In this months issue

June 2010

Greater risk of high fines and imprisonment from traffickingdrugs has led to a new focus on the sale of smuggledcigarettes in Ireland.

2 NEWS

4 COVER STORY - RETAILERS AGAINST SMUGGLING

8 NEWS

The much feted proposal to sell Glanbia Plc’s Irish dairydivision to its 54 per cent shareholder, the Glanbia Co-op,was narrowly defeated by co-op members.

M.D/Editor: Frank MaddenDeputy Editor: Ruth TimminsBsn. Dev. Managers: Niall P. Madden

Sarah GriffinContributors: Emma Maguire

Daire WalshCirculation: Margaret CorryDesign: 90% Proof

Todays Grocery Magazine Tel 2809466 (6 lines)The Mews email: info@todaysgrocery.comEden Road Upper editorial@todaysgrocery.comDun LaoghaireCo. Dublin www.todaysgrocery.com

Small PrintTodays Grocery Magazine is circulated to all proprietors, directors and managers of allrelevant manufacturers and distributors, to every cash and carry, every multiplesupermarket, group head office and wholesaler, all group affiliated shops and Londis outletsin 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 bereprinted without the written permission of the editor. All letters to the editor of thismagazine will be treated as having been submitted for publication. The magazine reservesthe right to edit and abridge them.Disclaimer While every effort has been taken to ensure that all information is accurate atthe time of going to press, neither TGM Ltd or Todays Grocery Magazine acceptresponsibility for any inaccuracies or omissions. Please note that the opinions expressed inthe articles are strictly those of the authors.

30 FOCUS - SOFT DRINKS

38 FOCUS - WATER

10 EQUALITY BITES

14 CO - OPT OUT

28 BOTTOM OF THE BARREL2008 represented the first signs of a decline in the drinksindustry, and the Irish economy in general, as it embarkedinto what may well be a long and difficult period in itshistory.

12 NEWS

40 NEWS6 AN EXTREMELY TESTING YEAR

The past year has proved to be a most challenging one forretailers operating at all levels and in multifarious retailformats.

Have we all become more aware of our obligations to treatall categories of customer and employees equally?

16 NEWS

32 FOCUS - FRUIT JUICE

42 HIS AND HERS - BEAUTY CARE FEATURE

44 NEWS

N E W S

2 TGm

A Northside shopkeeperhas warned that the sale ofillegal cigarettes is sowidespread that it couldforce the closure of severallocal businesses.

Benny Gilsenan, whoowns Benny’s newsagents onEmmet Street, says he haspersonally suffered a 15 percent drop in sales and is nowcalling for a crackdown onthe sale of counterfeit andcontraband cigarettes.

Benny, who opened hisshop over 40 years ago, isone of the foundingmembers of the RetailersAgainst Smugglers whichhas a membership of over3,500 despite being lessthan 12 months inoperation.

He claims his business issuffering greatly as a resultof the increased availabilityof smuggled ‘smokes’.

“Up until last summer,between 40 and 45 per centof my overall turnover wasgenerated from cigarettesales, which is fairlysignificant for any retailer.

“But then over the spaceof a few weeks that figuredropped by about 15 percent.

“I started to notice thatmy regular customersweren’t coming in as often orat all anymore.

“I know of one family offive sons who all smoke.Each of them used to comeinto my shop every daywithout fail for theircigarettes but not anymore.

“I believe some of mycustomers are now buyingtheir cigarettes on thestreets and I can’t put myhand on my heart and saythat I could blame them forwanting to save €40 or soon a carton of 200

cigarettes, but my businessis very much dependent onthe custom I get fromsmokers.”

It’s estimated that aquarter of cigarettes smokedhere in Ireland are illegal, asituation which led to a totalloss of tobacco sales worthalmost €700 million toretailers in 2009.

Benny says he has seenpeople, some of themchildren as young as 12-

years-of-age, sellingcounterfeit and contrabandcigarettes on the NorthCircular Road.

We are licensed andcontrolled retailers ofcigarettes, yet a blind eyeseems to be turned to thosewho are illegally floggingcigarettes on the streets,” hestated.

“Where is the law to dealwith these smugglers?

Sale of illegal cigarettes widespread

We aslegitimateretailersaren’t beingprotected....“

TGM

June 2010 3

““We as legitimateretailers aren’t beingprotected and provided withthe support we deserve fromthe Government.

“Just recently it wasmentioned in an Oireachtascommittee that anybody isallowed to bring in whateveramount of cigarettes theylike as long as they’re forpersonal use, so where’s theregulation in that?”

He added: “We can affordto take a hit in businessprovided that we know thatsomething is being done totackle the illegal smugglingand sale of importedcigarettes.”

The Retailers AgainstSmugglers Group wasestablished last year andwithin four months itbecame the largest retailtrade group in the country.

Anti-smoking group ASHIreland also believe thatauthorities are not doingenough to control theproblem of illegal cigarettes.

“The Governmentrecently increased themaximum fine for smugglingtobacco in the Finance Billfrom €12,695 to€126,960,” a spokespersonstated.

“However, much moreneeds to be done either byway of amendments to theFinance Bill or with furtherchanges to our legislation.

“Customs and Exciseneeds additional services totackle this tobaccosmuggling epidemic or theproblem will expand rapidly.

“Additional personnel,technology, canine supportand legislative changes areneeded urgently to tacklethe large scale smugglersand the commuters to otherjurisdictions who are takinglarge amounts of cheapercigarettes into thisjurisdiction all year round.”

According to Revenue,

cigarettes brought intoIreland from within the EUmust be for personal use,must be transportedpersonally and travellers

have to have receipts toprove duty and taxes havebeen paid. The guidelinesused by Revenue forpersonal use is 800 or four

cartons of cigarettes.Travellers are allowed bringin 200 or just one carton ofduty free cigarettes fromoutside the EU.

“Customs and Excise need additionalservices to tackle this tobacco smuggling

epidemic or the problem willexpand rapidly.”

4 TGm

C O V E R S T O R Y

RETAILERS AGAINST SMUGGLINGThe illegal cigarette trade in now one of the most profitable forms of crime

and is the number-one method of defrauding EU tax payers.National and international criminals are turning away from the illegal drugs

trade in favour of the illegal cigarette trade.Greater risk of high fines and imprisonment from trafficking drugs has led

to a new focus on the sale of smuggled cigarettes in Ireland.In 2009, there were over 150 prosecutions for smuggling tobacco into

Ireland yet the average fine was under €1,000 with very fewprison sentences.

he explosionof the illicitc i g a r e t t etrade hasoccurred overthe past 18months but inthat timecriminals haveadapted their

sales methods to ensurethey are selling to a broadmarket.

Bingo halls, townmarkets, betting shops, dolequeues and even schools inrecent times have beenreported as places whereillegal selling has taken placebut as the awareness ofillegal selling has increasedso to have the sales avenuesbeing explored by thecriminal

Since the turn of the yearRetailers Against Smugglinghave been flooded withreports of handwritten notesbeing passed into homesand businesses across thecountry offering cut pricecigarettes.

The notes usually offer200 cigarettes for between€40 and €50 making theprice of 20 cigarettes €4 or€5 as opposed to almost€8.40 in the shops. If acustomer is interested inpurchasing anything fromthe note, they simply ringthe number at the bottom ofthe leaflet and a delivery ismade later that day or the

next day. According to thealmost 3,000 strong group,more needs to be done bythe Gardaí.

“At present we’re beingoverrun by the blackeconomy and shops areconstantly under threat,”said national spokesmanBenny Gilsenan. “The threemajor forms of income forthe average retailer is lotto,newspapers and cigarettes.People will almost alwaysbuy additional goods whenpurchasing these items so itis vital to protect theseforms of income. Cigarettesare hugely important to ourincome.

As a group we lost €692million in 2009 from losttobacco sales so it is a verygrave issue. I’m expectingthat number to be muchhigher in 2010 as leafletslike these are nowwidespread and we seem tobe getting very little helpfrom the Gardaí.

“They seem to beconstantly shirking

responsibility when it comesto clamping down on thesepeople. The people areputting these leafletsthrough doors are criminalsand are crippling the Irishretail sector, we need helpfrom the Gardaí. At presentit’s the criminal versus theretailer and it’s not theretailer that’s winning.”

T“At presentwe’re beingoverrun bythe blackeconomy andshops areconstantlyunderthreat.....

TGM

June 2010 5

6 TGm

As predicted by many of ourforemost leading economists andforecasters, 2009 proved to be anextremely testing year for thoseoperating in the retail sector - both herein Northern Ireland and further afield.

However, one of the mostinteresting things about the year justgone is the fact that it wasn’t just theindependent retail sector which wasunder threat, but also the multiples andnational chains. The past year hasproved to be a most challenging one forretailers operating at all levels and inmultifarious retail formats.

It’s clear that everyone understandsand accepts that the economicdownturn was a global problem and notone peculiar just to Northern Irishretailers. However, few had predictedthat it would be quite as difficult,lengthy or protracted as turned out tobe the case. From a general perspectivefew would have predicted the demise ofmany of our well-known retail names,for example Woolworths. unfortunately,this is far from the end. Others, sadly,are set to flow and as 2010 unfolds, wewill see other casualties ‘go to the wall.’

Independent retailers often receivevery unfair press and are often,mistakenly, perceived to be constantlywhining and moaning about theircircumstances. This is extremely unfair.Those who have managed to weatherthe storm in he independent sectorhave managed to do so through clever,dedicated management, excellentresource utilisation, clever procurementpolicies and sheer hard work - and theyare to be congratulated on theirsuccesses in 2009, especially given thecurrent economic climate.

It would, however, be totallyinaccurate to suggest that they didn’tfind the economic situation draining inthe extreme. Those far-sighted enoughto realise that times were going to betough followed the lead of the multiplesand, for example, introduced more non-food product lines to their retailoffering. This is one of the many trendswhich will help them to continue togrow, expand and strengthen theirretail operations in 2010 and beyond.In many respects, the far-sighted

independent retailers has greaterflexibility than the multiples and canrapidly effect changes which would takemonths to implement at national-multiple chain level.

But the multiples too had to face upto the fact that the recession-consciousconsumer was changing from beingtime-poor, cash-rich to almost totallyprice-focused and price-oriented, whichformerly had not been the case. Pricehas often been regarded by retailers asbeing a very blunt instrument - not so,when trading or shopping inrecessionary times. therefore, themultiples had to sharpen up their retailoperations and retail offerings. Many ofthen did this through trimming the

number of product lines they madeavailable to customers and throughpruning jobs - both in-store and at headoffice. Further cuts cannot be ruled outduring 2010.

The consumer has changedirrevocably and, even after therecession is well and truly over,shopping patterns, trends andbehaviour will be slow to change.Consumers have realised that there arequality retail offers available at bargainrices and are acutely seeing out thesequality products at premium prices.

They have learned also that they can‘make do with less and many areconsidering this as a valid lifestylechoice or option. Profligacy is out;frugality is in - and it’s in to stay - atleast for the foreseeable future.

Retailing has always been a toughgame and 2009 has been articularlydifficult. During recessionary times, theyremain (or principal) trends generallyemerge.

1. Weak retailers flounder and failand have then to face up to the fact thatthey are no longer viable tradingentities;

2. The clever and more strategicretailers ‘trim’ their retail operations

and staffing levels and squeeze theirsuppliers tighter for better margins withthe result that they often (though notalways) emerge from the recession asbetter (or at any rate, leaner) retailersin the long term.

3. Just as recession can inspiregreat poetry art or music, it can also -eventually -inspire new retail formatsand offerings which help to fill the gapsleft by those in category (1). We stillawait their arrival to help fill the ‘blackholes’ in many of our town centres leftby those who have had to exit themarket.

