Small and medium sized food companies in Ireland are being hit with input cost rises of almost 30%, according to research from the representative group Love Irish Food.
Companies said costs were rising across the board, but the most significant hikes were being experienced in the areas of transportation, followed by raw materials and energy prices.
The increases in transport prices related mainly to the cost of exporting goods, but the cost of transporting within Ireland also increased.
Companies reported that their insurance costs have been rising, but to a lesser extent that the other categories.
Three quarters of companies surveyed by Love Irish Food attributed the cost increases to supply chain issues arising from the pandemic.
Other key contributing factors included Brexit, and increased worldwide demand.
Those cost increases are likely to make their way through to the prices that consumers pay for their food.
However, although consumer price inflation is running at in excess of 5% in Ireland, according to the latest CSO figures, food prices increased at a more muted rate of 0.6% year-on-year in October.
The bulk of the inflation in the wider economy is accounted for by rising energy and fuel prices.
Food companies are also concerned about the impact of labour shortages across the wider economy.
Four out of five SMEs surveyed by Love Irish Food said they anticipated challenges in recruiting qualified and trained staff next year.
A similar proportion expect that retaining current staff will be a challenge.
Many companies report that they are having to prioritise core ranges of goods in an effort to offset labour problems.
“The twin challenges of rising input costs and significant labour shortages have the potential to cause serious disruption on the food and drink industry in 2022,” Kieran Rumley, Executive Director of Love Irish Food said.
“The global pandemic and Brexit have made the issues facing the sector acute, with many now having to consider range rationalisation to offset labour challenges and decrease costs,” he added.
It’s a family affair
Ballymaloe is an Irish household name that is synonymous with quality, authenticity and style. Maev Martin talks to
Maxine Hyde, general manager of Ballymaloe Foods, part of this multi-generational and matriarchal enterprise, about her plans for the food company’s range of condiments for the coming year.
Ballymaloe Foods entered the pasta sauces category a few years ago and over the past year they have brought new sauces to the market, including their Hidden Veggies variety for children, a Mediterranean Vegetable pasta sauce, and the family value Bolognese sauces. “These have all performed well over the past year,” says Maxine. “Since the onset of Covid-19, it has been a good time for pasta sauces and for good quality Irish products and we tick those boxes.” The Ballymaloe Mayo brand was launched in the market 18 months ago
and is now well established in the mayonnaise category. “We are seeing good increases in sales here too, albeit off a small base, and it
has a lot of growth potential,” she says. “It was a slow starter, but we always have slow starts in Ballymaloe Foods as we don’t have big marketing budgets, but our brand is now embedded in the mayonnaise category.”
Ballymaloe is ranked third in our Top 5 brands within the Salad Accompaniments category of Checkout’s Top 100 Brands 2021, in association with Nielsen, retaining its third- place position from last year. This category covers mayonnaise, salad cream and salad dressing product classes, and the Nielsen data reveals that Ballymaloe Mayo has grown by 77% year-on-year, while its salad dressing has grown by 21% compared to last year.
However, it is their Ballymaloe Relish, which is sold to both the retail and foodservice sectors, that is the mainstay of the
food brand. “Our relish got a huge boost in the retail sector last year and that was great to see,” says Hyde.
“We are now driving back into the foodservice market, as we want to see our Original Relish range in as many Irish restaurants as possible. We are also driving the growth of this range in the UK. Again, it is off a small base, but we are seeing good growth,and we plan to really drive it as a retail
product in that market. Over the past year, we have introduced a Fiery Relish, adding to the range of relishes that we have beyond our
Original Relish, and that is something we will continue to do in the future. “We are currently working on a brand refresh across our sauces, relishes andmayonnaise ranges. Given that we have so many products and that we are cross category, we feel that we need to introduce a uniformity
to their appearance to reinforce the message that, although they are in different categories, that they are all part of one food company.”
The Ballymaloe brand
That company, Ballymaloe Foods, was founded in 1990 by Maxine’s mother, Yasmin Hyde, daughter of Irish Michelin Star winning chef Myrtle Allen. She identified a gap in the market for a great tasting, natural and versatile Irish-made condiment. As a teenager, Maxine Hyde worked for her mum at
Ballymaloe Foods. “I worked in the hotel and restaurant and my experience working in the restaurant, which is the original Ballymaloe first
generation business, gave me a goodgrounding in Ballymaloe’s core values,” she says. “I then completed the Ballymaloecookery course and a degree in commerce at University College Cork before heading straight into the Ballymaloe Foods business.
At that time, the company was very production based, which meant that we had areally good product but there was no one to
market it, so I joined the business in 2008 to take on that role.” The Ballymaloe brand is well known, but given that it incorporates the food company,cookery school and restaurant, there is bound to be potential for confusion among consumers. “A few years ago we had an
incident where a group of people were driving to visit Ballymaloe and they headed for west Cork,” she says.
“They called into Scally’s SuperValuClonakilty and asked them where Ballymaloewas. The store assistant pointed them in the
direction of our relish on the supermarket shelves, but they were looking for the hotel!
However, it was a humorous incident rather than something problematic. We are one family with separate businesses, but we all
have the same values of quality, good service and simplicity, and that is why customers trust the Ballymaloe name.”
Moving away from plastics Ballymaloe Foods are verified members of Origin Green and are justifiably proud of the fact that they have taken 1.3 million tonnes of plastic out of their supply chain in 18 months. Over the past year, they have moved their single serve pasta sauces from a soft plastic
pouch and put them into a fully recyclable glass bottle. In addition, Ballymaloe Foods only uses recyclable material for all products delivered via its online shop, which was launched in October 2020.
