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In this months issue

JUNE 2011

While Irish shoppers are aware of Iceland from its UK ads andcelebrity endorsements, most would have been unaware that ithas returned to Ireland after leaving 5 years ago.

In the Republic, where Musgrave operates the SuperValu,Centra and Daybreak symbol groups, the group’s turnoverdeclined 3.6 per cent to €2.6 billion.

Musgrave, the owner of SuperValu, is understood to have madean approach to buy Superquinn, the upmarket chain. However,the prospect of a deal may hinge upon the attitude ofSuperquinn’s banking consortium

2 NEWS

12 ICELAND - A NEW BEGINNING

18 MUSGRAVE PROFITS UP

24 WHOSE NAME OVER THE DOOR?20 NEWS

28 NEWS

30 FOODCENTRAL - NEW FOOD PARK

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

Sarah GriffinContributors: Emma Maguire

Daire WalshCirculation: 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.

32 FOCUS - DRINKS

40 FOCUS - DRINKS BEER

44 FOCUS - DRINKS CIDER

58 BLOOMING RECORD FOR BORD BIA

60 NEWS - DUNNES RETURN TO GROWTH

61 NEWS - THE NATIONS ‘SWEET HEART’

62 DROMBEG INSPIRES NEW BUSINESS VENTURE

64 NEWS - OPEN FOR BUSINESS

66 NEWS - MOYPARK SHAREHOLDER SUES

68 NEWS - A LESSON IN MAKING CRISPS

48 FOCUS - DRINKS SPIRITS

52 FOCUS - DRINKS WINES

A masterplan for the development of FoodCentral, a 113hectare food park located beside Dublin Airport has beenprepared in consultation with Fingal County Council.

2 TGm

Marks & Spencer havebeen doing what they dobest for almost 120 years,but is failing to display itswares to best advantageand customers are havingtrouble negotiating theirway around the ranges.

Along with having theright products at the rightprice, ensuring that storesare attractive and easy tonavigate must surely be themost basic of retail skills.

Marc Bolland presentedhis first set of full-yearfigures since taking overfrom Stuart Rose, admittedit’s a skill M&S appears tohave lost somewhere alongthe line.

However, fixing it willnot come cheap - the groupis ramping up its capitalexpenditure to Stg£900million to finance a revampof its 600-strong UK shopschain. This will include thereal basics such as bettersignage; improved labelsand packaging and betterstore layouts.

M&S also plans toexperiment with tailormadestores for different areasand, from autumn, will pilotstore formats that stockranges specially selected forlocal shoppers. The rangeswill be chosen according todemographics of thecatchment area with age,affluence, ethnicity andregional tastes taken intoaccount, as well as thepresence of rival retailers.

This is not the first timeM&S has overhauled itsstores in recent years -Bolland’s predecessor, SirStuart, launched a lavishprogramme that draggedon for years. Yet it emergedthat almost 100 M&Sshops missed out on thatrevamp.

Bolland’s take on it isthat while the most recentmodernisation programmebrought improvements tothe core infrastructure, itfailed to deliver an“inspirational” shoppingexperience. That is what heis aiming to achieve overthe next three years, adetermination underlinedby the appointment of a

new director of space, NeilHyslop, who headed M&Soperations in NorthernIreland.

Tailoring ranges fordifferent stores seemssensible - though therewere fears among somecustomers that those whodon’t live in the “right” areamight be denied the bestranges.

M&S’s performance lastyear was judged to begood, with profits coming inahead of forecasts atStg£714m. That is anincrease of 13 per cent onthe previous year.

But it still leaves it wellshort of the Stg£1 billionthe group made in2007/2008.

N E W S

M&S demographic Targeting

Marc Bolland

June 2011 3

Drinks giant Diageo hastold staff in Ireland that itwould seek redundancies insupport functions andmarketing as a result of areorganisation of thebusiness across Europe.

It is understood thatDiageo is seeking to achievelabour cost savings of €8million a year. This couldresult in more than 70redundancies in Ireland,where it employs 1,700staff on the island.

Staff were informed ofDiageo’s plans at a series ofbriefings.

The changes willprimarily affect supportfunctions and marketing,and will not impact onDiageo’s manufacturingoperations or itsStorehouse visitor centre.

Diageo plans to consultwith employees on therestructuring, and isexpected to offer voluntaryredundancies.

John Kennedy,managing director ofDiageo Ireland, said thechanges were “absolutelyessential” to ensure thatDiageo continued to have a“competitive andsustainable business” inIreland.

“Diageo is fullycommitted to Ireland andhas very significantoperations here that are anessential element of ourcompany’s operationsglobally,” said Kennedy.

“However, we do need tomake changes and delivergreater efficiencies in someof the support functions ofthe business.

The latest decision isshaped by a sharp declinein beer sales in Ireland inrecent years due to therecession and other factors.

In February Diageo saidIreland was the “key driver”of a 4 per cent net salesdecline in beer in Europe inthe first half of its tradingyear. This was attributed toweakness in the “on-trade”,particularly in rural areas.

In 2008, Diageounveiled plans to build a

super-brewery in Kildare aspart of a €650minvestment that would haveresulted in the Kilkenny andDundalk brewing closingand some land at StJames’s gate being sold.The plan was put on ice atthe start of 2010 due to therecession.

TGM

Diageo looking to cut 70 jobs500 whiskey lovers

attended the first everWhiskey Live held in theMansion House, Dublinrecently.

The affair was officiallyopened by Dublin LordMayor Gerry Breen.

The one day eventshowcased Irish whiskey, itsdistilleries and the successof the industry, and was thefinale of the inauguralWhiskey Week Ireland. Alsoon show were a number ofinternational whiskeybrands, whiskey foodpairing, a whiskey cocktailmixologist and CooleyDistillery’s cooper who heldan interactive workshop onthe ancient art ofcooperage.

“We are delighted withthe success of the first everWhiskey Live in Dublin,”said Damian Riley-Smithfounder. “The responsefrom the industry and thegeneral public has beenphenomenal. We hope tobuild on this success andcome back even bigger andbetter next year.”

A series ofMasterclasses hostedthroughout the day weresold out.

The Whiskey Livepackage also included agourmet meal served in thebespoke dining area of thebalcony level of theMansion House’s RoundRoom.

IN SHORT

Shares in conveniencefoods group Greencore fellby 3.2 per cent in Dublinrecently as it posted a lossfor the first six months ofits trading year andcautioned that consumerbuying would “remainsubdued” throughout 2011.

Greencore recorded aloss of €251,000 for thesix months to March 25thcompared with a profit of€25.1 million in the sameperiod of 2010.

The turnaroundreflected an exceptionalcharge this year of €17million and the strippingout of discontinuedoperations (it exited maltand bottled water), whichcontributed €16.4m toGreencore’s bottom lineprofit in the first half of lastyear.

Greencore’s exceptionalcharge included €13 millionin costs associated with itsunsuccessful attempt toacquire UK-based rivalNorthern Foods this year.

Greencore’s revenuesrose by 7.9 per cent to€442 million while itsoperating profit, beforeexceptional items and

acquisition-relatedamortisation, was up 17per cent at €27 million.

Convenience foodsturnover rose by 8.2 percent to €402.4 millionwhile the operating profitwas 4.9 per cent higher at€26 million.

In sandwiches, the valueof sales rose by 8.4 percent in the periodcompared with 2.6 per centfor the market as a whole.In chilled ready meals,Greencore achieved growthin value of 19.3 per centagainst a market increaseof 9.4 per cent.

Its US conveniencefoods “made considerableprogress” in the period,Greencore said.

Patrick Coveney,Greencore’s chief executivesaid that the performanceof its ready-meals divisionas “very good” while thesandwiches division was“solid”. Its Yorkshirepudding and cake units sawsales soften but the harshwinter weather ofDecember and Januaryboosted its soup products.

Irish produced honeywas found to be a healthierchoice than imported honeybecause it contains lowerlevels of the chemicalhydroxymethylfurfural(HMF), according to arecent scientific studycarried out at the LimerickInstitute of Technology.

While HMF is naturallypresent at lowconcentrations in mostfoodstuff, the heattreatment involved inprocessing honey can leadto elevated concentrationsof the chemical.

commercially processedhoney undergoes heattreatment to prevent ordelay crystallisation or tomake it easier to packageand make it moreaesthetically pleasing.

Heat treatment trialsshowed that local Irishhoney maintained levels ofHMF well below EU limitswhile all the other honeysexceeded the upper limit of80mg/kg in the sameconditions.

“The EU has set anupper limit of 40mg/kg ofHMF in honey, while honeywhich originates fromtropical climates areallowed levels of up to

80mg/kg,” said SaoirseHoulihan, who carried outthe work.

“Our results show thatthe local artisan honey hadthe lowest levels of HMFand was significantly belowthe EU limit of 40mg/kg,while the two honeys ofinternational origin were atthe upper limits of the80mg/kg EU limit.”

Houlihan used Irishhoney sourced in a healthfood shop and from abeekeeper in Co Clare. Theinternational samples werea household name andsupermarket’s own brandrange.

4 TGm

N E W S

Patrick Coveney

Greencore USmakes progress

Irish honey a healthier choice

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Eating chocolate could beassociated with a one-third reductionin the risk of developing heartdisease, a study from the Universityof Cambridge suggested.

Researchers from the Departmentof Health and Primary Care analysedthe results of seven previous studiesinvolving more than 100,000participants.

For each study they compared thegroup with the highest chocolateconsumption against the group withthe lowest.

Presenting the results, Dr OscarFranco said the studies did notdifferentiate between eating dark ormilk chocolate, but included theconsumption of chocolate drinks anddesserts as well as chocolate bars. DrFranco and his colleagues said “thehighest levels of chocolateconsumption were associated with a37 per cent reduction incardiovascular disease and a 29 percent reduction in strokes comparedwith lowest levels.”

However he stressed the studieswere all observational in type and soother reasons for the reduction indisease could not be ruled out.

Previous research has shown thebenefit of chocolate on health due toits anti-inflammatory and antioxidantproperties. These include reducingblood pressure and improving theeffectiveness of insulin which, in turn,helps to slow down the developmentof diabetes.

Asked to define the optimum doseof chocolate to bring aboutcardiovascular benefits, Dr Francosaid his study was unable to quantifythis.

