Close to you, because it belongs to you.

ADM Londis plc is the only symbol group to offer retailers ownership and profit sharing through shareholding in the group. So the more we grow, the more your profits grow.

Working together with Londis, you will gain a partner that listens to your needs and understands today’s competitive marketplace.

You can benefit from our tailored range of services including logistics, unique store design, marketing, retail information systems and quality retail management support systems in

addition to extremely competitive terms.

If you would like to learn more about our unique approach to retailing, please contact eitherJerry Mc Donnell, Sales Manager East or Joe O’Connor, Sales Manager West on 1890 33 33

73 or email jerry.mcdonnell@londis.ie / joe.oconnor@londis.ie for further details.

Over 50 years in the business, working hand

in hand with our retailers.

In this months issue

September 2009

6 THE ALDI EFFECTThe recent departure of Paul Foley, m.d. of Aldi Ireland the theUK came as a shock to the industry.

The food industry is urging us to shop local but just how Irishare some of the products?

Tired of attempting to deal with the age old problem ofshoplifting one multiple has hired a former shoplifter.

2 NEWS

32 SURVIVAL OF THE SMARTEST

16 SHOP LOCAL

34 EARNING AN HONEST BEAN

38 DRINKS NEWS

42

SPIRITSHEALTH & BEAUTYHOUSEHOLD

8 NEWS

18 NEWS

22 AHEAD OF THE GAME

26 NEWS

30 CONSUMER PRUDENCE

With its award winning cream liqueur, Coole Swan, ScionSpirits hopes to increase sales.

Analysts believe that the world of consumerism has changedforever.

M.D/Editor: Frank MaddenDeputy Editor: Ruth TimminsBsn. Dev. Managers: Niall P. Madden

Sarah GriffinContributors: Emma Maguire

Tomas O’BrianCirculation: Margaret CorryDesign: 90% Proof

Todays Grocery Magazine Tel 2809466 (6 lines)The Mews email: info@todaysgrocery.comEden Road Upper editorial@todaysgrocery.comDun LaoghaireCo. Dublin www.todaysgrocery.com

Small PrintTodays Grocery Magazine is circulated to all proprietors, directors and managers of allrelevant manufacturers and distributors, to every cash and carry, every multiplesupermarket, group head office and wholesaler, all group affiliated shops and Londis outletsin addition to over 6,300 unaffiliated independent retailers and the country’s leading off-licence outlets. All articles are copyright of Todays Grocery Magazine and cannot bereprinted without the written permission of the editor. All letters to the editor of thismagazine will be treated as having been submitted for publication. The magazine reservesthe right to edit and abridge them.Disclaimer While every effort has been taken to ensure that all information is accurate atthe time of going to press, neither TGM Ltd or Todays Grocery Magazine acceptresponsibility for any inaccuracies or omissions. Please note that the opinions expressed inthe articles are strictly those of the authors.

31 SWEET TASTE OF SUCCESS

36 A SCION OF GOOD TASTE

When Michael Parker started his online sweet shop he had theadvantage of one secret ingredient- nostalgia.

Irish retailers are lagging behind their British counterpartswhen it comes to business intelligence.

Derek and Yvonne Kelly’s chain of healthfood stores continuesto go front strength to strength.

N E W S

2 TGm

The Irish retail marketfor fruit and vegetables fellby 3.1 per cent in volumeand nearly 6 per cent invalue, according to a BordBia report.

In its weekly bulletins,the food board said itbelieved the drop in thevalue of household foodpurchases was due to thenumerous promotionswhich were taking place inthe fruit and vegetablesector.

The report showed thelargest decline was inpotatoes with both valueand volume down 11 percent; but it said the arrivalof new season potatoesshould help to arrest thisslide.

However, it reportedthere was good news formost of the rest of themajor vegetable crops, withvolumes of broccoli up 18per cent, cabbage up 12per cent, cauliflower up 20per cent, carrots up 11 percent, turnips up 16 per centand swedes up 15 per cent.

Other major lines suchas mushrooms, tomatoesand lettuce showed modest

growth while pepper saleswere in slight decline.

“One predicted outcomeof the downturn in theeconomy is more homecooking, and the figuresseem to back up this viewas all these are traditionalaccompaniments to a homecooked meal,” the Bord Biareport said.

On the fruit side, salesare down 7-8 per cent inboth value and volume, andthe report asked if this wasdue again to more tryingeconomic times. “The bigmove is blueberries, withsales up 91 per cent involume over the sameperiod lastyear...Strawberries are alsodoing well, with sales up 23per cent in volume terms,although the value of saleswas down by 27 per cent.”

FRUIT & VEG PRICES DROP

Businesses in the Northcontinue to endure farlighter recessionaryexperiences than theirpeers in the Republic, butfaith in the government’spower to improveconditions north of theborder has still taken aconsiderable tumble.

The findings arerevealed in the latestquarterly InterTrade Irelandreport, which covers theperiod from April to Juneand records theexperiences of 1,000companies.

The new survey shows72pc of companies in theRepublic recorded a fall insales over the three-monthperiod, compared with44pc of businesses in theNorth.

NORTHERN BUSINESSES DOING BETTER

SUPERQUINN DEFENDSSUPPLIER CHARGES

A major supermarketchain defended thecharging of fess forpromotional shelf space,saying it meets competitionrules.

Superquinn chargessuppliers up to €1,200 aweek for promotional shelfspace in fridges or freezersand up to €1,000 a weekfor special stand displays.

Producers must pay asmuch as €700 a week for apallet display, while a ‘shelftab’, which serves tohighlight a product, cancost up to €575 a week. Aspecial shelf display cancost up to €185 a week.

The supermarket alsocharges suppliers a “wasteallowance” before theirproducts will be stocked. Asupplier must pay forunsold stock for the firstmonth it goes on sale.

The list of chargescomes as Fine Gaelrevealed that suppliers were

being forced to hand over€160m a year tosupermarkets in so-called“hello money” in order toget prominent productplacement.

The Government haspublished a draft code ofpractice that will outlawsuch payments.

However, Superquinndenied it was doinganything wrong. It said:“The Competition Authorityreviewed the 2008 versionof this price list last year ndwas satisfied that thecommunication was part ofnormal business practice.The 2009 price list containsthe same prices as lastyear.”

SHOPPERS TO PICK UP THE TABShoppers face paying

more for basic consumergoods, because high streetretailers are to be hit withhikes in local authoritycharges.

The roll-out of a newcommercial rates systemwill mean higher annualbills for retailers sellingclothes, food and householdgoods - with charges likelyto be passed on to theconsumer.

While the CSO revealedthat prices for goods werefalling and that shopperswere spending again,looming rate hikes will hitthousands of high streetshops in major urban

centres.Commercial rates are a

property-based tax leviedby local authorities onoccupiers of propertiesincluding shops, factoriesand offices, and the systemfor calculating the amountpayable is being changedby the Valuation Office.

Because the rates arebased on rent during a briefsnapshot in time, the newsystem will result in winnersand losers.

The new system hasalready been rolled out bySouth Dublin CountyCouncil, which saw almost2,800 businesses hit withincreased bills.

N E W S

September 2009 3

Cautious consumers aresaving while paying offdebts and holding back ontaking out mortgages.

Households now owe€170bn to banks andbuilding societies inmortgages and other debts.

But consumers aredesperately paying off theirdebts. Households reducedtheir mortgages, credit cardand other debts by €404min July, according to newCentral Bank statistics.

Canny customers paidoff more money than theyspent on credit cards, andthere were fewer peopleusing their cards, thefigures show.

There were 2.19 millioncredit cards n the hands ofpersonal customers in July,which is 27,000 fewer thanat the start of the year.

Some €913m in new

spending on credit cardswas incurred by consumersin July, which was upslightly on the figure for theprevious month.

But the spending on

credit cards wasoutstripped bypayments, as savvyconsumers paid off€934m on their plasticcards in July.

Households are alsoproving to be cautiouswhen it comes tomortgages. More oldermortgages are beingpaid off than new onesbeing taken out.

Some €148bn isowed on all domesticmortgages.However, some 60pc of

people surveyed in Augustsaid that they remainedoptimistic in spite of therecession.

SAVINGS BOOM

Developer Sean Dunneis being investigated inrelation to planningregulations, after a shopand off-licence opened inhis Ballsbridge hotel.

Dunne and his wifeGayle’s latest venture is D4Stores, a supermarket onthe former Jury’s Hotel site,selling cut-price goods,including groceries, beersand wine.

A spokeswoman forDublin City Councilconfirmed that theauthority had received acomplaint in relation to analleged unauthorisedchange of use of thepremises. The matter wasbeing investigated, sheadded.

Under the 2001Regulations you do notneed planning permissionto convert a pub into ashop, but the inclusion ofan off-licence in the newshop complicated matters.

DUNNE’SD4 STORE

Makers of the much-loved spice burger secureda number of High Courtinjunctions against a formerdirector who, it is claimed,has been passing offburgers made by him astheir product.

Walsh Family FoodsLimited has sought theorders against oneof its formerdirectors PatrickWalsh. He is theson of theperson creditedwith havinginvented theSpice Burgerand is one of thefew people whoknows theproduct’s secretrecipe.

Fears over thefuture of the spice burgerwere first raised in June lastwhen it was revealed thatthe product would nolonger be manufactureddue to the closure of Walsh

Family Foods in Finglas,which was in receivership.

Supplier interest wasthen generated, however,by campaigns to “save thespice burger” which weremounted on

Facebook and bynewspapers.

Just two weeks afterending production the

company had sufficientorders to justify aresumption in production.Spice burgers wereinvented by butcherMaurice Walsh at his shopin Glasnevin Dublin in thethe early 1950s.

Walsh Family Foodspatented the recipe for

spice burgers, whichit describes as “adelicious blend ofIrish beef, onions,cereals, herbs andspices coatedwith traditionalouter crumb”.

The court hasheard that formerdirector PatrickWalsh has beenmaking and selling

spice burgers as wellas using trade secrets

that are the property of thecompany. This, it is claimed,is contrary to the terms ofhis employment.

THE SAGA OF THE SPICE BURGER

4 TGm

N E W S

The Griffin Retail Grouprecently announced thecreating of 130 new jobs inthe retail sector.

The group opened its19th store, called TheMarket, at Belarmine Plaza,in Stepaside, with thecreation of 50 jobs.

They also opened a newstore in Newcastle, Galway,with the creation of 35 newjobs and plan to create afurther 45 positions whenthey open in Adamstown inSeptember.

General manager, TrevorKearns said the market isdoing very well and theyhave received fantasticfeedback already.

“It’s very encouraging sofar and we are getting agreat response fromcustomers. They love theconcept.

“It’s a high-classdevelopment. We wantedsomething fitting for the

area so, instead of goingwith somethingmainstream, we came upwith the idea for TheMarket.

“We don’t want tocompare ourselves toanyone else, but what wedo is offer regular brandsas well as premium brands.It suits the current climate.to have one right now butwe have 19 other storestrading under the Londisbrand.

“We have other sites inmind. A lot of people go tohigh-end stores to getcertain things and then goto other stores to get theirbrands like cornflakes.Research that we carriedout showed that peoplewould prefer to do all theirshopping under one roof,rather than having to do itseparately.

“The market is delightedto welcome a new fresh

food departmentalspecialist into the store,Lawlor’s Butchers and FreshFish. The focus on our storewill be to offer the customera full range of goods tosatisfy their every need withthe emphasis being on thehighest quality beingoffered, both in produceand customers service.”

In terms of job creation,Kearns said “We wereconscious that we wantedto employ local people, sowe focused our recruitmentin the local area and theywould also know a lot of thecustomers which is god.”

The Market’s full rangeincludes full delicatessen,speciality cheeses, freshfruit and vegetables, in-store bakery, in-store Chef,Dilmah tea bay, freshcoffee, full off-licence andgrocery section. The storewill open from 7am to11pm.

GRIFFIN GROUP CREATES 130 NEW JOBS

Depressed dairymarkets led to a 28 percent fall in profits atGlanbia in the first half,but the food group expectsthe pace of decline to easeover the remainder of theyear.

Glanbia posted apretax profit of €38m forthe first six months, downfrom €53.1m a yearearlier.

John Moloney, groupmanaging director, said theconfluence of changes inthe Common AgriculturalPolicy and the globalrecession had created an“unprecedented tradingenvironment”.

Moloney described thecompany’s overall first-halfresults as “quite a

reasonable performance”,acknowledging that the “keyissue” for Glanbia was milk.His outlook for the full yearwas “cautious”.

Drinks group C&C wasthe star performerrecently when the Iseqindex of Irish sharesoutperformed theirEuropean peers andclosed up 49.76 points or1.65 per cent at3,066.80.

The Bulmer’s cidermanufacturer announceda €205m deal withAnheuser Bush Inbev,that will see it take overthe world’s biggestbrewer’s Irish andScottish business, givingit a portfolio includingScotland’s biggest sellinglager Tennant’s.

Investors respondedby buying 16 million of itsshares, sending its priceup by 15.7 per cent.

DAIRY MARKETS ‘KEY ISSUE’

DunlaoghaireRathdown County Councilhas granted planningpermission for a revamp ofStillorgan shopping centrein south Dublin. Thedevelopment group willdemolish and amalgamatea number of the centre’sshops as part of an interimasset management plan.At present the centre hasmore than 60 retail unitsin two pedestrian malls.The developer hasplanning to develop a newshopping centre on thesite but it is awaiting theoutcome of its efforts topersuade the council toupgrade its wider landinterests in the area. Ifgranted it would increasethe centre’s size to some40,000 sq metres of retailspace, roughly the samesize as the Liffey Valley SC.

STAR PERFORMER

John Moloney

STILLORGAN SCGREEN LIGHT

6 TGm

T H E A L D I E F F E C T

Since the dawn of the credit crunch,Aldi more than any other retailer, haskept its proverbial head and respondedto the consumer with its safe bet lowerprices formula. Aldi came into its own inthe last 18 months breaking itstraditional media shy reputation andgoing toe for toe with the moreestablished Tesco and Dunnes. Thediscounter appeal of Aldi shone aspotlight on just how much moneypeople were prepared to spend ongroceries in the downturn.

As times grew more challenging inrecent months many customers flockedto discounters. Aldi and its cousin, Lidl,which represented the perfect antidoteto the inflated prices of the generalgrocery market. Through Foley’sunprecedented entry to centre stageAldi rose to the fore and took on thechallenge of recession while baitingcompetitors with lines like;

“Our products are better than othersupermarket own labels, as good as theleading brand in the sector andsignificantly cheaper.”

It worked. Almost straight off thebat, Tesco leaped in to claim it was adiscounter, docking its prices on aweekly basis. Similarly, Superquinn laidon the 1970’s prices bonanza andDunnes played the Irish card, all in anattempt to make panicked shopperschose them over discounters.

However, most of these strategiescame across as somewhat gimmicky.Tesco will never be a discounter andwas less than wise to attempt to wanderinto unexplored territory at a time ofeconomic crisis. It came off asdesperate and subsequently themultiple has been quick to resort tomore sensible strategies such asbringing Irish prices on a par withSterling. The scrambling for consumersattention was deemed transparent bysome watchdogs.

A UK Which? survey found severalleading multiples, some of which haveoperations in Ireland, were clearlybreaking the rules when it came tospecial offers. One multiple, forinstance, had wine on offer that was at

the higher price for only one week intwo months. Another had blueberrieson offer that were at a higher price foronly two weeks before being sold at halfprice for six weeks. The third multiplehad cherries on offer at half price whichhad been sold at the higher price for amere 17 days, a month before theoffer.

One of the leading multipleshighlighted in the survey commented;

“It is never our intention to misleadconsumers but to offer excellent valuefor money.”

Another claimed;“We always strive to meet the

voluntary guidelines and would not atany time seek to mislead customers.Your [Which?] report has highlighted afew incidences where signs had notbeen updated and training will berepeated to avoid this happening infuture.”

The findings of this survey takes ona greater resonance when all evidenceis pointing at how the recessionsignificantly effected traditional

THE

EFFECTThe recent departure of Paul Foley Managing Director of Aldi in Ireland and the UK came as a shock to the

industry. Foley had done more for the discounter in terms of pushing its raison d’etre at a time when every

penny counts. He broke with tradition with his media shy bosses approach to promotion by stepping out of the

shadows when it was obvious Aldi could trump all competitors in a time of economic upheaval. Foley has been

replaced by Armin Burgur, formerly head of Austria’s Aldi operation.