The recession may have bottomedout but there’s absolutely no reason tobe popping the champagne corks - atleast not quite yet. However, the three-stage model outlined above has alreadystarted to panout and will continue tounravel and unfold as we move through2010 and beyond.

N E W S

An Extremely Testing Year

The consumer has

changed irrevocably and,

even after the recession

is well and truly over,

shopping patterns,

trends and behaviour

will be slow to change.

“

8 TGm

Martin Mulligan welcomed thedelegates, members and guests tothe 2010 AGM held at the HodsonBay Hotel, Athlone. He said that itwas a great honour to represent themembers as District President of theNational Federation of RetailNewsagents, Ireland.

Among the many guests he gavea special welcome to NationalPresident Suleman Khonat,Northern Ireland President BrendanConway, Scottish District PresidentAbdul Qadar and Irish politiciansMary O` Rourke, Denis Naughtenand Nicky McFadden.

Mulligan said that it gave himgreat re-assurance to see such a fineturnout of NFRN Ireland members,trade partners and guests afterwhat had been a turbulent yearboth domestically andinternationally. He spoke of hisconfidence in the robustness,determination and ability of the Irishretailer to survive the currenteconomic recession.

Mulligan spoke of the recentIrish Times promotion formulated bythe newspaper`s marketingexecutive Fran Walsh along with theNFRN Ireland`s Deirdre Drennan.He said the point of sale materialwas first class and brought a realfocus to the offer in stores. Theprizes were excellent and it wasgreat to be able to give somethingback to his customers. He hadreceived a very positive feedbackand it was definitely the wayforward. Retailers and publisherscan now work together to activelypromote titles and increase sales toour mutual benefit.

Mulligan believed Joe Griffin, athird generation newsagent andincoming president, could lookforward to a fresh beginning withrenewed commitment from allparties to work together for thebenefit of all their members.

N F R N I R E L A N D

Pictured above clockwise from top:

ROI PRESIDENT LOOKS BACK AT 2009

NFRN Ireland Elections

District presidentJoe Griffin

District vice presidentJoe Sweeney

National councillorsPeter SteemersDes O`Reilly

ExecutiveJohn FoleyPaddy DonoghueTom McDermotMichael McDermotPackie DohertyMichael DawsonMartin Mulligan

Guest speaker Denis Naughten TD(MP) said the NFRN had a proud recordboth in the UK and Ireland representingand protecting the interests of theindependent retailers. He recognisedthey are at the coal face of the economyand play an important part in thecommunities.

As Fine Gael`s Economic andBusiness Chairperson he said he wasacutely aware of the difficulties retailersface.

On the subject of the public displayban on cigarettes he feels movingtobacco goods under the counter hasmade it easier for smugglers and thewidespread illicit t sales. He noted thatwhilst there was a significant drop in thesales of cigarettes through legitimateoutlets actual consumption is going inthe opposite direction. As a member ofthe Justice Committee he had pointedout the failure of the government todeal with this growing problem.

The current law allows criminals totake money from the pockets ofretailers and deprives the exchequer ofone million euro per day. He criticisedthe fact that the government has failedto address the problem and pointed outthat there were only two tobaccoscanners at our ports to identify theillegal importation of tobacco products.

He congratulated the NFRN andother organisations for highlighting thisissue and was quite taken aback to

learn that almost 30% of all cigarettessold in Ireland were illegal.

Meanwhile the government reactedwith more regulation that has hadunforeseen consequences. Retailershave been providing valuable jobs inevery village, town and city but nowtheir businesses are dying quietly andthere is no national outcry.

Donegal retailer Maurice Timoneywarned the delegates that there wouldbe no need for a NFRN organisation ifthey did not address the issue of illicitcigarettes. He pointed out the loss ofassociated sales that go with tobacco.He recently conducted a survey in hisshop and noted that 50% of tobaccosales led to another sale. With a loss ofalmost 30% of cigarette sales to illicitselling he was facing a bleak future andwondered how many newsagents wouldbe open in five years. He was also losingsales when visitors were not aware thathe sold tobacco products.

Maurice has initiated a high courtaction against the Tobacco Display Ban.

NATIONAL PRESIDENTADDRESSES DELEGATESNFRN national president Suleman

Khonat told the ROI delegates thatvisiting the districts was one of the mostimportant tasks of the NationalPresident. The member is what theFederation exists for and the traditionof visits by the National President is anexcellent way of staying in touch. Heacknowledged the tobacco display banhad led to closures, job losses and athriving cigarette black market Hecomplemented the Retailers AgainstSmuggling organisation that continuedto keep this issue in the media.

He was pleased to hear of the recentmeeting the ROI had with theirNorthern and Scottish colleagues tolend support to them in their battleagainst proposals to move tobaccoproducts out of sight.

He also congratulated thoseinvolved in the launch of the Code ofPractice for the Press Industry and therecent Irish Times/NFRN promotion.The one constant that we have is ourdetermination to adapt and thrive inthe face of adversity.

IRISH TIMES PRESENTATIONBrian Whelan, Irish Times Business

Development Executive, spoke on thedifficulties facing the publishingindustry in the current downturn asadvertising revenue fell and corporateorders showed a sharp drop. Freeonline availability of the Irish Times wasalso a factor. Nevertheless they wouldcontinue to be committed to COPPI andwould soon roll out full copy collectionsthroughout the country.

Brian than announced the winnersof the recent Irish Times/NFRNpromotion and spoke of futurecooperation with the Federation.

DEIRDRE DRENNAN GIVESANNUAL ACTIVITY REPORT

Development executive DeirdreDrennan reported on meetings heldwith wholesalers, publishers andCOPPI. She also spoke on activity in thetobacco and government lobby.

She announced that NFRN Irelandwill again be involved in the ADMLondis retail excellence awards inSeptember 2010. Once again we will bethe only outside organisationrepresented at determining a Londisawards winner.

STEFAN WOJCIECHOWSKI BRIEFSDELEGATES ON COPPI PROGRESS

Several delegates agreed withStefan that there was greatimprovement in the service given by thewholesalers since the COPPI (the IrishISSA) agreement came into play lastAugust. In his interesting presentationStefan outlined the level of service thatpublishers and wholesalers will give toindividual retailers. This, in turn, willenable them to provide their customerswith optimum access to newspapersand magazines.

Wholesalers and publishers nowrecognise the right and entitlement ofretailers to decide what products theywill stock and they also recognise thatretailers have a particular knowledgeand awareness of their customers needsand preferences.

June 2010 9

TGM

10 TGm

As we all know, there are a famous“9 grounds” for unfair treatment whichare set out in the legislation. Theyare:

The Acts prevent direct or indirectdiscrimination taking place on any ofthe 9 grounds. Over the last fewmonths, retailers have been hit withsome interesting and challengingcases – read on and beware!

EircomGender - Equal Pay – cost =

€55,000 plus 4 years back payIn this case Eircom were hit with a

substantial bill because theyvictimised a staff member after shecomplained about unequal pay. She

was awarded €55,000 forvictimisation and then given back payfor 4 years.

Mrs Z Vs A Chain Storedisability – cost = €8,000

Mrs Z was an epileptic working onthe tills. She asked to be moved asshe feared the flashing lights in the tillarea could trigger a seizure. The storedeclined and she went on sick leave.She was willing to swap roles withother staff members but the ownersrefused to listen. She resigned and

E Q U A L I T Y B I T E S

Since the introduction ofthe Equal Status Act in2000 and 2004 and theEmployment (Equality)Acts in 1998 and 2004 wehave all become moreaware of our obligationsto treat all categories ofcustomer and employeesequally. Whilst thelegislation took a while tobed in, with some highprofile cases in relation totravellers rights hitting thenewspapers, there is nowa constant stream ofclaims being lodged byemployees for unfairtreatment.

1.Gender (includes men and womenand transgender)2.Marital Status (includes single,married, separated, divorced orwidowed)3.Family Status (includesresponsibility as a parent, or in locoparentis in relation to a person whois under eighteen years of age, or asa parent or primary resident carer)4.Sexual Orientation(includesheterosexual, homosexual, orbisexual orientation)5.Religious Belief6.Age7.Race(includes race, colour,nationality, or ethnic or nationalorigins)8.Disability (includes the total orpartial absence of a person's bodilyor mental functions, including theabsence of a part of the body9.Membership of the Travellingcommunity

EQUALITY BITES

was awarded €8,000 incompensation.

The head in the sandcost €10,000

In a recent case by a securityguard who alleged discriminatorytreatment based on his race, theemployer did not even bother to showup and defend the case. With noopposition to fight, the employee wasawarded a cool €10,000 without evenhaving to prove the case. A lessonlearnt!

Lost in translation?Do you have a substantial number

of non English speaking staff? Thinkabout warehouses, drivers, back office,food processing, waste management?If you have numbers of non Englishspeaking workers you should get yourhandbook translated.

In 2008 the Equality Tribunalfound that where there were a largenumber of foreign speaking staff, anemployer should ensure that theirstaff policies are translated so thatthey can be understood by everyone.

Practical advice – check themajority of your staff are Englishspeaking. If not get your handbooktranslated for the one major nationallanguage. You can also insist thatwhen hiring staff they have basicEnglish and accept English as theworking language of the business.

Be careful on maternity!Expectant mothers are a super

protected class of employee. Did youknow that you cannot make anemployee redundant when she is onmaternity leave? Did you know thatyou must provide paid leave for ante-natal visits? Always be careful whendealing with Maternity situations asthey can be legally and emotionallyfraught. If in doubt, take some advice.

How do you protect yourself?One common thread to all of these

cases is common sense. If theemployer (as most employers do) hasan equality policy, you should refer toit and follow it! Do not try to be cleverabout dressing up discrimination as aperformance issue. The EqualityTribunal will make you squirm when it

comes to justifying discriminatoryactivity. The evidence is public andplaced on the website – it can behighly embarrassing for anorganisation and a HR department.

Practical Steps

At the end of the day, if you haveconcerns, check out the EqualityAuthority website – www.equality.ie orcall them with any issues that mightconcern you. Proper preparation andrespect for policies will keep you right.Employment Equality concerns shouldnot be an excuse for getting lawyersinvolved. The information is there foremployers to access.

© LEMAN Solicitors 2010

One commonthread to allof these casesis commonsense.

“

June2010 11

1.Review your equality policy. If youdon’t have one, get one. If it is inEnglish and you have a number offoreign staff, get it translated.2.Go through it with the storemanagers3.Make sure there are no problemcases in any stores. If there are“delicate” situations, deal with themin an organised way – don’t wait forthe claim!4.Remember, length of service orpart time working is irrelevant –anyone can claim and the awardsand embarrassment factor can besubstantial.

TGM

12 TGm

Moy Park, the NorthernIreland poultry processorowned by the Brazilian foodgroup Marfrig, is to acquireone of its closest rival firmsin the North in a deal worthStg£26 million.

Moy Park, which waspurchased by Marfrig justtwo years ago, has boughtthe family-owned O’KanePoultry business, which isbased in Ballymena.

In a statement issued tothe Brazilian securities andexchange commission,Marfrig confirmed itintended to acquire 100per cent of the O’Kanecompany “for the amount ofStg£13 million due on theclosing date and equalamount in June 2011.”

Marfrig said the financefor the acquisition had been“internally generated byMoy Park and it is alreadyavailable there.”

O’Kane Poultry, whichhas been in business since1932, is one of the North’slargest poultry processing

companies.Is assets, which have

been acquired by Moy Park,include two hatcheries, afeed mill, a primary andfurther processing plantand one laboratory testingfacility.