He called for further research tobe carried out to test his findings andwarned it was too early to rewriteguidelines for healthy eating andlifestyle. He also suggested thatinitiatives to reduce the current fatand sugar content in most chocolateproducts should be explored.

OOhh so good!!

TGM

June 2011 5

6 TGm

Drivers ditch cars

Retail sector struggle

€2.1m for Executives

N E W S

Drivers are opting toleave their cars at homewith sky-high fuel pricescontributing to a gloomyretail landscape.

Plummeting fuel andfurniture sales contributedto the worst fall in retailsales seen since 2009.

New figures form theCentral Statistics Officeshow retail sales droppedanother 3.9 per cent. InApril compared with thesame month last year - anannual fall not seen sinceDecember 2009. Saleswere down 0.8 per cent

month on month.With petrol above

€1.50 a litre and dieselalso a at record highs,drivers are buying 12 percent less fuel than theywere a year ago - backingup an AA survey whichfound people are thinkingtwice before makingunnecessary journeys.

Economising only goesso far to help, however, asthe astronomical pricesmean people are stillspending almost as muchon fuel as they were a yearago.

Retail sales declined inApril, according to newdata from the CentralStatistics Office.

The seasonally adjustedvalue of core retail sales,which excludes the volatilemotor trade, was down 0.3per cent compared toMarch.

By volume the monthlydecline in core retail saleswas 1 per cent. Thisdifference between valueand volume is accounted

for by the return ofconsumer price inflation.

The underlying trendreflects continued acuteweakness in consumerdemand owing to a range offactors including a flagginglabour market, taxincreases, the paying downof high debt levels and thelimited availability of credit.

Business groups calledfor action to be taken tohelp support the strugglingretail sector.

C&C’s top threeexecutives received €2.1million in total in theirsecond full year at the helmof the company, accordingto the drinks group’s annualreports.

C&C chief executiveJohn Dunsmore saw histotal package increase by 6per cent last year to€989,000. StephenGlance, the company’s chiefoperating officer andfinance director, received an8 per cent increase. Hispackage increased from€669,000 to €724,00 lastyear.

Strategy director Kenny

Nieson was awarded€405,000 in total.

None of the threeexecutive directors wasawarded a bonus during theyear.

Some €732,0 was paidin total to the company’sseven non-executivedirectors. One 51 chiefexecutive Philip Lynchreceived €85,000,€20,000 of which relatedto his work as chairman ofthe company’sremuneration committee.

C&C’s currentmanagement trio - allformer executives atScottish & Newcastle -

joined C&C in late 2008,following a period of fallingsales at the company.

Results for C&Cpublished earlier thismonth showed a 17 percent rise in operating profit

to €105 million for the yearended February 2011,boosted by a strongrecovery in the company’scider sales in the UK andinternational markets.

8 TGm

N E W S

Revenues at soft drinksgroup Britvic Irelanddeclined 5.3 per cent toStg£18.9m on a constantcurrency basis in the 28weeks to the end of April17th as it continued to feelthe effects of the recessionon consumer spending.

Britvic, whose brandsinclude Ballygowan andClub, said the Irish marketremains “challenged”,particularly sales of itsproducts in pubs.

Its volume was down 7per cent at 106 millionlitres but its averagerealised price per litre roseby 3.9 per cent as thecompany pushed throughprice increases.

This was Britvic’s firstprice rise in Ireland forsome years and reflectedthe increased cost of sugar,tin and other items.

Britvic incurredrestructuring costs inIreland of Stg£7.5 million in

the period relating to arationalisation plan thatreduced its headcount hereby 100. There are now 630staff employed acrossBritvic Ireland.

Andrew Richards,managing director of BritvicIreland, said the marketremains tough but “one ortwo channels arestabilising”. Sales to thelicenced trade remain “verydifficult...they were downyear on year”, he said.

Britvic said its stillsportfolio “performed well,especially the key brands ofRobinsons, Fruit Shoot andMiWadi”.

Earlier this month,Britvic agreed to acquiredrinks wholesaler Quinn’sof Cookstown from C&C.“This will allow us to be anall Ireland wholesaler andalso give us significantlyincreased access to thelicenced trade in NorthernIreland,” said Richards.

Revenues fall at Britvic Ireland

10 TGm

N E W S

A well knownindependent supermarketwhich has been operating inNenagh, Co Tipperary, foralmost 40 years is to closewith the loss of 70 jobs.

O’Connor’s, whichopened in 1975, had tocease trading following thefailure of refinancing andrestructuring attempts.

Rory O’Connor, whosefather Joseph started thebusiness, said competition,particularly from largeGerman supermarkets, anda fall in spending had led toa drop in trade.

“There are now foursupermarkets in Nenaghand it’s a small enoughtown. The German multipleshave been taking more ofthe market, but people’sspending power is justgone. The universal social

charge in particular had aninstant effect.”

The rescue plan forO’Connor’s hinged onproperty values and thewillingness of banks to“take a longer-term view” inrelation to the repayment ofloans. But it emerged thatthese issues couldn’t beresolved, O’Connor said.

While it is regrettablethat the closure took placeit was clear that there wereno longer options left to thebusiness.

“We were advised thatto continue on would resultin reckless trading as wewould be taking in stockthat we couldn’t pay ourcreditors for. So we couldn’tdo that.”

O’Connor said he wasvery sad about the loss ofso many jobs and thateverything had been doneto try to keep the businessafloat.

Independent supermarket closesThere are

now foursupermarketsin Nenagh andit’s a small

enough town.The Germanmultiples havebeen takingmore of themarket....

“

TGM

June 2011 11

Cork City Council hassought further informationfrom Heineken Ireland andBAM Contractors on theirplan to develop a €150mheritage quarter on the siteof the former Beamish &Crawford brewery in Cork.

Cork City Council hadbeen due to give a decisionon the project, whichincorporates a 6,000capacity event centre.

Instead, however, it hassought further information,giving the applicants sixweeks to respond to anumber of queries.

H e i n e k e n I r e l a n dcorporate affairs managerDeclan Farmer said it had

already worked with councilplanners in “an open andengaging way” and wouldcontinue to do so.

Heineken Ireland andBAM Contractors, a whollyowned subsidiary of Dutchgiant Royal BAM Group,applied for planningpermission for the projectlast December andthroughout January briefedthe public on their proposalsfor the 1.8 hectare site.

The project, called the“Brewery Quarter”, featuresa mixed scheme of shops,bars, restaurants, an eight-screen cinema, exhibitionareas, 46 studentapartments and a viewing

tower, as well as the eventcentre.

The entire area is highlyhistoric as it is near the siteof the current St Fin barre’sCathedral, where St Finbarrfounded a monastery in the6th century, while in 2004archaeologists foundevidence Vikings had built acolony near the South GateBridge.

The Beamish & Crawfordsite is also historic in thatbrewing began there in1690, and up to its closurein May 2009 it was theoldest continuouslyoperating brewery inIreland.

€150m site plan for Beamish

€100m forsale of S.C.

Avestus Capital partners,the Dublin-based propertyinvestment firm which tookover the asset managementbusiness of Quinlan Private,has sold the Mall of Sofia inthe Bulgarian capital.

The shopping centre hasbeen purchased fromAvestus and GE Real Estateby London private equityfund manager EuropeCapital for more than €100million.

The sale generates a gainof more than €20 million tobe shared equally byAvestus and GE, accordingto a source close to the Irishproperty company.

The partners invested€80 million to acquire theproperty. The beneficiariesof the deal include Irishclients of Avestus, whoseprincipals co-foundedQuinlan Private withfinancier Derek Quinlan.

Avestus and GE RetailEstate acquired a 50 percent stake from AVIV andIsraeli cinema operator, CCI,for about €37 million inAugust 2005.

They purchased theremaining 5 per cent whenthe centre was built in May2006, taking theirinvestment to €80 million.

The shopping centre,which is 254,000 sq ft insize, has more than 130stores.

Avestus will continue tomanage the propertyfollowing the sale.

12 TGm

In 1970 Iceland sprang to life whenMalcolm Walker and another bored,young retailer decided to open a shopin an attempt to make their fortunes.They raised initial capital of justStg£60 to pay one month’s rent andopened the very first Iceland inOswestry, Shropshire in November1970. In those days, before domesticfridges and freezers becamecommonplace, Iceland specialised inselling loose frozen food.

1975: The business really took offwhen Woolworths fired the foundersfrom their day jobs in February 1971,and they were able to devotethemselves to developing the Icelandconcept full-time. By 1975 there were15 Iceland stores in North Wales andthe North West, supported by a coldstore in Rhyl.

1979: Iceland progressivelyevolved away from loose frozen food,opening its first purpose-built freezer

centre at Stretford, Manchester, in1978, and developing its own brandedproducts. In 1979 the companyopened a brand new cold store andhead office at Deeside, Flintshire,where it has been based ever since,and by 1980 it had grown to 37stores.

1984:Expanding through newstore openings and the acquisition ofsmaller chains, Iceland had 81 storesby 1984, when it became a publiccompany through one of the mostsuccessful flotations ever seen on theLondon Stock Exchange. The initialpublic offering of just £8 million worthof shares brought in applications withcheques totalling over £900 million,making it an amazing 113 timesoversubscribed.

1989:Iceland had been steadilyacquiring smaller freezer centre chainsbut late in 1988 it went for The BigOne, making a fiercely contested bid

for its much larger, southern-basedrival Bejam. Victory was secured bythe narrowest of margins and Icelandtook control in January 1989, creatinga truly national chain with 465 stores.

By 1995 Iceland had 752 storesand had clocked up an impressive 25years of consistent profit growth. Itnow began to feel the effects of moreintense competition as superstoreswere permitted to open on Sundays forthe first time, and progressivelyextended their weekday openinghours.

Under the leadership of founderMalcolm Walker, the company stageda successful fight-back based on amassive programme of innovation.This included the introduction of a stillunique free, national home deliveryservice, and the development of a widerange of new products.

