Founded in 2015 by Alison Cowzer and Michael Carey, East Coast Bakehouse manufactures biscuits for the domestic and export markets from its factory in Drogheda, Co Louth. Maev Martin talks to managing director Sean Murphy about the Brexit opportunity, adding value to the category, and responding to the latest trends.
Built for scale from day one, the East Coast Bakehouse factory features one of the largest biscuit ovens and the longest single production line in Europe, which runs to 400 metres. The company manufactures and packs 10,000 packets of biscuits per hour. According to Murphy, East Coast Bakehouse has the scale to supply a significant proportion of the demand for biscuits in Ireland.
“We have a large-scale production facility with the capacity to produce approximately 90,000 biscuits per hour,” he says.
“To put that in context, on a 24-7 operation, every week we could produce more than three biscuits for every person in Ireland. While we are a scale producer, we have developed a unique capability to be dynamic and responsive to meet our customers’ demands. We are proud of our in- house product development capability that has created high quality product solutions across a wide range of biscuit and snack platforms. These products can then be quickly transformed to production on our large-scale plant to deliver cost effective solutions to the market.”
The biscuit market in Ireland is over 95% imported and a proportion of those biscuits are coming from the UK. Now, post-Brexit, is there is a big opportunity for Irish biscuit producers to ramp up their production capacity?
“Certainly, it is an advantage for retailers to source locally as it removes the challenges associated with Brexit and will enable them to operate with lower stock-holding,” says Murphy. “From our perspective, we are ready to meet the local demand.”
Diverse Export Strategy
When East Coast Bakehouse was first established, the business model was export-driven, with the Irish market being just a component of the operation, and the business plan was initially built on a strategy of selling 80% of East Coast Bakehouse’s production to the UK market.
“We commissioned our production line around the same date as the original Brexit referendum vote, so from that point it was clear to us that we needed to diversify our customer and geographic base,” he says. “That led to an immediate pivot, driving stronger focus on the
Irish market, Europe and other international markets. Today, we produce private label products for three of the major retailers in Ireland and our brand is available in the leading retailers in the country. In addition, our biscuits are exported to 26 countries.”
Driving Category Growth
The company has its own brand called East Coast Bakehouse, which includes a cookies range and granola options. Using the best of Irish ingredients, the company’s mantra is ‘Baking Better Biscuits,’ and this is also reflected in other revenue streams that include own label for retailers and contract manufacturing for other leading manufacturers.
When it comes to the segments that are driving overall category growth, Murphy says that it is being driven primarily by indulgent, better for you and functional biscuits, as consumers seek either a permissible treat or a healthier regular snack.
East Coast Bakehouse has responded to these trends with a range of indulgent product offerings, including fully enrobed in chocolate products, and by developing several better for you or healthier options, including biscuits that feature zero and reduced sugar, provide immune support, are high protein, and support consumers who are embarking on a Keto diet.
Vegan is a hot trend in every grocery retail category and East Coast Bakehouse is looking to capitalise on the increasing popularity of vegan biscuit products. “Last month we launched a vegan range under the East Coast Bakehouse brand,” says Murphy.
“The launch includes three excellent products that are receiving very positive feedback from consumers. We continually monitor emerging trends and develop products that meet the needs of many of the core trends. It is important to us that when we develop products to meet these trends that the product delivers a high quality experience and does not require the consumer to make a compromise, as biscuits should be an enjoyable eat.”
Selling In A Pandemic
Like other businesses around the country, East Coast Bakehouse has made several investments to ensure that its employees are operating in a safe working environment and has taken steps to reduce the opportunity for Covid-19 transmission.
“From a business growth perspective, we initially found it more challenging to engage with buyers as their work environment has been disrupted, and we found that customers were more cautious and slower to commit to new products or new suppliers,” he says.
“However, we have seen that situation improve significantly since mid-summer last year and we now have strong engagement with buyers who are looking to reinvigorate their category growth.”
Regarding the impact on sales, Murphy says that in the early days of the pandemic consumers adopted a pantry load approach as they secured themselves for the first lock-down. “This provided us with a short-term boost in sales,” he says.
“However, as households began to embrace the lockdown periods and engaged in home baking, there was a slowdown in biscuit consumption. Those trends stabilised as people adapted to the Covid-19 world and we are now experiencing a more natural, organic growth trend.”
Aggressive Growth Agenda
According to Murphy, East Coast Bakehouse has “an aggressive growth agenda” and launching new products is a critical element of delivering the growth. “In the last few months, we have introduced 14 new products, either under our own brand or producing for our partners,” he says. “We anticipate a similar rate of expansion over the rest of the year.
The business is a scale investment and, as such, significant funding has been required to bring the business up to a breakeven point that will be achieved in the next few months, which then allows us to refocus on the next wave of expansion.”
Most of East Coast Bakehouse’s 43 full-time employees live in Drogheda, Dundalk and the surrounding areas. “We plan to expand our employee numbers to approximately 70 by the end of the year as we expand production capacity,” he says. As well as employing locally, they try, where possible, to use Irish ingredients, due to both their high quality and ease of availability.
“We are continually looking to source locally and have recently moved some of our packaging requirements to an Irish supplier,” says Murphy.
One of the founding members of the Origin Green programme, East Coast Bakehouse operates specific programmes that are focused on reducing waste, energy consumption, and total packaging, as well as improving the recyclability of its packaging. “Current initiatives include moving all of our plastic trays to fully recyclable plastic and exploring some solar energy solutions for the Bakehouse,” he says.