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.”+
The Keelings family business was until the 1970s, when the family set up a established in 1926 when WP and wholesale business. Following the emergence of Christine Keeling began growing the multiple retailers, Keelings evolved further rhubarb. They progressed to in the late 1970s and 1980s, developing a strawberries in 1937 and apples in business to serve that growing market. “In the
revealed that consumers wanted to build relationships with Irish growers, so we launched our own brand in-store. The Keelings brand has supported the growth in the consumption of berries since it was launched in 2010.
“We have been lucky to have a brand that is well regarded and we have done a lot of work with consumers over the years with events in- store. We have worked hard on the quality of the berries that are available on the farm – we can’t grow them all year round, so we follow the sun to ensure supply 52 weeks of the year. Our Irish strawberry season starts in March and finishes in mid-November. Raspberries are June to early October, blackberries are June to September, while blueberries are July and August. We import from carefully selected suppliers around the globe to ensure that Irish consumers have great tasting berries throughout the year.”
1949, and the business was then handed on to the next generation. “My father and uncles ran the business between the 1950s and the 1990s,” says David. “It was then passed onto my sister Caroline, my brother William and myself.” Growing was the focus of the business
late 1990s we invested significantly in our own farms in Ireland and in the berries business,” he says.
The growing process
The growing process at Keelings has changed beyond recognition since David’s grandparents were supplying the market. “They would have had a few plantings and the season would last for six weeks – now everything is covered and even if it is raining we can still harvest,” he says. “We now have 26 separate plantings to ensure availability of excellent quality strawberries. We start the season with heated glass houses, then move to cold glass houses and then tunnels and then back to cold glass houses and heated glass houses. How we staff our farms has changed a lot too – a few decades ago most of the work was done by local, seasonal staff. However, the Irish economy and employment levels have grown significantly over the last 20 years, so that has made the securing of seasonal staff particularly challenging for us, as it is for other Irish growers, so we currently source our seasonal staff from abroad.”
Embedded in the community
Keelings is a major employer in north county Dublin. They employ an average of 1,500 people throughout the year and that figure goes up by about 40% in the summer, when the seasonal staff arrive to help them harvest the crop. About 900 staff are from the locality.
Keelings are also keen to keep things local when it comes to their suppliers. “We work with various growers of Irish berries, cherries, tomatoes, apples, carrots, beetroot, flowers and plants, as well as packaging suppliers, whether it is punnets, boxes or labels,” he says. “We also work with refrigeration
companies and other suppliers relating to our buildings, so we work with a lot of Irish, and for the most part, local companies.”
Working with the local community is important to Keelings, and not just in terms of employees or suppliers. They are also focused on giving back to the local community and to causes that are important to them at a national level. This is the third year in a row that the company has worked with the ISPCC Childline charity, donating 10c per punnet.
“We worked hard to contribute more this year in what has been a particularly challenging year for the country,” says David. “We also try to bring experiences from our farm to the annual Bloom Festival, and we have hosted our own summer harvest festivals that bring people to our site, so they can see what farming looks like.”
Keelings have been members of Origin Green for the last five years and David says that this has helped them to deliver plans that have significantly reduced their impact on the environment. “We have developed our own sustainability strategy, which includes a number of key measures such as capturing the rainwater on our farms, using integrated pest management, and creating grass areas that are beneficial to insects,” he says.
“We don’t have any landfill in terms of our waste and, in conjunction with local farms, we are using surplus fruit for animal feed. In 2021, we will be part of the Business in the Community Pledge, which pledges us to have a 50% reduction in the intensity of carbo emissions by 2030.” Keelings have also invested in improving the efficiency of their transport fleet and they have upgraded to more environmentally friendly refrigeration systems. “We have been actively involved in removing single use plastics from our business and we have engaged with packaging specialists to help us understand consumer behaviour towards packaging,” he says.
“Together with our supplier we worked on one of our packaging items, which is used to pack 500g grapes. We engineered a new pack design, which has a reduced weight but is still strong enough to go through our conveyors and sealers without compromising the quality of fruit. The project was such a success that we are now extending this to our full packaging portfolio. By the end of 2023, the net effect of this will be to reduce Keeling’s R-PET usage by almost 80 tonnes, which is equivalent to over seven million fruit punnets!” Another recent innovation is their residue- free pineapples, which they are supplying to supermarkets and to the foodservice sector throughout Europe. It follows their purchase of their own farm in Costa Rica last year which, David says, has given them access to a unique way of growing pineapples.
Is David concerned about the impact that Brexit will have on the Keelings operation or is there an opportunity to develop their import substitution capability? “It is really important for us to be able to transport goods in and out of Ireland efficiently and quickly to ensure fresh stock for our customers. We have been doing a lot of work on alternative routes to ensure that we are geared up for what is coming and that we can get our products through the ports. However, until we are fully clear as to what the real picture will be, we can’t make any definite plans. We have tried to be as agile as possible for when the deal becomes clear. In terms of import substitution, if Ireland becomes harder to deliver to, then opportunities may arise for Irish businesses, including Keelings, so there may be some positive aspects to Brexit, as well as challenges.”
According to David, Keelings experienced sales growth that was higher than expected in the retail sector over the past few months. “However, our costs were significantly higher too and the costs have been higher than the impact of the growth in sales,” he says. “During the lockdown there was increased demand for a number of weeks and, thanks to our amazing staff, we were able to deliver big volumes eight weeks in a row, but demand is more stable now as restrictions have been reduced. Sales had been growing fast in our foodservice business, but during lockdown they were dramatically reduced and then started growing again, but they have fallen back down once again following the introduction of Level 3 restrictions.”
David says that the most immediate impact on the supply chain during lockdown was the significant demand in the retail sector because a lot of countries in Europe shut down. “I’m really proud of how all of our teams delivered at such a challenging time,” he says.
“It has been incredibly challenging for Irish growers to harvest the crops because there was more local recruitment than normal and they aren’t as experienced as the crews that we bring in from abroad. I can see that being a problem next year as well. Also, growers overseas would have had challenges running their farms and that impacts on us. In addition, the transport of produce has been difficult because there are a lot less flights, so security of supply and managing quality will be big ongoing challenges, but we have experienced and committed teams on our side, so that helps.
Love Irish Food
Keelings joined Love Irish Food in 2010, when they launched the Keelings brand. “We have really enjoyed our association
with Love Irish Food and we use the Love Irish Food logo in all of our packaging on Irish grown seasonal produce,” says David.
“I love the concept of Love Irish Food. We are an island nation and we are proud of the standard of quality fresh food that we
produce. As suppliers and retailers, we are also lucky that consumers are proud to buy Irish because that boosts the overall economy. We are big supporters of telling the story, not just of our own brand, but of all Irish food brands because, collectively, we are much stronger. I think local brands,
a sense of community, and supporting each other, takes on a greater significance during challenging times, and that is why
Love Irish Food will continue to play such a vital role for Irish businesses as we navigate through the current pandemic.”