Iceland A New Beginning

I C E L A N D A N E W B E G I N N I N G

June 2011 1 13

TGM

1998: Among Iceland’s many worldfirsts in the late 1990s were thedevelopment of a complete own labelrange free of GM ingredients, underthe ‘Food You Can Trust’ banner, andthe launch of a nationwide homeshopping service. Iceland also led theUK food retailing industry in removingartificial colours and flavours, whichhad been eliminated from all its ownbrand products by 1999, along withartificial preservatives where this waspossible without compromisingcustomer safety. The company alsodeveloped a partnership with theCancer Research Campaign topromote the health benefits of eatingmore frozen vegetables.

In 2000 Iceland made arecommended offer for Booker, theUK’s largest cash-and-carry operator,with the aim of exploiting buying andother synergies between the twobusinesses. Booker’s top managerStuart Rose was appointed chiefexecutive of the enlarged group, whileIceland’s Malcolm Walker wasscheduled to become non-executivechairman. But shortly after the dealwas completed, Stuart Rose left tohead the Arcadia fashion chain, wherehe made a fortune before moving on toMarks & Spencer.

2001: Into this managementvacuum stepped new chief executiveBill Grimsey, who had built his Cityreputation at the Wickes DIY chainfollowing the departure of its previousmanagement team as the result of afinancial scandal. Within weeks ofjoining Iceland, he and his new financedirector Bill Hoskins – also fromWickes – claimed to have identifiedmassive problems. These plunged thebusiness into a £120 million loss afteran amazing £145 million ofexceptional items – an extraordinaryreversal of fortunes for a groupoperating in inherently stableindustries, which had recorded a profitof £32 million in the first six months ofthat financial year. Malcolm Walkerand many of the senior managers whohad built the Iceland business wereforced to leave the company.

2003: Renamed The Big FoodGroup in February 2002, thecombined Iceland-Booker businessstruggled under its new management,despite the launch of a grandiose

recovery plan. (Click here to read thesaga of 'The one, two, three, four, fiveyear recovery plan.) For Iceland, thedeclared ambition was ‘to dominatehigh street food retailing through arenewed focus on core customers andfrozen food’. The reality was a steadydecline in customer numbers andsales, while costs – including seniormanagement rewards – escalated.Profits never recovered to historiclevels and were supported only by therelease of provisions made in 2001.(Click here to see how the release ofprovisions found to be 'not needed'boosted profits in 2002-2004.) Thecompany therefore faced growingdifficulties as these neared exhaustiontowards the end of 2004.

2005: In February 2005 The BigFood Group’s shareholders accepted arecommended offer from a consortiumof investors that made it a privatecompany once more. Shareholdersreceived only a fraction of the value thebusiness had enjoyed on the stockmarket at its peak. The group wassubsequently split into its maincomponent parts and Iceland placedunder the management of MalcolmWalker and other senior executiveswho had been ejected in 2001.

The new team returned to find acompany in crisis. Sales were running

at minus 10% on the previous year,having declined every year since 2001.Over the same four years overheadshad escalated on a massive scale, withhead office employee numbers growingfrom 800 to 1,400 and a further £16million being spent on the services ofexternal consultants. The productrange had expanded chaotically andprices were well out of line with themarket. Morale was at an all-time lowand the company was in such aprecarious financial state thatsuppliers could not even obtain creditinsurance.

2006: Sales began to rise steadilyevery week during the new team’s firstyear Image of inside an Iceland storeback in charge, as customers returnedto the stores. By the end of thefinancial year to March 2006 like-for-like sales were running 20% up year-on-year, making Iceland the UK’sfastest-growing food retailer.

An independent customersatisfaction survey, conducted aroundthe same time, also identified Icelandas the country’s fastest improvingretailer. Instead of the massive lossanticipated at the time of the takeoverin February 2005 the businessachieved a satisfactory operatingprofit, while the cash position wastransformed to give Iceland a healthybalance sheet. This permitted thelaunch of a major investmentprogramme to improve neglectedstores, and to turn the previousmanagement’s unsuccessfulconvenience store formats back intotraditional Iceland freezer centres.

The key to this success was astrategy of making the businesssimpler, and refocusing on itstraditional strengths. Through this,Iceland rapidly became recognisedonce more as the UK’s naturaldestination store for innovative, value-for-money frozen food. Theintroduction of round sum pricingmade it easy for customers to budget,while the unique home delivery serviceprovided a vital helping hand to busymums.

By Christmas 2006 like-for-lkesales were growing at 15% for thesecond year in a a row and Iceland wasproud to take on sponsorship of ITV’sflagship show, ‘I’m A Celebrity.. Get MeOut of Here!’

The keyto this successwas a strategy

of makingthe businesssimpler, and

refocusing on itstraditionalstrengths

“

I C E L A N D A N E W B E G I N N I N G

14 TGm

2007: The results for the financialyear to March 2007 demonstratedthat Iceland had been restored torobust financial health, generatingcash and recording an operating profitof almost £100 million. Continuedstrong sales growth throughout theyear was driven by innovation acrossthe whole range of frozen food underthe Iceland brand, while costsremained under tight control.

The 2007 staff survey and mysteryshopper programme highlighted themassive recovery in morale since thedark days of 2004/5, with managersnow feeling valued and the whole teamdemonstrating a real passion to makethings even better. In recognition oftheir achievements, Iceland took all682 of its store managers toDisneyland, Paris for two days inOctober for a fun-filled andinspirational annual conference.

2008: As Iceland’s strong sales andprofit growth continued into 2008, thescale of the economic challenges facingBritish shoppers became ever moreapparent. Iceland responded byreinforcing its long-standing reputationfor great value and constant innovationwith a range of product launches. Aswell as providing truly outstandingvalue for money, the companycontinued to win recognition for thequality of its innovations, with IcelandChinese Takeaway Duck in Plum Saucewinning a Gold Award for best newpoultry product of the year from theBritish Frozen Food Federation, whilethe Indian Takeaway Tandoori ChickenMasala won the Frozen Food SavouryAward in The Grocer Own LabelExcellence Awards. There were awards,too, for Iceland’s successful storemanagers at their annual conference inLiverpool: the Iceland Oscars, a blacktie extravaganza featuring theManchester Camerata Orchestra,opera, pyrotechnics and a liveperformance by Girls Aloud.

2009: The year began with theannouncement that Iceland hadagreed to buy 51 stores from thereceivers of Woolworths, massivelyaccelerating the current year’s plannedstore opening programme. Iceland willnow open 70 new stores this yearthroughout the UK, from Fraserburghin the north of Scotland to Exmouth inDevon, creating some 2,500 new jobs.

The company also plans to open afurther 20-30 new stores in 2010.This is Iceland’s fastest rate ofexpansion since it bought Bejam 20years ago.

In March Iceland was recognised inthe annual Sunday Times 100 BestCompanies to Work For survey as oneof the 20 best big companies to workfor in the UK.

In June the company announcedrecord sales and profits for its financialyear to 27 March 2009. Like-for-likesales were up 16%, making a totalincrease of almost 45% over the fouryears since Malcolm Walker and histeam returned to the business in2005, and taking total sales over £2billion for the first time. Operatingprofit increased by 41% to £135.7million and net profit before tax by amassive 84% to £113.7 million.

From rock bottom four years ago,morale had soared to give Icelandsome of the best ratings in the countryfor employees feeling cared for andmotivated, proud to work for thecompany and excited about where it isgoing.

Small wonder when, in fulfilment ofa pledge made at the 2008 managers’conference to reward another goodChristmas performance, almost 800 ofthe company's store, regional and areamanagers spent five days at WaltDisney World Resort in Florida for theirannual conference in September. Seemore on A Great Place to Work.

2010: Iceland again achievedrecord results for its financial year toMarch 2010. Total sales grew by10.5%, including a like-for-like salesimprovement of 4.3%, while EBITDAincreased by 11.2% to £184.2 million.A total of 74 new stores were openedduring the year, on schedule and onbudget, representing the fastest rateof expansion by the group since theacquisition of Bejam in 1989.

Customer numbers continued togrow, aided by the build-up of theBonus Card loyalty scheme, whileindependent mystery shop resultsconfirmed further improvements instore standards and customer service.

Continued strong cash flowreduced net debt to £7.6 million bythe year end, when the companyrepaid its old debt and replaced it withan unsecured revolving credit facility

which will generate annual interestsavings of over £2 million for thefuture.

However recent newspaper reportsconfirmed a ‘beauty parade’ offinancial advisors strongly linkingMorrisons with a Stg£1.5billion swoopof Iceland.

Malcolm walker is still the favouriteto get his hands on the company hefounded. One source confirmed thatMorrisons was “seriously looking” atIceland after its owners officialsresponsible for the winding up ofIcelandic bank Landsbanki put its 67%stake up for sale earlier this month.

But he added that Iceland ceoWalker, who has a 25% share of thebusiness and would be entitled tomatch any offer, would end uptriumphant.

"You have to askwhy a trade buyer would want to gothrough a very expensive and time-consuming bid process, with all thedue diligence and anti-trust issues,only for Walker to come in, match thebid and walk off with it."

The sale was likely to be a long,drawn-out affair with the biddingprocess not officially kicking off untilSeptember, followed by monthsnegotiating regulatory hurdles, headded.

Morrisons is not the onlysupermarket understood to be runningthe slide rule over Iceland's 776stores. Asda has been linked to a deal,while Sainsbury's is believed to beinterested in some sites. Most expertsbelieve competition concerns wouldprevent Tesco from acquiring more

than a few stores.The source's comments were

echoed by Walker himself. The Icelandfounder was bullish about his chancesof retaining control of the business,while dismissing those of his rivals.

"This speculation about Sainsbury'sbeing interested in a break-up; theycan clear off, they'll never get a lookin," he blasted. "I am not about to giveall my competitors our numbers, butwhere is the value in a break-up?There is inherent value in this business.The number being quoted in thepapers is Stg£1.5bn that is €£3m pershop.It sounds a lot if they are justgoing to convert them into somethingelse. And why would potential buyerspay a top price just for sites?"

Most experts believe a tradebidder such as Morrisons would have

no interest in retaining the Icelandfascia or frozen discounter's operatingmodel, which, along with the issue ofWalker's remaining stake, would alsodiscourage them from bidding.

UK supermarket group Iceland isreleasing its FY11 figures amidspeculation that either Asda,Morrisons or even Waitrose are poisedto make a Stg£1.5 billion bid for thechain. While total sales have not beenreleased just yet, RBS estimates LFLgrowth of the retailer is +2.1 per centand total sales probably up 3.5 percent to Stg£2.5 billion.