September 2009 7

TGM

consumer behaviour.All major multiples operate on a

percentage margin. The practice of fakepricing allows some who practice it, tomaintain these margins yet at the sametime provide a point of difference eitherwith a newspaper advert, or on the shelfwith a noticeable discounted price ondisplay.

In order to outdo rivals, somemultiples have been found out in theUK. One in particular introduced a 3-bottles-for-the-price-of-2-deal across allits product range except for fortifiedwine and champagnes. The practice for‘Marking Up’ only to ‘Mark Down’ hasbeen practised for years. The multiplepretends to be offering a great discounton a €7.99 bottle of wine, but the realprice of the wine is actually €3.99. Thistakes on a greater relevance when ithas been estimated that as much astwo-thirds of all wine drunk has beenpurchased in a discount promotion.

Aldi and indeed Lidl has come outon top because neither has needed toresort to misleading claims of value. Itsofferings are not only genuinely greatvalue they are of excellent quality.

The two German discounters Aldiand Lidl have enjoyed a 40% expansionof trade since January 2008 which inpart reflects the impact of openingmore stores (up to 7% over the sametime). However, this increase inbusiness is mostly through attractingnew customers or greater spend pershopper through their existing stores.The evidence is clear, for a basket of 15items prices are on average half ofthose in convenience stores.

Households are also turning toprivate label goods in greater numbers,at the expense of pricier brandedproducts. Private label goods are onaverage 33% cheaper than brandedgoods. They are, however, still underdevelopment in some productcategories such as confectionery,bakery, health & beauty and could havemore growth to come.

Throughout all of this Foley wasdeemed a breath of fresh air bycommentators. He immediately saw theopportunity to drive sales when theeconomy went pear shaped but wasalso quick to point out that Aldi was notcapitalising on misery - just pointing outits advantages in tough times, pointing

out;“What the credit crunch has done is

jolted some people into giving us a try.”He created what became phrased as

‘The Aldi Affect’ which saw shoppersacross the demographic board pullingup to Aldi stores across the country.Instrumental in building Aldi in the UK,Foley claimed he would open a store aweek until he reached a target of 1500stores. Foley continued to bang thebushes pointing out the differencesbetween Aldi and other retailers and itleft its mark.

In Ireland, Foley launched a charmoffensive last November, checking outIrish operations and meeting up withForeign Affairs Minister, MichealMartin. At the time he laid out his viewson Ireland’s nose-diving consumerismstating;

“It’s not all down to the recession.There is a squeeze on consumerfinances right now but I wouldn’t bewinning consumers if it wasn’t for thequality of our produce.”

Aldi is estimated to have a 5% shareof the Irish grocery market and sources40% of its goods from Irish suppliersincluding well known names such asBewley’s, Largo Foods and the GleesonGroup. However, 95% of the productson the shelf are own label so thefamiliar grocery names are not on offer.Own label delivers higher margins andcoupled with lower store operatingcosts, translates into higher profits forthe Irish stores.

Paul Foley was with Aldi for over twodecades having trained with the frozenfood multiple Bejam which was boughtout by Iceland. Iceland ceo, MalcolmWalker calls Foley very capable andfocused. He says;

“We inherited him after the takeoverand about six months after the buy hehanded in his notice. I tried to persuadehim to stay but he wanted to join Aldi.

His abrupt departure has led somecommentators to muse as to whetherthe infamously coy powers that be atAldi were less pleased by his new foundspot in the media and that all this bushbanging could only lead to a fall-out.Although Aldi is still showing growth, ithas seen a slowdown with sales rising8% in the 12 weeks to July 13 againstrises of 20% to 25% during last year.

Aldi’s founders, brothers Theo andKarl Albrecht, have lived reclusivelysince a kidnapping ordeal in the 70’sand this has manifested into how Aldiruns things. It does not do media andFoley broke with this tradition whichmay have ruffled some feathers.Whatever the case the incumbentArmin Burgur is expected to be a returnto the old guard and is likely to be lessconspicuous than his predecessor. Butwill this be possible given that Foley’sforay into the limelight did so much toforce a light on Aldi’s appeal rather thanjust leave consumers to discover it,unprompted, for themselves.Sometimes we don’t know what’s goodfor us until its under our noses.

Burgur’s aim will now be to maintainsales whilst ensuring consumers stay asthe recession wanes and people want amore evocative shopping experience.Burgur must convince these shoppersthat Aldi is about much more thanbargain hunting.

“It’s not alldown to the

recession. Thereis a squeeze on

consumerfinances rightnow but Iwouldn’t bewinning

consumers if itwasn’t for thequality of ourproduce.”

8 TGm

N E W S

Over 220 companieshad applied to benefit fromthe Government’s €250memployment subsidyscheme, according toTanaiste and Minister forEnterprise, Trade andEmployment MaryCoughlan.

Commenting on liveregister figures, whichshowed unemployment hit12.4 per cent in August butthat the rate of growth injoblessness was down, theMinister acknowledged that

the Government “still has ahill to climb” in terms oftackling the problem.

Under the scheme theGovernment has pledged tomake €250m available tosupport jobs in businessesinvolved in manufacturingand/or internationally-traded services.

The scheme will providetemporary support of€9,100 for each worker inqualifying businesses over a15-month period.

The payment rate

begins at €200 a month forthe first 26 weeks, but fallsto €50 by the scheme’send.

Nine Irish retailerscaught selling counterfeittobacco will faceprosecution. The RevenueCommissioners hasconfirmed. The commissionis set to introduce a newtax stamp - present on allcigarette packets sold inIreland - as part of amassive crackdown on theburgeoning black market.

“The tax stamps haveseveral overt and covertsecurity features whichmake counterfeiting moredifficult and allow customsofficers to readily detectwhether packs of cigarettesare the genuine product ornot” said Revenuespokeswoman Triona NiRabhartaigh.

Tobacco supplier JTI(Japan TobaccoInternational) has ceasedsupply to one Irishmidlands retailer which wascaught selling imitationbranded cigarettes. JTIsupplies such brands asBenson Hedges, Silk Cut,Mayfair and Camel, and hassaid this is the first time ithas ever taken this kind ofaction in any country.

According to corporateaffairs director Gerard

Redmond, JTI is nowconsidering stopping tradeto other Irish shops.

“We do not think thiswill be the last retailer westop supply to and we don’tthink this is the end of ourproblems in Ireland”, saidRedmond. “Theconsequences will be gravefor those caught, and whenwe revoke our supply wewill never reverse thatdecision.”

Redmond saidcounterfeit tobacco madeup 25% of Irish sales as theblack market “spirals out ofcontrol”. JTI will now workwith revenue officials in thecrackdown.

According to NiRabhartaigh, “the decisionto invest further significantresources is testimony tothe fact that this is an areaof long-term strategicinterest to Revenue andconfirms its commitment totackling smuggling of alltypes of goods’.

The Convenience Storesand NewsagentsAssociation (CSNA) has alsosaid it will condemn any ofits members who sellcounterfeit cigarettes.

CIGARETTES GET THE STAMP

With customers flockingto discount retailers, a newindigenous operation hasemerged headed by formerHeatons director VanGannon, who is planning toopen up to four discountstores in Ireland.

The new group willtrade under the 321EuroStore brand and hasopened its first store onMoore Street, Dublin. The

company is linked to theAIM Cash & Carry businessin west Dublin, whichoperates the Iceland storein Ballyfermot, and ismainly selling brandedambient goods, such ascanned foods and toiletries.

It is also selling goodsfrom German discounterNetto Marken-Discount.There had been strongrumours in recent weeksthat unrelated Danishgroup Netto was planningto enter the Irish market byopening in the MooreStreet area but that has yetto be confirmed, whilePoundland is also believedto be looking at the Irishmarket.

DISCOUNTVENTURE

Marks & Spencer hasdropped plans to open ashop at the €350m OperaCentre shopping mall whichis planned for Limerick.

The scheme is half-owned by the state throughnationalised Anglo IrishBank, with the remainderowned by developers JerryO’Reilly, David Courtneyand Terry Sweeney. Aspokeswoman said M&Sdoes not “comment onstore speculation” but tworetail sources confirmedthe decision.

The company had alsoplanned to open in theCrescent shopping centrein Limerick but plans toexpand that centre, whichis owned by the Kennyfamily, were turned down inJuly by An Bord Pleanala.

M&S PLANSSCRAPPED

FIRMS APPLY FOR SUBSIDY

Ireland should continueto increase the price ofcigarettes to put them outof reach of young people,according to a senior policyadvisor to the World HealthOrganisation (WHO).

Dr Judith Mackay saidthat putting an extra €2 ona packet of cigarettes wouldbe “spot on”, discountingclaims by the tobaccoindustry that increasing theprice of tobacco only led tosmuggling and therefore itshould be avoided.

“If you have to pick onesingle thing to bring thetobacco epidemic down andparticularly reduce smokingamong young people, it hasto be taxation.. it’s a simplematter of affordability,” sheadded.

She said the tobaccoindustry was behind a lot oftobacco smuggling to evadetax and flooded marketswith cheap cigarettes sochildren could use them.

“A third of all tradedcigarettes in the world aresmuggled. This is not littlemen in boats. It is theindustry itself that isorchestrating this,” shesaid.

Dr. Mackay was in

Dublin for the launch of thethird world Tobacco Atlas.

The report says the Irisheconomy lost €684m in2007 as a result of tobaccouse. The figures includescosts around absenteeismfrom work, lost productivityand premature death.

According to Atlas,tobacco use kills six millionpeople each year, morethan a third of whom diefrom cancer, and drains€349bn annually fromglobal economies.

It says the tobaccoindustry has shifted itsmarketing and sales effortsto countries that have lesseffective public healthpolicies and fewer tobaccocontrol resources in place. Itstates that in Bangladeshalone, if the averagehousehold bought food withthe money normally spenton tobacco, more than 10million people would nolonger suffer frommalnutrition and 350children under the age offive could be saved eachday.

The report also statesthat a quarter of youngpeople who smoke triedtheir first cigarette before

the age of 10.Worldwide tobacco use

among girls is increasing, itadds, with some under themistaken belief thatsmoking assists with weightloss. “In fact, cigarettesmoking is not associatedwith a lower BMI (bodymass index) in youngwomen,” it says.

Dr Mackay, one of theauthors of the report forthe World Lung Foundationand the American CancerSociety, said while Irelandand Britain were among thecountries with the strongesttobacco control policies,there was no room forcomplacency.

“I think the message

with tobacco control is thatyou’re never done, thisepidemic is never over. Youban one form of advertisingand another creeps up likesmoking in the movies -paid advertising I mightadd, but you have to keepat it forever,” she said.

“This has to be themessage for Ireland as well.You’ve done well but youcannot sit back.”

Ireland, which has plansin the pipeline to putpicture warnings oncigarette packets, couldalso ban companies withinthe State putting uptobacco advertising on theinternet, she said.

WHO URGES€2 INCREASE IN CIGARETTE PRICES

Asia & Australia

Middle East & Africa

Western Europe

The Americas

Eastern Europe &former Soviet Union

World cigarette consumption by region 2007source: American Cancer Society & World Lung Foundation

TGM

10 TGm

Businesses in Dublin’scity centre are being“crucified” as a result of“bus gate” at CollegeGreen, according to DublinCity Business Association(DCBA).

The ban on private carsin the city centre duringrush hour - introduced tostem traffic congestion -has had a detrimental effecton retailers according tothe business association. Inorder to bypass therestrictions in place sinceAugust, consumerstraveling by car arechoosing to shop in retailcentres on the outskirts ofDublin.

Thursday, the mainshopping day, is the worst-affected with no allowancesmade in the 4pm-7pm banon private cars.

One car park operatorin the city centre hasreported a 70 per cent

drop in business.Although the bus gate is

up for review in January,Dermot McCormick,chairman of DCBA, said;“With the Christmasshopping season comingup, if we wait for sixmonths it could be too latefor small businesses.

“July was showing signsthat the rate of fall-off inretail was slowing downbut, having spoken tomajor retailers on GraftonStreet, it has gone back tothe worst of it.”

He is calling for asuspension of the bus gateuntil the opening of SamuelBeckett Bridge at MackenStreet, to avoid furtherblocking the city duringalready-straitened times.He said people need to bemade more aware the banis only in place on weekdaysduring peak hours.

RETAILERS CALL FOR SUSPENSIONHalf of Ireland’s

shopping centres havestarted to grant rentreductions to tenants,despite strong resistancefrom many landlordsaround the country to rentcuts.

A survey of members ofRetail Excellence Irelandsuggested that, of 58centres around the country,29 had given reductions insome form.

However, the research,which is based on anecdotalfeedback from REImembers, indicated thatmany shopping centreowners were still refusing tonegotiate with retailersseeking lower payments.

Many retailers arefacing difficult tradingconditions, as oldershopping developmentslose out to more moderncentres. At the same time,some newer centres havenot performed as well as

expected, due to theeconomic downturn.

However, tenants arestill locked into contractsand rents which are basedon projections of thrivingshopper numbers. The REIsurvey showed that somecompromises were beingreached on rents.

Among those believedto have granted rentreductions in recent monthsis Blanchardstown Centre inDublin and The NorthsideShopping Centre, Coolock.In Cork, retailers in DouglasCourt Shopping Centre andthe Blackpool Shoppingcentre had generallymanaged to negotiatereduced rents, according tothe REI data.

In many centres,landlords have requestedmonthly accounts fromtenants to assess whetherthe downturn in businessactually justified the rentreductions.

RENT REDUCTION

Shoppers in Britain areto be told how much of theprice they pay for goodsgoes on taxes under ascheme launched bybusinesses to exposestealth increases.

In a protest led byMichael Van Clarke, a hairstylist to Diana, Princess ofWales, UK companies arestarting to itemise receiptsto highlight how an array oflevies pushes up prices.

The scheme shows hatup to half of whatcustomers pay at the till ismade up of tax. At presentVAT is the only taxhighlighted on receipts,even though it accounts fora fraction of what actuallyends up in Treasury coffers.

The British government

has introduceddozens of taxes in thepast decade. Amongthe taxes thatshoppers may notrealise they aresubsidising arebusiness rates,climate levies, landfillcharges and NationalInsurance.

Full tax receiptingcould eventuallybecome standardpolicy.

Van Clarkeintroduced the newtype of receipt at hisLondon salon afterspending just a fewhundred pounds onthe softwarenecessary toreprogramme his tills.

The calculationsare based on his latestannual accounts andshow that a typicalStg£374 bill for a cutand blow dry, full headof highlights andluxury hair treatmentsat his exclusive salon isabout 50% tax.

“People just don’tunderstand how muchtax they are actuallypaying; it’s at leasttwice what they think.

“In mostbusinesses, about halfof your bill is made upof various taxes.”

STEALTH TAXES ON RECEIPTS

N E W S

A sharp decline inconsumer spending in thefirst half of this year hashad a significan impact onnewspaper sales in theRepublic, with most titlesrecording a decline in theircirculation, firgurespublished by the AuditBurea of Circulations (ABC)showed.

The Irish Times achieveda circulation of 114,488between January and June2009, a decline of 3.2 percent or 3,771 copies a dayon the same period of lastyear.

The ABC audit showsthat 92.9 per cent of TheIrish Times copies were“actively purchased” withthe rest represetningreduced price sales.

The figures for The IrishTimes included a circulationof 4,001 in NorthernIreland and 5,732 in othermarkets.

The other daily

newspapers in the Republicall recorded a steeperdecline in their circulations.

(See graph).The Irish Independent

had an average circulationof 152,204 during the firstsix months of this year. hisrepresented a year-on-yeardecline of 7,159 or 4.5 percent.

The Evening Herald,which is also owned byIndependent News &Media, continues to losesales, according to the ABCfigures. The paper had anaverage circulation of71,7187 copies betweenMonday and Friday, down10.4 per cent year on yearor 8,260 copies a day.

The Cork based IrishExaminer saw its circulationdecline by 7.1 per cent or3,845 copies a day to50,346. Its sister title, theEvening Echo, posted a 6.3per cent decline year onyear at 24,192.

DAILIES DROP SALES

When EntertainmentWeekly readers open themagazine next month, theywill discover people talkingto them from a wafer-thnvideo screen built into aprinted page. Theexperiment will highlight theradical new strategiesadvertisers are using toattract consumers.

The full-motion ad ismade possible by technologyfrom a US company calledAmerchip that works muchlike a singing greeting cardand recalls the movingpictures of the Daily Prophetnewspaper of the HarryPotter films.

The cost of thepromotiion from CBS, theUS broadcaster, and Pepsi,

the soft drink maker, was notdisclosed. Hoever, magazineexecutives estimated the adwould come at a high cost ata time when global mediacompanies face a severedecline in advertisingrevenue.