Marfrig has notcommented on whetherthere will be anyrestructuring that couldresult in redundancies atO’Kane following theacquisition.

The buyover is subjectto both due diligence andregulatory approval but itsexpected to be formallyapproved by early autumn.

O’Kane processes in theregion of 120,000 chickensand 5,000 turkeys per day.

It is a key supplier tothe retail and food sectorand counts Marks &Spencer as one of itslargest customers.

Last year,the company,which employs more than1,500 people, reported netrevenues of Stg£132m.

Moy Park whose nameis set to become familiar tomillions around the globethis summer thanks to asponsorship deal with theFifa world Cup, currentlyemploys nearly 7,000people in Northern Ireland,England, France and theNetherlands.

Moy Park is a majorsupplier to Tesco Ireland,Dunnes Stores andSuperquinn.

Nigel Dunlop, chiefexecutive of Moy Parkbelieves the acquisition ofthe Ballymena business willbring new opportunitiesbecause it will create anorganisation with “the scaleand sustainability of supplyneeded to meet the verysignificant growthopportunities that existacross Europe”.

“O’Kane Poultry isattractive to Moy Parkbecause it complements ourexisting business modelbringing new sources ofsupply, processing

capabilities and marketexpertise,” said Dunlop.

“I am confident that thisacquisition will prove to bea very strategic and positivedevelopment for the NIagrifood sector andenhance the contribution itmakes to the wider NIeconomy”.

It is likely that thecombined company willemploy in the region of8,500 people, with around5,000 based in NI, where itwill operate contracts withapproximately 760 localproducers.

The acquisition marks anew chapter for the O’Kanecompany. Its chairman, BillyO’Kane, the son of founderWP O’Kane, said that it had“always been a businesswith strong family valuesand its future, and the andthe future of its workforcematters deeply to us”.

N E W S

Moy Park amalgamates with Marfrig

14 TGm

The much fetedproposal to sell GlanbiaPlc’s Irish dairy division toits 54 per cent shareholder,the Glanbia Co-op, wasnarrowly defeated by co-opmembers.

The vote required a 75per cent majority in orderto be passed. In the event,73 per cent voted in favour-a result that was‘tantalisingly close” as chiefexecutive John Moloneydescribed it to analysts.

The defeat of theproposed sale was a major

blow to Glanbia. Both thelisted business and the co-op had embarked on amajor communicationsdrive in the weeks leadingup to the vote to convinceco-op members that a salewould be beneficial for all.

As the dust settles, andthe company begins toweigh up its options, focusis now shifting to the role ofthe co-operative structurein the process.

As one shareholder putit, the only impediment tothe deal going through was

Glanbia’s co-op structure.“The plc wanted it, themajority of the farmerswant it but, because of therules of the co-op, the dealcan’t go through.”

But while Glanbia mayhave thrown the issue of co-operative rules into focus,there have been stirringsfor some time that thiscomplex and somewhatarchaic corporate structureneeds to be addressed.

Last year the corporatelaw division of the thenDepartment of Enterprise,Trade and Employmentembarked on a consultationprocess and review of thesector.

It is due to present itsfindings, and its proposals

on a new legislativestrategy for co-operatives,to the government withinthe next month.

The primary issue facingthe sector is its datedlegislative structure. Co-operative societies occupyan unusual and uniqueposition in Ireland’scorporate landscape.

Categorised as “friendlysocieties”, they areregulated and governed bythe Industrial and ProvidentSocieties Act - legislationwhich dates back to the1890s. While the legislationhas been amended to someextent since then, there hasbeen no major overhaul ofthe system, and theprovision of the 1893 Act

C O - O P T O U T

CO - OPT OUT

still form the main part ofthe legislative systemapplying to co-operatives inIreland.

In addition, most Irishco-ops are members of theIrish Co-operative Society(Icos) a body which offers ageneric framework of rulesfor member co-ops..Individual co-ops then formtheir own rules inconsultation with Icos .Thecase of Glanbia illustratesthe complexities of thestructure. The recent ballotsaw the peculiarities of theco-operative rules kick intoaction. These include:

•the need to have a 75per cent majority’

•the prohibition ofproxy votes;

•the requirement thatone meeting, rather thanvarious regional meetingsshould take place givingrise to significant logisticalissues;

•the requirement, in theevent that the deal waspassed, that an identicalmeeting take place twoweeks later.

Icos has said it had norole in the formation of theGlanbia Co-Op’s rules,pointing out that the co-opdrew up its own set of lawswhen the merger ofAvonmore and Waterfordtook place in 1997.

The co-op is now left inthe situation where it mustabide by its own rules,despite the fact that amajority of their membersfavour the sale.

Further, the Glanbia Co-op rules stipulate that,while, for the most part, anychanges to the co-op’s rulesneed a two-thirds majority,a 75 per cent majority isrequired to sanction anychange which would see theco-op’s holding in the plcfall below 51 per cent.

Critics of the co-operative system point tosuch restrictive rules asevidence of a corporateentity which is resistant tochange, and question thevalidity of a structure thatseems more suited to a pre-industrial age than therealities of moderncommerce.

Nonetheless, there isstill a strong body ofsupport for the system.

A major 2007 report byForfás argued that the co-operative model ofenterprise had a wider roleto play in the Irish economy.Apart from the agriculturalsector - which accounts forthe vast majority of co-operative activity in Ireland- Ireland has a few co-

operative structures, incomparison to countriessuch as Australia andEuropean countries whereconsumer, housing andwater-management co-opsabound.

Jim Power, Economist,who strongly supported themooted Glanbia co-opbuyback as representingthe best deal for farmers,believes the co-op structurecan play a central role inIrish agribusiness, providedco-ops are run on abusiness basis rather thanas a fund to support milkprices.

“The fact that,historically, some co-opswere not run properly hasled to an image problem forco-ops,” said Power, “Aslong as they are runprofessionally, there is noreason why co-ops cannotplay a central role inIreland’s agribusinesssector.”

One issue allstakeholders agree on,however, is that majorchange is required in theIrish dairy sector.

There is a sense amongthose in the industry thatIreland’s dairy business isentering a watershed due totwo separate factors -increased competition asmarkets open up, and theplanned removal of milkquotas.

Just as the introductionof milk quotas in the 1980sarguably drove thecommercial direction ofIreland’s dairy industry,forcing companies likeGlanbia to focus on otherbusiness abroad togenerate profits, the liftingof restrictions on milkproduction looks set todictate the future directionof Ireland’s dairy sector.

Further rationalisationof the sector is perceived asessential by most in the

industry if Ireland is to keepits head above water in thisnew commercialenvironment.

Advocates ofconsolidation point tocountries like theNetherlands, Sweden andGermany, where milkproduction is dominated bya major co-op, as the mostlogical net-step for Ireland’sdairy industry.

It is in this context thatthe rejection of Glanbia’sdeal need to be seen. Whilenever explicitly stated, itwas felt by many that anewly demerged GlanbiaCo-op, with its extensiveprocessing facilities, couldhave been the obviousdominant player in Ireland.

The defeat of theproposal to decoupleGlanbia from the co-opraises questions for theindustry as a whole, but thecompany itself is left to dealwith its own internal issues.

June 2010 15

TGM

“As long asthey are runprofessionallythere is noreason whyco-ops cannotplay a centralrole inIreland’sagribusinesssector.”

16 TGm

Molson Coors Irelandannounced the launch ofHome Draught, aninnovative draught beersystem filled with ten pintsof Carling that fits easilyinto the fridge for theperfect pint at home. HomeDraught is available in themultiple and conveniencesector from June 2010.

The launch of HomeDraught signals a€250,000 marketinginvestment by MolsonCoors Ireland, gearedtowards improving the in-home beer experience forconsumers and adding longterm value to the beercategory for customers.

Through thedevelopment of HomeDraught, the first trulyglobal Molson Coorsinnovation, Molson Coorsaims to reinvigorate itsbrands and introduce a new

category to help build thein-home beer industry, inIreland with this great newformat.

“There have beennumerous attempts bybrewers over the years toproduce a product like this,but the technology that hasgone into creating HomeDraught is unprecedentedand truly makes HomeDraught an exceptionalproduct” said Seamus Daly,Marketing Manager,Molson Coors Ireland.

“Carling is the lead brandfor this new technology butwe are also launchingGrolsch in the HomeDraught system very soon.We believe Home Draughtis one of the mostinnovative products we’vecreated and demonstratesour commitment todeveloping our brands”.

The launch of HomeDraught will be supportedwith a significant marketingcampaign including amixture of in-store mediaand activity backed up witha proximity mediacampaign outside majorstores. There will also be anexclusive special offeraround the launch -purchase a Home Draughtpack and get 2 free glasses.

Home Draught fusestechnological innovationwith Molson Coors’ richbrewing heritage to create

the ultimate in-homedrinking experience.

With an easy-to-useminiaturised draughtdispenser, Home Draughtfeatures three simple stepsto the perfect pint, justchill, twist, pour. Afterchilling the beer for 24hours, a draught pint isdelivered by simply twistingthe CO2 cartridge andholding the glass under thetap for a perfect pour.

The Home Draughtsystem’s innovativeminiaturised CO2 cartridgealso keeps the beer tastingfresh for 30 days afteropening and delivers aconsistent pour, meaningthe last pint tastes as greatas the first.

Molson Coors BrewingCompany launched an Irishoperation in January 2010and opened a new salesoffice in Kildare for thegrowing Molson Coors teamin Ireland. Molson Coorsmarket and distributeCarling, Grolsch, Sol andCaffreys in Ireland as wellas a growing portfolio of“world beer” brands.

The group also recentlyannounced the set up itsown direct sales andmarketing operations inNorthern Ireland, creatingup to 14 new jobs.

Launch of ‘Home Draught’ system

N E W S

A moratorium on largenew retail developments inthe mid-west will result inthe loss of 700 future jobs inTesco’s operations the retailgiant has said.

Tesco said regionalplanning guidelines shouldnot curtail retaildevelopment - particularlyconvenience goods - in thesecentres as it was required tomaintain their self-sufficiency

and avoid unsustainabletravel.

The retailer said theapproach would also resultin the significant loss of jobsand investment in Ennis,Shannon, Nenagh andThurles.

Draft planning guidelinescovering Limerick, Clare andnorth Tipperary areproposing that localauthorities allow no net

increase in floor space inlarge retail developmentsother than that arising fromredevelopment projects.

Tesco said themoratorium would cost inthe region of €100 million inlost capital investment.

“By restricting thisplanned investment, theremay be a loss of tax revenueand continued growth inunemployment estimated tocost €5.5 million perannum. It is apparent thatthe regional planning

guidelines for the midwestwill act as a barrier to retaildevelopment, investmentand employment-creation.”

The Tesco statementadds: “Tesco are not involvedin speculative retaildevelopments, but ratherseek to construct/occupyunits where a proven needexists following detailedresearch and analysis.”

New guidelines hit jobs

18 TGm

Horgan’s DelicatessenSuppliers’ opened its firstever Food Emporium atJoyce’s Supermarket,Knocknacarra, Co Galway.To mark the launch, tastingsby selected suppliers,special offers and a prizedraw to win a luxury foodhamper will take place atthe store until Monday, 7thJune. The initiative marksHorgan’s first FoodEmporium Concept Storeand cements a longstandingrelationship with Joyce’sSupermarket Group.

Horgan’s DelicatessenSuppliers has been theleading supplier of

speciality foods to retailerssince 1977 and the FoodEmporium at Joyce’s willprovide a wide range ofquality speciality produce,which Horgan’s is alreadyfamous for, including a wideselection of farmhouse andcontinental cheeses, cookedand fermented meats, pâtéand salami.

