In this month’s Meet the Makers, in partnership with Love Irish Food, Maev Martin talks to JOHN FORBES, general manager of international specialist spreads producer JDS Foods, about their branded range, recent innovations, and being the original plant-based products producer.
JDS Foods were established as James Daly and Sons in 1871 and its origins were in the Cork Butter Exchange in the heart of Cork city, which was
established in 1770. At that time, the Cork Butter Exchange was one of the world’s biggest exporters of butter to territories throughout Europe and as far afield as Australia and the West Indies. “The company originally produced butter, then margarine, and today it produces a wide range of traditional dairy spreads, as well as blended spreads made from vegetable oils,” says John.
“We supply the retail, foodservice and bakery sectors with a range of both branded and private label spreads.”
In 2017, the company was bought by Lisavaird Co-Operative Creamery Ltd, which is based outside Clonakilty in west Cork. JDS Foods is
celebrating 150 years in existence this year. “Along with Musgraves and The Irish Examiner, we are one of Cork’s oldest companies,” says John. “We had big plans to mark this milestone, but Covid-19 knocked that on the head. There was some increased marketing spend this year, but not what we had planned.”
Branded portfolio
In Ireland, JDS Foods is best known for four key brands, all of which are available in Dunnes Stores, Tesco and SuperValu outlets across the country. Launched 10 years ago, Dairymaid is the flagship and best-selling brand in the range. Dairymaid Premium is a 100% natural dairy spread made with fresh cream from west Cork with no artificial ingredients. It is widely available in the Irish market and JDS also export it to destinations such as South Africa and the UK. Their other Dairymaid variant is Dairymaid Buttery, which is a blend of fresh cream and butter.
“We also have Frytex, which is a nostalgic Irish brand that is made from beef oil and is typically used for frying,” he says. “We have a
branded 250 gram block, which is a very popular product. We then have our garlic brands – Garlic Gold and Irish Cottage Garlic which are available in small 125g or 220g pots. They are the little stars of the portfolio, having experienced incredible growth over the last few years, so much so that we have a new packing machine arriving in four weeks’ time to allow us to keep up with demand. The garlic brands are a very versatile product –
they can be used for baking, as an accompaniment to steaks, as an addition to pasta dishes, or to make your own garlic bread.” Taste is particularly important when it comes to the Irish palate and making a product both healthy and tasty is an ongoing challenge for most brands. How does JDS
Foods address this challenge when they are researching and developing new spreads? “Dairymaid was launched 10 years ago and the focus has always been on using premium Irish dairy ingredients in our branded products, and to use local and natural ingredients, where possible,” he says.
“Consumers are looking for cleaner products and less artificial ingredients across all categories, and all our branded and private label products have been reformulated over the past ten years to reduce salt, fat, and artificial ingredients. As a producer of branded products, you have to do this in order to follow the market trends, and when you are producing private label, the retailers demand it.”
Vegan variants
The JDS Foods branded portfolio of products also includes some recent innovations, such as Free, which is a dairy and gluten-free vegan
spread that is available in Tesco and SuperValu. “We are one of the few Irish manufacturers that are doing this,” he says. “A lot of vegan and vegetarian spreads on Irish supermarket shelves are from northern Europe, so it is good to see Irish-produced vegan and veggie products in Irish stores. We are also launching a vegan version of our garlic pots with a UK retailer and it will beavailable in UK stores on 21 September. We have high hopes for this product, and for further retail listings in the UK and Ireland on the back of a successful launch.”
Plant-based products
Vegan product development is now well and truly mainstream and has been embraced by the world’s big food manufacturers. Is John
concerned that this will inevitably threaten the profitability of dairy brands? “Ten years ago everyone predicted the demise of butter, but it hasn’t happened, so I think yes, they probably will, but that is why so many dairy companies have diversified into plant-based alternatives,” he says. “Looking at the JDS Foods offering, we already supply a huge range of vegan and vegetarian products for the Irish and export markets. That is
because a lot of our products are plant-based they are made from edible vegetable oils. We have always been in that space – margarine is made with vegetable oil. We had a vegan and vegetarian range before it became popular because a lot of our products happened to be plant-based.”