According to media reports, Asdaappears to be the most likely suitor forIceland, and has appointed Lazards tohelp it prepare its bid. Morrisons isalso expected to enter the fray with itsown offer, while Waitrose also hasn’truled out taking over some Icelandstores - as its chief executive, MarkPrice, admitted recently, “I thinkwhoever gets it we’d be happy to workwith, if the shops fitted ourdemographic. But we wouldn’t go in onthe basis we’d be the major party.”

Malcolm Walker, Iceland’s chiefexecutive, could also be in the running- he currently owns 25 per cent of thebusiness and made an offer to takeover the chain last year.

TGM

June 2011 15

Iceland is avery strong

model that suitsthe climate...wewould also seeourselves as amainstreamsupermarket.

“

The Irish PerspectiveWhile Irish shoppers are aware of

Iceland from its UK ads and celebrityendorsements, most would have beenunaware that it has returned to Irelandafter leaving 5 years ago. it is nowplanning to open more than 40 newstores across the Republic by the endof 2014.

AIM Group which holds the masterfranchise for the chain in Ireland hasappointed Tom Keogh as chiefexecutive of Iceland. There arecurrently 200 people employed butAIM Group is planning to increase itsnumber of employees by 2,175 beforethe end of 2014.

Tom Keogh, who took over the roleof ceo several months ago, started hiscareer in retail when he was 19 andjoined Dunnes Stores as a traineemanager. Originally from Enniskerry,Co Wicklow, Keogh eventually becamebranch manager in various storesaround the country. After leavingDunnes, he went on to hold a numberof senior management roles with ADMLondis and the Musgrave Group, aswell as becoming chief executive of theGala retail group.

The AIM Group, which is based inRobinhood Industrial Estate inWalkinstown Dublin, was set up 20years ago by Irish-based businessmanNaeem Maniar, and has built itself upfrom a small, local wholesale companyto a national wholesaler. In the lastcouple of years, the company hasbranched into retail, with its biggestmove being the takeover of the Irishmaster franchise for the Icelandsupermarket chain in 2008.

It has since opened stores inFinglas, Ballyfermot, the Ilac Centre inDublin’s city centre and on the NavanRoad.

According to Keogh “We havealready talked to a number of peoplewho have properties where we want toplace stores. There will be quite avigorous roll-out of stores in the nexttwo to three years.” The investment inthese stores is around €1 million eachand the company is predicting a totalspend of between €35 and €50million in capital expenditure over thatperiod.

But why did Iceland leave Irelandbefore?

According to Keogh Iceland pulled

out of the Irish market due to internalissues. “Pulling out of Ireland in 2005was more of an internal businessdecision than a commercial situation.A new management team had beenbrought in and they had tried tochange the model away from a frozenfood retailer to a general retailer andthe business wasn’t performing andwas losing money. They starteddiversifying into different products liketoys, newspapers and magazines. Theoriginal owners of the company went

back in and said anything that wasn’tcore had to go. Ireland wasn’t core,they didn’t have a base here and it wastaking time and personnel away fromwhere the issues were in theUK,”Keogh explained.

“Iceland is a very strong model thatsuits the climate, and it won discountsupermarket of the year in the UK inthe past couple of months,” saidKeogh.

“We would also see ourselves as amainstream supermarket. Frozen food

I C E L A N D A N E W B E G I N N I N G

16 TGm

is Iceland’s market, but if you go intoan Iceland store now you buy anythingthat you can buy in a regularsupermarket. It’s not just about frozenfood, although it is a huge part of itand Iceland has it down to a fine art.”

The company is using many Irishdistributors and suppliers for theIceland stores.

“There are also opportunities forIrish manufacturers to supply theIceland group,” said Keogh. “Morethan €50 million is spent by Iceland

buying products in Ireland for its UKstores, and this is going to grow. It hasclose to 800 stores and has a turnoverof €2.2 billion, so it is a massivecompany. We will certainly beencouraging Irish companies andmanufacturers to get involved with thecompany.”

The AIM Group recently opened ahomeware value store, calledHomesavers. This will be the first ofbetween 15 and 20 stores focused onhomeware and electrical goods.

“We have gone aggressively intothis market, with value-driven retailoutlets,” said Keogh. “We have buyerswho are travelling the world so that wecan get value at every opportunity. Wehave offices in China and buy directlythere as well.”

The groups has also opened threediscount stores called€2 Stores, inRathmines, on the Navan Road and onMoore Street. The company plans toopen 50 of these across the countryover the period of this plan.

Tom Keogh ceo

Supermarkets enjoy biggest increase

Despite the convenienceformat being widelytrumpeted as the fastestgrowing and most dynamicgrocery store offer, thisyear's figures show that thesector enjoying the biggestincrease in outlet numberswas the supermarketformat, with the Big FourTesco, Sainsbury's, Asdaand Morrisons and thediscounters completingsignificant storedevelopments.

But that doesn't meanthe multiples weren't activein the small store sector aswell. Nearly three newTesco Express outlets wereopened every week lastyear as the chain added145 outlets, an annualexpansion rate of morethan 15%.

Despite being a sectorin decline in recent years,unaffiliated independent c-

stores remain numerous,with more than 20,000 stilloperating. In fact, thereduction in numbers of3.4% is the slowest rate ofdecline for five years,suggesting that thestronger stores areenduring and arecontinuing to meet theircustomers' needs. Netrecruitment into the symbolsector from the unaffiliatedsector also fell, with thetotal number of symbolgroup stores growing by2.9%, a marked slowdowncompared with the 7.8%increase experienced in2009-10.

Within symbols,Booker's Premier hasovertaken Spar to be thebiggest symbol group bystore numbers. Thewholesaler has beenparticularly effective inrecruiting stores to its small

'Express' format, more thandoubling membershipnumbers to 463 at the timethe survey was completed.Nisa and Mace also provedparticularly successful insigning new members totheir fascias.

The supermarketchannel saw the greatestincrease in store numbersof any of the major groceryretail sectors, up 4.8% to8,545. The Big Fourmultiples all increased theirestates in the past year, butthere was also a noticeableincrease in outlets with astrong discount offer, withB&M Retail, Poundland andWilkinson all openingsignificant numbers of newstores.

Within the forecourtsector, consolidation ofownership is continuingwith a decline in thenumber of independent

operators and a growth inthe sites under theownership of dealermultiples. Traditional retailspecialists continue todecline, with a marked dropof 4% in the number ofCTN outlets. Both largechains and independentCTNs saw a reduction instore numbers,demonstrating once againthat the broader rangeavailable within theconvenience store format isgenerally proving moreappealing to shoppers.

The specialist off licencechannel has seen asuccession of large chaincollapses in recent years,but store numbersstabilised during 2010-11,supported by growth in theBargain Booze estate and arecovery in the number ofindependent off licences.

18 TGm

N E W S

Theconveniencestore industryis static in

terms of totalnumbers, butwithin thesector thereare a numberof dynamicchanges

taking place.

“

n the Republic, whereMusgrave operatesthe SuperValu, Centraand Daybreak symbolgroups, the group’sturnover declined 3.6per cent to €2.6

billion. In the UK, where itsbrands include Londis andMace, sales fell fractionally to€1.57 billion. In Spain wherethe group is eyeing expansionopportunities, they fell 2.6per cent to €185 million.

“It is a good set of resultswhen you think of thecontext, particularly theeconomic crisis in Ireland,”said Chris Martin, Musgravegroup chief executive.

The retail and wholesalegroup, which includes “notbeing greedy” in its list ofcorporate values,implemented “significant”price cuts in the early part of2010 in line with deflation inthe grocery sector.

“Since the start of 2011,prices have been edging up,which is a function of higherprices for commodities suchas cocoa and wheat, whichare having an impact onthings like pasta, cereals andchocolate,” said Martin.

20 TGm

Ourview of the

market is thatit will remain

tough.”“

Musgrave Profits UpMusgrave Group increased its profits by 3 per cent last year,

despite a 3 per cent fall in sales. The grocery and cash and carrygroup reported overall sales of €4.4 billion, with pretax profitsarriving at €72 million. The company also paid down debt of

€59 million and ended 2010 with net cash of €21 million.Turnover fell in all of Musgrave’s geographical markets last year,

although the Irish market was the worst hit.

I

Chris Martin

M U S G R A V E P R O F I T S U P

““Customers are nowfacing into the next phaseof the recession with risingfuel prices, higher taxes anduncertain employmentprospects,” said Martin.

“Our view of the marketis that it will remain tough.”

Musgrave’s retailpartners secured combinedsales of €6.5 billion in2010, down 1.5 per cent.

In Ireland, Centraretailers invested €7.6

million in new stores andrefurbishments, with furtherinvestment of €17.3 millionexpected in 2011. Thereare now 468 Centra storesin the ROI and 82 inNI.Musgrave’s SuperValuretail partners invested€23 million in new stores,extensions andrefurbishments with furtherinvestment of €16.7 millionexpected this year.

The group said the

introduction of RealRewards, a SuperValuloyalty card, had been asuccess, with the card usedin 55 per cent of sales.There are 192independently ownedSuperValu stores in theRepublic and some 41 inNI.

The Mace brand wasrelaunched in NorthernIreland last year, with morethan 50 stores openings,

leading to the creation of110 jobs. In Britain, morethan 200 retailers joinedthe Londis brand, takingthe total number of Londisstores to 1,784.

Musgrave also operates192 Budgens stores inBritain. Martin added thatthe group had no plans forfurther redundancies, after150 jobs losses in Irelandlast year.

June 2011 19

TGM

22 TGm

An estimated 1,500lives could be saved eachyear in the Republic if foodmanufacturers werecompelled to label clearlyproducts which have highsugar, salt and fat content,the annual conference ofthe Irish MedicalOrganisation was told.

Prof Anthony Stainesfrom the school of nursingat DUCU said there hadbeen a voluntary agreementbetween a number of majorplayers in the food industryand the Food SafetyAuthority of Ireland toreduce the salt, sugar andtrans fatty acid content oftheir foods over the pastfew years but progress onmaking reductions hadbeen too slow and it wastime now to make itmandatory throughregulation. “It has takenmuch too long to do thisand we need to bite thebullet,” he said.