Joyce’s Supermarket,Knocknacarra is part ofJoyce’s Supermarket Group,a family business whichcomprises of 3 stores andemploys 250 people. Thecompany ethos is to provideexcellent customer serviceoffering quality, locallysourced and reasonablypriced foods, wherepossible.

Speaking at the launch,Pat Joyce from Joyce’sSupermarket Group said,“At Joyce’s Supermarkets,customers are at the core ofour business. We strive toconsistently offer thehighest standard of qualityand service and Horgan’snew Food Emporium will bea great addition to ourKnocknacarra store. I’msure our customers will be

delighted with thenew offering”.

Joyce’sSupermarket Groupis a family ownedsupermarket chainestablished in 1951by Patrick C. Joyce.Employing over250 people, theyconsider theircustomers to be thecore of their businessand one of their maingoals is to provide superiorcustomer service over theircompetitors. Their locallysourced food produce is ofthe highest quality whileremaining reasonablypriced.

Michael Horgan, MD ofHorgan’s comments,“Horgan’s is renownedwithin the retail sector forproviding excellent freshproduce and now we aredelighted to be able bringthat directly to consumersthrough our FoodEmporium at Joyce’sSupermarket, Knocknacarra– we hope the customerswill be suitably impressed.”

Horgan’s DelicatessenSuppliers is the leadingsupplier of speciality foodsto multiple supermarketchains and independent

retailers, speciality foodstores and the food servicessector in the Republic ofIreland and NorthernIreland since 1977.

Horgan’s are alsoowners of a 3,500 squaremetre premises atMitchelstown to supporttheir cheese cutting, waxingand packaging facility whilealso providing designatedrooms for cheese maturing.Horgan’s DelicatessenSuppliers works closely witha range of large and smallproducers, to bring thefinest foods to the marketwhilst ensuring that thehighest quality and safetycriteria are met.

N E W S

Connacht Rugby's GavinDuffy

Joyce's Cheesemonger PaulineDeveaney and Connacht Rugby'sGavin Duffy,

A FIRST FOR HORGANS

Britvic’s Irish businessreturned to profit despitedifficult trading conditions asthe group’s programme tostreamline business came online.

Operating profit atBritvic Ireland, which ownsthe Club and Ballygowanbrands, was stg£1.3 millionfor the period, but revenuewas down 11.3 per cent toStg£89.7 million in the 28weeks to April 11th.

“Trading conditions inIreland remain difficult with

consumers focused onprice, but our synergiesprogramme continuesto track and hashelped to deliver amodest return toprofit,” said chiefexecutive Paul Moody.

Britvic said it wasremaining “extremelycautious” on the short-term prospects, andexpected the rest of2010 to be difficult.

The firm predicted thewider group would meet full-

year expectations after astrong performance in thefirst half of the year, and

“robust” trading in the earlyweeks of the second half.

BACK IN PROFIT

20 TGm

N E W S

The people of Irelandhave some of the bestdental habits compared totheir cross-borderneighbours – a new surveyhas shown.

The survey, which wasreleased in line withNational Smile Month (May16 – June 16) andcommissioned by itscampaign sponsorsWrigley’s OrbitComplete,Oral–B, andListerine surveyed morethan 1,000 members of thepublic from ten regionsthroughout Ireland and theUK.

It found that Dublinersadmitted to flossing morethan anyone else in the UK,with positive responses fivetimes higher than London,Edinburgh and Belfast.

Toothpicks are alsomore popular in Dublinthan anywhere else in theBritish Isles, with scores onaverage three times higher.

Chief Executive of theInternational Dental HealthFoundation, Dr Nigel Cartersaid: "Although Dublincame top of the charts forflossers, the survey hasflagged up that only fivepercent of them floss. Thisfigure, along with thedramatically lower scores ofthe UK, needs to rapidlyimprove Flossing or using

an interdental brush is avital part of a good oralhealth routine, removingfood particles from betweenthe teeth and plaque fromagainst gumline. It shouldbe done once–a–day beforebrushing.

"It is very important tobe gentle, even when usingproper dental floss, asjerking or snapping thefloss into the gums candamage the gum tissue.”

“The best things toremove food from betweenthe teeth with are theinterdental brushes orwood sticks, shapedparticularly for thispurpose. Although, it isvital to remember thatcocktail sticks, which threepercent of the population ofDublin use to pick theirteeth, are not an adequatereplacement as they aremuch too hard and sharpand should really beavoided.

The survey also foundthat exactly twice as manywomen floss in Dublin thanmen while almost twice asmany men use toothpicksthan women.

The Foundation pridesitself on giving out qualityoral health information tothe public so if you’reworried about the state ofyour smile and want to

know just how to improve ityou can contact theNational Dental Helpline on00 44 0845 063 1188.

The annual survey aimsto investigate the dentalhabits and practices ofthose living in the UK, inorder to address the levelsof awareness andmisconceptions there areabout oral health.

Further findings fromthe study will be releasedthroughout National SmileMonth on the Foundation’s

website atwww.dentalhealth.org.

The Foundation’s threekey messages throughoutthis year’s National SmileMonth campaign of ‘Teeth 4Life’ are to brush your teethtwice a day for two minutesusing fluoride toothpaste,cut down on how often youhave sugary foods anddrinks and visit your dentistregularly as often as theyrecommend provide a firmbase for a lifetime of goodoral health.

IRISH TOP OF THE FLOSSERS

The recession iscontinuing to take its toll oncompanies, with 86 per centof firms reporting a severemoderate impact from thedownturn in a new survey.

The InterTrade Irelandsurvey of 1,000 owner-managers of businesses -500 in the Republic and

500 in the North - foundthat more than half of thebusinesses recorded a fall inrevenue and profits in thefirst quarter of the year.Labour costs were a majorconcern for almost half ofcompanies, while 53 percent said they had cut pricesover last six months to

stimulate growth.Almost nine out of ten of

the companies surveyed saidthey intended to review theirbusiness strategy in thecoming year. They outlinedplans to diversify into newmarkets, develop newproducts and services, andreduce costs in theirbusinesses.

Cashflow was listed asthe single most important

issue facing businesses, withone-third of customersrequesting longer paymenttimes.

Almost two-thirds offirms said they were going totake action to reduce theirenergy costs, while a fifth ofthe companies surveyed saidthat the government shouldencourage bank lending tohelp businesses.

80% of firms suffering

22 TGm

Dating in Ireland is aforeign concept for most. Incomparison with serialdaters in the US, the Irishjust don’t have the knackfor the formalities andtraditions of dating. Inresponse to the mountingnumber of calls for somegood old fashionedromance, Cornetto Enigma,the latest ice cream bundleof love in a cone, hasmounted a campaign tobring the customs andrituals of dating to Ireland.

Why is dating different inIreland?

Generally, American’sare more outspoken when itcomes to approaching thefairer sex, Italians do it overcoffee and the French wouldhave us believe they have asoundtrack to everyromantic encounter. On theother side of the coin,historically, Irish peopletend to hide their feelingsunder a bravado of craicand humour, with anunderlying deep rooted fearof rejection. To try and ridthe new generation of theirdating inhibitions on thegreen isle, Cornetto Enigma

has made it easy tojoin the dating gamewith the new ‘RevealWhat’s Inside LoveRobot’ FacebookApp’.

The Cornetto‘Reveal What’sInside’ Love Robotallows fans to findtheir perfect matchand even go on avirtual date with theperfect mate. Howdoes it work? TheCornetto Love Robotruns the Facebookprofile through atrademarked potenti-date-o-meter(working title!) whichuses SCIENCE, MATHSand SUMS to findpossible love matchesfrom their network offriends. Once a match isfound, the initial scarystep is bypassed in thesafety of an online socialnetwork and opens thedoor to real life dating.

They may not have hadthe X Factor, but twins Johnand Edward could top thecharts this time with theCornetto Love Robot andserenade the girl of their

dreamssuch as Leinster

lovely Louise Kavanagh.Cupid has some stiff

competition.The New Cornetto

Enigma collection includes2 delicious flavours perfectfor bringing on any date,Vanilla & Chocolate orVanilla and Raspberry.

N E W S

IT’S A DATEWITH CORNETTO ENIGMA

The falling value of theeuro against other majorcurrencies is having apositive impact on Irishexporters, according toEnterprise Ireland.

Recently the euro fellbelow $1.20 for the firsttime in more than four years.While the move was sparkedby renewed concern aboutthe eurozone debt crisis,Niall O’Donnellan, head ofinvestment services atEnterprise Ireland, said it

was good news for theagency’s client companieswhich sold products inoverseas markets.

“They are obviouslyunder pressure on a widerange of fronts, but this hashelped ease the situation -45 per cent of our exportsare sold into Britain andabout 9 per cent in the US,so the decrease in the euroagainst both of thosecurrencies obviously helps,”he said.

O’Donnellan said thatcompanies that wereexporting to Britain inparticular would benefitfrom the shift.

“Those selling intoBritain would be sellingproducts that would be quiteprice-sensitive. In sectors likefood there are noopportunities for hedging.For example, they wouldn’tbe able to compensate bybuying raw materials fromBritain,” he said.

WEAK EURO HELPS EXPORTERS

SCA announces anexciting, new marketingcampaign for its leadinghousehold towel brand;Plenty. The campaignincludes a new televisioncampaign which went on airfrom the 19th of April.

Building on the brand’score message; ‘One sheetdoes Plenty’ which was

introduced in 2009, thenew brand icon Juan Sheetwill replace the housewifeduo Brenda and Audrey inthe new-look TVadvertisements. Theintroduction of Juan Sheet;the sexy, Latino, cleaningsuperhero, forms one of thefinal stages of the brand’smigration from Bounty* to

Plenty. The ad will see JuanSheet saving the day bycleaning up spills with justone (or if you like, ‘Juan’)sheet of Plenty – bringingto life the brand’s keymessages in a fun andcreative way.

Demonstrating Plenty’ssuperior strength andabsorbency, the ad sees a

housewife struggling toclean up a spill withordinary paper towel, onlyto be rescued by JuanSheet and his one sheet ofPlenty. In true Latino style,Juan with a sexy swing ofthe hips will tackle andconquer spills around thecountry with the help of thestrong and absorbentPlenty Household Towel.

Marketing Manager,Morgane Salin, explains:"We’re really excited by theintroduction of the newPlenty icon, Juan Sheet.Whilst we’ve had greatsuccess to date in Irelandwith the Plenty brandmigration using Brenda andAudrey, we felt it was timeto inject new energy intothe brand and we feel thisnew icon personifies thebrand’s character and coremessages in a morepowerful way".

It’s expected that thenew icon will help echo thesuccess Plenty experiencedduring 2009, when despiteundergoing a major brandmigration, the brand in factoutgrew the market in bothvalue share (+10.7% yoy)and volume share (+33.8%yoy)**.

Attributing to thesuccess experienced duringthe initial phases of themigration to an integratedmarketing approach, thenew campaign will againsee a below-the-linestrategy which will supportthe new TV campaign andamplify the brand’s keymessages. Digital,promotional marketing andPR activity will all work toreinforce Plenty’s numberone status. The Plentywebsite (www.plenty.ie) willalso be updated and will actas an anchor for all activity.

TGM

June 2010 23

SCA UNVEILS NEWBRAND ICONFOR PLENTY

24 TGm

Innocent has justlaunched a campaign forAge Action with the help ofSenator David Norris. ‘Theinnocent big knit’ campaignaims to get 80,000 littlewoolly hats knit by thepublic between now andSeptember.