Achieving standout in store Dairy is one of the most keenly contested areas of the store for branded dairy offerings, so achieving standout can be challenging for smaller brands. “We have excellent product quality, we are competitively priced, and availability and customer satisfaction are our
key credentials,” says John. “At all stages of the pandemic our brands were always present in stores, even when there was a huge demandsurge in March and April 2020. We invested in promotions in-store and online. We employ a team from a promotions company that visits stores on a weekly basis to ensure that our products are visible, neatly presented and well stocked. On the private label side, we work in partnership with the retailers. We are at a size as a business that makes us very flexible and our quick turnaround times make us theretailers’ go-to partner for private label
products in Ireland. Exports are a vital part of our business. The UK is our largest export market and we have a sales director in the UK, but diversification is the key to our future strategy. Over the past 18 months, we have developed a strong relationship with an Asian based retailer and we are supplying their stores in Hong Kong, Singapore and Malaysia.
We have other exports markets across Europe, as well as South Africa and north America, and we are always actively looking at new export opportunities.”
Soaring costs
Food input costs have soared in the last year. While Covid-19 and Brexit were contributory factors, John points out that many other external developments had much bigger impacts on the market. “The most recent FAO edible oil index showed an increase of 90% since June 2020,” says John. “Some of that is Covid-19 related, as it led to labour shortages affecting harvests and throughput at mills, but it can also be attributed to biodiesel mandates, and as more countries demand that less mineral oil-based products and more biodiesel is used for transportation fuel, those price
increases are likely to continue. All of that comes from food crops and that is competing with food, so it is not just all about Covid-19 and Brexit. There is a lot more happening in the market. “You then have transport costs and the rising cost of packaging and ingredients. Plastic resinprices have doubled since earlier this year. Energy and labour costs have also increased substantially. Going forward, all of these increases are on a scale that cannot be absorbed by the supplier. However, at JDS Foods we are remaining positive. It is great to see some semblance of normality returning to the market, and we hope that by 2022 we will be in a position to meet with our customers and suppliers in more normal circumstances.”
A support network
JDS FOODS ARE FULSOME in their praise of the service they have received from the Love Irish Food organisation during the current
pandemic. “The excellent communications and advice from the organisation before and during Brexit and also during the pandemic were a standout for us,” says John. “Love Irish Food worked very hard for its members. They are continually innovating and coming up with customer-facing initiatives and their digital customer interaction is exceptional.” Love Irish Food recently announced its new retail partnership with
Tesco and this month Tesco will highlight Love Irish Food member brands throughout its stores. “The new partnership with Tesco is an excellent initiative and we are looking forward to seeing the impact in stores,” says John. “I think it will add real value for LIF member companies at the point of purchase. If there is something differentiating LIF members on shelf, such as the shelf talkers, then it will have a positive impact. It is great to have big retailers like Tesco joining Love Irish Food for progressive initiatives like this and we would love to see it rolled out across other retailers.” Would he recommend membership of LIF to other branded food producing companies? “Absolutely – it is well worth the investment as it adds value and introduces opportunities for smaller companies and their Irish brands,” he says.
ThinkBusiness.ie
Irish Food SMEs expect revenue growth in year ahead
Author: John Kennedy
Date: April 27 2021
75pc of Irish food SMEs expect revenue growth in the year ahead as investment is set to intensify, according to the Love Irish Food/PwC 2021 Irish SME Food Barometer.
Irish food SMEs are positive about the year ahead and many plan to invest, emphasising the continued importance of the UK market.
The 2021 Irish SME Food Barometer by Love Irish Food and PwC Ireland of close to 70 Irish food SMEs found that 69pc of respondents do not intend delaying investment in the year ahead, compared to 62pc who did delay investment over the last 12 months due to pandemic uncertainty.
More than a quarter (26pc) score the UK as their most important export market, with 69pc considering the Republic of Ireland their most important territory for growth.
Close to two-thirds (60pc) state the importance of environmental sustainability has increased in 2021.
65pc of companies are confident the economy will improve over the next 12 months, despite challenges related to COVID-19 and Brexit, up from just 16pc in late 2019. However, some caution is in the air as these positive economic growth forecasts are tempered by 22pc of companies who believe economic growth will decline in the year ahead.
“With the prospects of the re-opening for our economy over the coming months, the research reveals cautious optimism for business prospects for Irish food SMEs,” said Owen McFeely, Director, PwC Retail & Consumer Practice.