“It’s part of the future - away to engage consumers innew and surprising ways,”said George Schweitzer,president of CBS marketinggroup. “How do you samplea drink? You give them ataste.”

CBS and Pepsi’spromotiion will feature a six-page print advertisement inteh magazine that will play avideo promoting theMondaynight autumn televisionprogramming line-up.

The promotion willappear in copies tomagazine subscribersin the New York andLos Angeles areas.

The companiesdeclined to discuss thecost of the promotion,but one magazineexecutive familiar withthe technologestiamted the ad on100,00 copies wouldcost in the low seven-figure range.

Although itremains unclearwhether the ads willcatch on, themagazine industry hascontinued to seek newtechnology to lift themoribund print sector.

A TASTE OF THE FUTURE

N E W S

12 TGm

14 TGm

Tesco Ireland has deniedits practice of attachinganti-theft security tags tofood in one of itssupermarkets will be rolledout countrywide. Thesupermarket’s expressbranch in Dolphin’s Barnsouth Dublin uses tagssimilar to those used inclothing stores on much ofits produce.The move hasbeen cirticised, but Tescosays it is simply on trial aspart of ongoing efforts to“innovate” new securtytechniques.

However, last July thepractice hit the headlines inthe UK when it wasannounced the retailer wasto apply the metal striptags to cheese following anincrease in shoplifting.

In Dolphin’s Barn, thetags were applied tonumerous productsincluding packets of chickenfillets and bacon.

But Tesco insists it is nota response to an increase inshoplifting.

“Essentially, this is just atrial,” a spokesman said.

“We trial varioussecurity right across thewhole sector. We are alwaysinnovating new ways ofdoing things. That is all it isat this stage - there are noplans in relation to futureactivities.”

However, the Irish Smalland Medium Enterprises(ISME) Associatoin, whichrepresents smaller retailers,warned any such policycould backfire.

“It actually has adetrimental effect onshopping because theexperience of shopping goeson how the products arepresented,” said Mark Field,ceo.

“If you have a shop thattags everything and a shopthat doesn’t then people willgo to the one that doesn’t.”

ISME says it is gettingmore complaints aboutshoplifting but the majorityof concerns relate to high-end products such asclothing and perfume.

However, retail experts inthe UK warned earlier thissummer that Tesco’sexamlne may be followed byother retailers.

NO PLANS TO TAG FOOD

The owners of the LiffeyValley shopping centre inDublin are making a secondattempt to sell the centreafter failing to receive thebids they had hoped for.

The owners haveinstructed estate agents DTZand Savills to market thescheme again butnegotiations are understoodto be continuing with at leastone interested party.

The centre which is

owned by Morley FundManagement put the centreon the market in the middleof last year but it isunderstood that Morley wasunhappy with the bids, whichare believed to have come inat about €30m.

The shortlisted biddersfor Liffey Valley werereported to have includedOrion Capital, J Morganwith Birde Hall and a privateIrish investor.

SECOND ATTEMPT TO SELL

Supermarket outletshave been strongly criticisedin a new litter survey by abusiness group.

Irish Business AgainstLitter (IBAL) said that overone-quarter of supermarketsthroughout the State were“serously littered”.

Supermarket entrances,car parks and surroundingpavements were the mostlittered areas in many towns,according to the survey.

Overall, supermarketsites were twice as likely tobe seriously littered as sitesgenerally.

IBAL chairman Dr TomCavanagh accused localauthorities of turning a blindeye to commercial litteroffenders, adding that it wastheir job to enforce the law.

“They plead thatresources are scarce, but itcosts little to send a fine inthe post... and the money iscollected and retained bythose authorities,” he said.

“The benefit in improvedcleanliness is immediate.”

Dr. Cavanagh warnedthat supermarkets, pubs andfast-food outlets wouldcontinue to “blot ourlandscape” until membersand officials in localauthorities issued finesinstead of mere warnings.

SUPERMARKETSCRITICISED

A campaign to reduceIrish people’s daily saltintake from 10g to 6g hasbeen extended for a furthertwo years as the averageperson is still consumingdouble the recommendedamount.

Following consultationwith the state’s foodindustry, the Food Safety

Authority of Ireland (FSAI)has decided to push thedeadline for its voluntarysalt reduction programmeback from its initial targetof 2010 to 2012.

A total of 63 foodcompanies and tradeassociations areparticipating in theinitiative. The food

authority said Irish peopleare continuing to consumesalt at an “alarming” level,with 80 per cent of thiscontained in processedfoods such as bread andmeat.

TAKING ITWITH A PINCH

N E W S

September 2009 15

TGM

Two years ago EoinMacEntee set out his stalland took leave of hisengineering career for ataste of food production.

Craft breads, cakes,chutneys and sauces arenow the lot of EoinMacEntee who turned hisback on a successful Dublin-based career in buildingservices engineeringconsultancy two years agoto go into food production.

Instead of dealing withmulti-national clients likeMicrosoft he now sells hisproduce at farmers’markets in Co Clare afterreturning to live in the townof his childhood, Kilkee.

Ironically, it was thesuccess of the economicboom that helped him tomake the decision to leave.He had been consideringtaking out a mortgage on ahouse in Dublin beforedeciding he would takesome time out and returnto his old job if it did notwork.

“I thought if I commit tothis mortgage I haveanother 30 years at leastwhere I have to make thepayments.

“It got to the stagewhere I said if I do not do itnow I will never do it. It wasa big shock to everyonethat I actually did it. And ashock to me.”

After giving his notice inJuly 2007 at the age of 38,he was reassured when hisemployers told him tocontact them if he wantedto return to work.

“That was all before thedownturn,” he says. He was,however, surprised andtempted by an offer toreturn to his formeremployment last October. “Ihad committed to working

on this up until Christmasand then review it.

“It is hard to knowwhether I would havesurvived because I wouldhave been back in late.”

After relaxing for thesummer of 2007 he studiedfor a Diploma in SpecialityFood Production in UCD, acertificate in wine tastingand signed up for a three-month course inBallymaloe.

“It did get to the stagewhere I had to fly from Corkup to Dublin just to do thewine course, and backagain. My year of lessstress was, at times, fairlyhectic.”

After finishing thecourses last year hebrought his previousengineering skills to bear bydesigning a new kitchen forhimself and setting up awebsite. But instead of acommercial baker’s oven hehad to settle for a Hotpointrange cooker.

“I could have bought acommercial one for twicethe price but with 10 timesthe capacity.

”Because I amproducing from the house Iam very restricted in what Ido. I am not allowed a lot ofcommercial equipment. Itactually got scaled back toa glorified domestic kitchenin the end, unfortunately.”

He also spent €1,700on having a good stallmade, believing it projects agood image. “Also I neededa strong one with the windaround here” he says.

His new life has its ownpressures, the main onebeing that he has tocombine the unsociablehours of a baker with themorning hours of an on-street trader.

“I might get to bed at5.30am and I am up againat 7am. People like to talkto the person who bakedthe bread. They appreciatethat I bake it and here I amnow in the market.”

He sets up his stall attwo other markets everyweek, in Kilrush and Ennis,selling porter cakes,muffins, Italian breads, sodabreads, including a cheeseand chive one, and afavourite of his from whenhe lived in London. “It’swhat I would call a LondonBloomer. It’s a white, yeastloaf, quite similar to a sourdought but sweeter inflavour.”

He also sells chillisauces, chutneys andrelishes, and bakes weddingcakes to order and forChristmas is promising afruit cake from a recipe ofhis great aunt’s that heunearthed.

While he is the only oneof a family of six to turn toprofessional foodproduction he is drawing ona strong cooking ethos. Hisgreat grandfather had abakery in Limerick, Ryan’sin Irishtown, and even whilehe worked as an engineerhe did courses at theNational Bakery College atDublin Institute ofTechnology and inBallymaloe.

“I have always had thisthing that one day I will dosomething with food,” hesays.

He got satisfaction fromhaving achieved the goalbefore his 40th birthday.“There were friends whothought it was some mid-life crisis but it was not.”

Gaining entry to the newbusiness was expensive.When he tots up the cost ofdoing the courses, buyingand fitting out theequipment and paying foritems “you do not factor in”,he says the start-up costhas run to thousands ofeuros.

After a year in businesshe says he is now making aliving from it, although “inthe year overall probably,technically I did not”.

“It is not going to makeme a rich man,” he adds.

But he finds this morethan made up by theappreciation he receivesfrom his customers.

The stress factor is alsomuch less. He enjoyed thecreative aspect of being abuilding services engineer,designing lighting, IT andsecurity systems for clientsbut often he worked 70hours a week.

Now that he is backlooking on Kilkee beach, hedoes not miss his formerexistence.

PUTTING BREAD ON THE TABLE

16 TGm

S H O P L O C A L

With half of supermarket shoppersdefecting to German discounters, andlast year’s pre-Christmas rush acrossthe border fresh on their minds, Irishshops and food products are pulling onthe green jersey.

“Buy me, I’m Irish” say the stickers,and it’s a tactic being used by suppliersand competitors.

A band of more than 30 food anddrink brands, including Tayto crisps andBarry’s tea, recently unveiled its LoveIrish Food logo. The umbrella groupplans a marketing campaign fromSeptember 27, during which customerswill be asked to buy “just one more Irishbrand every week”.

Jim Power, the economist frontingthe campaign, admits it is a commercialtactic by a food industry underpressure. “We are seeing moves fromcertain retailers about sourcing lessproduct in Ireland. Exchange-ratemovements, paticularly against sterling,have been adverse for the last twoyears,” he says. “Disposable income isunder pressure and consumer spendingis down.

“There are economic advantages tobuying Irish. You are preserving jobsand contributing to the exchequerfinances of this country. People may talkabout an all-Ireland economy, but it notthat. What’s spent in the north staysthere. People need to realise theeconomic implications of what they aredoing”.

Such patriotic appeals were rarelyheard during the boom years, whenIrish products became somewhat passe.Cash-rich Celtic tiger cubs affecteddiscernment and fashion by choosingforeign goods.

“Ten years ago at the height of it, no-one wanted to know us,” says Tom Rea,director of Guaranteed Irish, a schemelaunched in 1975. “We found it difficultto survive during the Celtic tiger. Oursymbol is now on 12 of Dairygold’sspreads but, a year ago, it wasn’t. This

year has been one of the best we everhad in terms of inquiries and companiesjoining.

“The reason Guaranteed Irish wasfounded was the state of the economy,job creation and to identify Irishproducts. And where the hell are wenow? Back where we started. Peopleare revisiting the symbol.”

So, assuming that shoppers want tobe patriotic, what exactly should theybuy? Which, among the thousands ofavailable products, are actually Irish?

Consider an iconic brand such asJacob’s biscuits, makers of Kimberley,Mikado and Coconut Creams, belovedof homesick emigrants. None of thesehave been products in Ireland since theclosure of Jacob’s plant in Tallaghtearlier this year with the loss of 220jobs.

“We have had no relationships withJacob’s in 10 years,” says Rea. Thereare brand names synonymous withIreland not made here any more.

Another is Old Time Irishmarmalade. It is manufactured in theUK, “to an Irish recipe”, according toJacobs Fruitfield Group. It says so onthe side of the jar, in tiny writing.

Siucra could more aptly be brandedZucker, since it is made in Germany.Irish Sugar’s plants in Carlow andMallow closed in 2005 and 2006, andafterwards “all references to the Irishmanufacture of the product wereremoved” according to the company.But the name Siucra remains.

The label on Lakeshore Irish relishstates that it is “packed in the EU”.Asked to explain, a spokesman says theLakeshore line of relishes and mustards“are made to original Irish recipes”.

Gem Pack Foods on Dublin’snorthside sells sugar with a GuaranteedIrish label. Bobby Mulligan, a companyrepresentative, explains that they are“packing the product and adding value,”noting that the business employs 80people, and that it does “the same with

SHOP LocalThe food industry is urging us to shop local but just howIrish are some of the products?

sultanas and raisins which are notnaturally grown in Ireland”.

Rea, of Guaranteed Irish, defendsthis, pointing out that its membershiprule is that 50% of the added value becreated in Ireland.

Do shoppers know the differencebetween smoked Irish salmon, and Irishsmoked salmon? With the latter, onlythe smoke may be Irish. The fish couldbe from anywhere. Labelling it Irish-smoked salmon would be bothgrammatically and ethically correct.

It is not legally possible to say aproduct is “Irish made” if it’s not, butopportunistic uses of “Irish” abound, asdo variations such as Erin. It’s a sourceof annoyance to domestic companies.

Mairin Ui Lionaird, director ofFollain Teoranta, a jam producer in CoCork, says brands masquerading asIrish make it hard for real Irishproducers to compete fairly on the openmarket.

“We should have our ownindependent food industry,” she says.

Power, who is not paid for his workwith the Love Irish food campaign, saysshoppers are confused about what isIrish.

“There is even confusion in my ownmind about what is an Irish brand,” hesays. “Take Bachelors beans - if you hadasked me a couple of month ago, Iwouldn’t have known that they are nowmanufactured in Ireland. The same withGateaux”.

To qualify for Love Irish Food logo,80% of a product’s manufacturing mustbe done in Ireland and companies mustuse local ingredients “where possible”.Does this proviso allow some productsto slip through a loophole?

“No,” says Power. “If the ingredientsare available and the company doesn’tuse them, the label will not beincluded”.

While he stresses Love Irish Food isnot a lobbying organisation, Poweradds tht stricter rules on labelling areneeded. Other EU countries, he,believes, handle this better. Irelandapplies EU legislation too rigidly.

“The potential for small, artisan foodproducers were would be enormous ifthere were less red tape,” says Power.It’s prohibitive. We do not do it well.”

A spokesman for Siptu, the union,argues that “hundreds of jobs have

been lost by Irish labels moving theirmanufacturing offshore.

”It would help to protect jobs if thegovernment ensured that productsidentified with Ireland, and believed bypurchasers around the world to be Irish-produces, were made here,” he says.

“The French would not allow theirchampagne to be marketed as Frenchunless it was produced in France.Likewise the Greeks with feta cheese.”

Some governments make extensiveuse of protected geographical status todefend regional foods, such as Parmaham, Gorgonzola, Stilton, Balsamicvinegar and Roquefort.

According to Bord Bia, only fourIrish producers have protected status.

Some Irish labels are, however,moving manufacturing back home.Galtee, the bacon producer, wasrecently acquired by Kerry Group. FrankHayes, Kerry’s director of corporateaffairs, says production is returningfrom countries such as Denmark.

“The majority of Galtee porkproducts is again producing in Ireland,in Munster,” he said. “There is a smallproportion produced in Scotland, butthis is in the process of relocating backto Ireland.”

Hayes also promised that Galteecheese would be back in Ireland within“two months”.

Meanwhile, Guaranteed Irish is alsolaunching a marketing campaign thisautumn. Almost 400 companies comeunder its label, and Rea hopes to addmore.

The biggest problem for thoseplaying the patriot game is thatconsumers with less spending powersuspect that Irish brands areoverpriced.

As the season of cross-bordershopping approaches, the argumenttakes on an added edge and an extraimportance.

Power, who is already thinkingabout how to market the Love IrishFood logo abroad, insists that nothingless than the country’s economicprospects are at stake.

“I am passionate about the future ofthe Irish economy,” says Power.

“The food and drink sector canmake a contribution while financialservices and construction are going tobe much less important.”

TGM

September 2009 17

18 TGm

Majestic wine haschanged one of the moredistinctive business modelsin UK retailing by ending itspolicy of demanding thatcustomers buy at least acase of 12 bottles pertransaction.

In an effort to attract abroader clientele and toentice existing customers tovisit more frequently, thewine warehouse chainannounced that theminimum purchaserequirement had been cutto six bottles withimmediate effect across its151 stores.

Steve Lewis, ceo, saidthe one-case minimum wasdevised in the 1980s toenable the then-youthfulchain to be classified as awholesaler and to complywith laws that would haveotherwise restricted its

Sunday opening hours.The policy was

maintained after Sundaytrading restrictions werelifted in 1994, fuelling thegroup’s stg£136 averagetransaction value

Lewis, who has beenceo since August 2008,said of the decision tobreak with companytradition: “It has gotnothing to do with therecession.”

Instead, Lewis said thechange reflected customerfeedback and the needs ofshoppers who did not havecars or copious storagespace. It also stemmed fromhis own experience ofseeing the minimumpurchase rule deter ashopper.

The new six bottlesystem was tested for ayear in several branches.

Other outlets were addedto the trial in February.

