Ireland’s original superfood
In the first article in our Meet the Makers series this year, in partnership with Love Irish Food, Flahavan’s managing director JOHN FLAHAVAN and director JAMES FLAHAVAN talk to Maev Martin about thriving in a pandemic, developing a highly successful export market in South Korea, and the quest to source all of their organic oats on the island of Ireland
Flahavan’s sales, marketing and administration teams have been working full-time from home since March 2020. A total of 85 staff are working in their plant at Kilmacthomas, Co Waterford. “We have been splitting staff into pods to ensure that contact is kept to a minimum and we have all of the necessary sanitisation requirements on site,” says John. “We have been very lucky so far in that we haven’t had any positive cases here in the plant, and that can be attributed to the precautions that we and our employees are taking.” And when it comes to their relationship with consumers, Flahavan’s appears to have successfully navigated the waves of uncertainty and challenge presented by the pandemic. “Sales in the Irish market are at the same level as they were pre-Covid-19,” says John. “While the food service sector has gone quiet, the retail side of our operation, which constitutes 85% to 90% of our business, has grown, and exports are still strong. The UK is our main export market. We have also been exporting to the US for the past 15 years.” Like their strong sales in Ireland, the US market has been a big success story for Flahavan’s. “We got a recent read of IRI data to the end of December and it shows that the retail side of our business in the US is up by 33% year-on-year,” says James Flahavan. “About 15% to 20% of our business in the US is food service and, while it hasn’t dropped to zero, that sector has declined significantly from where it was, but the US is one of the few export markets where we are in food service. While we have a national presence in the US market, our two strongest sales regions are the north east, covering the New York metro area and the east coast. The IRI data doesn’t cover Amazon and we also had strong growth online with Amazon, which made up for that shortfall in the foodservice sector.” Big in South Korea Another export market that has delivered for Flahavan’s is South Korea, which they entered six years ago. “We have done well there through a combination of persistence and luck,” says James. “We went into the market when oats were becoming trendier and there were a number of other external factors that contributed to our success. The Korean people were being encouraged to include more fibre in their diets. While rice is their staple carbohydrate, oats have three times the fibre of even brown rice, so they were encouraging the general population to broaden their diet. “In tandem with this, Korean influencers and celebrity culture was on the rise, whether it was actors, musicians or celebrities who had been in the US or other places and were bringing back new foods to Korea. Oats was one food that had become extremely popular, so we entered the market at the right time. Flahavan’s oat products were initially stocked in some of the higher end department stores, and distribution was then expanded to include the wider retail sector and the online channel. “Before Covid-19, online would have been a much bigger part of Korean culture for purchasing groceries compared to Ireland, so they were ahead of us in that sense, and we partnered with some retailers who were exclusively online,” he says. “We have been told by our agent that we are the number one oatmeal brand in the market, albeit starting from a very small base.” Flahavan’s are also exporting to Japan, Thailand and India, with a small amount of product going to Singapore. “We are looking to develop these and other markets,” he says. “While sales are growing, it isn’t at the same pace as the growth that we are experiencing in the Korean market.” Seven generations of superfood Flahavan’s has been milling locally grown oats and creating wholesome, natural foods for generations of Irish families from their base in Kilmacthomas, Co Waterford for over 200 years. The current generation of the business is still very much a family affair, with managing director John Flahavan, his son James, a director of the company who heads up the export side of business, and daughter Annie, who is the financial controller. John’s wife Mary, who passed away in August 2020, played a key role in the business, and now, with the recent birth of James’ son, the business has moved into the eighth generation. Of course, Flahavan’s superfood product is central to the longevity of the business. “The key attribute that allows oats to lay claim to the superfood moniker is the balance between proteins and energy and, in particular, the fact that most oats are gluten-free,” says John. “We produce a gluten-free product, but even our regular product is 99.99% gluten-free, but it can’t be labelled as gluten-free if it contains any wheat seeds. There is also a good fibre level in oats because the outer section of the kernel is oat bran and that is retained within
“We estimate that 70% of our company’s total energy requirements are self-generated on site through our wind turbine, water turbine and solar panels, and we have to make up the balance from the grid.”
the product, whereas with wheat the bran is discarded when it comes to white flours.” According to John, the company has been working on new product development throughout 2020, with a special focus on granolas and flapjacks. “We have been looking at developing functional and more health-related variants within our granola and flapjack ranges and we are also reassessing our packaging. We are happy with the Quick Oats Drum as a packaging format, for example, but we are pro-actively looking at ways to make it more environmentally friendly.” Self-sufficiency – achievements and ambitions One aspect of the sustainability agenda that Flahavan’s have really excelled in is energy generation and usage. “Sustainability has always been a major part of our family business,” says John. “Since the 1780s, when the original waterwheel drove the mill, we’ve been committed to working in harmony with the environment in everything we do. Instead of the original water wheel, we now have a water turbine, so the old mill stream that used to supply the water to the mill wheel is now supplying it to a water turbine and we are getting electricity from that as well. We are using the by-product for our steam. “When it comes to our waste product – the husk of the oats – we sell some of it and we also use some of it in our boilers instead of using oil. In 2015, we installed a 500KW wind turbine to generate electricity and our grain store features solar panels. “We estimate that 70% of our company’s total energy requirements are self-generated on site through our wind turbine, water turbine and solar panels, and we have to make up the balance from the grid. When we have excess electricity, we can sell it back into the grid, but we use most of the energy that we produce.” Another key area for Flahavan’s is around raw materials sourcing. James points out that, while a good portion of Flahavan’s business is in conventional oats, about 30% of their business is organic oats, so there is demand for both in the market. “A lot of what we export is in the organic oats space, and in the UK market we are the number one brand of organic oats,” he says. “We would purchase the entire crop of organic oats that grow in Ireland, process it, mill it and sell it as porridge oats. However, we don’t get enough supply from the island of Ireland, so when we run out of the Irish crop we have to source the remaining organic oats abroad, either from the UK market or from Scandinavia. Part of our Origin Green plan is to become fully self-sufficient in terms of the supply of organic oats for our operations. To that end, we are working with the organic unit in Teagasc to encourage Irish growers to switch from conventional to organics oats. We give farmers pointers and the opportunity to network with their peers. We tell them what our demands are and where we see our market growing. We have been successful in working with farmers so far, and we have gone from having an average of 50 organic suppliers a year for each harvest to about 100 organic suppliers at the harvest last year.”