He said high levels ofsalt consumption were amajor cause of high bloodpressure, stroke and heart

disease, leading tohundreds of unnecessarydeaths each year.

He added that foodcompanies were profitingfrom these foods but notcovering the costs ofconsequences of theiractions.

“The food industryprofits and the rest of uspay the costs,” he said.

Current food labels wereof little use to the averagebusy mother doing her bestto feed a family on a limitedbudget, he said. They aredesigned to be helpful if youhave a PhD in nutrition, headded.

Call for clearer labelling

Motorway servicesstation operator Petrogas,the company behind theApplegreen chain, made apretax profit of €4 millionin the year to the end ofJune 2010.

Applegreen is part of aconsortium that holds apublic-private partnership(PPP) contract with theNational Roads Authority(NRA) to build and operatesix motorway service areas.It received a governmentgrant of €35,000 in 2010.Three of the motorwayservice areas have notopened.

The Superstopconsortium was formed inOctober 2009 as apartnership between

Applegreen, Top Oil and thenow liquidated buildinggroup Pierse Contracting.

The Petrogas group,which operates 65 servicestations in the Republic,employed 515 people in theUK and Ireland last year, upfrom 387 in 2009. Some445 of the jobs are in retail.

The group has 11 percent of the motor fuelmarket. Its annual reviewshows that it also sells173,000 cups of coffeeevery month.

The group also holds themaster franchise in Irelandfor Wimpy restaurants;however, this does not forma large part of its totalbusiness.

As global retailers lookfor new growthopportunities and focus oninternational expansionstrategies, the 2011 WorldRetail Congress will bringtogether a powerful line-up

of emerging marketexperts.

The Congress, which willmeet in Berlin in Septemberthis year, will includespecific sessions on theleading retail growthmarkets such as China,India and Brazil.

The sessions will seeleading retailers from keymarkets sharing theirexperience and knowledge.These industry specialistswill be joined by over 100leading retail executiveswho will speak on today’score issues as chosen bysome of the top names fromacross global retailing.

€4mpretaxprofits for Petrogas

Congress focus on retail markets

N E W S

24 TGm

Procter & Gamble’schief customer officer BobFregolle was in Dublinrecently to address aconference.

In essence, his messagewas that suppliers andretailers need to workclosely to get through therecession and prevent thetug-of-war that often exists.

P&G’s stable of brands,includes big names likeGillette, Oral-B, Pampers,Ariel and Duracell. Most ofthese have been onpromotion in Irishsupermarkets since 2008as retailers try to draw incash-strapped shoppers.

Fregolle is not a fan of

this practice.“In the short term,

these promotions cantrigger volume and sales.But long term, they tend toerode brand equities andloyalty, not just forsuppliers but for retailers.”

Fregolle describes it as“shopper promiscuity” andsaid it would inevitably leadto less money being spenton “innovation” and productdevelopment.

“It’s a trade off.”P&G is a significant

employer in Ireland, withabout 750 staff employedat manufacturing facilitiesin Nenagh and Newbridgeand in support functions in

Dublin. Most of the productis exported.

Fregolle said sales inIreland rose by a singledigit percentage last yearand its market share

increased, but there hasbeen margin attrition.

“We’re cautiouslyoptimistic that the futurewill be better for us thanwhat we’ve got now”

Suppliers/retailers need to workmore closely

In the short term,these promotions can

trigger volume and sales.But long term, they tend to

erode brand equitiesand loyalty......

“

N E W S

Brian O’Driscoll

26 TGm

Musgrave, the owner of SuperValu,is understood to have made anapproach to buy Superquinn, theupmarket chain.

Superquinn’s board, however, isopposed to an immediate sell-off of thecompany founded by Feargal Quinnand sold for €450m in 2005.

The prospect of a deal may hingeupon the attitude of Superquinn’sbanking consortium of Allied IrishBanks, Bank of Ireland, and DanskeBank, which are believed to be owedup to €250m by the consortium of

property developers and corporatefinanciers who own it.

“The board has not sought a buyerand is focused on implementing a newbusiness plan,” said Superquinn. “Butthe board would have to consider anymeaningful approaches made bypotential buyers, even if they arriveunsolicited.”

Musgrave said it would notcomment on ”rumour andspeculation.” It is understood to havemade a previous unsuccessful bid tobuy Superquinn’s trading business, not

including its 24 properties, for about€150m in 2008.

Superquinn says it recentlyconcluded a two-year funding deal withits banks, after the lenders endorsed atwo-year business plan that isexpected to involve a fresh round ofredundancies.

Superquinn’s latest market sharefigure has slid to 6.4% from 6.9%,while its rivals have all increased theirshare.

Simon Burke, former chairman ofSuperquinn, who left in February,remains a shareholder in Superquinnbut has been replaced by fellowinvestor Kieran Ryan. Since SelectRetail Holdings bought it for €450mfrom Feargal Quinn in 2005,Superquinn’s management team hasbeen dogged by upheavals.

Since SRH bought the business ithas lost a chairman, two managingdirectors, an operations director, itshead of trading, a purchasing director,a human resources director and twomarketing directors.

Simon Burke, who brought a topclass retailing pedigree to theproperty-dominated SRH line-up, hasdecamped back to London where hehas taken up directorships at the BBCand pubs chain Mitchells & Butlers.

In his absence, his formerboardroom colleagues have been busy.More change, it seems is on the way.

Last month, Superquinn’s latestmanagement team, led by formerDunnes Stores executives AndrewStreet, sealed a deal with its lendersfor a far-reaching new business planthat was a precondition for continuedsupport for the group.

Now the entire company has comeinto play. The Superquinn board, whichhas struggled to keep pace with itsbigger rivals during the recession, hasfielded an approach for the business,believed to have come from MusgraveGroup. A private equity house is alsobelieved to be interested.

With Superquinn’s property-focused shareholders under pressureelsewhere, the company is facinganother huge round of cost cuts underthe watchful eye of its banks.

W H O S E N A M E O V E R T H E D O O R ?

Whose Name Over The Door?

Simon Burke

Is Superquinn set to change handsyet again, and can Street, its new chiefExecutive, restore it to its formerglory?

In 2008, Superquinn appointedGoldman Sachs to advise it on a saleof the business. Superquinn said at thetime that Goldman interest fromoutsiders was uninvited, and that thebusiness was not for sale.

Superquinn recently made astatement that the board “has notsought a buyer.” That same statementcould easily have ben made threeyears ago. Sources believe that the2008 bid also came from Musgrave,which was prepared to offer about€150m for the trading business on itsown. SRH would have remained

landlord for its 24 stores.The deal never happened, but

Cork-based Musgrave has now comeback for a second bite of the cherry.Corporate finance sources highlightedfour main options now facingSuperquinn’s board.

The first is to reject a sale andcontinue the status quo. But with itsrivals clicking into a higher gear andthe market set to stay in the doldrumsfor years to come, this may not appealto the SRH shareholders, who haveother business interests.

The second option is to sell theentire chain to either Dunnes Stores,headed by Margaret Heffernan, orMusgrave, headed by Chris Martin.Geographically, Musgrave would be

the best fit as it is under-representedin Dublin, where Superquinn isstrongest. However, Superquinn’s sitesare mixed bag of large and smallformats: many are too big for aSuperValu, while others are too smallfor a Dunnes.

The third option is to break up thecompany and sell it off piecemeal,similar to the way H Williams was soldin the 1980s. Dunnes and Musgravecould go head to head for the bestsites. This option is unlikely to appealto its bankers, who might struggle torealise value on a break up. Some ofits supermarkets are worth just afraction of the boomtime value uponwhich its borrowings were raised.

TGM

June 2011 25

28 TGm

The final option is to keep theSuperquinn trading name, which couldthen be franchised out by SRH toensure a continuing revenue stream topay down some of its €250m debts.everything else could be flogged toMusgrave.

Other potential bidders includeBritish multiples Asda, Sainsbury’s andWaitrose, which observers say wouldbe the best for the Superquinn brand.Waitrose headed by chief executiveMark Price, has reportedly beenscouting for sites in Northern Irelandand its parent, the John LewisPartnership, is interested in the Irishmarket.

With the Dunnes family still firmlyin control, Superquinn remains theonly real opportunity for an outsider tobuild scale in the market. Seniormanagement are believed to beopposed to as they think that once thenew business plan is implemented, thecompany will see a significantturnaround over the next 18 monthsto two years.

But its banks may have other ideas.When asked if its lenders supporteddelaying sale, the company would onlysay: “The banks and the board areagreed that the current focus on thecompany’s management should be onimproving the value of the businessthrough successful implementation ofthe business plan.”

Implementing that plan may beStreet’s most pressing task. Sourcessay that while it was signed off by thebanks in recent weeks, implementationbegan months earlier and a “€5million benefit” and already accrued tothe business, presumably by way ofcost cuts already implemented.

The plan has set detailed targetsfor every part of the business, andmost of the measures are being front-

loaded into 2011. A central plank ofthe plan is to reduce the pay bill formanagement - shop-floor staff will alsodo well to escape unscathed.

Under the new plan, it is unclear ifthe company will be able to hold itsside of the bargain. Street earned hisspurs at Dunnes Stores, which has afamously frosty relationship withworkers’ representatives.

In the meantime, Superquinn mustdeal with its resurgent rivals, who areleaving the chain behind. Figuresreleased by Kantar Worldpanel Irelandshow that Alid, Lidl, Tesco andSuperValu are all gaining share atSuperquinn’s expense.

One retail source says the movetowards cheaper own-label goods hashurt Superquinn, as it is less able tocompete in this area than its rivals.Kantar says own label goods nowaccount for 5% of the market.

Another source says there is still aslight “culture clash” in the firmbetween those managers loyal toFeargal Quinn’s way of doing thingsand those who have embraced SRH.

In terms of generating a big profitfor its owners, the franchise hascertainly passed its sell-by date. Thebanks, owed between €200 millionand €250m, will ultimately decidewhat name will hang over the door.

The banks andthe board areagreed that the

current focus on thecompany’s

management shouldbe on improving the

value of thebusiness through

successfulimplementation ofthe business plan.”