“We have been pleasedwith the results of the trial,”said Lewis, stating thatMajestic would still be ableto differentiate itself fromsupermarkets through one-on-one attention from staffthat would not be viablewithout some form of bulk-buy requirement.

Majestic’s corporatecustomers have trimmedtheir spending during thedownturn, a trend thatcontributed to the 22 percent drop in underlyingannual profit.

Majestic stores will stillonly offer free delivery forpurchases of 12 bottles ormore, while those who buyfrom its website will still beobliged to buy at least adozen bottles.

Chief executive of Kraft,Irene Rosenfeld has warnedthat Cadbury, the UKconfectionery group, wouldstruggle to remainindependent if it continuedto spurn Kraft’s Stg£10.2billion cash and sharetakeover move made publicrecently.

“Given the complexionof the market and theglobal landscape, webelieve it would be difficultfor them to go it alone.”Rosenfeld told Wall Streetand City of Londonanalysts.

“We believe scale willbe an increasing source ofcompetitive advantage bothin confectionery and in thefood industry at large,” shesaid, as she set out Kraft’sarguments that theproposed deal represented

“a significant premium forCadbury’s shareholders,and well above what theythemselves are expected todeliver”.

In a move thatunderlined growingexpectations of a wave ofconsolidation in theconfectionery sector, itemerged that Hershey, thelargest US chocolate-maker,has asked JPMorgan toassess its options followingKraft’s proposed bid.

The move highlights thethreat posed to Hershey bya possible combination of

Kraft and Cadbury,following last year’s $23billion acquisition ofWrigley, the gum maker, byMars.

Analysts havespeculated that Hershey,unsuccessfully courted byCadbury in 2007 and byWrigley in 2002, mightparticipate in a jointcounter offer for Cadburywith Nestle, the world’slargest food company.Hershey currently producesCadbury products in the USunder licence. Hersheydeclined to comment.

CADBURY REJECT OFFER

SIX PACKWINE

The National RoadsAuthority (NRA) haspostponed plans to buildnine of the 12 servicestations that had beenplanned for Ireland’smotorways, because ofbudget cuts.

The 12 stations weredue to be built on the fiveinter-urban motorways by2011. However, a sourcesaid that only the threeservice stations for whichthe contracts had alreadybeen awarded would moveinto constructiion.

A consortium made upof construction firm Pierse,Petrogas and Tedcastles Oilwill build and operate twoservices areas on the M1between Dublin andBelfast, and on on the M4between Dublin andGalway. These will open in18 to 22 months.

Conor Faughnan of AAIreland said that“marvelous new motorways”were being devalued by“glaring deficiencies’ likethe failure to build serviceareas. “It is unacceptablethat it may be 2012 beforethese are looked at again,”said Faughnan. “They arenecessities, not optionalextras. Next year there willbe motorway from Dundalkto Dunkettle (in Cork)without a petrol station”

NRA SHELVESPLANS

N E W S

20 TGm

Tesco has been blamedfor the demise of the State’sonly large-scale vegetableco-op after it withdrew itsbusiness just two monthsafter Dublin Meath Growers(DMG) opened a new €5million facility to meetdemand from the multiple.

Employment at the coopdropped from 80 to just twoor three voluntary membersafter Tesco pulled out earlierthis year, teh OireachtasJoint Committee onEnterprise, trade and

Employment were told.Colm Warren, a member

of the co-op, claimed thereason Tesco rejected DMGwas because it was known tobe fully supportive of Irishgrowers.

He accused the multipleof being “totally ruthless”and said its actions costDMG more than €600,000in outstanding obligations toindividual growers.

His claims were rejectedby Tesco, which said thatDMG had lost outlegitimately to a competitorafter the business was putout to tender among sixcompanies, including the co-op.

A spokesman said Irishfarmers, who had beensupplying DMG, were notaffected by the newarrangements and Tescocontinued to have a strongrelationship with vegetablegrowers.

Warren told thecommittee that the systemTesco put in place to replacesupplies from the co-op“beggared belief”.

He claimed that, afterIrish growers sent theirproduce to a distributor in

Swords, it was then sent toNorthern Ireland forprocessing, before beingreturned to north Dublin fordistributiion to Tesco stores.

Tesco said 99 per cent ofproduce from Irish growerswas processed anddistributed entirely withinthe Republic; broccoli wasprocessed in NorthernIreland because the onlymodern grading machine inIreland was there.

Warren told thecommittee he wasn’tmotivated by revenge, butwished to show what hadhappened to DMG was asymptom of the “disease”now affecting the retail

sector. Unless the predatoryactivities of the huge retailconglomerates werestopped, there would be nodevelopment of Irishhorticulture.

“How many job losseshave already occurred as aresult of this insatiable rushto get more margins? Whoare the losers? Theunemployed, theGovernment, the decreasingnumber of employed and theconsumer, all subsidising thepredatory nature of these

supermarkets.”Irreland would be lucky if

one-quarter of the 300remaining commercialgrowers were left in twoyears, he said.

Chairman of the IFAvegetables growers comitteeJohn Dockrell told thecommittee the sector wasfacing disaster as a result ofthe high costs of production,bad weather, creditdifficulties and the demandsplaced on growers byretailers.

Because of the sustaineddiscounting of fresh produce,vegetable growing was notat an unsustainable leveland the viability of all grower

and packaging operationswas critical. Persistent badweather had nearly paraysedthe sector over the pastyears, he said; in that time,for example, he had lost 50per cent and 65 per cent ofhis spinach to bad weatherin consecutive years.

David Keeling, ofKeelings Fresh, told TDs andSenators that the currentbusiness environment wasvery challenging. Thebiggest cause for concernwas the relative cost of doing

business compared to theUK.

Minister of State forFood Trevor Sargent said hefavoured a statutory code ofpractice for the grocerysector as well as theappointment of asupermarket ombudsman.

Committee chairmanWillie Penrose also backed astatutory code and said thecommittee planned to invittethe six-main retailers to aone-day conference as partof its continuinginvestigations into praticesin the sector.

DMG CLOSES

N E W S

September 2009 21

Kerrygold, which isIreland’s favourite butterbrand and renowned for itslegendary ads, is set toreturn to the small screenwith a new creativespecifically for the IrishMarket, entitled ‘Sod’. Thiswill be supported by astrong promotionalcampaign by the Irish DairyBoard.

Previous ads fromKerrygold are famous forlines such as “Whose takingthe horse to France” and“….put a bit of butter onthe spuds Andre”, whichhave entered thevernacular. The latest adtells the story of an Irishson who has returned toIreland to visit his motheraccompanied by hisGerman wife, who ispregnant. The adverthighlights the Irish mother’sreluctance to let go theapron strings and the Irishémigrés attachment to hishomeland.

The new creative’scatchphrase “Sure weexport all our best stuff”highlights Kerrygold’sstrength as an exportproduct. Kerrygold’s hugesuccess at home is mirroredabroad. It is among the topthree imported brands inover 50 markets worldwide,taking the top spot in overhalf of those. It is themarket leader in Germanywhere over 405 millionpacks of Kerrygold butterare sold each year.

John Jordan, marketingdirector, Irish Dairy Board,commented; “The newadvert keeps the Kerrygoldstory up to date by fusingpresent day emigration withtraditional Irish scenes andtopics which almosteveryone can identify with.

This new ad is sure to attainiconic status and we lookforward to the publicpicking up on new

Kerrygold quotes.”“Sod” follows on the

success of five previouscommercials and reflects on

the important things in liferoots, family, heritage,tradition and food, as wellas reminding us about whatis great about being Irish.

Originally launched asan export brand for the UKmarket in 1962, Kerrygoldbutter has developed animpressive pedigreeinternationally. FollowingIreland’s accession to theEEC (EU) in 1973,Kerrygold butter waslaunched in Germany andcurrently commands thenumber one position in thislarge market. A ‘WelcomeHome Kerrygold’ campaignin 1973 was used to launchthe brand on the homemarket. Up until then Irishpeople could only purchaseKerrygold in the UK orNorthern Ireland and alively smuggling trade inKerrygold butter wasengaged along the border.

Today Kerrygold isIreland’s only trulyinternationally known foodbrand and is available onsupermarket shelves in over50 countries throughoutEurope, North & SouthAmerica, Africa, Asia andAustralasia. A variety ofbutters, cheeses and milkpowders are also marketedinternationally under thebrand. In Ireland,Kerrygold is the leadingbutter brand, with a marketshare of almost 46%. Withits signature gold foilpackaging, Kerrygold hasbeen a constant andreliable presence in Irelandfor almost five decades.

“AH SURE THEY EXPORT ALL OUR BEST STUFF”

TGM

22 TGm

A H E A D O F T H E G A M E

Shoplifting is as old as the hills. It’sreputation as a somewhat softmisdemeanour is being tackled by someof the big multiples. In tough economictimes the propensity to shopliftincreases and is an obvious bone ofcontention for retailers. In Ireland overone third of businesses (35%) havebeen the target of criminal activity overthe last 12 months. For instance Tescoapprehended over 43,000 shopliftersstealing from its stores in the first halfof last year an increase of 36% ofprevious year figures. The multipleclaims that the amount of shopliftingthat occurs annually at its stores couldfill 13,500 trucks. Hence Tesco hascomprised a novel new way to protectitself against shoplifting - it’s hired one.

Tired of attempting to deal with theage old problem, the multiple has hireda former shoplifter to teach them thetricks of the trade so to speak. Tescohas comprised a campaign in the UKcalled Eyes Wide Open which is aimedat staff and features the formershoplifter offering top tips to be onestep ahead of perpetrators. Some ofthese include the fact that whatconsumer’s wish for in a store - wideclear aisles, helpful staff - are usuallythe barriers to successful shop lifting.According to Tesco UK’s logistic director,David Potts;

“Shoplifting is an industry wideproblem and presents a challenge forretailers and manufacturers as well asthe police and the courts. Despite itsimage as a victimless crime the reality isvery different. As well as the financialharm it causes to business large and

small the proceeds of the crime are alsoused to fund drug use and other seriouscriminal activity leading to majorproblems in local communities. It is aneven bigger challenge during aneconomic slowdown when such crimeincreases.” He outlines the new theftprevention programme;

“The Eyes Wide Open projectreminds us how important a role ourstaff have. Luckily for us it shows us thatthieves hate what our customers tell usthey love - clear aisles and attentivestaff - which is exactly what our formershoplifter says he fears the most.”

The hired shoplifter lists through theusual items targeted by shopliftersincluding DVD’s. alcohol, babyfood andeven nappies and cheddar cheese. Healso insists that friendly staff whomaintain eye contact and smile are abig dissuader for thieves. This last pieceof advice offers a dual purpose - as staffare busy smiling at customers they mayalso be deterring potential shopliftersin the process.

Theft has seen unprecedented risessince recession hit. According to expertsthe goods most favoured are essentialitems like babyfood rather than luxurygoods. BRC (British Retail Consortium)Director General, Stephen Robertsonsays;

“Retailers are preparing for anupsurge in offences and are extendingcrime prevention methods - forexample, placing security tags onexpensive cuts of meat.”

A survey by ISME (the Irish Small &Medium Enterprises Association) pointsout just how serious the problem of

theft is in Ireland with over one third ofbusiness here (35%) having been thetarget of criminal activity over the last12 months. The survey of over 1500businesses outlines that there has beenan increase in the actual cost of criminalactivity, which is costing the businesscommunity almost €1.5bn in directcosts.

The incidence of crime in Dublin Cityhas shown a dramatic reduction of24%, followed by Ulster at 16% andDublin County with a reduction of 15%.The rest of Leinster was the only area inthe country to show an increase incrime.

Crime against retailers is aparticular problem with 44% reportingthat some form of criminal activity hadaffected them in the last 12 months.This compares to 40% formanufacturing companies, 39%construction and 29% for both serviceand distribution companies.

'Theft by outsiders', reported by38% of respondents was the mostcommon form of crime inflicted onSMEs followed by 'damage to vehicle'25% and 'vandalism' 24%. Asignificant 22% confirmed ‘theft bymembers of staff’ as being a particularproblem.

60% of companies affected by crimeexperienced more than one instance ofcrime in the last 12 months; 80% of allrespondents identified crime as being aproblem in their area.

The overall direct cost of Criminalactivity on SMEs is estimated at €440mper annum or €5,305 per company.This figure increases dramatically whenadded to the €1.02B or €4,295 spentper company on crime preventionmethods including alarms, C.C.T.V,security guards etc.

The indirect costs of crime cannotbe underestimated, as 21% of SMEswho suffered from criminal activityidentified disruption to trading as beinga particular problem with 13%indicating ‘poor staff morale’. Only 7%of business owners are confident thatcriminals would be apprehended. Theuse of alarms remains the primaryweapon for crime prevention, with 70%of companies having an alarm on theirpremises. This was followed by 50%who use alarm response and 44%access control and CCTV.

Aheadof theGame

24 TGm

A H E A D O F T H E G A M E

Computer related and e-crimecontinues to be problematic with 28%of companies experiencing computerrelated crime in the last 12 months. Theincrease in sophisticated scams ishighlighted with 32% of companiesexperiencing ‘phishing’. A significantone in ten companies has experiencedcredit card fraud while doingtransactions over the Internet.

A massive 86% felt that the judicialsystem is ineffective in adequatelydeterring repeat criminalactivity with only 2% who feltit was effective. Whenquestioned on what measuresshould be taken to preventcrime the following was theresponse, 86% of SMEsindicated that they would bein favour of a significantincrease in Garda numbersand presence on the streets.79% would encouragetougher sentencing by theCourts. 67% would like anincrease in CCTV in towncentres. 35% are in favour ofmore emphasis onrehabilitation of criminals.

The cost to businesses atalmost €1.5bn in the last 12months is a significant costparticularly in a difficulteconomic environment, where allcompanies are looking at the bottomline. According to ISME, however, theconsequences of Crime, however,impacts far beyond the direct financialaspect. As the survey results confirmthere is a significant disruption tobusiness activity with delayed orders,loss of customers, poor staff moralleading to absenteeism, damage tocompany reputation and increasedmanagement time devoted to dealingwith the aftermath of crime. Thesehidden costs invariably have a biggeroverall impact on the business than thedirect costs of damage, insurance andsecurity equipment.

Crime is becoming moresophisticated, with theft coming frommany new and different sourcesincluding fraud, intellectual propertytheft, identity theft and scams. This isevident by the 28% of companies whohave experienced computer relatedcrime in the last 12 months and the

68% who reported that they were thetarget of a scam attempt.

The results confirm that there is aperception among small businessowners that crimes against theirbusinesses are not taken seriously. Only7% of small business owners surveyedhad confidence that if they were a victimof crime, the criminal would beapprehended.

While 15% of companies did notreport the crime to the Garda, this has

more than halved from the previousyear, when 31% did not report thecrime, and is an indication that theGarda is beginning to gain theconfidence of the business communitywith regard to reported crime. Thispoint is backed up by the 78% ofcompanies who were satisfied with howthe Garda dealt with the incident.

Tesco’s creative methods aside,companies spend copious euros on newways to prevent theft. RFID is onemethod whereby radio waves aretransmitted which can be trackedremotely. Although RFID tags arenothing new, they have only becomeaffordable in recent years and as suchare in more frequent use. The averagecost of tags has reduced from €1 to€0.10c in the last few years. This fall isset to continue which should onlyincreased their uptake. There is littledoubt that technology hasrevolutionised supply chainmanagement. Equipment such as radio

frequency identification (RFID) isallowing businesses to trace their waresmore effectively.

Experts say that in this country,wider availability of this technologyshould represent something of a wake-up call to companies for the need toimprove the monitoring of products andoverall improve the image of Irishgoods. Jim Bracken, chief executive ofsupply chain technology organisationGS2 Ireland said;

“In a nutshell, RFID achievesreal-time visibility of products asthey move along the supplychain. RFID solutions eliminatewaste in terms of time spent oninventory control. Shrinkage andtraceability is automaticallyprovided through the visibilityprovided. Improved systemsreduce stock levels , shortenlead times and reducewarehousing costs.”

One of first retailer pioneersin the use of RFID tags was M&Swhich extended its tagging ofclothing items a couple of yearsago after successful trials in 42stores in 2002. The RFID tagsare contained in throw awaypaper labels attached to, butnot embedded in, a variety ofmen and women’s’ clothing

items in stores. M&S uses mobilescanners to scan garment tags on theshop floor, and portals at distributioncentres and the loading bags of storesallow rails of hanging garments to bepushed through and read at speed.