These little hats will thenbe ‘modeled’ by 80,000little bottles of innocent fruitsmoothies and sold in shopsnationwide from midSeptember to early October.For every woolly hat wearingsmoothie sold, innocent willgive 25 cent to Age Action.The goal is to raise €20,000

for Age Action. For moreinformation, knittinginstructions and variety ofknitting patterns please visitwww.innocentdrinks.ie/thebigknit

Ali Gibbons of innocentsays, “We need lots of littlewoolly hats during the nextfew months and we've gotlots of activity planned to getthe nation knitting. We willuse a mix of social media,mini knit-in events, the AgeAction network aroundIreland, an ongoing PRprogramme and, of course,we will work very closely withour media partner 2 FM

recruiting knitters throughtheir programmes and theRoadcaster. So, needles atthe ready....”

Eamon Timmins of AgeAction says, “We have up to

2,000 excess Winter deathsin Ireland each year. They donot die from hyperthermia,but from cardiovascular andrespiratory illness – cold-related conditions. Themoney raised from theinnocent big knit will gotowards our annual winterwarmth public educationcampaign which informspeople how they can staywell, warm and healthy intheir homes.”

Hats should be sent toThe innocent Big Knit, FruitTowers, 120 Lower BaggotStreet, Dublin 2 beforeFriday 3rd September 2010.

David Norris

N E W S

INNOCENTS 80,000 AGE ACTION

26 TGm

A group of West Corkseafood entrepreneurs havereturned from a tradevisitto Belgium, where they metwith key industry figures inthe fisheries andaquaculture sectors.

Members of the groupare participants in a newtraining initiative being runby West Cork EnterpriseBoard and BIM (BordIascaigh Mhara –the IrishSea Fisheries Board).

The trainingprogramme, entitled‘Developing a SustainableSeafood Business’, isdesigned to offer extensivementoring and specialistadvanced tutoring forindividuals who work in avariety of areas of theseafood industry.

Run over a twelve-month period, the businessdevelopment schemeensures that seafoodbusinesses reach their fullpotential by helpingentrepreneurs to updatetheir marketing andproduct development skills.Working in conjunction withBullseye Food Marketing,the programme puts astrong emphasis onformulating new businessstrategies to suit thechanging marketplace.

As part of this approachto training anddevelopment,representatives from eightWest Cork seafoodcompanies travelled to the2010 European SeafoodExposition in Brussels – theworld’s largest seafoodtrade fair. Here, the groupmet with industry expertsto discuss the latest marketresearch, productdevelopment and packagingtrends. The group also

benefitted from theopportunity topreview the newestand mostinnovative seafoodproducts poised tobe launched on theEuropean,

Asian and USmarkets. SeanO’Sullivan fromCisemair FisheriesLtd in Bantry, wasamong the WestCork entrepreneurswho visited theEuropean SeafoodExposition.Hebelieves the tripwas extremelyrewarding andworthwhile in termsof generating newideas for hisbusiness:

“The EuropeanSeafood Expositionprovided aninvaluableopportunity tomeet with the topindustry figures who areshaping the internationalseafood market. There were1,600 exhibitors at theevent from over 140countries. Throughout the‘Developing a SustainableSeafood Business’ trainingprogramme, we’ve beenhearing about the latestdevelopments acrossproduction, processing,packaging and branding. Iwant to ensure that mybusiness is keeping up todate with the newest trendsand offering consumersinnovative products.Cisemair Fisheries alreadyhas a foothold in the exportmarket but it’s extremelyimportant that weincreasingly push ourexport sales. Like most of

my colleagues on theSeafood Business course, Ihope to be able to return toBrussels as an exhibitor atthe European SeafoodExposition within the nextcouple of years”.

Michael Hanley, CEO ofWest Cork EnterpriseBoard, coordinates andmanages the trainingprogramme which isexecuted by Bullseye FoodMarketing. He maintainsthat small and mediumsized Irish seafoodcompanies have enormouspotential.

“In Ireland, andparticularly here in WestCork, we have some of therichest fisheries andaquaculture resources. Eachof the eight SMEsparticipating in the

‘Developing a SustainableSeafood Business’ is beinggiven both group tutoringand individual mentoring tohelp them gain the skillsthey require to grow theirbusinesses. It’s acompetitive market butIrish seafood has anexcellent reputation

throughout continentalEurope, Asia and furtherafield. With the right

skills and knowledge,along with an innovativeapproach to product

development, theseseafood entrepreneurs willbe ideally positioned to

capitalise on new andexisting opportunitieswithin both the domestic

and export markets. TheEuropean Seafood Exporeally opened our training

Inspiration forWest Cork seafood Compan

N E W S

participants’ eyes to thewide array of new productson the market”, heexplains.

By structuring thisseafood training initiativeto focus on innovation andstrategic businessdevelopment, the WestCork Enterprise Board andBIM, aim to helptraditional seafoodcompanies compete on aninternational level.

Susan Steele who isInnovation Coordinator atBIM Seafood DevelopmentCentre in West Corkbelieves that, “It’s allabout developing ‘valueadded’ products andcarefully targeting specificsegments of the market.Many seafood businessesin West Cork and

elsewhere are family-runand have a wealth oftraditional knowledge andskills.

‘Developing aSustainable SeafoodBusiness’ is helping theseSMEs to upskill andbecome more aware of theimportance of taking astrategic approach todeveloping and expandingtheir companies. In orderto be successful andsustainable, trainingcourse participants realisethat they need toconstantly keep up to datewith market trends andchanging consumerdemands. I hope to seeseveral of this year’sparticipants return toBrussels as exhibitors inthe near future.”

TGM

June 2010 27

ies

Competing with thefinancial firepower of aDiageo or a Pernod Ricardmakes it extremely toughfor indigenous Irish spirtsto gain a foothold in thedrinks market.

Just ask John Teeling,who has toiled hard to gaintraction for his Cooley Irishwhiskey brands.

That isn’t putting off thebackers of Coole Swan, thefledgling premium Irishcream liqueur. They arecurrently in the middle of a€1 million fundraisinground to boost theirmarketing firepower. Thiswould value the business atabout €8 million.

You don’t have to havemegabucks to invest,either. Share units of just€250 have been madeavailable to the generalpublic.

Coole Swan is aiming atthe premium market,avoiding a head-to-headwith Baileys, which hooversup the mass market.

Its main backers areDavid Gluckman, who hasworked on the Baileysbrand, and Adrian Walker,

formerly of Diageo.Its executive chairman

is Michael Nason, theformer head of Arnotts andex-Musgrave executive,while David Phelan of BoruVodka Vintage is also adirector.

“The fundraising wouldhelp take us to anotherlevel, particularly in the

US,” Nason said.Coole San has received

support from EnterpriseIreland and An Bord Bia,which has helped withresearch.

Nason argues thatsmall Irish food brandsshould come togetherunder the one umbrella,rather than flying solo. Co-opetition the Americanscall it, and this suggestionfeatures in a Harvard paperprepared recently for AnBord Bia. “Why can’t CooleSwan and other productsbecome part of an Irish-owned entity, rather thanbeing sold to a Diageo orwhoever?

Food for thought, youmight say.

Is Co-Opetionthe way forward?

In the annals of history,the last couple of years willno doubt go down as a verydifficult one for theFunctional and RefreshmentBeverages (FRBs) industry.2008 represented the firstsigns of a decline in thisindustry, and the Irisheconomy in general, as itembarked into what may wellbe a long and difficult periodin its history.

Indeed, surreal may well be abetter word to the describe the currentstate of the Irish economy, and theCeltic Tiger of recent years is fastbecoming a distant memory for a lot ofpeople. No industry or business hasbeen left unscathed during the currentdownturn, and a lot of work is neededto ensure that we return to some sortof normality before it is too late. Whileit is very hard to see Ireland returningto the same level of growth that theyenjoyed when the boom was at itspeak, there is still the possibility ofreturning to some form of economicstability if the right effort andendeavour is applied by all concerned.

Until that time, each industry hasto tackle the different challenges thatthey must face into in the comingmonths and years and, in this respect,the FRB is no different. As an industry,the FRB had enjoyed three to fouryears of solid growth, which helped toestablish a strong position for them onthe overall market. This growth cameabout as a result of shrewddevelopment and innovation, as well assignificant marketing investment, andthe FRB has been to the forefront interms of providing responsible andpositive market development and hasalways been very attentive to theneeds and demands of consumers,with their health and well being actingas a huge priority.

Unfortunately, these are very harshtimes that we currently live in and,despite the best efforts of those withinthe industry, Drinks MarketPerformance has been decidedlylacklustre in the past two years. At thetime, 2008 was described by insidersas the worst performance in decadesfor the overall drinks industry. It washoped that things would pick up forthe following year, but this did notmaterialise, and 2009 has now takenover the above-mentioned mantle.

It must be said though, that muchof this poor performance in the drinkindustry has been driven by the weaknational economic situation, and therewere certain things that people in theindustry simply couldn't control.Nevertheless, there were some veryalarming statistics in the drink marketfor 2009, as GDP volume declined by7.5%, with GNP volume also droppingby 10.4%.

Total national consumerexpenditure has shown a worryingdecline, while it must be also notedthat national employment has nowdecreased by 13%. Now, more so thanbefore, cross border purchases seemto be more and more enticing forconsumers, with the exchange rate andexcise and VAT differentials proving tobe extremely attractive to patrons inthe Republic.

Alcohol is a big part of the drinksmarket, and it had been expected that2009 would see total alcohol volumefalling by about 10%. Given thatalcohol has been quite a popularchoice for consumers in this country forso many years, this seemed at the timeto be a rather drastic prediction, butby and large it has turned out to be thecase.

In 2009, the volume of totalalcohol consumption declined by 8.9%in 2009, as measured by Revenueclearances. It had declined by 5.9% in2008 as well, so it shows just howmuch alcohol sales are struggling at

the moment. Even allowing for thecross-border sales (which again is onthe increase in this area), there still asubstantial decline in consumption ofjust over 7%.

The level of consumption for adultsis currently at the level that it was at in1999, with per adult consumptionhaving decreased by 9.2% in 2009following a decline of 7.3% from theyear before. The overall per capitaconsumption is also struggling, with a9.6% fall off last year, as opposed to a7.7% one the year before.

The average alcohol consumption isback at the level it was at during the1995/96 period, with spirits showinga particular drop in volume whencompared to the three other alcoholdrink categories (beet, cider and wine).Spirits have declined by an incredible18.5%, which is always three-timemore than the other categories. Beerand wine has dropped by 6.5% and6.9% respectively. Cider has had thelowest decline, but has a significantdrop-off of 5.9%.

When one looks at these kinds ofvolume and sale decreases, it doesmake you wonder why this ishappening and what can be done torectify it?

First off, the rise in alcohol prices,in terms of both on-trade and off-trade,has risen over the past couple of years.On-trade prices was, on average, 2.3%higher on average in 2009 than it wasin 2008. Off-trade prices rose by 2.2%in 2009 compared to the previousyear, while overall alcohol prices saw a2.3% increase. This may seem to somelike a mere coincidence, but thereduction in on-trade prices by 2.7%in January 2010 (compared to theprevious month) would suggest thatthere is some connection between thetwo.

This fall-off is due to the excise andVAT reductions in the Decemberbudget, and it may well help theindustry in the long-term as consumers

28 TGm

B O T T O M O F T H E B A R R E L

Bottom of the Barrel

are always on the look outfor good value and don'twant to pay over the oddsfor a brand or product.