“These organisations have seen major disruption in their businesses for more than a year and, with plans for investment, they are now looking forward to turning a corner.”
Separately, the positive sentiment expressed in the new research findings on what is one of Ireland’s largest and most important indigenous industries indicates that there will be a significant uplift in the levels of capital investment made by food and beverage companies, following a significant stall during the pandemic.
Underlining the growth agenda for Irish food SMEs, 69pc of respondents stated that they will not delay investment over the coming 12 months, compared to 62pc who said they did delay such investment in the last 12 months, representing a dramatic turnaround.
Furthermore, 20pc of respondents confirmed that they are planning to launch new products or services to drive business growth in 2021. A total of 11pc will enter new markets. Other activities to drive business growth include implementing operational efficiencies (19pc) with a further (11pc) aiming to achieve growth by investing in digital strategies.
Almost one in ten (8pc) will seek price increases, up from 6pc last year, highlighting the ongoing challenge for many Irish companies who are grappling with tight margins and cost competitiveness. The growth of volume at the expense of value continues to place huge pressure on the food manufacturing sector.
The impact of Covid-19 (58pc) is the greatest threat for the food and beverage sector, according to the SMEs surveyed, fuelled by economic uncertainty, and associated labour issues.
Volatile commodity prices (43pc) are also a significant threat for food and drink SMEs. This is likely a reflection of uncertainties in global and local supply chains. Almost one in four (24pc) are concerned about Brexit.
Meanwhile, despite the varied challenges posed to the sector by Brexit, the UK is the most important export market for Irish food SMEs, followed by the European Union. 26pc of respondents said that the UK continues to be their most important market. Notably, almost a quarter (24pc) stated that more than one-fifth of their company’s revenues in 2021 will come from trade with the UK compared to 19pc in 2019. 69pc consider the Republic of Ireland their most important territory for growth.
“Notwithstanding a difficult trading environment, it is encouraging to see evidence of optimism amongst food sector SMEs regarding the potential for their own company’s performance in the sector, reflecting factors they feel a greater degree of control over,” said Kieran Rumley, executive director, Love Irish Food.
“As anticipated, Covid-19 related issues remain the greatest concern for companies operating in the food and drinks industry.
“However, volatile commodity prices now clearly pose a new and significant threat to companies, especially in the context of Covid-19 related costs imposed on such businesses more recently.
“It is unlikely that SMEs will be able to shoulder the burden of these additional costs for long and may eventually be forced to pass these on as consumer price increases. Love Irish Food is working to increase the support offered to companies throughout 2021, with greater retailer support in the interface with the retail grocery sector, as part of its mission to advance the future of Irish food and drink brands.”
Environmental sustainability remains high on the agenda for Irish food and drink SMEs with 60pc of those surveyed stating that the importance of having an environmental sustainability strategy in place has increased this year.
In addition, over half (57pc) of companies confirmed that they have a sustainability plan in place to make improvements throughout 2021. Key areas of investment include energy consumption (22pc), packaging reduction (18pc) and water usage (16pc).
McFeely said that developing a sustainability strategy is critical as consumers have clearly indicated their willingness to engage with brands that promote their sustainable credentials. This is in line with recent PwC global research indicating that 55pc of consumers agreed that they buy from companies that are conscious of protecting the planet, and 54pc agreed that they buy products with eco-friendly packaging.
For grocery shopping, in particular, consumers across the board say that they’re willing to pay a price premium for healthier options (55pc), local produce (50pc) and sustainable packaging (46pc), regardless of shopping online or in-store.
“A key opportunity for the sector is the area of sustainability. Consumers have become far more sophisticated when it comes to sustainable choices. Irish Food SMEs are and will be dealing with customers who want to know what they are doing to play their part to protect our environment. Building a sustainable business is not a passing fad. Knowing what consumers now value and changing the business model will define their long-term sustainability and growth.”
Pictured at top (from left): Emily MacDonnell, Senior Associate, PwC Ireland Retail & Consumer Practice; Kieran Rumley, Executive Director, Love Irish Food; and Owen McFeely, Director, PwC Ireland Retail & Consumer Practice
https://www.thinkbusiness.ie/articles/irish-sme-food-barometer-pwc-love-irish/
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