Despite M&S uptake of RFID, mostretailers in Ireland and the UK havebeen exceedingly slow in implementingthis technology. Experts believe that itcomes down to the fact that retaildirectors don’t recognise / believe howmuch they could benefit from item-leveltagging - mainly because they don’tunderstand the scale of the problem itcould address, particularly that stockdata in stores can be very inaccurate.

Economic downturn places pressureon everyone from the retailer to thecriminal on the street. Theft is up andin some cases, crime prevention is goingdown a more creative path, asevidenced by Tesco’s sourcing of aformer shoplifter to expose the tricks ofthe trade.

If you walk down Dublin’sMoore Street today you willfind a snapshot of Ireland inall its ethnic diversity, butwhat do those who workthere say about its future?

If you had to choose onestreet in Ireland that hasbeen a litmus test to the waythe country’s population haschanged in the last decade,Dublin’s Moore Street wouldbe it.

Cheap rents and acentral location attracted avariety of people from theincoming immigrantcommunity, initially led bythe Chinese, who wanted toset up businesses. Now in2009, the street is changingagain. With the developmentof the former CarltonCinema site on hold, and anentire row of shopsshutttered on the south sideof the street, there is anincreasing atmosphere oftransience there.

Walk down Moore Streettoday, and this is what youwill find. In the centre of tehstreet are still the fruit andvegetable sellers that havebeen trading there fordecades, although there

aren’t many younger faces tobe seen.

On either side of thestreet are at least 12 shopswhere your phone can beunlocked and cheapinternational calls made,internet cafes, four Africanhair salons specialising inextensions, euro savershops, tanning solariums, abookies, a Polishsupermarket, a tattooparlour, at least four Asiansupermarkets, a butcher’sand several empty shops ina row that are shuttered andclosed.

In the undergroundMoore Streeet Mall at theParnell Street end, thebusinessses range from avitamin shop, to yet morehair extension shops andethnic takeaway restaurants.One of the newestbusinesses there is TeaWorld, a tea and coffee shoprun by Lithuanian MilanoSolovjovas. solovjovas sellscoffee in flavours thatinclude tiramasu, rum andchocolate cherry. Among histeas are Morning Dew, OldLove, Moonlight, 1001Nights, Seven Samuri and

Irish Breakfast.Solovjovas is five years in

Ireland and previouslyworked as a chef inLithuania.

The brand of tea hemainly sells is Gurman abrand popular with Polishand Lithuanians.

The Spice, an ethnic halalshop, is run by Salim Khan,from Bangladesh. He hasbeen in Ireland nine years.Khan sells Asian, Arabic adIndian produce. His maincustomers are Mauritians,followed by Bangladeshipeople, Pakistanis, Indiansand Africans. His top basicsellers are lentils of all kinds,folowed by beef ad lamb.

Teresa Lynch has beenworking at her fruit andvegetable stall on the streetfor 51 years. For part of thattime, her mother, JennyBeggs, worked alongsideher. In total, her motherworked at the stall for anextraordinary 73 years, andonly died in 2007.

Lynch’s best memorybeing on the street waswhen she was about 14, andall the women stall-holdersdressed up as Molloy

Malone and had a hugestreet party.

On Lynch’s stall,, amongthe many things on offer, youcan buy four red onions for€1, two aubergines for€1.50, and a lump of gingerfor €1.

“It used to be allcabbages, potatoes andturnips,” she said. “Now I’mseelling more foreign thingsto the new people - chillipeppers, ginger, aubergines,corn. It’s what they demand,so I get it for them.”

Lynch thinks the street isslowly dying. “A lot of the oldpeople on the stalls havedied or retired. We don’treally know the people whohave set up new businesseshere, because so many ofthem are on short-termleases.”

She wonders what willhappen to the Carltondrvelopment. “It’ll take yearsnow, with the recession, todo anything. Meantime, allthose shops on the otherside of the street areclosed.”

MOORE STREET -WHAT NEXT?

N E W S

26 TGm

TGM

September 2009 27

Food group TotalProduce has reported a 2.3per cent fall in pretaxprofits to €24.3m for thesix months ending June30th.

The fruit, vegetable andflower distributor, whichwas spun out from Fyffes in2006, has maintained itsfull-year adjusted earningsper share target in therange of 5.5 to 6.5 cents.

In the first half adjustedearnigs per share fell 0.7per cent to 4.06 cent, whilerevenues rose 1.2 per centto €1.3 billion.

Chairman Carl McCannsaid the company wasproposing an interim

dividend of 0.54cents.

He describedthe results as “inline withexpectations”,and said thecompany hadconcentrated oncosts to meettargets.

Operatingprofit fell to €22.3mcompared to €24.8m in thefrist half last year. Adjustedearnings before interest,taxes, depreciation andamortisation were down 4.7per cent at €26.3m.

While overall volumes inthe unit were up on the

same period last year, thiswas due to the contributionfrom acquisitions secured inthe second half of 2008.

The company said thestrength of the euro by 13per cent against sterlingover the period had loweredthe euro vaue of revenues

earned in Britain.“Competitive tradingconditions” in Ireland hadled to a fall in revenuesfrom the company’sconsumer foods and healthfoods division.

During the first sixmonths of the year, TotalProduce invested €2.7m ina bolt-on operation inEurope and a further€2.5m in new and existingjoint ventures, including a50-50 joint venture state inASF Holland.Total Producesaid it had also increasedits shareholding in southAfrican fruit exporterCapespan to15.6 per cent.

TOTAL PRODUCE REPORT FALL

Connemara PeatedSingle Malt Irish whiskeyhas become the officialspirit to Connacht Rugby.Connemara is a uniqueaward winning whiskeyinspired by the historicdistillation traditions of theWest of Ireland.

The partnershipbetween Connemara Irishwhiskey and ConnachtRugby has been forged outof a shared role as theunderdog and a commonpassion for rugby.Connemara Peated SingleMalt Irish whiskey is abrand of Cooley Distillery,Ireland’s only independentwhiskey distillery. LikeConnacht Rugby, Cooleyhas battled for survivalagainst better fundedoutfits but has perseveredto become a success intheir own right.

Cooley Distillery wasfounded by entrepreneurJohn Teeling, whose love ofthe game of rugby is closelytied to his affiliation withClontarf Rugby Football

Club. John has beeninvolved in teams at alllevels in Clontarf andcontinues to play for theclub’s Golden Oldies .

“As a rugby fanatic Iapplaud the David versusGoliath struggles ofConnacht rugby. In Cooleywe have been involved inmany ourselves.” says JohnTeeling, Chairman of CooleyDistillery. “I hope this voteof confidence by Cooley inConnacht rugby will help inthe battles to come”.

“We are delighted towelcome Connemara Irishwhiskey on board as apartner to Connacht Rugby.Cooley have alreadysupported a number of ourcorporate and fundraisinginitiatives and thispartnership allows us toforge a formal relationshipwhich will be mutuallybeneficial and which willestablish Connemara as theSpirit of Connacht,” saidGerry Kelly, CEO ConnachtRugby.

Connemara is the most

decorated Irish whiskey ofrecent times winning over20 Gold Medals fromInternational SpiritsCompetitions over the last5 years, including beinghonoured as the “World’sBest Irish Single Malt” in2008 and 2009. Inspiredby Ireland’s ancientdistilling traditions,Connemara’s smooth sweet

malt taste and complexpeat flavours make it a trulyunique Irish whiskey. Toreflect the quality of thewhiskey, Connemara hasrecently been rebranded toenable it to pay homage toits roots while maintainingan appearance in keepingwith modern premiumspirits brands.

COOLEY PARTNERSWITH CONNAUGHT

John Teeling, Chairman, Cooley Distillery, presents GerryKelly, CEO, Connacht Rugby, (left), with a Special Edition 12Year Old bottle of Connemara Irish Whiskey

C O N S U M E R P R U D E N C E

The world of consumerism haschanged forever. That’s the view ofsome analysts who believe that thelast year of recession has alteredshopping attitudes; reminiscent ofwartime prudence or 1970sthrifty ‘make do with what we’vegot’ attitude. This new foundparsimony is far from a kneejerk reaction to recession. Weare after all on the bend ofrecession. In earlySeptember economists wereclaiming the worst was overand the slow path torecovery was in sight.After excess there isalways a return tosimpler way of living butare retailers preparedfor a new era of

frugality after the splurgeyears of the past decade?

The signs of a newshopping sensibility have beeneminent for some time now.Cheap cuts of meat are beingsnapped up such as hocks, orbeef skirt. In addition, women arechoosing to perform a little hairDIY buying hair colorant ratherthen paying for an expensive trip tothe hairdressers. Where once, stalebread, wrinkly fruit and food past itssell by date were passed over theyare now being snapped up; anantidote to the po-faced consumer

habits of previous years.The thriftier way of living is more

complex than simply making savings oreven being mean - it is a decision toreally look at what we need. Forinstance get last year’s winter bootsheeled rather than rush out to buy anew pair. Sales in second-hand storesare reportedly up and the staycation(holidaying at home) was the (over-used) term of summer 2009.Gardening, growing your own andkeeping hens for their eggs has takenoff once more and a self-sufficiency notseen since the early 1970’s is in the air.According to Mintel;

“A potential return to 1970’s-styleeconomic commissions is promptingsome to return to the values of this eraand to simply making do.”

Moreover, what once passed for

good value has been reassessed. Forinstance purchasing two for one wasnever a particularly good deal andusually resulted in wasted product thathad to be thrown out at the end of theweek. Today we are seeing new terms ofwhat value must mean. According toone commentator, Tom Savigar,strategy director of Future Laboratory;

“There has been a re-evaluation ofwhat value stands for - quality andmeaning. People will take a step backand ask themselves, ‘do I really needanother shirt’. There will be a sense ofausterity and a slightly reservedapproach to consumption. Value will be

the deal breaker so brands will bedeveloping a value package.”

Everyday, transparent value willhave to be the approach of retailersfrom now on. Promotions andspecial offers are too misleadingand are usually the wrong type ofproducts that simply createwaste.

While there are signs of areturn to consumerconfidence (car sales are up,house prices are rising), itwill be a while before wesee a return to spendingsprees and the shoppingculture that sawconsumption replacinghobbies as the quickestsolution to boredom.

That said shopping

is a pleasant experiencethat most people enjoy forthe lifestyle aspirations itespouses. The creditbonanza of the early part ofthe century is over probablynever to be seen again. Thecash in our pockets is moreprecious and hence we aremore discerning of how wechoose to spend it. People willreturn to consumer confidencebut in a far more grown up way.

Consumer

Prudence

30 TGm

Remember the sherbert fountain,space dust and flying saucers? Or kolakubes and sweet cigarettes?

When Michael Parker started hisonline old-fashioned sweet shop, he hadthe advantage of one secret ingredient- nostalgia.

He got the inspiration for hisbusiness, A Quarter of, from memoriesof the sweet shop at the end of the roadwhere he grew up in Beaconsfield,Buckinghamshire.

The eldest of three children, Parkerdid well at school but when he failed theentrance exam to college he started toquestion why he even needed to go touniversity. So he spent he next threeyears working in a petrol station andthen in the personal department ofRank Xerox. He finally went touniversity at the age of 21, studyingmarketing and operational research.

On graduating, Parker followed noparticular career path, working first fora bank and finally for a company thatmade automatic doors.

In 1999 he started a marketingcompany from his spar room at homeusing his savings - €500. He learnteverying he could about the internetand soon found himself a niche helpingfirms to improve their position onsearch-engine sites.

It was in 2002 that Parker had hiswinning idea. His brother had told himabout a firm that put together boxes oftraditional sweets to send to

expatriates. “I thought if they could get10 orders a day by making people takea fixed selection, maybe I could get 10orders a day letting people choose whatthey wanted.”

He designed the website using afree demo disk from a magazine. Thenhe went to his local cash and carry andspent €85 on sweets. He was onlyintending to run a small operation tobegin with.

“I thought if it makes me €200 amonth it will be an interesting thing todo and I will have learnt how to dowebsites for shops,” he said.

“I would get an order a day if I waslucky. I would have the sweets in theoffice with me and at about 3pm Iwould weigh them out and post them. Ifsomeone ordered chocolate that I didn’tstock, I would buy it in the shop nextdoor, peel the price off and post it out.”

However, after six months Parkerhired a PR company to spread the wordabout his website and as orders grewhe took on staff to help him weigh andbag the sweets.

Things did not always go accordingto plan. In the run up to Christmas2003, two newspapers wrote articlesabout the firm. This prompted so muchinterest that Parker had to stop takingorders on December 9.

“We had 5,000 e-mails and I workedout that if we worked absolutely flat outfrom 7am in the morning to 11pm atnight every day in the run-up to

Christmas, we might just be all right.On some days we were getting fourpallets of deliveries that we had tounload by hand because we were in anoffice that had normal-sized doors.”

In the end, Parker just managed it.“Everybody I spoke to said, it’s a niceproblem to have. But it wasn’t, it washorrible. If we had let people down atChristmas we would never have gotthem back.”

Parker continued to add to theinitial selection of 50 types of sweets,as customers have urged him to trackdown their childhood favourites. Onesuch find, sweet tobacco - made ofcoconut strips dusted in chocolatepowder - has become the company’sbest seller.

A Quarter Of now sells 700 differentvarieties and turnover this year isexpected to be about €3m.

Parker, who still owns 100% of thebusiness, thinks the secret of hissuccess has been having a strong vision-namely to re-create the sweet shopfrom his childhood.

He has this advice for buddingentrepreneurs: “Give it a go and learnas you go along So many people havee-mailed me to say they had the idea ofstarting an online sweet shop but didn’tdo anything about it. If you wait untilyou have got it absolutely perfect, youwill never do it.

SWEET TASTE OF SUCCESSMichael Parker

32 TGm

S U R V I V A L O F T H E S M A R T E S T

Irish retailers are lagging behind

their British counterparts when it

comes to business intelligence and

will have to catch up if they want to

compete against international

competition. This stark warning

comes form Martin Duffy, head of

business analytics with SAS Ireland,

a leading supplier of analytics

software and services.

According to Duffy, there are veryfew data analysts employed in the Irishretail sector, and many indigenouscompanies were too caught up in theCeltic tiger to invest in a new wave ofanalytics and business intelligence thatcan deliver significant businessadvantages in tougher times.

“In the last 15 years, there has beena lot of innovation around customerloyalty and floor planning, but it wasalso a time when the Irish retail marketgrew and grew,” Duffy said. “All you hadto do in Ireland was open a new store.Now they are facing the prospect ofclosing stores, so the challenge hasmoved from expansion to maximisingwhat they have.”

He talked about “survival of themost intelligent,” urging retailers toharness the power of analytics to takeon the might of world-class enterpriseslike Tesco and Marks & Spencer, whichhave spearheaded an invasion of globalhigh street brands into Ireland.

With the indigenous sector introuble, there is speculation that asecond wave is coming with Costco andSainsbury as likely entrants, following anew path marked out by Ikea.

“The next 15 months are critical forretail in Ireland,” said Duffy. “My gutfeeling is that the worst is hopefullyover, but retailers will have to get usedto running a more lean and intelligentbusiness. If they can’t, we will see moreforeign retailers moving in.”

There are plenty of indigenoussuccess stores but this time it’sdifferent, according to Duffy.

“There are outlets that havesurvived time and time again but this isthe first downturn where they have to

compete against the likes of Tesco,Marks & Spencer and UK retailers inthe North.”

According to Duffy, the benchmarkis to be smarter than Tesco - whichmeans knowing how and where tocompete. He said he was concernedthat the recent round of price cuts wasnot the answer.

“You don’t compete by slashing thesupplier as close to the bone as youcan; you compete by being moreefficient in-store.”

He said than many retailers hadfallen into the trap of cutting prices toattract customers without measuringthe impact it would have on theirbusiness.

“From my knowledge of the Irishmarket, any saving that can be made isbeing passed on to the customer and,in the cold light of day, a lot of thoseprice cuts are unsustainable. They arecutting prices but profitability levels arenot increasing.”

The alternative is the “smart”approach, beating the competition atits own game in the customer loyaltystakes.

“You can’t compete on their termsso you have to take a leap in front ofthem. If an international retailer issending out mailings to customers oncea quarter, then you need to take theleap and do something better.”

Real-time couponing is tipped as thenext big innovation, whereby the loyaltycard is swiped by the cashier at thepoint of purchase and money-offvouchers are printed there an then.

SURVIVALof the

Smartest

“You don’tcompete byslashing thesupplier asclose to thebone as youcan; youcompete bybeing moreefficient in-store.”