“Chris MartinAndrew Street

W H O S E N A M E O V E R T H E D O O R ?

30 TGm

Sir Stuart Rose, formerchairman and chiefexecutive of Marks &Spencer, enjoyed an €9million “golden goodbye”from the high streetretailer. And Marc Bolland,its chief executive, receivedpay and share awardsworth up to about €15.8million last year.

Bolland was notawarded his full first-yearpackage of up to aboutStg£5 million as he missedout on his full bonusbecause M&S did not meetits profit target in the yearto March, according to theretailer’s annual report.

The level ofremuneration to Sir Stuartand Bolland could reigniteinvestor ire over pay atM&S despite its newchairman, Robert Swannell,attempting to lay tensionsto rest with a new, moremodern, pay structure.

One shareholder saidthe size of the payment,together with M&S’sdecision to include salesgrowth as one of theperformance criteria in itsnew pay plan, would “raisea few eyebrows.”

According to the annualreport, Sir Stuart, who asnon-executive chairmanfrom July until he steppeddown in January, walked

away with Stg£8.1 millionin cash and shares. Hereceived Stg2.77 million insalary and bonus, with hisStg£1.26 million bonuspaid in full in cash. He alsogained Stg£915,000 in ashare plan that wasscheduled to pay out, andanother Stg£4.5 million oflong-term share awardsthat would have potentiallypaid out in future years,which were acceleratedunder “good leaver” status.

Sir Stuart’s salary asnon-executive chairmancame under fire last year,while two years ago, he wasforced to give up more thanStg£1 million of shares toavert a showdown withshareholders.

Disclosures of hisremuneration comes justdays after he spoke outagainst payment for failure,and called for a review ofthe widening gap betweenexecutive pay and staffwages.

According to the annualreport, Bolland receivedjust under Stg£5 million insalary bonus and shareawards, in the year to April2nd. This includedStg£894,000 in salary, andStg£2.6 million tocompensate him for awardshe would have received atWm Morrison.

‘Golden goodbye’

Brewer’s successBrewer Jan-Renier

Swinkels is the seventhgeneration of his family torun the Dutch beer makerBavaria, which was foundedin 1719.

Bavaria’s main productsis Pilsner lager that is soldin Ireland, mostly onpromotion in the on-trade.It is also widely available inoff licences.

While it has a smallshare of the market here,Swinkels said that Ireland isone of Bavaria’s top 10export markets out of atotal of 130 countries.

Bavaria has annualsales of about 500 millionglobally and 70 per centare from export markets.

Bavaria has branchedinto non-alcoholic beers,which Swinkels said haveproven a hit in Spain andthe Middle East.

Swinkels startedworking in the familybusiness on the productionline at the age of 12 and,having graduated fromcollege in food technology,started to work his way upthe ranks of the companybefore being appointedchief executive chairman in2007.

The company employs1,000 people at twobreweries in theNetherlands and is proudof its independent roots.

N E W S

32 TGm

F O O D C E N T R A L - N E W F O O D P A R K

FoodCentralNew Food Park

A master plan for the development of FoodCentral, a 113 hectarefood park located beside Dublin Airport has been prepared in

consultation with Fingal County Council, following on from the zoningof the site as approved for food park development

in the Fingal Co Council, County Development Plan 2011 – 2017

Located immediately beside theairport, close to Dublin Port and withexcellent M1, M2 and M50Motorwayaccess, FoodCentral provides astrategically located gateway toIreland’s food market for Irish andoverseas companies. FoodCentral hasan optimal location for receiving andproducing food products anddistributing them nationally from thepopulation centre in Dublin. Approx75% of Ireland’s retail fooddistribution operates from within a25km radius of FoodCentral.

Businesses currently located inFoodCentral and employing over1,000 people include a number of

Keelings and Donnellys businesses aswell as foodservice company, Brakes.The existing businesses in the foodpark encompass a range of growing;food related processing and packing,foodservice and logistics operations.These diverse businesses are bothcompetitors and co-operators in anumber of respects involving sharedservices and inter-company trade.

FoodCentral aims for food anddrink businesses locating within thepark to foster co-location synergiesand benefits. A wide scope of activitiescan be optimised to commercial andfinancial advantage. These activitiesinclude manufacturing, processing,logistics, innovation, research anddevelopment, sustainability,marketing, exhibition andadministration.

It is critical for the growth of theIrish food and drink industry tocontinually improve costcompetitiveness. The vision ofFoodCentral is best expressed as thedevelopment of a major food-centricbusiness and logistics hub for thedomestic and export markets thatfacilitates and is a catalyst forconsolidation, collaboration and co-operation to enhance competitiveadvantage.

Commenting on the park’sobjective William Keeling,FoodCentral’s Managing Director said;“as FoodCentral develops with bothexisting and new businesses, itspotential to deliver anenvironmentally attractive food park,harnessing synergies, sharing services,generating new opportunities andadding value to the food and drinksector can be realised in anenvironment which could generate upto 5,000 sustainable jobs, in a widespectrum of activities.”

TGM

June 2011 31

......it’spotential to deliveran environmentallyattractive food

park..“ UK chemist chain Boots has

signalled a new policy on rentingshops in unproven shopping locationsby opting to pay a percentage of itsturnover rather than any kind of fixedrent where there is uncertainty aboutthe viability of the store.

The chemist chain, which hasmore than 60 outlets in the Republic,has just agreed to pay 9 per cent ofits turnover rather than the usualstandard rent for a new store plannedfor the newly opened MilfieldShopping Centre in Balbriggan, CoDublin.

Other multiples are alsoincreasingly pushing for letting termswhich include an element of turnoverbut in most cases the terms have alsoincluded a basic rental figure.

Big name traders particularlythose from the UK, are well awarethat shopping centre owners aredesperate to attract them,particularly in the present difficultenvironment. A rental arrangementbased entirely on turnover reducesthe risk for the trader and putsshopping centre owners underpressure to continue to bring in evermore shoppers.

Boots is to trade from a well-located shop unit opposite Tesco inthe Balbriggan Centre. It will have4,500 sq ft of retail space andanother 2,000 sq ft of storage spaceoverhead.

New rent policy

Interesting times lie ahead for thedrink industry, and not just in the nextfew years, but even further down theline, and into the next decade where anumber of factors may come into playthat will have a major effect overallmake-up of the industry.

At least, this is the way that An BordBia, The Irish Food Board, sees it,when they undertook a very detailedstudy that tells us how the alcoholicdrinks industry may have evolved by2025, and what opportunities it maypresent to Irish manufacturers.

Certainly, a study with an outline likethis will immediately grab theattention of a whole host ofconsumers (particularly those with adeep interest in the various aspects ofthe industry), who will be eager to seehow the alcoholic drink industry willlook like 15 years from now.

However, before we go into detail ofhow Bord Bia feel the industry willshape up during the next decade-and-a-half, it is important to outline someof the principles of futures work,which makes it easier to understandwhere they are coming from. Theseprinciples are as follows:

•You can't predict the future unless allthe variables are known•You can identify and understand thedrivers of change that will shape yourfuture - understanding these driversand how they connect will enable youto consider possible futures•There are often many clues in today'sworld as to what the future could be- piecing these clues together willenable us to explore the mostplausible futures for your industry

In terms of how to judge what thefuture holds, three stages have beenidentified as being key in determininghow this particular industry is goingto look in the future. The first of theseStages is Trends and driver scanning,which involves conducting 14 one-hour interviews, which are conductedwith industry representatives andrelevant experts in areas such as

design trends, future legislation andsensory trends. Desk research is alsoused during this stage, withcompanies like Euromonitor, Mintel,Nielsen, TNS, ESRC and the NationalIntelligence Council being sought fortheir expert opinion.

The second Stage that they look at isImpact Assessment, which acts as aworkshop to prioritise drivers with thegreatest impact. As a result of astandard driver prioritisationworkshop process with the Bord Biaand TFC core team, 23 drivers wereprioritised from an initial list of 59.

Finally, the third Stage is calledExploring Implications which is, inmany ways, the most important ofthese stages. It involves anotherworkshop, which helps to identifystrategic priorities, where forces ofchange are reviewed and refined in aone-day workshop with Bord Bia, Irishindustry representatives and otherexperts.

The implications of these forces ofchange were explored with theworkshop participants, which helpedthem become more aware of thedirection that the industry is currentlytaking at the moment. For the record,the eight forces of change outlinedare:

1. Competition for Provenance2. Mainstreaming of Connoisseurship3. On-Trade Specialization4. In-Home Sophistication5. Polarisation of Retail6. New Forces of Global Demand7. Social Cost of Alcohol8. Energy-Efficient Production andDistribution.

Given how important theseimplications may well turn out to be,and how they can drastically changethe industry from the way it is set-upat the moment, it is probablyworthwhile to take a detailed look atthese implications, and what impact itwill have on the alcoholic drinksindustry by 2025.

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Firstly, in terms of competition forprovenance, Bord Bia believe thatprovenance will still be hugelyimportant by 2025, as it will be morefluid and less tied to specific nationalgeographies or heritage claims. Thereasons that this may be the case isbecause of a greater interest inhistory, heritage and tradition,growing demand for local productsand services, as well asdemocratization of high qualitymanufacturing.

Under this force of change, it isestimated that consumers will havebecome jaded with near identicalstories of authenticity and copy-catprovenance claims. It will also be

more important where a product isprocessed and how much quality ithas overall, while provenance ingeneral will be more local thannational, while at the same timeconsumers will be more sensitive tothe difference between a Siberianvodka as opposed to one from theBlack Sea region.

Mainstreaming for Connoisseurship isthe next force, and it shows that, by2025, a more discerning attitude toalcoholic drinks will be moremainstream, leading to a decouplingof price and connoisseurship.

As Billy Steel, a Beverage Managerand ex-barman at Mesa Grill, NewYork is quoted as saying: “The mainchange over the last few years is thatsociety has created a culture thattreats alcoholic beverages like food.The barman has become a 'chef'. Aswith food, there is now an emphasison fresh ingredients e.g. fresh juices.10-15 years ago this was not thecase”.

This sophistication amongstconsumers is an interestingdevelopment that comes aboutbecause of a greater desire forpersonal expertise, greater scrutiny ofvalue offered by brands, and reactionagainst mass brands.