Innovation and creativityin terms of marketing will bemore important than ever inhelping to improve thecurrent situation, but it maywell take some time beforethe Irish Drinks marketreturns to some form ofnormality. GDP wasforecasted, by theGovernment, to havesuffered a decline of 1.3% in2009 and the volume ofconsumer expenditure isalso expected to go down by3%. With a higher level oftax being introduced, as wellas increased mortgagerates, pay cuts and payfreezes, discretionaryincome will also be reduced.This will certainly not help toboost the volume and salesnumbers in the industry.

With a tax gap currentlyin place, there is now lessincentive for cross-bordershopping among consumers,but there is still a tax basedfinancial incentive for spiritsand wines. The reduction inVAT is very welcome, and itwill hopefully lead toimprovements, but it stillquite high by EU standards.Spirits excise alone is24.7% greater in theRepublic than it in NorthernIreland.

So, while there is hopethat the drinks market willeventually pick up over thenext few years, there wouldseem to be little chance of ithappening in 2010, as thealcohol market, especially,expecting to continue itsdecline. Total alcohol volumecould decline by 5%, butmay well have a largerdecline of 7% in theemployment intensive onlicenced sector.

June 2010 29

TGM

The past couple of years have beenextremely difficult for many differentsectors in the Irish economy. Asmentioned elsewhere in thispublication, the Functional RefreshmentBeverage (FRB) Industry has beenstruggling in the past two years, inparticular. The soft drinks sector of theFRB has been suffering during thisperiod, and plenty of work is needed byall if it is to return to the same level ofproductivity that it enjoyed in the past.

The current decline first reared itsugly head in 2008, when the Irish SoftDrinks market endured a poor summer,which was deeply disappointing as the

summer of 2007 wasn't the best yearfor them either, and it was hoped thatimprovements would be made.Unfortunately, this didn't happen, andmuch of this can be attributed to theturbulent economic environment thatbegan to affect Ireland during this time.

Therefore, it was somewhatunsurprising when it was revealed thatthe Irish Soft Drinks Market registereda 28 million litre volume decline of3.2%, leaving the overall figure at 858million litres. There was an overallmarket value of 1,060 million, whichrepresented a 2.3% fall off from theyear before.

The only soft drinks categories torecord volume growth during 2008were still and juice drinks, energy drinksand not from concentrate juices, whileit was bottled water that suffered thebiggest decline. 2007 had seen bottledwater record a 14.2% increase inconsumption, but saw a decrease of5.2% two years ago.

These kinds of figures started tocome about when consumers decidedto tighten their purse strings in thewake of the economic downturn. Irelandwere the first country in the Eurozoneto declare a recession, so it is fairlyunderstandable why Irish consumersdecided that it was necessary to cut

their spending down.As consumer confidence continued

to dip as a result of the worseningeconomy and the rising levels ofunemployment, conditions across thelicensing trade got worse in 2008 inparticular, especially outside of themajor urban areas. As a result of this,the licensing trade's percentage shareof the total soft drinks market fell foranother year. In 2007, it had been9.3%, but the following year it wentdown to 8.9%.

Value has become a major factorbehind the decision-making ofconsumers, as they will go for the items

that will provide them the best value asopposed to the one that will give themthe best quality. Health has alsobecome a driving force for consumers,as people are now starting to get moreand more concerned about their well-being, and are now choosingbrands/products that best suit theseneeds.

It isn't all doom and gloom it has tobe said though as, while the volume ofsoft drink consumption has waned inthe past couple of years, it is still at aconsiderably higher level than inprevious years. As mentioned above,the volume of consumption went from886 million litres in 2007 to 858million litres in 2008.

There is absolutely no denying thatthis is a significant, and somewhatworrying drop but, as recently as 2003,the level of consumption was muchlower at 783 million litres. Indeed, itdidn't break the 800 million litresbarrier until 2005, so the levels ofconsumption in this category is stillreasonably solid.

This means that there is a goodbase for the industry to work their wayback, but there are a number of issuesthat need to be addressed if they areintent on returning to the levels thatthey were at during the peak years of

the Celtic Tiger. One of the biggestissues that may be holding back thissector is something that is largely outof their control.

This issue is in relation to thecurrent VAT Rates being imposed by theGovernment on FRBs in the Republic OfIreland, which are 6.5 percentagepoints higher than they are in the UK.Though this is not the sole reason forthe fall-off in sales and volume levels, itcould be argued that if the VAT Rateswere at least in line with that just acrossthe channel, then some positive resultsmay be achieved.

Other possible problems, which canbe handled by the industry itself, arethose related to consumer boredomand brand loyalty. Buyers are alwaysgoing to look for some kind of varietyand will, sooner or later, grow tired ofpurchasing the same product over andover again, and will start to look for amore suitable alternative.

This is also where the issue of brandloyalty comes sharply into focus, asbrand loyalty can be deeply affected if aconsumer becomes bored of the brandon offer. This is why manufacturers needto come up with new ways of makingtheir products more attractive toconsumers, so that people don't loseinterest in the product or in soft drinksas a whole.

Value is becoming a major factor inconsumer decision-making as well, andpeople are now going to look for aproduct that is easily affordable, asopposed to a more expensivesubstitute, which comes with a ricetaste. This has seen a decrease in thesales and volume of some of the majorsoft drink brands and, when thesebrands suffer, the industry as a wholedoes as well.

As we move on in this publication,we will see how the various categoriesin the soft drink industry haveperformed during this difficult period,and how they are currently facing up tothe various challenges which are beingposed to them from a number ofdifferent angles. There are a multitudeof different categories in the soft drinksmarket such as bottled water,carbonates, dilutables, still & juicedrinks, fruit juice and sports drinks.

As stated above, many of thesecategories have suffered a decline in

30 TGm

F O C U S - S O F T D R I N K S

Soft Drinks

recent years, with recentrecords showing thatcarbonates have struggledalong with bottled water, adecline of 3.6%. Dilutableshave fared reasonably wellthough, and have held firm inspite of a lot of the problemsfacing the industry. A lot ofthis can be attributed to theconsumer desire to feelhealthy, which is somethingthat dilutables offer inabundance.

Still & Juice Drinks havealso shown a slight rise involume, but not all health-based drinks are strivingthough, as fruit juices havefallen in volume growth in thelast couple of years, with the2008 volume figures showinga 3% decrease.

Sport & Energy drinks looklike continuing in popularityhowever, and even thoughthey don't represent a massivepart of the overall market,they have shown uplifts ofaround 2% or so.

All in all, it has been arather mixed couple of yearsfor the soft drinks market and,while there is still plenty ofimprovement needed in theindustry, there are still enoughpositives to move forward withinto the future months.

With certain categoriesperforming well at themoment, it should ensure thevolume rate doesn't fall too fardown, and this can help builda platform for future growth,which is just the boost that thesoft drinks market needs.

Of course, no one quiteknows how the soft drinksindustry will perform in thefuture (certainly no one couldhave envisaged the Irisheconomy's currentpredicament), but if eachmanufacturer and/or producerput their creative minds to thetest, then they can come outof this difficult period smellingof roses.

TGM

June 2010 31

32 TGm

For the last number of years, fruitjuice has performed exceedingly wellwith sales of 100%, growth of 6.6% toreach 66 million litres and a retailvalue of €142m. However, fruit juice isno longer just used during breakfasttime. In recent times, consumers havegradually increased their intake of fruitjuice, and have now embraced the 5-a-day concept and all the virtues thatcome with drinking natural and healthyjuices.

People are also now taking fruitjuices outside of their homes, with anumber of places across Ireland nowserving various nutritional drinks tothe paying public. While it still plays afar more important role in thehousehold, the level of consumerinterest in buying fruit juices outside oftheir homes should not beunderestimated, with places like highstreet shops, snack bars, pubs andrestaurants now selling such items.

There are a significant number ofchallenges facing this sector though,with one of the major ones being risingenergy costs. This has hindered chilledjuice growth, and with some otherglobal conditions hitting the sectorwhere it hurts, then manufacturersmay need to show some innovation indeveloping and selling their products.

Currently though, this trend isbeing bucked as chilled juice hasgrown to one-third of all juice being

consumed. Continuous promotions hashelped in this regard, and it has alsoled to a reduction in the price gapbetween chilled and ambient productsand has also seen brands taking onprivate label offerings.

The growing importance thatnaturalness and purity brings to theaverage consumer is evidenced by the18% hold that Not From Concentratehas on the market. However, orangejuice continues to be the principal

flavour on the Irish Fruit Juice marketwith a total of 62%, while apple flavouraccounts for 15%. Berried fruits arealso quite popular, with cranberryshowing good sales within this subcategory.

Mango has also shown goodgrowth, especially given the fairly lowbase that it is derived from.'Superfruits', which are mentionedelsewhere in this publication, are alsopopular within this sector with theiradded health benefits starting toencourage even the more scepticalconsumers out there. Many people canbe reluctant to change if they have aset routine regarding the intake ofminerals, but recent results wouldsuggest that more consumers arestarting to come around to the idea of'superfruits' with pomegranate, agi andgoji (amongst others) being consideredand bought more frequently onretailer's shelves and supermarkets

have also begun the process of ofoffering superfruit own brandformulations.

This shows how seriouslyconsumers are now taking their health,and this has been in evidence in recentyears with the growing popularity ofsmoothies amongst Irish people.Growth in the sales of smoothies wereso powerful in fact, that it almostbecame a sector in its own right. Firstintroduced in the United States back inthe late 1960s, they were sold mainlyat ice cream vendors and health foodstores. By the 1990s and 2000sthough, they were being sold inmainstream cafes and coffee shops,and also in pre-bottled versions atsupermarkets. With its combination ofcrushed ice, frozen fruit, honey and/or

frozen yogurt, it is easy to see why ithas become so popular in recent times.

Having said that though, there hadbeen a decline in the sales ofsmoothies in recent months, asconsumer boredom starts to kick inand people feel the need to move awayfrom this product and onto a new andmore exciting product/brand, whichthey may find has a more refreshingtaste. One of the problems associatedwith smoothies is that the salesvolumes are quite low when comparedto the rest of the market, which meansthat they have to rely on theirpercentage growth performing waybeyond expectations.

Packaging wise, cartons tend todominate most Irish fridges andchildren's lunchboxes, and can be usedeither as a take-home drink or asconsumption when you are on the go.Juices have also become available inglass bottles, and this seems to befairly attractive to the needs and wants

F O C U S - F R U I T J U I C E

Fruit Juice

of consumers.A major part of Fruit Juice's

impetus as a sector has been driven bythe fundamentals of naturalness,keeping healthy and the need to havea five-a-day intake of a particularbrand/product. The continued focus onthe importance of health and wellbeingmeans that manufacturers, retailersand marketers alike will undoubtedlyrespond with ever appealing productsthat will stand out favourably againsttheir direct competition, addingfurther influence to the purchasingbehaviour of consumers and alsodriving juice sales onwards.

In the current economic climate, itis to be expected the sale in fruit juiceswould experience a fall-out, and thishas certainly happened amongst anumber of Irish households, as theylook to tighten their purse strings inthese challenging times. However, theIrish buying public are still quite highin the list of countries that currentlyconsume fruit juices and itsproducts.

In a recent of study offood statistics (or more tothe point, of Fruit Juiceconsumption bycountry), Irelandwas placed No.17, with atotal FruitJ u i c e

consumption of 15.1 litres, which putsthem just ahead of Italy (who have13.6 litres).

They have a long way to go to rivalCanada's whopping 52.6 litres but,with the trend towards keeping healthyin this country, and also with theprospect of sales in fruit juices pickingup once again a very live one, henthere is every chance they will at leastclimb up the list in the not too distantfuture. What may well help it to find itsway up this particular ladder ispromoting and selling other FruitJuice-based products that may not beas popular as the more recognisablebrands, but have great potentialnevertheless.