34 TGm

Health food shops may be acommon sight in Irish towns and citiestoday, but that wasn’t the case whenDerek and Yvonne Kelly opened theirfirst store in the mid-1980s.

“We took an awful slagging when wefirst opened,” said Derek Kelly. “Peopleused to stick their heads round the doorand ask us why we were selling budgiefood.”

But the Kellys knew that they wereon to something. As the public becamemore interested in healthy living, thebusiness grew.

More than 20 years later, thecouple and their family run five Nourishstores in and around Dublin city centre.The business emplys 40 people and isstill expanding despite the downturn.

The Kelly’s latest venture is aNourish branch specialising in naturalcometics which is on Liffey Street,overlooking the Ha’penny Bridge in thecapital.

“We wanted to do something a bitdifferent on Liffey Street,” said Kelly.

“We already have branches in theGPO Arcade and on Wicklow Street, soif we had opened another standardNourish store in between them, all wewould have done was dilute the market.There are so many fantastic naturalcosmetics brands now, like Dr Hauschkaand Weleda, that can hold their ownagainst anything you could buy in adepartment store. The new shop givesus a great opportunity to showcasethem.”

It was their own interest inwholefoods and macrobiotics that firstprompted the Kellys to get into thebusiness. “We were both vegetarians,and were very interested in the wholearea of health foods,” Kelly said.

“We wanted to do something that

reflected that, and we thought we’deither like to open a health food storeor a vegetarian restaurant. Then,through a friend of a friend, we heardabout a premises on MarlboroughStreet and decided to give the shopidea a go.”

The Kellys opened the shop andcalled it The General Health Food Store.“At the time, Dublin was a very dullplace, so we decided to go for a realbright and cheerful look. We paintedthe shopfront in bright colours, andreally made it stand out. Tourists usedto come and take photos of it,” he said.

Having started off selling traditionalwholefoods like porridge, brown riceand beans, the Kellys graduallyexpanded their range, adding skincare,food supplements and herbal remedies.After a few years, they opened a secondbranch in the Nutgrove ShoppingCentre in Rathfarnham, followed by astore in the Omni Centre in Santry.

“At that stage, we also took thedecision to sell Marlborough Street,simply because the area had becometoo rough. It was no longer safe for ourstaff or our customers,” said Kelly.

The proceeds of the MarlboroughStreet sale were used to open the outletin the GPO Arcade off O’Connell Street,as well as the couple’s first southsidebranch on Wicklow Street.

The business hasn’t escaped theeffects of the recession: turnover isdown, and Kelly has had to cut back onstaffing.

“We run an extremely tight ship, andwe have tightened up on everythingthat is within our control,” he said.

“The problem is that your mainoutgoings are the things that areoutside your control - your rent, yourrates and your service charges.

“You can appeal to landlords toreduce their rents, but if they say ‘no’,there’s nothing you can do, because youare tied into the upward-only rentreview system.

Kely believes that businesses whichare already tied into commercial leasesare at a distinct disadvantage in thecurrent market.

“There are nay number of incentivesavailable for new tenants. I have afriend who has just taken a lease on aunit in a Dublin shopping centre, and hehas got a 30 per cent discount on whatwas an already reduce drent, along witha range of other incentives,” he said.“But if you’ve already got a lease,landlords will simply not budge. It’scompletely inequitable.”

He believes it will be at least18months before the economy beginsto recover.

“In an economic situation like this,you can’t be rigid - you have to becompletely fluid.

“Will we learn the lessons of theCeltic tiger? I don’t think so. There willbe an increasing number of people whowill choose quality of life over money,but they will be in the minority”.

On the flipside, Kelly said the growthin popularity of farmers’ markets, andthe increasing number of peoplegrowing their own food, were causes foroptimism.

Things like that are really positive,and show that even at a time like this,people are still looking for ways to makethings better,” he said. “

At the end of the day, all of us haveto make a living. But money doesn’talways have to be the main motivator -there are things that are a lot moreimportant.”

Earning an Honest BeanDuring the 1980s Derek and Yvonne Kelly’s chain of healthfood stores was founded in the

depths of the recession, but continues to go from strength to strength today.

E A R N I N G A N H O N E S T B E A N

36 TGm

A S C I O N O F G O O T T A S T E

Dublin company Scion Spirits hopesto increase sales of its award-winningcream liqueur, Coole Swan, to a millioncaseloads a year through a series ofinternational deals.

Scion’s managing director, DavidPhelan, launched the brand in June2007, with partners Adrian Walker andDavid Gluckman. Both Walker andGluckman previously worked asconsultants with drinks giant Diageo.

Phelan co-founded vodka brandBoru in 1998. Boru emerged with UScompany Great Spirits to form CastleBrands in 2003. By that time, its valuewas in excess of $16m. Phelan left thecompany following the deal, and turnedhis attentions to the liqueur market.

“I was always very keen in beinginvolved in brand development” he said.“I wanted to see if it was feasible tocreate an Irish liqueur of real premiumquality.”

There are 10 million cases of creamliqueur sold every year, with Baileysholding an estimated 75 per cent shareof the market.

Coole Swan sells to the Irish, Britishand US markets through distributors,including CoeVitners in Britain andRepublic National DistributingCompany, the second largest distributorof spirits in the US.

The company also has a major retaildeal in place with Duty FreeInternational.

Within the US, Phelan is targetringsales in the sizable Texan market, wherehe hopes to sell through 3,000retailers. “It has enormous potential forus - route to market is essential for abusiness,” he said.

“You can have a fantastic productbut your route to market, operation and

your marketing communiation on theground is what will deliver a successfulcompany.”

Scion is projecting revenues of€750,000 for the current financialyear. Investment in the company todate, totalling €2m, has come fromEnterprise Ireland and private sources.The company is seeking a further €1million to take the business to the nextlevel.

“With more resources, this brandcould be a very big brand,” said Phelan.

“Our intention is to try and fund itat the right level. Strong financialsupport from investors is key for start-ups like ours, and communication toyour investors about the potential ofthe brand is esential.”

Phelan said Coole Ssan sought todifferentiate itself with high-specpackaging that would appeal todiscerning customers.

The product is made using Irishcream and whiskey, Ivory Coastchocolate and Madagascar vanilla.

In 2007, the liqueur won the SpecialMerit Award at Bord Bia’s Food andDrink Industry Awards.

“Out of 200 entries, we were chosenfor that award, and when I travelled tothe US, it immediately sent the rightsignals to potential partners andclients,”

Phelan hopes to have distributiondeals in place in China and India withinthe next two years.

“We are focusing our resources andfinances to develop the markets withthe highest potential at the moment. eswhere we get the best bang for ourbuck.

“We are excited about the future.”

“Out of 200 entries,

we were chosen for that

award [Bord Bia’s Food

and Drink Industry

Awards], and when I

travelled to the US, it

immediately sent the

right signals to potential

partners and clients,”

A Scion ofgood taste

September 2009 37

TGM

David Phelan

38 TGm

SALES CHEERPERNOD RICARD

Jameson Irish whiskeywas one of the fewpremium brands thatdelivered growth for itsmulti-ational owner, PernodRicard, during the 12months to June 30th.

The French-baseddrinks group said that salesof Jameson Irish Whiskeygrew 8 per cent during theperiod, with volumesincreasing 24.3 milliionlietres from 23.4 milliionlitres, a 2 per cent jump.

The comany said thistranslated into organicsales growth of 8 er cent,although it did not give afinancial breakdown ofthese figures. Jameson ispart of the Irish DistillersGroup (IDG), which alsosells Bushmills, Powers andPaddy.

Pernod Ricard is IDG’sparent and selected thewhiskey to become one ofits “strategic brands” anumber of years ago.

This means thecompany markets itinternationally, along withscotches Chivas Regal,Ballantine’s and Glenlivet;Maretll brandy; HavanaClub; Perrier-Jouetchampagne; and a range ofother spirits.

Bar workers whose jobsare under threat should becovered by the governmetnemployment subsidyscheme for vulnerablecompanies according to theVintners Federation ofIreland (VFI).

The body, which has5,000 members andrepresents mostly ruralpublicans, warned that up

to 5,000 more jobs couldbe lost if measures were notimplemented to reverse thedecline in the ub trade.

Independent researchon behalf of the federationfound that more than4,800 jobs had been lost inthe past year, and almosthalf of the publicnssurveyed had cut openingtimes because trade had

fallen by between 10 and20 per cent.

At a crisis meeting theVFI called for anombudsman to monitorfinancial institutions’dealings with small andmedium enterprises.

It also wants a cut in Vatand local authority rates.

SUBSIDY FOR BARWORKERS

Antrim firm Norbev hassecured four new contractsworth €35m with clientsincluding German retailerAldi.

“The contracts are forbottling a range of drinks,including some new juiceand mineral products overthe next four years,” saidDavid Halliday, managingdirector of Norbev.

A contract bottler,Norbev employs 75 staff atits headquarters inBalymena and produces120 million bottles of softdrinks annually for brandssuch as Britvic, Coca-Cola,Vinto and GlaxoSmithKline

“As well as enabling usto strengthen ourpartnerships with majordevelopers of soft drinks,the contracts are an

important endorsement ofour technical capability andthe strong customer-focusthat underpins our overallbusiness approach,” saidHalliday.

Despite the contractwins, Halliday said theeconomic downturn hadimpacted on the company.

“What the recession hasdone is brought bestpractice to the fore. Goingback this time last year, wehad to revisit our costbase,” he said. “We are nowhaving to manage our costsa lot tighter than we were inthe past. We are being a bitmore cautious about ourinvestment strategy - weare remodelling it to meetthe demand for the neweconomy and have takenout all the fat.”

Despite shedding jobs,the company is beginningto recruit again.

“The market is toughand we have a long way togo, but the business is outthere - you just really haveto want it badly enough togo out and get it.

“We are looking toexpand and bring in newlines and new technology.”

Procter & Gamblerecently refocused on itscore consumer healthbusiness with the $3.1bndivestment of itspharmaceuticals division.

The debt-funded dealends P&G’s move into thehighly competitivemedicines sector.

It follows a strategicreview announced by P&Gin December, which

considered continuedoperation, alliances or the

sale of the pharmaceuticalsdivision.

The deal comes as anumber of large

pharmaceuticalscompanies, includingGlaxoSmithKline andNovartis have increasedinvestment in non-prescroption consumerhealthcare prodcts as theyseek to diversify from theuncertainties of new drugdevelopment while existingproducts come off patent.

NORBEVWINS €35mDEAL

D R I N K S N E W S

P & G OFFLOADS

TGM

Heineken Irelandincreased its turnover andshare of the beer markethere in the first six monthsof this year but warned thatthe outlook for 2010remains “weak and unclear”.

The brewer increased itsturnover by 25 per cent to€211m and boosted itsmarket share to 27.1 percent. This was against abackdrop of declining salesin the Irish beer market asa whole, due to a fall inconsumer spending.

These figures included a

contribution from Cork-based Beamish & Crawford,which was acquired in2008.The deal addedBeamish stout and Fosterslager to Heineken’sportfolio in Ireland.

“In the face ofdeteriorating economicconditions, HeinekenIreland has deliveredpositive growth ahead ofthe market,” said DeclanFarmer, corporate affairsmanager of HeinekenIreland. “This has been

driven by very robust salesperformances from theHeineken and Coors lagerbrands and the newly-acquired Beamish andFosters brands.”

Around 40 staff at theBeamish operation joinedHeineken Ireland, whichalso has a brewery in Cork.Heineken Ireland employs441 staff.

Farmer said theBeamish brands - with theexception of Miller, whichdid not transfer - have all“performed ahead of the

market” and that the stoutwas “performing extremelywell”.

Heineken’s two stoutbrands - Beamish andMurphy’s account for morethan 10 per cent of thestout market nationally andmore than 50 per cent inCork.

The brewer is now thenumber one lager companyin the Irish market for thefirst time with a share of 28per cent.

TURNOVER UP AT HEINEKEN

Guinness held its own ina falling Irish market in theyear to the end of June, withsales of the black stuffremaining steady.

The performance cameas the overall alcohol marketdeclined by 4 per cent andbeer sales dropped by 4.7per cent, according tofigures released by Guinnessparent Diageo.

Within this smaller pool,Guinness increased its shareof pub beer sales by 1.3 per

centage points, or one inevery three pints pulled inthe Republic.

Across its range ofproducts, which includeSmirnoff vodka andBushmills whiskey, Diageosaid it performed ahead ofthe total Irish market, whichweakened by 4 per cent involume terms and by 3 percent in value over the firsthalf, according to industrydata from Nielsen.

Diageo products account

for 42 per cent of thedomestic market and, likemost other consumer-related businesses, it hasstruggled against recessionand a nosedive in consumerconfidence.

Profits across the globalgroup have, however, metforecasts with a 10 per centrise in what chief executivePaul Walsh described as “achallenging year”.

Diageo reportedoperating profits of

Stg£2.4bn on sales ofStg£9.3bn, which were flaton the previous year on anorganic basis.

Globally, Guinness saworganic growth of 4 per cent,with African sales growthparticularly strong at 18 percent. In Southeast Asia, thebrand’s largest market, saleswere up 11 per cent.

Across other brands,Diageo saw weakness inliqueurs, including Baileys,where sales dropped by 9per cent. A spokeswomansuggested the brand’spremium status may havemade it less attractiveduring a recession.

Bushmills was a flatperformer in general, but itsassociation with rugbyhelped it to grow slightly inthe Republic. Across thegroup, Diageo’s bestperformances came invodka, rum, tequila andbeer. Less strong were ginand wine.

Walsh said the resultshad demonstrated Diageo’s“resillience”. He said 2010should see the companydraw benefits from a€136m restructuring, andforecast “low single-digitorganic operating profitgrowth” next year.

GUINNESS SALES RISE

Paul Walsh

40 TGm

D R I N K S N E W S

42 TGm

White spirits represents the largestsector in the spirits market,representing an estimated 44% of totalspirits sales in Ireland. White spirits aredefined as those that are colourless; themost frequently consumed being vodka,gin and white rum. These spirits arepopular for mixing due to their mildertaste and clarity.

There have been challenging timesfor the spirits sector in the Republic fora number of reasons. Tax increases andthe smoking ban continue to impactsales. Equally, commoditisation hasbecome a difficulty for the larger drinkscompanies. As the main brands such asGordon’s or Smirnoff dominate sales,consumers are used to referring to theproduct by its generic name and tend toorder ‘vodka and coke’ or ‘gin and tonic’as opposed to ‘Smirnoff and coke’, orGordon’s and tonic’. The only exceptionto the rule tends to be Bacardi. As aresult, value brands maintain a strongposition in the off-trade in volumeterms.

The white spirits market is value at€553m based on volume sales of 8.8litres. Overall growth in this market islargely due to sales of vodka, whichrepresent 78% of sales. As vodka hasthe highest penetration level of allspirits it is the standard spirit for mostconsumers to drink. In this market,Smirnoff is the leader with an estimated68% share of the market in Ireland and80% of vodka volumes. A key trendwhich has emerged is that flavouredvodkas are gaining a strong footholdwith most of the top vodka brands

having a flavoured variant.Gin sales represent about 14% of

total spirit sales in Ireland. The markethas endured relatively flat sales of 1.2mlitres in Ireland. Some market insidersbelieve the problem with gin lies with itsconnotations as an ‘older persons drink’as it is still largely reliant on the 45+age group.

The gin category tends to bedominated by the two main brands ofGordon’s gin and Cork Dry Gin, with thepremium brands of Bombay Sapphirebelieved to be the third largest ginbrand.

White rum accounted for 8% of totalwhite spirits market, selling 0.7 millionlitres. Data shows no growth either inthe on-or-off trade sectors.

The off-trade continues to be themain channel for sales of white spiritsoverall and accounts for 52% volumesales in Ireland. Its relevance as anavenue for further sales grew by 12%.Analysis of leisure activity amongconsumers has found that at homedrinking has caused a great upset tothe growth of on-trade sales.

According to Mintel, the miniaturesmarket is still playing a significant rolewithin the alcoholic beverage market,particularly the off-trade sector. Thetriumph of brands like Bailey’s Minisshows how spirits manufacturerscapitalise on interest from infrequentusers who may not ordinarily purchasea 70cl bottle of spirits for homeconsumption. Unfortunately manyspirits brands available in miniaturebottles, are not backed by sales or

There are few who will doubt the impact of boom times on the drinks industry. It has been pretty much free-sailing for all drinks manufacturers over the last 12 years. Never has a population had so much [perceived]cash to play with. As much as boom times reflect the drinks industry, down times, or recession have evenfurther reaching consequences. Irish consumers have been slowing down and spending less for a couple ofyears now, long before the dreaded ‘recession’ word was ever emblazoned across a newspaper. Increasedactivity in the off-trade has reflected a trend towards in-home leisure and entertaining and this has actedas a direct hit on the on-trade and drinks manufacturers. The coming few years will be exceedingly interestingones for the industry, as well as interesting to see who will improvise, ride the storm or fail to meet somevery real challenges.

