THE pre-Christmas rush is a crazy time for Anthony Cresswell and his colleagues at Ummera.
At one stage, the business used to receive 60% of its total annual orders in the four to six weeks prior to December 25.
Products such as chicken and duck have helped spread some of the demand out of that bottleneck. The duck has been going very well in restaurants. The business is also making some headway in Italy.
Owner Anthony Cresswell says: “We met with a group of small food producers in Italy and they liked our product. They have formed a co-op, and they have a team of agents who are selling into shops and restaurants. We’re going out there in February to do some tastings.
“We also used to have a good market in the UK, but the exchange rate between sterling and the euro has made it difficult to compete with Scottish salmon at a 25% price difference. That stopped that market stone dead, but home sales have grown.
“Turnover has been fairly flat since 2008. For now, we will just hold onto what we’ve got in the home market, and look at new opportunities in Italy and Portugal.”
Ummera employs four and while the festive rush puts pressure on the team, there are no plans to take on extra full-time staff. Ummera was highly commended at this year’s National Organic Awards in the best organic prepared food product category.
It also won a three-star gold at the Great Taste Awards.
Based: Clonakilty, Co Cork
www.irish-yogurts.ie
Product range: Large variety of yogurts
IRISH Yogurts has had a turnover of about €13.5m for 2011, and has been enjoying consistent growth of about 10% gross annually in recent years.
Having started out with a staff of just one in 1994, dairy farmer Diarmuid O’Sullivan’s company now employs 120 people. In Ireland, its products can be found in Dunnes Stores, Supervalu, Centra, Superquinn, Tesco Ireland and many other independent stores.
In Britain, they can be found in Tesco and Sainsburys. They are also available in Saudi Arabia, Bahrain and Dubai in the United Arab Emirates.
While most of its sales are under its own brand, a lot of its recent growth is also down to private label or “shop’s own” brands in Britain — which comes with a very encouraging anecdote.
Josephine Carey, Irish Yogurts national accounts manager, says: “People in the UK liked the product and were asking about it. When they found out it was Irish, they suggested we put a tricolour on the pack and the sales increased by 40%.
“People want value for money, but they also want quality, healthy food. We have had a very successful year, winning Great Taste and Blas na hÉireann awards.
“The customer does see the award on your packaging, and they realise that you are giving them real value.
“We believe that the customer is looking for premium product. Our yogurt is traditionally made in the milk churn. That gives us a thicker, creamier product. Our milk comes from Diarmuid O’Sullivan’s own farm and from creameries around the area.”
The company’s most recent award was at the National Q Mark awards in October, when it was named the top dairy in Ireland for hygiene and food safety.
The British market now accounts for about 25% of the company’s sales.
The move into private label brands has sustained growth, and has kept the factory running at full capacity.
For now, Irish Yogurts is to keep its focus on the Irish and British markets. However, given the right circumstances, it will look at further expansion.
Based: Fermoy, Co Cork
www.silverpail.com
Product range: Dairy ice cream
SILVER Pail Dairy hopes it can develop new outlets in the Middle East for its premium dairy ice creams, desserts and frozen yoghurts during 2012.
Silver Pail is taking part in Bord Bia’s Marketplace 2012 in Dublin in February. It hopes to build further growth on its successes of recent years, producing private label or “shop’s own brands” for leading retailers.
Nikki Murphy of Silver Pail Dairy says: “The past five years have been particularly successful for us. We make ice cream under licence for home and export customers, producing private label ice cream.
“Our food service business has grown significantly and we provide premium ice cream and desserts to restaurants throughout Ireland and the UK.”
Silver Pail Dairy scooped first, second and third prizes in the recent Irish Food Awards in Dingle, Co Kerry, for Supervalu’s supreme truffle fudge, Superquinn’s raspberry sorbet and Silver Pail’s own Corrin Hill sticky toffee ice cream.
Silver Pail also took second prize in the cake category for the sticky toffee ice cream cake.
Nikki says: “In this highly competitive market with many great Irish ice creams available it was a great honour to sweep the boards and take the first, second and third prizes at this year’s Blas na hEireann awards.
“This win can be directly attributed to our strong new product development team and all our staff in Silver Pail, who work hard consistently to create and produce these award winning ice creams.”
The Blas na hÉireann awards highlight the high quality and innovative products being produced in Ireland at the moment in all categories.
Silver Pail began production in 1980 and over the past 31 years has fought hard to become a dominant player in the ice cream market, producing ice cream for the worldwide market.
The dairy produces over 20 million litres of ice cream each year. It uses the traditional method to produce its real dairy ice cream from fresh dairy ingredients with a weekly intake of over 50,000 litres of cream and milk from local farms.
