As the UK has experienced over the last two decades, the Republic of Ireland is seeing the arrival of the multiples in their droves. With the Celtic Tiger a distant memory and the turbulent economic situation raging on, consumers are being pulled away from the local offer at a time where it could do with support.
Here Matt Molloy, fresh produce development officer for the Irish Farmers’ Association (IFA) - which has 90,000 members - outlines the key issues of concern to the sector:
“Tesco is aggressively on the lookout for sites in and around Dublin and we are quickly getting to the situation where six or seven supermarket buyers have up to 80 per cent of the control over the supply chain. The growers are laying down the credit to increase and improve their businesses and taking all the risk: it’s a dangerous situation to be in. Tesco is the dominant buying force and wants the best out of everything. Saying that, Tesco is not the worst customer in Ireland in relation to growers and does look beyond the market in programming. There has been a major decline in the economy and everyone is fighting for a piece or fighting to hold on to their market share.
“Imported product into the country is having a very negative impact. For instance, cabbage is now programmed for 12 months of the year and product comes in from the UK or the Netherlands. The money growers get paid for the product obviously lowers as volume comes into the country. The market is structured to pay for that and suddenly cabbage is half the price or ploughed back into the ground at a loss. The general fall off in retail value and volume has taken a lot of money away from the fresh produce chain.
“Sixty per cent of the shopping basket should be fresh produce, but it’s not. About 25 years ago, it was different; there wasn’t so much choice or so many unhealthy options to pick. Now there is so much on the shelves, people are not considering their health and the population needs to be re-educated. The locally supplied trend is losing its grip within the fresh produce industry in Ireland and it’s a big problem.
“The aftermath of the Celtic Tiger has meant a downturn for the catering industry, especially in Dublin City. Whether it be a pub lunch, a meal at a restaurant or a sandwich, people are looking for better value or just not eating out. Prices have gone down to get people through the doors and promotions, such as the early bird offers or two for one, are now commonplace. But the money has to come from somewhere, as inputs for the growers and distributors etc are only increasing - sometimes ferociously. Companies have been forced to be competitive on raw product, and instead of provenance, the catering industry is going for cost. I think a lot of people in Ireland just assume that the carrots or potatoes being served to them in an Irish restaurant have been grown here, but more and more, they’re imported.
“Both economically and business-wise, we are in a state of shock in Ireland and everyone is desperately fighting their corner of the market. With all sectors pushing to get the most out of every situation, we have to be careful that all-powerful establishments don’t take advantage. The supermarkets are a worry, but they are operating in a market that allows them to exercise some unsustainable practices. The government should have stepped in. The issue of food security hasn’t been addressed by our government at all. It’s as if they are scared to look at it. From a regional point of view, the UK and Ireland need to work together more to make sure the fresh produce industry is sustainable.”
‘EDUCATION WILL CHANGE COMMODITY ATTITUDE’
The horticultural industry, the government and society in general need to place a value on the food we produce again, says Irish carrot, iceberg, cabbage and leafy salad grower John Dockrell.
The government and people are not connected with the land and its products, and vegetables should not be commodities. It’s an educational process that we need to go through and it’s everyone’s responsibility, as is the environment and climate we live in.
Supermarkets are good for business, but like anything where the power lies with the few, they need to be regulated. Food production needs to stand up on its own; the mandate for the IFA is to ensure that Ireland has a grower base that sustains itself and like all of us it needs to change and develop. So many rules are governed directly by the EU that we don’t have a lot of power over what actually happens on our own soil.
The cheap food culture needs to stop and we need to adopt a holistic approach, starting with the children in the schools and continuing to the families at home. Farming is more complex then people realise; we need an influx of professional, university-educated people coming through.
We need to go back to basics. It is difficult to change the opinions of older people, but once the new generation are educated, the horticultural industry will thrive. Consumers now spend 15 per cent of their income on food in Ireland, whereas not long ago it was 30 per cent. Where is it going to end?
THE GENERATION GAME
Potato grower Keogh’s has been given a new lease of life since the Oldtown, County Dublin-based firm welcomed its third generation of farmers on board, along with an integrated marketing strategy that has accompanied the launch of Keogh’s Easy Cook potato products.
In addition to the traditional offer of up to 10kg retail bags, this ready-to-cook range is now going into Republic of Ireland supermarkets under the Keogh’s: Grown With Love In Ireland brand, and consists of microwavable new potatoes and baked potatoes.
“People are changing the way they eat in Ireland and there are only certain parts of the demography that will still go out to buy a huge bag of potatoes,” says Ross Keogh, 29, who joined the family business with his brother Tom, 31, and cousin Derek, also 29, as production and sales manager after studying accountancy, finance and engineering at university. “We all went away to university and travelling, but always knew that my father and uncle had a place for us on the farm. We’ve never been told we have to work in the business, but then we have grown up helping out. Going out of the business to come back with a kind of knowledge and experience of the ways other industries do things has really helped.”
The forward-thinking ethos has translated into the company well. The Easy Cook range is aimed at the new generation of consumers in Ireland that will neither eat a lot of potatoes nor be able to transport them home from the supermarket. But they are looking for convenience, says Keogh. “We are trying to buck the trend of bulk buying in Ireland,” he says. “We’re losing out market share to other carbohydrates quickly, so we need to make potatoes as accessible as possible.”