Spirits

September 2009 43

marketing clout and remain gatheringdust on back shelves. Marketresearchers believe that a number ofwhite spirits manufacturers couldgreatly benefit enhancement of sales byexploiting the miniatures sector.

The overall spirits market is showingno particular overall growth in saleswith vodka being the only marketshowing growth. The question arises asto why vodka has outshone generaltrends affecting all other spirits. Thefact that vodka is tasteless, and as sucha more adaptable mixer is an obviousfactor but another is the changingethnicity of the Irish population.

In Ireland, an estimated two-thirdsof the population increase isattributable to net immigration, withimmigrants from eastern Europecountries accounting for about 40% ofmigration. As vodka is the traditionaldrink in a lot of these countries this factalone has been a major driver in itsincrease in sales as well as theincreased number of brands on themarket.

If CSO figures are any indicator, this

trend for a net gain in migration willcontinue to affect the Irish populationover the next two decades.Consequently, as this immigration islargely anticipated from eastern Europefurther increases in vodka sales are alsoto be expected.

A number of leisure anddemographic factors have beenaffecting the spirits market in Ireland inrecent years. There has been aprojected decrease in 18-24 year-olds.This is likely to have a serious impact onthe white spirits market. This age grouphas generally been driven by leisureand a pocketful of disposable income,particularly as they were largelyunfettered by mortgages etc. However,the boom times have left us and thisage group may still be out lapping it upbut recession will undoubtedly put atemporary stop to it.

The 25-34 age group is significantfor the sales of vodka as they have moredisposable income and have tended toexpend a higher proportion on socialactivity. They have also more leisuretime and a greater desire to spend this

leisure time to drinking in a socialsetting, whether it is in a bar, club or athome. In this category vodka is thefavoured drink with which to get thingsstarted with or ‘warm up’ before goingout in this age group.

This age group is increasing in theRepublic and there are some factsabout them that drinks manufacturersshould be paying attention to. This agegroup is more likely to hold off frommarriage or settling down. When theygo out, these individuals visit more‘trendy’ or ‘style’ bars. Some of thesebars gave dedicated relationships withparticular brands, increasing sales andawareness of them, and potential futurepurchase.

The overall white spirits market isexpected to grow by 5% up until 2011with an average annual growth rate of1% per annum. Continued immigrationwill contribute to this volume growth inboth the on-and off trades while rumand gin should remain static overall.

[Source: Mintel]

Barry Fitzwilliam MaxxiumThe beginning of 2004 saw two

alcoholic drinks distributors, BarryFitzwilliam and Maxxium Irelandcreating a strategic partnership. BarryFitzwilliam (BFM) has an estimatedturnover of between €55m to €60m.The incorporation of Maxxium addeddistribution contracts for such brandsas Jim Beam, Absolut vodka, whichcomes in five flavours, Remy, Cointreauand Aftershock.

BFM specialises in the distributionof a complete range of spirits andwines from France and around theworld. Key spirit brands includeAbsolut, Aftershock, Sambuca andFamous Grouse. The companyprovides a nationwide service, and hastwo administration centres, Cork andDublin.

In early, 2006 BFM landed a€12m contract to distributeCourvoisier, Harvey’s Bristol Cream,Cockburn’s Port and Teacher’s whiskyamong other brands, previously ownedby Allied Domeq and distributed byC&C.

In 2004, the Great Spirits

Company (GSC), based in New York,announced that GSC was merging withIreland’s Roaring Water Bay SpiritsCompany to form Castle Brands Inc.The Roaring Water Bay Spiritscompany had enjoyed great successwith its Boru Vodka and Clontarf IrishWhiskey, and the relationship betweenthe two companies began when GreatSpirits started importing Boru Vodkainto the US in 2001.

Castle Brands alcoholic drinksrange includes Boru Vodka, SeaWynde, Brady’s Irish Cream, CelticCrossing, Pallini Limoncello,Knappogue Castle Irish Single Malt,Clontarf Irish Whiskey.

In 2006, Castle Brands’International sales totalled 43% oftotal case volume and experiencedsubstantial increases up from 95,870cases in 2005 to 117,154 cases. Rumwas the fastest growing category forthe company’s International business,as a result of a partnership withGosling, a Bermuda based rumproducer, with an increase from 400cases in 2005 to 13,500 cases in2006. Liqueur and cordial case sales

increased 104%, as did vodka saleswhile Irish whiskey sales werestagnant. In 2009 Barry Fitzwilliamacquired Castle Brands.

TGM

44 TGm

Cantrell & CochraneGroup sales for this well known

company are heavily weighted towardsthe Republic which accounts for 83% ofsales. Northern Ireland, on the otherhand, accounts for 5% of sales, with theremaining 12% coming frominternational trade.

Holywood & Donnelly is the licensedtrade division of the C&C Group inNorthern Ireland. The companyemploys about 70 people across allbusiness operations and distributesalcoholic drinks in the on-license tradein Northern Ireland, including bars andrestaurants.

In the FAB sector, C&C distributesWKD, Kulov Ice and Reef. Cider underthe Magners and Bulmer’s brands isanother successful brand with Bulmer’sholding 81% of the entire trade in ciderin Ireland, including 94% of the on-trade.

Castle Brands IncIn 2004, the Great Spirits Company

(GSC), based in New York, announcedthat GSC was merging with Ireland’sRoaring Water Bay Spirits Company toform Castle Brands Inc. The RoaringWater Bay Spirits company had enjoyedgreat success with its Boru Vodka andClontarf Irish Whiskey, and therelationship between the twocompanies began when Great Spiritsstarted importing Boru Vodka into theUS in 2001.

Castle brands alcoholic drinks rangeincludes Boru Vodka, Sea Wynde,Brady’s Irish Cream, Celtic Crossing,Pallini Limoncello, Knappogue CastleIrish Single Malt, Clontarf Irish Whiskey.

In 2006, Castle Brands’International sales totalled 43% of totalcase volume and experiencedsubstantial increases up from 95,870cases in 2005 to 117,154 cases. Rumwas the fastest growing category for thecompany’s International business, as aresult of a partnership with Gosling, aBermuda based rum producer, with anincrease from 400 cases in 2005 to13,500 cases in 2006. Liqueur andcordial case sales increased 104%, asdid vodka sales while Irish whiskey saleswere stagnant.

DiageoDiageo controls some of the most

successful and prominent brands in thebusiness in Ireland. As well asdistributing beverages on behalf ofother brewers and producing otherdrinks brands under license, thecompany has several priority brandswhich it markets globally, includingGuinness, Smirnoff, Johnnie Walker,Baileys, Captain Morgan and the andthe Cuervo tequila range.

Smirnoff Vodka and Gordon’s Ginremain the key players in the whitespirits market in Ireland. In factSmirnoff is a major part in the entire‘spirits’ segment. Gordon’s position isnot number one in Ireland however, thisaccolade goes to Cork Dry Gin.Gordon’s Gin has recently tried to playupon its dominance with an advertisingcampaign centred on the concept of‘Gordon’s and Tonic’ as opposed tosimply ‘gin’.

Edward Dillon & Co2007 saw spirit and wine

distributors Edward Dillon & Co movefrom its long-established premises onMountjoy square to 1,248 sq metres ofoffice space in Estuary House in eastPoint Dublin. Edward Dillon & Co is awine and spirit distributor with aturnover of an estimated €150m. In2004, Diageo sold its 33% share in thecompany and ended a long standingdistribution agreement with EdwardDillon to distribute some of its topbrands.

As a result of the new arrangement,Bacardi, Brown-Forman and MoetHennessey increased shareholding inEdward Dillon & Co to take up the fullissued share capital of the company,and each has entered into new long-term distribution agreements with thecompany. Among its top brands include,Grey Goose Vodka, Bacardi, BombaySapphire Gin, Bacardi Breezer range,Hennessey, Southern Comfort, JackDaniels, Carmen Wines, Eaglehawk,Santa Julia, Wolf Blass, Moet &Chandon and Sandeman.

FindlaterGrantsGroup sales for this well known

company are heavily weighted towardsthe Republic which accounts for 83% ofsales. Northern Ireland, on the otherhand, accounts for 5% of sales, with theremaining 12% coming frominternational trade.

Spirits

September 2009 45

Holywood & Donnelly is the licensedtrade division of the Findlater Grants inNorthern Ireland. The companyemploys about 70 people across allbusiness operations and distributesalcoholic drinks in the on-license tradein Northern Ireland, including bars andrestaurants.

2008 sees some new additions tothe portfolio. this year FindlaterGrantshave introduced a new spirit to both ourportfolio and the Irish Market – RussianStandard Vodka. Russian StandardVodka is Russia’s number one premiumvodka and is the only premium vodkadistilled and bottled exclusively inRussia available on the Irish market.

For over 25 years Grand Marnierhas been the most widely exportedFrench liqueur. Today Grand Marnier isavailable in over 150 countries. Sogreat its success that a bottle of GrandMarnier is sold every two secondsworldwide. Grand Marnier has longbeen the liqueur of choice for use in avariety of cocktails and this continues tobe the case. Any bar would seem to belacking without the distinctive GrandMarnier bottle among its offerings.

The Marie Brizard brand wascreated in Bordeaux, a regionrenowned throughout the world for itstradition of quality wines, in 1755.Since then, the brand has grown fromstrength to strength with its growthperiod fuelled by the company'sdecision to branch out into a wide range

of cocktail-based liqueurs, spirits andsyrups. In Ireland, the Marie Brizardbrand is very prominent in the cocktailsector. The Marie Brizard brand ofliqueurs has a reputation and a know-how that are rivaled anywhere in theworld and thus their liqueurs are a mustin the typical Irish cocktail.

Glenfiddich, the World’s no. 1 singleMalt Scotch Whisky, is the onlyHighland malt whiskey to be distilled,matured and bottled at its distillery.Unlike many other malt whiskies thatbottle their expressions at 10 years,Glenfiddich is always at least 12 yearsold when bottled. It is not surprisingtherefore that Glenfiddich is the mostawarded single malt Scotch whiskey inthe world – having won more IWSC andISC awards than any other single maltsince 2000.

Tullamore Dew, one of Ireland’sfinest and most widely distributedwhiskeys, was first distilled in 1829 inthe small town of Tullamore in CountyOffaly.

The name derives from the initials ofan early owner, Daniel E. Williams –DEW.

Tullamore Dew is the fastest growingIrish Whiskey and is now the numbertwo bestseller in the world (IWRS2007). It is the number one selling Irishwhiskey brand in Germany, Sweden,Denmark and the Czech Republic, andthe leading overall whiskey brand inBulgaria and Latvia, outselling Scotchby a significant margin.

In addition, the brand announced a20% growth in the year to February2008, making Tullamore Dew by far themost dynamic brand of Irish whiskeyinternationally.

Distributed in the Republic ofIreland by FindlaterGrants, RussianStandard Vodka is Russia’s No.1Premium vodka and ranked 4th fastestgrowing spirits brand globally in 2007(Impact Magazine Feb ’08). Since thebrands launch in spring 2008 in Irelandit has secured nationwide distributionand supported by a heavy weightadvertising campaign awareness forRussian Standard vodka has risen to41% of Irish vodka drinkers (MillwardBrown IMS Research, Jul ’08). Alreadya classic in Russia, the homeland ofvodka, Russian Standard is rapidlybecoming a signature choice the worldover.

Irish Distillers LtdIrish Distillers is a division of Pernod

Ricard and as such distributes a wealthof premium brands both in Ireland andinternationally. It distributes theproducts itself in Ireland.

Its brands include HuzzarVodka,ABSOLUT vodka, Cork Dry Gin,Pernod Ricard, Malibu, West CoastCooler, Jameson, Murphy’s, Paddy’s,Powers, Jacob’s Creek, Ernest & JulioGallo, Long Mountain, Martell.

TGM

Few deals in the world ofinternational drinks matched lastyear’s acquisition by PernodRicard,the parent company of IrishDistillers, of the iconic Swedish vodkabrand, ABSOLUT. As the number onepremium vodka brand in the worldand as the fourth largest spirit brand,ABSOLUT went from selling 10,000cases in 1979 to selling 10.7 millioncases in 2007.

ABSOLUT is very much aninternational success story. Thiscommercial success is all the moreremarkable when one considers thatABSOLUT emerged onto theinternational scene in early 80’s fromunder the Swedish monopoly systemwith little or no international tradingexperience. According to PeterGallogly, Commercial Director for IrishDistillers Pernod Ricard, “We are in auniquely strong position in the Irishmarket, with 5 of the top 10 spiritsbrands. ABSOLUT is a fantasticaddition to our portfolio and trulypositions us as a leading player in thedynamic vodka category.”

Much of the success of IrishDistillers is down to the continuedswift growth of the Jameson brand; itslargest market, the US is growingrapidly, along with South Africa,Russia and Brazil. Founded in 1791by James Power, the brand’s fortunesrose dramatically under John Power.Powers was the very first distillery tobottle its own whiskey in 1886,adopting a gold label (similar to thefamiliar one today) exclusively forPowers bottled at John’s lane. Henceit became, and still is, the custom inpubs around the country to call for a‘Gold Label’.

Powers Gold Label is a rich, round,complex and full-flavoured drinkingexperience, rates “One of the best inall Ireland. Classic stuff,” in JimMurray’s Whisky Bible 2008. Powers12 Year Old Special Reserve retainsthe classic Powers’s spicy,honeyed,full-bodied flavour, enhanced andenriched by years of extra ageing incarefully selected American oakbarrels and is best enjoyed neat, orwith a little water.

Powers also pioneered the use ofminiature bottles – the famous ‘Baby

Powers’, among other first.Powers is tripled distilled forpurity and matured in oak barrelsfor up to seven years.

46 TGm

Spirits

Few will doubt the evolution of themale grooming market. No longer justabout razors and shaving foam, themarket comprises some key segmentsincluding deodorants, shavingpreparations, personal wash products,men’s skincare, men’s haircare andmen’s bodycare.

Regardless of changes in thetraditional makeup of households,women remain the principle shoppersfor families. This means that women arebuying grooming products for youngmen under-18 (including under-25 menstill living at home) as well as forhusbands and partners.

The majority of male groomingproducts are seen as a household stapleitem and as such can be purchasedwithout the input of the male consumer.This remains a disadvantage tocompanies and retailers alike who needto encourage men to become moreengaged in products.

Men’s literature such as weeklymagazines is important incommunicating what is available on themarket as well as the benefits of theproduct. In a similar way to women’smagazines, samples could be offered inevery issue to encourage male readersto try new products.

The male grooming market shouldnot be underestimated. One of themain drivers is the growing number ofmen who are interested and concernedwith their appearance. Men are nowbeing advised about how best to dressand also how to take care of their hairand skin. This has been in part led bymen’s magazines and prominent malecelebrities such as David Beckham andGeorge Clooney.

A decade ago, men could not haveas easily availed of information that isaround today. Aside from magazine,men are readily receiving informationabout grooming products on the

internet which have long removed anydoubts about looking after one’sappearance.

As women are likely to be the mainpurchasers of male grooming products,the industry needs to appeal beyondthe male audience and into the femalemarket. Some ways to attract attentionwould be to use male models at beautycounters in the larger departmentstores, free samples of male groomingproducts in women’s ,magazines with acoupon for repeat purchasing and moreadvertising in the female orientatedmedia.

The male grooming market, allIreland basis, is valued at €103.1m,increasing by 24%. The market in theRepublic is worth €62m rising by 26%.The multinationals dominate the malegrooming market with own label brandsfrom retailers holding a marginalproportion of retail sales. Gillette iscurrently the market leader in theshaving preparations category, with noother brands remotely close to itsposition, with disposable razors, razorsand shaving preparations. There isfurther potential to develop the Gillettebrand in other areas of the market, asmen may be more disposed to buying abrand if they already have a positiveexperience of it in another marketsector.