The report by Bord Bia states that, by2025, connoisseurship will no longerbe about price, meaning that, even atthe value end of the market, peoplewill expect brands to have ameaningful differentiation. They alsofeel that connoisseurship will be lessabout history and tradition, and moreabout the overall craft andcommitment to excellence that goesinto a product.

As well as this, they see alcoholicdrinks being a lot closer to food in theway that they are thought of anddescribed. On-trade specialization isalso expected to be a big part of thealcoholics drink industry by 2025, asthe traditional notion of “going to thelocal” slowly becomes a thing of the

past. The on-trade will become morespecialized and occasion-based, whichmeans that brands and products willneed to adapt accordingly.

This can come about as a result of;Diversification of leisure interests,Increased focus on experientialconsumption, and Growth of sharedspaces. 15 years from now, on-tradeis expected to have diversified, withthese venues offering more than just adrink, and the alcoholic drink itselfshould work harder to be part of theexperience.The next force is related in a certainway to on-trade specialization, as in-home sophistication will be powerfulas the shift to in-home drinkingconsumption will continue, and the in-home drinking experience has driftedmore closely towards the on-trade.

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June 2011 37

This can be caused by increasing relative cost ofdrinking in the on-trade, as well as greaterinterest in “professionalizing the home”. It isexpected that, by 2025, the divide between theon-trade and off-trade will be more permeable, astraditional on-trade occasions move in-home, withconsumers expecting a good deal more from anexperience in-home.

The polarisation of retail is another intriguingforce, whereby the retail market for alcohol haspolarized in two directions, namely, the risingpower of value and discount retailer, as well asthe growth of more niche or specialist retailmodels.

New Forces of Global Demand will mean thatopportunities for significant growth will comefrom emerging markets in 2025. Spirits brandswill need to work harder to capture the youngerconsumer in traditional markets.

A force that will be of great interest to a lot ofpeople is the social cost of alcohol, as this dealswith the cost of alcohol to a person's income andalso their health. This is something that an ageingWestern society is becoming more conscious of.This can be caused by increasing focus onhealthier lifestyles, greater focus on the socialcost of alcohol, and increased taxation andregulation.

It is expected that total alcohol consumption willhave declined, with grey markets and counterfeitmarkets are much bigger.

Energy-Efficient Production and Distribution mayalso see overall energy costs becoming muchhigher, affecting all aspects of production. Thiswill be compounded by the tax that carbonemitters will be required to pay.

As can be clearly seen, these forces of change canhave a major influence over the next 15 years,and they will have a number of implications forthe Irish industry. They will offer morecompetition, more sophistication and morespecialisation to the industry.

In terms of offering more competition, it will leadto focus, differentiation and collaboration, whilemore sophistication deals significantly withconsumer insight, branding and innovation.Thirdly, more sophistication is particularlyimportant, as it means that the industry is able tounderstand your customer, they can focus where

you can win and can develop niche propositionsas well.

While all of this will no doubt grab the attentionof most people who view it, a lot will wonder whatthe key message will be from all this. The keymessage that comes out of it is the potentialvalue of greater collaboration within the Irishalcoholics industry. The workshops that arementioned in these stages, as well as the one-hour interviews involved in the first stage, canhelp people within the industry to work togetherfor a brighter future.

However, manufacturers/retailers need to realisethat they are operating in a global market andfacing increased global competition, whichrequires increasingly sophisticated marketing anddistribution expertise. Irishness has the potentialto deliver meaningful differentiation in a globalmarket, though this does require a clear andconsistent identity, as well as the right balancebetween heritage and modernity.

Most of all though, collaborating in areas such asresearch, R&D, marketing and distribution couldbe mutually beneficial to all players in the market,so it comes with a high recommendation.

It is necessary to note that it is difficult to predictthe future, which means that all of the detailsmentioned within Bord Bia's report should betaken with a certain pinch of salt. Also, the futureis not static, and continuous monitoring for signsof change is crucial.

However, Bord Bia also say that preparing for thefuture is better than waiting for the future tohappen, and the eight forces of change do act asa good starting point. Unfortunately, noteverybody will heed this advice, and may not trustthose who look so far into the future, and mighthave been put off by certain assertions that havebeen made about the alcoholics drink industry inthe past.

In order to reinforce their point though, Bord Biaconclude their study with a quote from John M.Richardson, as it sums up what kind of people arelikely to drive this industry in the future, andthose who may hinder it.

“When it comes to the future, there are threekinds of people; those who let it happen, thosewho make it happen, and those who wonder whathappened”.

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Just like most markets right across theIrish economy, the overall beersegment has just come out of achallenging year within the Irishmarket. However, there are a numberof brands within the beer market whohave shown several positive signs,which has helped them to successfullyengage with consumers on a grandscale.

For instance, Barry & Fitzwilliam saidit anticipated growth in Corona sales toreach 10% in 2010, while Polish brandKarpackie (distributed by Comans inIreland) have demonstrated impressivegrowth in the past year, helping themto become the fifth biggest selling canof lager in Ireland.

Another encouraging sign came in2010, when the Drinks Industry GroupIreland (DIGI) said that theGovernment’s excise reductionannounced as part of Budget 2010 hashelped to stem cross-border alcoholpurchasing to a certain extent. A 6.4%increase in sales was recorded in thefirst six months of 2010. This statisticwas also boosted by the decision of theUK Chancellor of the ExchequerGeorge Osborne to raises VAT there, sohopefully this will see a continued slidein the number of people who travelacross the border for beer and alcoholproducts.

However, it isn’t all good news for thismarket, as reports are now beginningto emerge that due to the weak pound,consumers are once again starting tocommence an exodus up north in asearch for the right bargains to suittheir wants and desires.

Obviously, offering consumers valuefor money is vital in order to drivevolume sales, which makes it all themore pleasing to hear that many drinkcompanies were attempting to meetthis demand with special value packsin time for the festive party season.

Overall, consumption in all four alcoholdrinks categories (beers, spirits, ciderand wine) declined in 2009. However,it was actually cider who experienced

the lowest decline followed by beer andthen wine and spirits. There are plentyof brands in the beer market, andquite a few of them will be instantlyrecognizable to shoppers right acrossIreland.

Owned by Diageo, Guinness isregarded as the principle alcoholbrand in Ireland, and has beensynonymous with Irish people, as wellas many tourists, for a considerableamount of time. However, the secondhalf of 2009 saw Diageo’s alcoholsales, for all of their brands,plummeting by 10% as the economicdownturn continued to hit consumers.

As part of their findings, Diageo saidthat pubs suffered the biggest decline,with sales falling by as much as 14%,with many consumers heading acrossthe border to stock up on cheaperdrink. The off-licence trade in theNorth shot up by more than a third, afirm indication that cross-bordershopping is still extremely strong,despite the strong efforts byauthorities (listed above) to counteractthis.

In addition, Diageo saw their net salesdropping by 9% during this period but,on the plus side, their main branddidn’t actually suffer that much, andhas actually added considerablegrowth to this market. Statistics showthat Guinness’ share in the decliningbeer market increased in both pubsand off-licences thanks, to a largedegree, because of their massive250th anniversary celebrations.

“The hugely successful 250thcelebration in Ireland, culminated onSeptember 24, Arthur’s Day which,given the scale and impact achieved,was one of the key drivers of themarket share and equity growth in thishalf”, a statement revealed.

Guinness’ famous stout also accountsfor some 32.3% of the draught beermarker in the Republic and, as of theend of 2009, it accounts for more thanhalf (55%) of Guinness global sales.

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Across Europe, Guinness sales did dropduring this tricky period by 1%, butdid rise in Britain by 3%, with a recordpub sales increase of 7.6%.

Paul Walsh is Diageo’s Chief Executive,and he felt that the last six months of2009 was extremely challenging, butthat the company would be headinginto 2010 with their spirits up.

“Our category leading brands, theconsistency and scale of our marketinginvestment, successful innovation andour industry leading sales capabilities

have led to share gains for Diageo’spriority brands in key markets”, Walshstated.

“We are in the early stages of recoverywith more encouraging signs in theemerging and developing markets”.

2009 also saw their most recentproduct innovation, as they came upwith a contemporary new design forthe Guinness draught that features alarger harp logo on its front, and in theprocess reinforcing the premiumquality of the brand. Alongside thisnew can design, they also adopted anew visual identity across their fourand eight can packs.

This new packaging features a visual ofa beautifully settling glass of Guinness,helping the brand to stand out on shelfmore so than they had before. Theyused this new look can identity as partof the Christmas promotional packs of2009, and they were successfulenough that, by the time Christmas2010 came around, they wereextremely familiar with most shoppersin this market.

Indeed, 2010 was a very interestingyear for Diageo, as they started toconsider the benefits of backing analcohol-pricing proposal, which wouldsee a ban on selling alcohol below thecost of duty and VAT. This was reportedin various outlets in August of 2010,but Diageo denied that there was anylink between price and problemdrinking.

Apart from sales in Ireland though,Guinness also look to exports to helpincrease their overall sales and, asKieran Tobin, the chair of DIGI anddirector of Irish Distillers points out,Guinness “has produced good results”in this area.

As Tobin also points out, this is anindustry that provides quite a lot tonational income, though spirits areseen as the biggest winner when itcomes to alcoholic exports.

“This is an industry which exports and

contributes €1.2 billion to nationalincome in exports, primarily in spirits”,Tobin has said.

Indeed, Tobin sees exports as beingcrucial if we are to get out of the stickyeconomic situation that we findourselves in at the moment.

“If we’re going to get out of thisrecession, verging on a depression,that we’re in, everyone agrees that it’sgoing to be export-led”, Tobin added.

HEINEKEN

Heineken are the world’s third-largestbrewer and reported third-quartersales in 2010 at the bottom ofexpectations, as poor summerweather, austerity measures, and lowconsumer confidence conspired to capEuropean and US drinking. The Dutchbrewer also produce Amstel, which isEurope’s number three beer, butHeineken is Europe’s number one beer,and is therefore the brand thatconsumers identify with the most.

They say that volumes in theircompany rose sharply in Africa, Asiaand Latin America, but were loweroverall on a like-for-like basis becauseof weakness in mature markets.Overall though, Heineken revenue roseby 13% to €4.61 billion. In addition,cost savings, changes in scope andcurrency profit meant operating profitgrew by a mid-single digit percent. Ona like-for-like basis, net profit rose by10% to €520 million.