One such is brand isethical beverages,which are very

supportive of worthy causes. Productssuch as these can be very enticing asthey are both tasty and nutritional, soit is no surprise that their sales are onthe up. Meanwhile, the industry isreducing emissions, product weightand encouraging recycling to takepositive action on environmentalimpact. This is certainly a clever moveby the industry, because there areplenty of environmentally-awareconsumers out there and they, as wellas others, are always looking for waysthat they can help out by 'doing theirbit' to help the environment.

TGM

34 TGm

Bottled water is one of thosecategories that maintains a hugepotential for further growth accordingto market analysts. There have beenplenty of ups and downs in the softdrinks market, which is to be expected,but the Irish bottle water sectorcontinues to lead the category involume sales regardless. Indeed,

bottled water is currently outgrowingthat of the carbonated soft drinkssector particularly in the case of value-added waters, which claim to offercosmetic or health benefits. In additionto this, convenience still manages tobe a motivator for bottled waterconsumption.

This perception for future growth isconsistently linked with risingconsumer health awareness andinterest in choosing products that are'good for you'. Increasing a person'sintake of water is always important,and if this fact is advertised effectively,then it can prove to be a greatmotivational factor in ensuring thatnew customers get into the idea ofdrinking water. Health experts theworld over have been telling us that weshould be drinking more and morewater and, according to research, weshould be consuming close to 2-litreseach day.

Statistics show that there areplenty of people out there who trytheir best to heed this advice, with theglobal consumption of bottle watergrowing all the time. It is expectedthat, by the time 2011 comes around,that 251 billion litres of bottled waterwill be consumed the world over.Western Europe has shown plenty ofgrowth in this regard with a total of280 million litres being consumed inthis particular part of the world.

Bottled water has always beenquite popular in Ireland, andBallygowan has been this country'snumber one bottled water brand for

almost 30 years. It is bottled at sourcein Newcastlewest, Co. Limerick andcontinues to stand up favourablyagainst even the most popular brandsin the overall drinks category,producing an estimated 60 millionlitres of bottled water per annum.

Down through the years, a vastamount of Ballygowan's success has

been built on strong innovation,marketing and, of course, investmentinto making it the brand that it hasturned into today. Sponsorship is alsoa key part of Ballygowan's make-upand has helped to strengthen itsposition and promote awareness of allthe superlatives that the brand canoffer to consumers.

Some of the more recentinnovations include new packs andproduct variants such as the fruitflavoured range of Ballygowan waters– introduced in line with consumerdemand for Ballygowan 'Hint of Fruit'Ballygowan Flavoured Waters, whichcontain no-added-sugar, no artificialcolours, sweeteners or flavourings andare available in 500 ml packs.

Despite this though, it is stillundeniable that the traditional Stilland Sparkling varieties are the onesthat are in most demand amongstconsumers.

Ballygowan bottles are 100%recyclable and the company has takenenormous steps in their bid to reducethe weight of their bottles. This efforthas largely been a successful one overthe past ten years as they havemanaged to reduce the weight on theirbottles by a staggering 38%. This isextremely important, as he helps outin the area of environmentalconservation.

Ballygowan has no desire to rest ontheir laurels though, as they areacutely aware that they need to comeup with new and exciting innovationsin their company that will be met with

approval by the many consumers whodrink their various products. They havecome up with a number of new ideasin the past few months, and it isexpected that more will be on theirway.

The Volvic brand also has a goodreach on the Irish market, and hashelped in the development of the

F O C U S - W A T E R

Water

TGM

June 2010 35

bottled water category, and it currentlyholds a market share of 22.7%approx. The number one flavouredwater on the market is Volvic Touch OfFruit, which is available in three sugar-free flavours: Strawberry, Lemon &Lime and Orange & Peach.

Volvic Revive is a delicious andstimulating fruit flavoured water drink

that is designed to give an invigoratinglift. Volvic is also currently available in'Berry Blast' flavour with a 50 clformat, which includes a sports cap.

Much like Ballygowan, Volvic arealso looking to creative new andexciting products to add to theiralready rich selection with the launchof a new partnership with World VisionIreland in April 2008. Volvic hasteamed up with them to produce their12-for-10L campaign and it is ontarget to deliver over 1.7 billion litresof water to Africa. For every litre ofVolvic and Volvic Touch Of Fruit sold inIreland and the UK, Volvic and WorldVision generates 10-litres of safedrinking water across Africa throughthe provision of merchandised wells,which appeals strongly to those withan interest in charitable endeavours.

Tipperary Natural Mineral Water isa significant player in the Irish bottlewater market. It is bottled by theGleeson Group in Co. Tipperary, and issupplied in a number of differentranges such as 2L, 1.5L, 1L, 750ml,500ml and 250 ml PET bottles. It canalso be purchased in 25cl or 75cl glassbottles. In addition to these, there isalso a sparkling flavoured water bottle,Clearly Tipperary, which is available in500ml and 2L bottles.

Late 2008 also saw the re-branding of Tipperary Kidz, with theirnew bottle containing 20% less plastic,which makes it far moreenvironmentally friendly. With its onepiece flip, it is far easier to use and ismuch safer for children too. Anotherinteresting feature is the bottle'sambidextrous grooves which providean 'ezi-grip' for either hand.

This is a strong innovation, and it ishoped that Tipperary Kidz willcontinue to lead the way in thechildren's water category, especially inthese trying times. 2009 saw theintroduction a new strapline:'Tipperary – Part Of You'.

Another major player in the marketis Deep RiverRock, which is pure Irishwater and is bottled from source inTullynacross, Co. Antrim. It containsessential minerals such as calcium,Magnesium and Potassium, which areall naturally occurring within thesource. It continues to drive the watercategory both in terms of value and

volume through innovation and andsatisfying consumer demands. Likemost of its competitors, it comes in avariety of ranges, with 1.5-litre and 2-litre bottles being the largest onsupply.

There is a slight difference withDeep RiverRock however, as the 1.5-litre bottles has surpassed the 2-litrevariant to become the second biggestpack size segment with grocery. It hasalso launched a range of flavouredwater free from artificial colourings,flavourings and sweeteners.

Evian is the number one waterbrand in the world, and has a strongpresence in the Irish market. It ispurified through a natural filtrationprocess that spans over 15 years, deepwithin the French Alps. It is available inmany different formats such as 50cl,75cl and 1-litre so there is a bottle sizeto suit every consumer and everyoccasion, whether they be drinking onthe go or at home as part of a healthylifestyle.

Vittel is another live product in thebottled water category, and it hasbeen undergoing a nationwiderelaunch as part of a pan-European'ReVITTELisez Vous' programme and isnow established as one of thecountry's premium mineral waterbrands. It appeals to the discerningconsumer, who is after a moresophisticated brand of water.Currently, it is available in 500ml and750ml on the go packs and a 1.5ltr'take home' pack.

Three years ago, H20H! Waslaunched and rose up to capture anumber three position in a mere sixmonths after its launch. While it hasn'tquite sustained this level of growthsince, it does show what a new productcan achieve when it comes onto themarket for the first time. What makesthis particular product so appealing isits sugar-free and no-calorie features,which health conscious consumers findvery interesting.

A H20H! 1.5-litre bottle isavailable to enjoy at home. With itsmodern and colourfully designedbottle, this lightly sparkling fruitflavoured water will look good in thehands of any aspiring fashionista!

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36 TGm

Coffee is prizedaround the world as ahelpful pick-me-up in themorning, but the notion itmakes you more alertmay be no more than anillusion according to newresearch.

The study showed thatnon-users or occasionalcoffee drinkers got noboost in alertness afterhaving the caffeine from acup-and-a-half of coffee.

And moderate toheavy users did no moreafter caffeine than reachtheir normal levels ofalertness, the coffee onlyreversing their overnightcaffeine deprivation.

This will come as ahuge disappointment tothose of us who justcannot function in themorning without thehelpful effects of a cup ofjava.

Clearly the Irish havea grá for the beverage.We knock back 3.5kg ofbeans per capita eachyear according to 2008statistics from the WorldResource Institute. Thisputs us at 27th in a list of181 countries, behind theUS in 26th place with aper capita consumption of4.2kg but ahead of theBritish who are 47th witha 2.8kg consumption.

Mind you, if we didnot have tea available ourcoffee consumption wouldprobably be n the top 10.This is dominated by theScandinavian countrieswith Finland leading theway with 12kg per capitaper year.

A decade ago Irelandhad the highest per capitaconsumption of tea in theworld, at 3.2kg perperson per year.

As tea consumptionslowed, the coffeebegan to flow.

But if you believe itgives you a genuine liftyou could be mistake,according to theresearchers in Britainand Germany whopublished their findings.They were trying toseparate two effects ofcoffee which varies fromperson to person,depending on geneticmake-up.

Some consumersfeel a stimulating effectwhile others experiencea state of mild anxiety.

The researchersgave either a placebo orcaffeine to 379 subjectsdivided into two groups:those who avoided orseldom drank coffeeand moderate-to-heavyusers. They found thatlow-level users did notsee any boost inalertness.

The moderate toheavy users, if deprivedof caffeine as a result ofreceiving a placebo,reported headaches anda decrease in alertness.But those who got theircaffeine hit returned toa normal level ofalertness.

Researchers put thisdown to coffee“tolerance” due tofrequent consumption.

The subjects mayhave felt better able toface the world, “but nonet benefit for alertnessis gained, as caffeineabstinence reducesalertness andconsumption merelyreturns it to baseline”,they concluded.

NOT SO FULL OF BEANS

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N E W S

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Together with our retail partners we are Ireland’s second largest employer with more than 35,000 employees

It means great value on my doorstep

I can drop in on my way back from work

Supporting my local retailer supports local jobs

Local retailers understand local needs

Local retailers support local suppliers

It can help me reduce my carbon footprint

www.musgravegroup.com

Londis – GB only; Mace – Northern Ireland only

38 TGm

A new range of facialskincare products for menhas been launched by P&G,who are about to tell menthey need pampering.

P&G has introducedproducts including a pre-shave thermal scrub, which itlikens to a hot towel at thebarbers, and a cooling after-shave moisturiser. The fourproducts - selling forbetween €5-7 make up thefirst skincare line aimed atmen since P&G’s €50 billionacquisition of Gillette fiveyears ago.

P&G is seeking topersuade buyers of Gilletterazors to take better care oftheir skin after thecompany’s sales fell 3.3 percent last year. It’s also afurther push into highermargin beauty products forthe world’s largestc o n s u m e r - p r o d u c t scompany, which makesCharmin toilet paper andmoved into cosmetics in the1980s.

“We have an aspirationto be the biggest and bestbeauty and groomingcompany,” said Chip Bergh,

head of P&G’s groomingunit. “But we can’t get thereunless we win with men.”

Chief executive BobMcDonald is tapping themen’s grooming market tohelp reach his goal of addingone billion new consumers toits base by 2015. Worldwidesales of skincare, haircare,bath and shower productsand deodorant for menreach €22 billion last year,up 44 per cent from 2004(Euromonitar Internationalplc).

“I expect this to be veryprofitable for them, but it’sgoing to require education toget people to try it and toget over the hump of thecost,”

Beauty products areamong the more recession-resistant product categories,according to a survey of USconsumers.

Consumers are less likelyto buy a cheaper version oftheir favourite skin cream orperfume, than of detergent,batteries or children’snappies, the survey showed.

P&G’s products willcompete for customers with

Beiersdorf AG’s Nivea forMen, L’Oréal SA’s Men’sExpert and Unilever’s Dovefor Men skincare lines.

Gillette has an edge,because it’s a male brandthat doesn’t need to makeclear that it’s “for men”, saidBergh.