“Our aim is to cut our plastic output by10% per annum and in 2019 we were 39%ahead of our annual targets,” she says.
“Originally packed and sold in non-recyclable soft plastic pouches, our stir in pasta sauces are now packed and sold in 100% recyclable
glass jars, which has removed 1.3 tonnes of plastic from our supply chain in the first 18 months of production. At Ballymaloe Foods, we are fiercely committed to reducing the level of unnecessary waste within the company. 80% of input packaging is currently recycled and 95% of output packaging is recyclable. Within the last five years, we contacted all of our suppliers to encouragethem to reduce unnecessary packaging sent with raw materials.”
When it comes to reducing energy and water consumption, Ballymaloe Foods reduced its electricity consumption by 12.5% between
2014 and 2019, and they capture and recycle water, which is used to steam all of their jarsbefore filling them with their products.
“We have also put controls in place to ensure water is not needlessly wasted,” says Hyde. “By taking these steps, we consistently exceed our target of reducing our overall water usage by 10% each year.” The company has also installed LED lighting in its facility in Little Island, Co Cork, and solar panels to reduce its reliance on non- renewable energy sources.
Social responsibility & biodiversity
Supporting local charities, clubs and schools, whether it is local or national initiatives, is hugely important to Ballymaloe Foods. “We are privileged to be associated with wonderfulpeople, many of them working with incredible charities,” says Hyde. “In recent years, we
have supported The Marie Keating Foundation and the Irish Grocers Benevolent Fund. We provide food donations to Food Cloud and Penny Dinners and we frequently support local and national charity events and flag days with hampers and products.”
The company also makes regular product donations to Food Cloud and, to date, they have donated approximately 26,001 meals
(4,762 in 2020). “Food waste is a huge social and environmental issue that contributes massively to carbon emission,” she says.
“Through our partnership with Food Cloud, we are working to decrease the negative impacts of food waste.”
With one third of our bee species threatenedwith extinction from Ireland, Ballymaloe Foodsare determined to play their part in reducingthe risk to our bees by being active members of the All-Ireland Pollinator Plan. “We have givenseed bombs to all of our staff for use at homeand in the countryside, and we are currently looking at creating ‘Bee Safe’ spaces in ourlocal community,” says Maxine. “Ballymaloe
Foods is always a hive of activity – and we’re committed to creating an environment where pollinators can survive and thrive.” The
company also works with the non-profit organisation 8 Billion Trees, whose goal is tofuel positive environmental change through the conservation and planting of trees. Through the partnership, Ballymaloe Foods have conserved 3,000 trees and planted an additional 300.
While Covid-19 gave the Ballymaloe Foods business a big retail boost, its food serviceoperation, which constituted a third of theirbusiness pre-Covid-19, shrunk to a small amount in a matter of weeks. “We really hopeto get that market back soon as we have great customers and distribution partners in thatsector,” says Maxine.
Love Irish Food
BALLYMALOE FOODS JOINED Love Irish Food when the organisation was established in 2009. “We were in a dire situation
as sterling had weakened overnight and Irish food products were massively exposed,” says Hyde. “Suddenly we were competing
with products that were much cheaper, the recession had hit, andpeople were shopping a lot in Northern Ireland. Against that
backdrop, Love Irish Food acted quickly to create a support network for Irish-produced food and drink brands.
“From our point of view, it became a place to go to for support, and to interact with other wonderful Irish brands. Ballymaloe
Foods is a small company. We are producing a high quality product in relatively small volumes in Ireland, where there is a high cost base, we are competing on shelf against international brands that have a cheaper cost base, and we have limited marketing budgets. Therefore, getting in front of customers and telling them about our product is a challenge when you are working with small marketing budgets.
That is where membership of the Love Irish Food organisation is so beneficial. I can ask other marketing managers questions and seek advice. Love Irish Food has given me a lot of support as a business person and the organisation continues to support our business in terms of marketing, promotion and the Love Irish Food events.”
A lot of new brands have joined Love Irish Food this year,including Glenisk, Cuisine de France, Glenhaven, Tayto Snacks,
Promise Gluten Free, and Gallagher’s Bakehouse. Would Maxine actively encourage other food brands to sign up? “Absolutely! There is great power in coming together anddoing things as a group and meeting up around events to support and advise each other.”
“Our online shop experienced big sales inNovember and December and a spike aroundSt Patrick’s Day. Without Covid, we wouldn’t have experienced online as a key part of our business, but it really took off for us.However, supermarkets are, and will remain, our main sales channel.
“The support local movement has becomeincreasingly important over the last year and a half and, as a result, people are recognising just how many good value quality products are available in Ireland and that has been really beneficial for the economy. During that time, our business was active on social media, promoting those restaurants using local Irishproducts, as well as Ballymaloe products. As an industry, we need to constantly encourageour customers to get out and spend money with Irish producers.”
What guidance would she give to a new business in the branded food market? “A quality and unique product is essential,” she
says. “Then start with a small customer base, unless you have a lot of funds to launch a big
marketing campaign. If you start with a small selection of stores, it is less difficult to get off the ground, and it is easier to catch any issues
with your product. Last, but not least, you have to put your heart and soul into marketing that product, as it won’t sell itself
when it reaches the supermarket shelves!”