Keogh’s is also making sure that it makes the right impression on the market and has been pushing forward a marketing campaign with on-pack branding and pictorials relating to the family story.
“People like to see the grower on pack and even more than that, they like to read a story,” says Keogh. “On each pack we have each of our stories from mine, Tom’s and Derek’s, to the directors Tony and Peter [Keogh’s father and uncle, respectively]. Sales are going up and up.”
A FIRST FOR THE IRISH STRAWBERRY SEASON
This March saw the first of Keelings’ Irish strawberry crop harvested and in the shops earlier than ever before.
The Irish family firm grows in excess of 150 million berries every year from March through December, equating to two million kilogrammes of strawberries and approximately six million punnets for 2011. In the business since the 1940s, Keelings grows, sources, ships, markets and distributes fresh produce from sources around the world to Irish, UK and European markets.
With an annual turnover of €300 million and employing more than 1,400 people in Ireland and a total of 1,700 people across the group, Keelings has worked out that by purchasing Keelings strawberries consumers are saving 600,000 food miles because there are 200 less trucks coming to Ireland from Spain and the Netherlands.
FRUIT MARKET OPENS ITS DOORS
Dublin’s Corporation Fruit Market is now advertising that it’s open to consumers as well as wholesale traders, and welcoming off-the-street purchases within its partly grade II listed traditional canvas market site.
But although this has drummed up sales along the way, the wider economic gloom has continued to prove a real challenge to the trade. What’s more, the redevelopment or relocation plans that were on the agenda a couple of years ago seem to have been put on ice until the economic outlook improves.
“The general perception is that it’s a wholesale market, but it has helped having signs outside letting the public know they can come in,” says Denise Clarke, chair of the wholesale market’s tenants’ association and owner of a floral business on the site. “Nothing has changed though; we need more promotion. It’s a tough business at the moment, but we are managing to survive. Everything is cheap and cheerful at the moment when it comes to flowers. Home garden plants and accessories are on the up though. As money is tight, people are going for the option that will last and so going for garden plants instead of cut flowers.”
Clarke is worried that in an exercise to cut costs, businesses are neglecting the next wave of wholesalers coming into the market. “No one is being taught how the business works,” she says. “It’s a dying art here. There is no long-term thinking; this business used to be family led, but as money has been made, children have been educated and chosen not to come into the business. I can’t say that I’ve seen one new sales person on this market for two years.”
Pat Martin of K&M Fruit &Veg also has concerns. “There’s a little growth in retail, but the real problem is that the government needs to support us,” says Martin. “We also need help regarding being able to collect money. Credit control is a huge issue and companies are allowed to write off debts and never repay them. It’s difficult to get money out of people at the moment as it is.”
Popular market figure Derek Leonard says his wholesale business has also been challenged by the tough winter which equally hit the rest of the wholesale market. “The snow in December was devastating to the trade, as the building is so open to the elements,” explains Leonard. “This is a north-facing Victorian building, and although fruit and vegetables suffered, flowers were lost completely in November as the temperature dropped below zero.
“I think the move is a no-go now, as all the money has gone out of Ireland and no one is buying land to develop now. But we do need a building for a new generation. The Bulmers Festival will be held here in June and its launch was not so long ago. It will be celebrating food with music and all sorts. This is where this site and this business is a potential gold mine.”
Even though Dublin wholesale market is in need of some modernisation, it’s still one of the last traditional wholesale markets within the UK and Ireland, and the atmosphere is lively and nurturing.
“Demand is still there and more customers are coming onto the roadway,” insists wholesaler Michael Dowling. “People love fruit and vegetables, and always will do. I’d like to see more retail on the site; bring on fish and poultry. I’d like to see that happen and bring a bit of footfall onto the market. It’s not all doom and gloom. It was similar in the 1980s. It will all come round again.”
VARIETAL DEVELOPMENT KEY TO GROWTH
Lettuce grower Matt McCann believes that the climatic situation his family business, Morning Fresh Farm Ltd, faced in the town of Rush’s light levels, and a strong ethos that new products are the key to sustainability, has made it a strong supplier to Irish supermarkets and multiples.
“You have to think ahead and grow not for yourself, but what the market dictates,” says the third generation grower, who launched the Morning Fresh Farm branding five years ago as an extension of his father and grandfather’s business. Harvesting 120,000 plants a week at peak -including cos, Little Gem, celery, butterhead and Pak Choi - the business built its first glasshouse in the 1970s, but McCann maintains that this is a story of steady improvement and investment.
Three years ago, the company built a new packhouse to specifically serve M&S with Little Gem and Pak Choi. “We could see where the market was and stepped up production in Little Gem and Pak Choi,” says McCann. “M&S loved the product and we’re happy to pack it on site.”
The company has been growing Pak Choi for eight years and is trialling new types of leafy vegetables, including Chu Choi. “Butterhead is dying [in the market] here,” he adds. “And more interesting types and baby leaf are what people want to eat. I am a niche grower, my crops are hand planted and harvested by hand. You have to make the move to become business people, not just growers. You have to give yourself a boost. Things change -10 years ago, my yard wasn’t even cemented over, now I have a state-of-the-art facility. In the same way, people’s tastes change: you have to move with the industry.”
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