Getting US men topamper themselves will stillbe a hard sell, said WalterTodd, who helps manage€663 million at GreenwoodCapital in Greenwood, SouthCarolina, including about100,000 P&G shares.

“I don’t think themajority of men think abouthow soft their face is or howto care for it,” Todd said. “It’snot something that comesinto my mind. Particularlynow with the economy, we’restill kind of watching how wespend our money and thelast think I’m going to go outand buy is some facecream.”

However, Bergh said themarket for men’s lotionscould be similar to the lastcentury’s evolution ofwomen’s skincare, which, forhis mother’s generation,consisted of cold cream.

“That’s all been driven byeducation and marketing,and the same will happen toguys,” he said.

P&G, which startedselling soap in 1837 andpioneered radio soap operasto promote them, will reachmen through websites,blogs, online videos and instores, Bergh said. In the US,where P&G has about 68per cent of the blade andrazor market, the companywill include samples of thenew products in cartridgerefills for the Fusion andMach 3 razors, he said.

The Gillette unit made up9.5 per cent of P&G’s €65billion in sales in fiscal 2009.

Last June, the companyacquired the Art of Shaving,a boutique chain that offers€83 chrome razors and €62badger-fur shaving brushes,as well as Zirh, a premiumskincare brand. The brandsjoined P&G productsincluding Old Spicedeodorants and Braunelectric shavers.

Partnerships with Dolce& Gabbana and Hugo Bosscould also be expandedbeyond cologne, Bergh said,

We’ve got a portfolio ofbrands and the company’ssupport to win with him,”Bergh said of the maleconsumers. “We’ve gotpretty strong plans to do justthat.”

P&G pampering

N E W S

40 TGm

Irish spirits industrybosses are getting tough oncopycat tipples.

Beware, cheap imitators.Copycat Irish cream liqueurscould be taken off shelvesaround the world after thedepartment of Agriculturejoined forces with themakers of Baileys and othercompanies to defend Irishwhiskey-based drinks in theway France protectschampagne and cognac.

The Department isworking with Diageo,Pernod Ricard the othermembers of the Irish SpiritsAssociation (ISA) to set up asystem whereby makers ofIrish cream liqueurs will buyimitations of their productsthat they find abroad andsend information on wherethey are being sold to thedepartment. It will thenrequest that its counterpartin that country remove thecopycat drink.

The initiative is aimed atensuring that foreignconsumers do not thinkcream liqueurs produced intheir country are Irish justbecause they have an Irishname or design. Thedepartment is struggling toprotect Ireland’s €1 billionspirits exports.

Cream liqueurs andwhiskey are the only types ofIrish spirits that were givenstatus as a geographicalindicator by the Europeancommission in 2008.

This status, whichdictates that certaincategories of spirits can bemade only in specific areas,ensures that drinksmarketed as Irish creamliqueur have actually beenmade here using cream fromIrish cows and Irish whiskey.

Despite this legalprotection, on only fiveoccasions has the agriculturedepartment asked othercountries to remove aproduct from retail shelves.It is determined to gettougher on imitations fromnow on.

“If we can get protectioninto internationalagreements and get thepublic to recognise that Irishcream liqueur has to bemade in Ireland, it maydiscourage people fromimitating it,” said MarianByrne, head of thedepartment’s food division.

“The French get upsetabout champagne, and theItalians get upset aboutParma ham and parmesancheese. When the Frenchcomplained to us about theway Puy green lentils weresold here, they were quitevigorous and we followed upand they thanked us.

“The spirits industry hereis beginning to see the needto do the same thing.”

Geographical indicatorsare recognised only withinthe European Union and aretemporary. The Irish spirits

industry has five years tosecure permanentgeographical indicatorstatus.

In the meantime, whenthe European commissionis negotiating bilateraltrade agreements withcountries outside the EU, itasks them to protect Irishcream liqueur and Irishwhiskey by not allowing thesales of imitations.

Since the start of thisyear, the commission andthe department havesecured agreements fromCanada, Colombia andPeru not to allow the saleof imitation Irish spirits. Ifsales of copycat drinksbecome a serious problem,the department says it willtake legal action.

First Ireland Spirits, theAbbeyleix makers of creamliqueurs such as IrishKnights and O’Mara’s, hasalready reported fake Irishcream liqueurs to thedepartment in an effort toprotect its exports.

“There are a number ofclever and well-packagedimitation Irish creamproducts in our markets,”said John Harte, thecompany’s sales andmarketing director. “Theserip-off products threaten thejobs of the people who areemployed in Ireland makingthe real thing.”

Clarke said the problemis especially widespread in

America, where demand forIrish cream liqueur is strongamong the 40m Americanswho claim Irish heritage.

One of the Irish soundingbrands on the US market isRyan’s Irish Cream. Thatbrand is produced in Maineby White Rock Distilleries.Clarke believes America isunlikely to agree to removeimitation Irish creamliqueurs from shops any timesoon.

Irish foodstuffs withEuropean protection includeConnemara Hill lamb andClare Island salmon.

FAKES FACE CHALLENGE

Consumer confidenceremained steady in May, butconcerns persist about thecurrent climate, newresearch has shown.

The KBC Ireland/ESRI

consumer sentiment indexrecorded a level of 65.3 inMay, compared to 65.6 theprevious month. The indexhit a record low of 39.6 inJuly 208.

The index of currentconditions moved lowerduring the month, but theexpectations index wasunchanged at 53.7 despitethe ongoing concerns about

Ireland’s public finances andrecent bad news for thelabour market.

Confidence Steady

N E W S

Cork entrepreneurStephen O’Sullivan hasgone a long way for hisbusiness - to Shanghai,where he saw anopportunity make moneyfrom Irish chickens.

O’Sullivan has spent anumber of years living andworking in China, wherechicken products are sopopular that the countrycannot produce enoughdomestically to meetdemand. The vast bulk ofpoultry products importedby China originated fromthe United States, but whena trade dispute escalatedbetween the two countries,O’Sullivan spotted hisopportunity.

With 14 years’experience in the exportmarket, he has set up acompany called that aims tofacilitate sales of chickenby-products into HongKong.

“Chicken by-products,such as chicken wings andchicken feet, are a delicacyin China,” said O’Sullivan.“China has a population ofmore than 1.3 billion andcan only produce enough tomeet 5 per cent of thedemand.

”The United statesdominated the poultryexport market to China andsupplied 93 per cent of thepoultry products imported,but a trade dispute hasresulted in large tariffsbeing imposed by theChinese. That has effectivelypriced American chickensout of the market.”

O’Sullivan plans to tradethe products into HongKong, which is where mostof China’s meat traders arebased. In Ireland, he hasjoined forces with PJ Veale,

a well-known figures in thepoultry business.

Veale will deal with Irishchicken suppliers, many ofwhom are under pressure intheir traditional marketsbecause of their largeexposure to sterling andincreased competition fromcheap imports.

O’Sullivan said he hadreceived “huge support”from Bord Bia for thebusiness, and had helddiscussions with a numberof large poultry and foodprocessing companies inIreland.

“The market in China isso vast. My proposal is tohelp eliminate some of theiroverheads and contribute

to their bottom line,” hesaid.

“It is not really worth itfor poultry producers to putpeople in on the groundthemselves but, at thesame time, you need a goodlocal partner who can helpyou navigate and developthe market. That is wherethe opportunity is for me. Ican represent them on theground in China.”

He said that companiessimply needed to be willingto give a minimalcommitment in time andlabour to prepare the off-cuts.While that wouldrequire some change inthinking from Irishsuppliers, who typically

throw away by-products,they had a chance topartner with an Irishcompany and gain afoothold in a massivemarket, O’Sullivan said. Hesaid that Irish chicken by-products should be able tocompete effectively inChina.

“We’ve done the sumsand we should be able tomatch the Chinese prices,”he said. “When the channelbecomes more developed,it will present opportunitiesto develop specific highervalue-added products suchas a branded product forthe Chinese market. That isdefinitely something wewould like to do down theline.”

TGM

June 2010 41

Rise of the Irish Phoenix

Irish scientists havewarned farmers to be onalert for a new aggressivestrain of potato blight called“Pink 6”.

Stephen Kildea ofTeagasc, the agriculture andfood development authority,said the new strain could notbe properly controlled bysome existing chemicals onthe market.

“The new strain has beenpreviously found in potatocrops in Donegal but so farthis year, despite a numberof blight warnings from themeteorological service, therehave been no reports of it,”he said. Kildea saidscientists here did not yetknow where it had comefrom but were moreinterested in where it wasgoing to spread.

New potatoblight

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Tomás

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42 TGm

H I S A N D H E R S

June 2010 43

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44 TGm

Darren Grant left his jobas a senior manager withcomputer giant Dell to setup an organic supermarket.

“I got a feeling that theeconomy might turn, andthought that one of the firstsectors to be hit would bemultinationals,” he said.”So Iwanted to create a back-upplan.”

Grant opened the doorsof the Organic supermarketin Blackrock, Dublin, in July2008, four months after heleft Dell.

His own experiences ofshopping weekly at farmers’markets and being unable tostock up on similar standardproducts during the weekprompted him to set up hisstore to cater for thoseseeking consistent access toorganic food.

“I felt food in Ireland washomogenised and saw adefinite opening in themarket,” he said.

But getting from idea toreality took a huge amountof research. “I had a verycomprehensive businessplan, about 60 or 70 pages.It had to be detailed to get itpast the banks,” he said.

A year or so after helaunched the business, herealised that a change ofstrategy was required.”Saleswere up but were still not atthe targets I had set,” hesaid. “The recession wasbiting hard. we rapidlyneeded to adjust thestrategy without increasingour overheads.”

So Grant launched anonline version of his store atOrganicsupermarket . iewhich saw his potentialmarket expand rapidlyovernight. The websitepromises next-day deliveryto all 32 counties, and all of

the supermarket’s productsare available online.

In Grant’s view,developing an onlinebusiness model to operatealongside the moretraditional retail outlet hastransformed his business.“Now we are thriving,” hesaid. “Sales and turnover areup 40 per cent year-on-yearand the internet business isa huge contributory factor.”

In-store sales are also upon last year, with sales oforganic fruit and vegetablesshowing the biggestincrease, up about 50 percent on last year. “The luxurysales - things like organicwine - have tapered off a bit,though,” he said.

Grant stocks more than3,000 products from morethan 120 suppliers. Hisbusiness ethos is a simpleone - quality produce andquality services.

“Food was beingdestroyed in Ireland,becoming so homogenised,so I’ve tried to bring thefarmers’ market conceptindoors,” he said.

While Grant is happywith his business’s progressto date, he is somewhatfrustrated that his plans toopen a second shop inDublin have been delayeddue to a restrictive lendingenvironment.

“Banks aren’t exactlysupporting small businesses.I am a small business, and Ijust can’t get money,” hesaid. “We have fantasticturnover, year-on-yeargrowth: it’s a huge viablebusiness. But the banksrejected our expansionplans. It’s an ongoingstruggle to secure finance.”

Aside from the struggleto access finance, Grant has

found the transition fromspecialist to generalistanother of the keychallenges of being his ownboss. “You go from being aspecialist and knowing howto do a specific job well tobeing self employed and aJack-of-all-trades,” he said.

Getting used tomanaging staff, bearing theweight of financialresponsibility and dealingwith all the day-to-day

challenges that a businesspresents have been alearning curve for Grant.

His main piece of advicefor aspiring entrepreneurs isto make sure there is a largeenough cash reserve tosustain the business throughthe tough times. “You reallyneed to have that moneythere. Not having a reserveis what is killing so manysmall businesses.”

ORGANIC OUTLOOK

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