Deodorants account for the largestsector of the market, valued at€18.2m, representing 29% of themarket share. Shaving preparations arethe second-largest segment of the malegrooming market accounting for 25% ofthe total market value and worth€15.6m. Personal wash and bathroomproducts, including shower gels andbath oils currently hold an estimated20% of the male grooming market,worth an estimated €12.2m. Skincareproducts are worth €6.8mrepresenting 11.0% of the market

Older men’s routines consist oftaking a shower or a bath, washing hairand cleaning and flossing teeth. Whilstmen in the younger sections of thepopulation, notably those aged 15-34will be more engaged in the market andinclined to use products that fall outsidethe realm of personal hygiene such ashair styling and skincare products.

Younger men no longer considerconcern over their appearance as acompromise on masculinity. These menwill be most likely to adopt new forms ofmale grooming such as skincareroutines. Whilst men in the oldersections of the population are not aseasily convinced and will have a verytraditional method of grooming whichinvolves primarily washing and shaving.

Older men will have taken groominghabits from their younger years into adifferent life stage and will be leastlikely to experiment with differentbrands/products. These men mightwelcome products such as haircolorants or skin treatments thatenhance the texture or colour of theskin by providing a healthy glow.

There are very few shampoos on themarket to treat hair thinning orbaldness, which affects a considerableproportion of the male population overa certain age. Manufacturers shouldembrace this trend by offering a widerselection of products to address thisneed. Other types of skincare productssuch as facial scrubs and under-eyetreatments are less likely to be used bymen in the greying years and it mightbe impossible for manufacturers to everturn this around.

Male grooming products such asanti-ageing skincare, anti-cellulite andbody firming treatments and hairremoval creams are still very muchniche products and it is difficult topredict if these will move into

For a number of years now there has been growing pressure for the average man to take care of himself and hence,spend more money doing it. As a consequence, the media has pushed this concept, backed by multinational healthand beauty companies, to acceptability. The challenge for this market is to encourage men to adapt to more varied

daily grooming routines without compromising their masculinity.

Health & Beauty

TGM

48 TGm

mainstream or not.Manufacturers need to be careful in

terms of the language they use to targetmen by not over using scientificterminology, as with the women’scosmetics market, and bycommunicating the functional benefitsof the product without bogging medown with to much fact.

Usage of anti-ageing treatmentssuch as under eye creams orgels/creams to reduce bags, collagen

fillers and anti-wrinkle moisturisersare not strictly confined to the femaleconsumer base. There are a few male

specific anti-ageing treatments on theskincare market for men to treatwrinkles under-eye bags and skinslackness, however nowhere near thesame level as for women. There ispotential to further develop this marketsegment when targeting men withskincare products as men are alsoconcerned with the ageing processdespite the fact that some men are notwilling t admit to being so.

Men are far behind women in termsof the purchasing of personal care itemsand ‘embarrassment’ may be onereason for a reluctance to spend of arange of items. Data shows that at leastone in five men is put off skincareproducts because they perceive them tobe female products. In one survey, it

was acknowledged among participantsthat certain brands and environmentsare more permissible than others.Nivea for Men has quite cleverly tappedinto this market and was seen to beacceptable and appropriate.

This is perhaps as this product fitsinto the ream of shaving, rather thangeneral personal care and en felt it wasa ‘male’ brand and not one with overtfemale overtones. It was noted that thelevel of discomfort with the issue ofextending male grooming was reflectedin the switching of male respondents totalking a ‘third party’ rather than

themselves.Another interesting finding was that

the adoption of products may be limitedby the lack of other people adopting theproducts. Men agreed that they wouldhave to accept a certain degree ofteasing from friends but as thebehaviour became more predominantthen it would become a normal activityand ‘they’d all be at it!’ (Male, aged 18-25). Consequently, marketers may findthat encouraging women to buy onmen’s behalf might increase productuse and adoption.

Christmas is a key time of the yearto purchase gifts for loved ones.Christmas is the ideal time toencouragement to try products theywould not normally use in the hope that

they will see the benefits of the productonce tried and tested eventually made arepurchase. Likewise gift packages canencourage people to buy products formen that they would not normally buyfor themselves. One good example isanti-ageing treatments or facialtreatments.

Future projections show a steadyrise in this market over the next sixyears. Mintel predicts that the malegrooming market will rise by 25% in thenext three years. The most difficultchallenge for manufacturers will be toencourage men over the age of 40 to

expand upon theircurrent male groomingroutine that tends toconsist mainly ofshowering, shaving andhair washing. Productswhich meet functionalneeds such as haircolorants for themoustache, beard andsideburns may be aneffective way oftargeting this categoryof men.

The deodorantsand antiperspirantssector has expanded toinclude a wider rangeof formats outsidetraditional aerosolcans. Growth in themarket has beendriven byantiperspirants whilstbody sprays, accordingto trade sources seems

to be in unit decline. The market hasseen a steady rise in brandedmanufacturers with aerosol offeringslaunching antiperspirant roll and stickformats.

There has been a slight blurring ofthe boundaries between the maledeodorants and body sprays with Lynxincluding Lynx Dry, a body spray withanti-perspirant properties. New productdevelopments in the deodorants marketclaim to offer improved staying power interms of increased durability. Sure andNivea are two of the leading layers inthis market with a range ofantiperspirant deodorants for men andwomen. The Nivea deodorant range ofmen has expanded to even includedeodorising wipes in recent years.

Health & Beauty

September 2009 49

TGM

The shaving preparations sector,encompassing both disposable razorsand pre and after shaving treatments,has experienced a particularly high levelof innovation in recent years in terms ofnew product development. Disposablerazors led primarily by Gillette, haveincreased the number of blades toimprove the effectiveness of the productand further segment market.

Gillette continue to be marketleader in the blades, disposable razorsand shaving preparations markets andis the only brand to excel in bothmarkets. Gillette blades and razorsaccount for 78.3% of the total marketshare and the company holds 60.9% ofthe shave preparations category.Gillette is driving new productdevelopment and category growth withstrong investment in the brand throughmarketing support such as sponsorship,advertising and celebrityendorsements. Other brands which arestrong in this sector include WilkinsonSword and BIC.

Sure for Men sport shower gel andAdidas Active Body care range for men,which includes shower gels anddeodorants, offer personal washproducts for male grooming. Othermanufacturers of male groomingproducts include Radox, Lynx andPhysio Sport. Shower and bathproducts are increasingly offeringmultiple benefits, outside the usualcleansing properties such asmoisturising, nourishing and skinprotection. Manufacturers havelaunched several sports shower gels toappeal to men participating in sportsactivities including gym usage.

Some of the leading brands in theskincare market have extended theirproduct portfolio by moving into thepersonal wash market including Doveand Nivea. The Nivea for Men range,from Beiersdorf is a top performer inthe personal wash sector, consisting ofMoisturising Shower Crème,Revitalising Shower Gel, Fitness Gel andEnergising Shower Gel.

The haircare market for men hasstill to reach its full potential incomparison with other sectors of themale grooming market. Men primarilyuse unisex brand offered bymanufacturers such as Wella,Shockwaves, Pantene shampoo andHead and Shoulders which all target

men in their advertising campaigns.Manufacturers have been slow indeveloping male specific shampoos andconditioners mainly due to the fact thatthey feel men will not respond to theseproducts and will continue to useestablished brands.

Premium manufacturers such asClarins and Clinique have been muchquicker to respond to demand for malespecific haircare products by offeringhair and scalp treatments for men.Manufacturers have been reluctant tolaunch hair conditioners for men asthere is a distinct possibility that menwill not buy into this market sector. Hairconditioning products for men aremainly offered as 2 in 1 combination –shampoo and conditioner in one. This isprobably die to the fact that men willnot spend time applying conditionerafter they wash their hair and want oneproduct that cleanses and washes inone go.

New product developments in hairstyling products for men, including wax,gels, sprays, mousses and serums, havebeen more active than with haircleansing or conditioning products. Hairstyling products are increasinglybecoming an important part of the malegrooming routine as men take morepride in having their hair cut regularlyand using hair styling products toachieve a certain look.

Hair colorants for men arebecoming more widely used withmanufacturers such as L’Oreal andWella into the needs of the makeconsumer. Some men are probably justas concerned with going grey as womenand will be willing to spend money onhair colorants to use in the privacy of

their home. The range of hair colorantson the market for men is much morelimited than for women with productssuch as Just for Men displayedalongside other male groomingproducts rather than in the hair dyeaisle.

The skincare market for men isdeveloping as a new productdevelopment activity is growingalthough nowhere near the same paceas for women’s skincare products. Themarket leader in the skincare market isthe Nivea brand by Beiersdorf Niveapioneered the entry of skincareproducts for men with the launch ofNivea for Men in the male groomingmarket. The Nivea brand was already astrong contender in the women’sskincare market and successfully madethe transition into the male groomingmarket due to the strength of the Niveabrand.

The Nivea brand is no longer theonly mainstream brand competing inthe skincare market with entry ofL’Oreal Paris Men Expert. L’Oreal usedthe colours orange and silver in itsbrand packaging to ensure the productwould stand out POS against othermasculine colours.

Premium skincare brands for menare starting to increase their presencein the skincare market now that menare prepared to pay more for qualityand added skincare benefits. Brandssuch as Clinique and Clarins for menhave extended the range of productsnow available for men to includeexfoliating treatments, under-eyeconcealers and anti-ageingmoisturisers.

]Souce: Mintel

50 TGm

The Irish household care marketexperienced slightly stronger growthafter two years of stagnancy. The mostimportant product segment ofhousehold care – laundry care – faceddecline as a result of competition fromthe multiple sector as well as thegreater influence of lower prices atdiscounters.

Equally, other key categories liketoilet care, dishwashing products andaircare continue to show confident salesgrowth. Dishwashing products showeda significant turnaround inperformance, augmented by a flurry ofnew product development (NPD). Thismature market has been revitalised byvalue-added detergent tablets, such asFinish 5-in-1 Powerball and Fairy Active.

The years of economicprosperity have had a positiveeffect on the household caremarket. While consumers hadgreater discretionary incomelevels, there is less time to spendon household chores. As a resultthe market as a whole witnesseda wave of all-in-one productscapable of doing more than onecleaning job at a time, includingkilling germs, smelling nice, extracleaning strength, convenientlypackaged and of course,premium priced.

Equally, home improvementshave been one of the mostpopular trends of wealthyIreland. Manufacturers were

therefore creating innovative and value-added cleaning solutions. This has beenthe case in the market for some yearsbut there are challenging times aheadas global economies, includingIreland’s, struggle in recession andconsumers’ priorities come into sharpfocus.

Suddenly, consumers will questionthe need for an all-in-one super brandname when a supermarket own labelequivalent can do the job but moreimportantly at a fraction of the cost. Bigname brands are undoubtedly facingpressure from own label household careproducts as value takes on a newimportant role on the slimmed downshopping list.

Unilever Plc, Procter & Gamble(Manufacturing) Ireland Ltd and ReckittBenckiser Ltd have maintained their topthree positions. All three leadingplayers continue to invest in marketingand NPD to sustain their shares in therather mature marketplace. However,unsurprisingly the own label share gain

Although 50% of women are out working, 70% claim they are left todo most o the cleaning household chores and this is encouraging ashift to a little and often approach to cleaning. Household cleaning isstill seen as a chore as people generally feel they don’t have enoughtime to spend cleaning the home; this is underlined by the fact that

they would rather be doing something else.

Household

September 2009 51

remains tops with each of the topmultiples claiming to have increasedpenetration of own label householdcare. Own label benefits from theconsistent belief from shoppers thatthat the quality of own label is exactlythe same as premium priced brandequivalents.

Ireland has one of the highest birthrates in Europe. The years of strongeconomic growth have meant thatyoung and professionally qualified Irishconsumers stayed at home, while anincreasing immigrant population wasattracted to living here. This created anincrease in the number of householdsand a higher spend amongst thepopulation which has helped to pushvolume and value growth in householdcare.

There is expected to be a slowdownin growth over the next few years notjust because of recession, but asmanufacturers struggle to conjure upnew products and major innovations.Rather than product launches that

focus on physical attributes andfunctionality, NPD will increasinglyfocus on more abstract and intangibleproperties such as fragrance and colour.Air care currently focuses on theseareas and is expected to see thestrongest value growth as a result.

There have been many importantimprovements on traditional householdcare products assisting unpleasanttoilet and floor cleaning. With this inmind, manufacturers have focused onimprovement of products that arehoned to make the most hatedhousehold chores easier.

The introduction of ‘Bucketless’mopping systems, designed to replacethe traditional Mop & Bucket approachto cleaning has been a significantdevelopment in the household caremarket. Consumers who are loathe tocleaning floors with spill-prone bucketsand unsanitary mop heads have gladlytraded up to these new systems.

As a result more traditional floorcleaning products have experienced a

decline following the success of easierto use floor cleaning systems.Manufacturers also saw a gap in themarket for similar devices to make toiletcleaning less of a chore for consumers.Toilet cleaning is understandably theleast favoured household chore forconsumers and there are valid concernsabout the possibilities of germs on thetoilet brush.

TGM

52 TGm

Disposable, refillable, replaceableand flushable cleaning devices haveemerged as a consequence whichmeans consumers can operate cleaningefficiently and thoroughly withoutworrying about lingering bacteria.Similar advances have been made onperceived ‘dull’ household cleaningproducts such as wipes, fabricfresheners, car fresheners, liquidcleaners, gel cleaners, 3in1 cleaners.

The relevance of innovation to mosthousehold care manufacturers isunderlined by the fact that for somecompanies up to 40% of revenues comefrom products that are no more thanthree years in the market. Newproducts coming on the market in thefuture are likely to include solutions tocleaning problems many consumersmay not have even considered, such ascleaners which seek out‘invisible’ stains and laundryproducts that not only protectfrom lime scale build-up inwashing machines but also inclothes.

Such higher margin newproducts are backed by someserious advertising spends.For instance, Reckitt Benckiserrevealed that it’s alreadysubstantial marketing budgetincreased by 10% over thefirst half of 2008 or more than13% of its revenues.

Household fresheners arethe largest growing sector ofthe household care market.The market is being driven bytechnological advancesnotably in the time releasesegment and the evolution ofa wider range of formats.Marketing initiatives seekingto elevate the status of the airfreshener to lifestyle accessoryhave also helped furtherpremiumisation.

Killeen is the no. 1 playerin the cleaning product andrefuse sack market, with awhopping 37% market share(AC Nielsen 2007) and isdriving the category withinnovations to meet the everchanging needs of Irishconsumers.

The Killeen range isremarkably effective and

convenient and the products deliver apowerful combination of highperformance whilst remaining value formoney for the consumer.

The continued success of cleaningproducts such as Killeen ‘Aware’Biodegradable Refuse Sacks, 4 packmicro Fibre Cloths and 6 pack Mop Upsdemonstrates Killeen’s ability andcommitment to meeting the continuouschanges in consumer behaviour.

The Killeen Glove range hasperformed outstandingly well since itslaunch in Summer 2008. The Smartcuff– which minimises spills and dripping;Sensitive – which is designedspecifically for those allergic to latexand Strong Scented – bring the scent ofzesty lemon to your home, are justsome of the best selling products. Forgarden lovers there is the Kileen garden

fingers glove and really tough outdoorglove.

The challenge for manufacturers isto ride the change that is puttingpressure on consumers to improve theirgreen credentials. Although the marketis continuing to innovate and invest inmarketing spend, there is no doubt thatthe credit crunch combined with therising cost of fuel, food and power hasleft many consumers keen to reducetheir usual brands benefitting own labeland discount brands.

[Source; Euromonitor]

Household

Do you sell or intend to sell tobacco products by retail?You must register with the Office of Tobacco Control. Section 37 of the Public Health (Tobacco) Acts, 2002 and 2004,provides for the establishment and maintenance by the Office of Tobacco Control of a register of all persons who carry on in whole or part the business of selling tobacco products by retail.

All retailers wishing to sell tobacco products must register with the OTC. It’s the law.

Download “Guidance for those selling Tobacco Products” at www.tobaccoregister.ie

What does this mean for Retailers?

If you sell or intend to sell tobacco products by retail whether over the counter or from a self-service vending machine you must register with the Office of Tobacco Control (OTC).

A person who, prior to 1 July 2009, carries on the business of selling tobacco products by retail must apply to register with the OTC between 1 July and 1 October 2009.

A person who proposes to commence the business of selling tobacco products by retail from 1 July 2009 must register with the OTC before they can sell tobacco products.

In relation to self-service vending machines, both the owner of the self-service vending machine(s) and the holder of a license for the sale of alcohol for a licensed premises or the person entered in the register of clubs in which the machine is located must register. Tobacco products can only be sold when both parties have registered and are entered on the register.

To register online visit: www.tobaccoregister.ie or lo-call 1890 333 100

To keep the register up to date you are required to notify the OTC of any change in particulars.

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