Just over half of Heineken’s revenueduring 2009 came from WesternEurope, and 2010 was very much thesame. However, the deal that saw thempurchasing the beer business ofMexican group FEMSA should swellthe share of operating profit fromfaster-growing markets to 40% from32%.

Christmas 2010 in Ireland was aninteresting one for Heineken, as theycame up with a special Christmas offerthat included special edition 12 bottlepacks;20 bottle packs; 8 can packs

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24 can slabs and the HeinekenDraught Keg. The 5L draught isparticularly popular, as it consistentlyprovides perfect quality draughtHeineken with an intelligent patentedpressure system, ensuring fresh beerfor 30 days after tapping.

All of these Christmas activities wereheavily supported by above the linecampaigning, as well as a full suite ofcomplementary point of sale for all off-trade partners. Heineken are thenumber one lager brand in thiscountry, and they currently hold a

27.2% volume share of the total lagermarket.

They have a rather large marketingcalendar that packs a punch all yearround and they enjoy prolificsponsorships of events like theHeineken Cup, the Rugby World Cup(due to take place in the Autumn of2011), UEFA Champions League,Oxegen and the Heineken GreenSphere Series.

The Heineken can is a favourite withconsumers and holds the number oneposition in the off-trade, and thehighest percentage volume share ofcanned lager in the off-trade at 16.3%volume share of canned lager. Theyhave also introduced an initiative tocelebrate the Heineken Bottle withHeineken Expression, which hastraveled the country providing yetanother opportunity for enjoying lagerexperiences.

COORS LIGHT

A number of brands in this markethave enjoyed a decent couple of yearsin spite of the economic climate theyare dealing with, and Coors Light isone such brand. They capped off agreat 2010 with their new customizedChristmas packaging and POSmaterial, which promised to bring theRockies to life. The new RockyMountain packaging was unveiled just

in time for the festive season, both onpack and in store.

2010 saw Coors Light boastingcontinued growth in all parts of Irelandacross all channels. The most recentAC Nielsen statistics on Coors Light,released in August of 2010,demonstrated that there was strongconsumer call for the brand in an everchallenging market. This wasparticularly true in the off-tradesection, where they accounted for 5%of the total market.

However, they are also now thenumber one on-trade bottle, as well asbeing the fastest growing draughtlager beer in the on-trade. Thesespecific results stem from increasedactivity from the brand and a fresh newlook and feel for 2010, which enablestheir cool, rocky mountain refreshmentto pubs and off-licences across Ireland.

In 2010, Coors Light also introducedtheir first-ever on-pack promotioncalled Destination Rocky Mountains.This was an online venture for thebrand, where hundreds of consumerscompeted to win the right to one ofeight weekly trips to the RockyMountains in December with threefriends. This proved to be quitesuccessful for Coors Light, and theywere helped in no end by a brand newTV commercial and outdoor creativecampaign.

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BUDWEISER

Budweiser have been considered asthe number one beer in the off-tradesector, and this was enhanced by abrand new look that they launched in2008, which saw them redesigningtheir secondary packaging to maximisevisibility, just in time for the Christmasperiod of that year.

This bold new design communicatedthe brand’s positioning of premiumand quality, while at the same timeretaining the iconic red colour thatlinks not only the tradition andauthenticity, but also the brewingheritage of Budweiser. The packagingupdate was released just in time forthe all-important Christmas market,and has worked well for the two

Christmas periods that have followedsubsequently. It has ensured maximumimpact on-shelf so that it remains atthe forefront of customers’ awarenessat what is a crucial period for mostconsumers.

This packaging has worked to goodeffect for the brand, and they had aclear vision for it at the start, which caneasily be seen from the following quoteat the time from Budweiser’s AssistantBrand Manager, Amy Copeland:

“Over the years Budweiser packaginghas always stood out and this new lookwill ensure that the great tasting beerinside is reflected by great-lookingpackaging on the outside. Sincebrewing began back in 1876,Budweiser has always stood forauthenticity. Budweiser brew mastersuse only the highest quality barleymalt, hops and rice and water to craftour premium beer”, Copelandremarked.

Budweiser also have pack formats thatsuit pretty much every occasion for thefestive period, whether it be small get-togethers, or big gatherings during the

part season. The new packaging designwas part of an overall campaign, whichBudweiser hoped would reinforce thecommitment to quality, something theyhave always held dear. The campaignappeared across television, outdoorand press, and the current signs wouldindicate that it has worked extremelywell for Budweiser.

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2009 was a difficult year for the drinkmarket, as it saw overall consumption inall four alcohol drinks categories (beer,spirits, cider and wine) declining. However,Cider was the category that was leasteffected, as it experienced the lowestdecline, closely followed by the beermarket, putting them in an excellentposition to build in 2010 and 2011.

As was reported by market analyst Mintelduring 2009, cider has “enormouspotential to transcend its summerpopularity and be drunk all-year round”.Men aged 18 to 44, in particular, are themost likely to want cold served drinksregardless of what the season is. As wellas this, launches in recent years likeBulmers Pear and WKD Core have helpedto generate renewed interest in thiscategory.

Cider has also benefited in recent yearsfrom the concern over binge drinking, asthis has revived the market for low-alcoholdrinks, which has grown 12% in valuesince 2006. While lager does tend todominate in this regard, cider sales arealso beginning to pick up, in a large partdue to the introduction by cider brands ofrefreshing new tastes to fit the summermood, such as Bulmers Pear, which hasbeen heavily marketed. Noreast have alsointroduced distinctive new cider blendsthrough the launch of Aspall Suffolk Cydervarieties in the Republic of Ireland.

Plenty of innovation is also occurring rightacross the drink market, with plenty oflaunches in the cider sector, as well as thespirit and beer markets, which bodes wellfor the future. Certainly, the innovation inthe cider market has helped it to growsubstantially, which was well needed as ithad experienced volume decline during2008, and had a market volume share of8.2% during the same year, well behindspirits at 19.5%, wine at 22.7% and beerat 49.6%.

This has been addressed in the pastcouple of years, and cider is faring a lotbetter, with a few brands leading the wayas the category looks to achieve growth.

BULMERS

While many beverages are consumedduring a certain time during the year,Bulmers are a cider brand that hasbecome an all-year round drink ofchoice for many consumers. For overseven decades now, Bulmers has beenproduced from a base in Annerville,Clonmel, and it is currently the numberthree brand in the low alcohol drinks(LAD) market, with periods such asChristmas and the New Year acting aspeak key selling periods.

Indeed, Christmas 2010 was a veryimportant period for Bulmers, as theyoffered the following selection of valueparty packs that their many userscould avail of:•Bulmers Original 18 x 500ml canparty pack•Bulmers Original ‘8 for the price of 7’x 500ml can pack•Bulmers Pear ‘6 for the price of 5’ x500ml can pack•Bulmers Light ‘6 for the price of 5’ x500ml can pack•Bulmers Berry ‘6 for the price of 5’ x500ml can pack

As a way of reflecting the currenteconomic climate that Irish consumershave to deal with, all of these packsoffer consumers a discount versusstandard retail prices, which acted as areal incentive for shoppers to chooseBulmers as their drink of choice for theholiday season. This Christmascampaign was also accompanied bythe much-anticipated return of theiracclaimed TV advertisements, whichare shot on location in Clonmel, andwere shown throughout the month ofDecember in both TV and outdoorformats.

Never one to rest on their laurels, andwait for the end of the year to comeabout, Bulmers were also busy duringthe Spring of 2010, with the Februaryproduct launch of their new BulmersBerry range.

Bulmers Berry is a new fruit cider,which has entered what is a largely

untapped (but growing) market withconsiderable potential behind it. Itpossesses a unique blend of 17varieties of apple, similar in many waysto the firmly-established BulmersOriginal. It is fused with the finestselection of blackcurrants, raspberriesand strawberries, making BulmersBerry a premium and natural product,maintaining the distinctive character ofthe normal Bulmers selection.

The launch of this exciting new productline was supported by heavyweightnational TV, outdoor, online andsampling campaigns. To keep in linewith a recent move towardsundergrowth, Bulmers adapted anunderground theme for the launch,which was run in association withSecret Wars, who were continuing theUndergrowth Movement Secret Warsevents right across the nation.

Interestingly, this also represented thefirst time that Bulmers rolled out a PR,online, viral and word mouth campaignbefore the actual launch of themainstream ATL activity took place inthe summer months. Bulmers Berry iscurrently available in Pint Bottle andLongneck in the licensed trade and500ml cans in grocery, with a RRP thatis at the exact same level as that ofBulmers Original.

Amongst the promotional activityassociated with the launch of BulmersBerry was a campaign that saw themjoining forces with both Spin 1038 andSpin South West to find the bestundiscovered DJ talent that there is.The top Dance DJs from both stationsformed a judging panel for thiscompetition, which catered for allinterests including Hip Hop, R’ n’ B,Indie Rock, House, Trance, Techno andDubstep.

This is a very useful marketing ploy forthe brand, and this is something thatBulmers have been extremely good at,with the various events that theysponsor bringing them to the attentionof people across the globe. One suchevent is the Magners League rugbycompetition, where Bulmers avail of

the Magners brand that they use tomarket the company’s cider outside ofIreland.

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Now in its fifth season, the MagnersLeague is now regarded as one of theleading tournaments in the world ofrugby. 2010 was a particularly goodyear for Bulmers from an Irishperspective in this competition, as theinaugural Magners League Grand Finalwas played at the RDS, Dublin,between Leinster and Ospreys, in frontof a sell-out crowd.

In addition to this, the first-evercompetitive rugby fixture at the re-designed Aviva Stadium was aMagners League encounter betweenLeinster and Munster on October 2nd,watched by a Magners League recordcrowd of 50,645.

The sponsorship of local competition isalso important to Bulmers, and 2011will see them entering their 20thconsecutive year as title sponsors tothe Bulmers All-Ireland Cup and Shieldcompetitions. The 2010 final tookplace in September at Castlebar GolfClub, and was one of their mostsuccessful years to date.

This competition is organized by theGolfing Union of Ireland, and is one ofthe most coveted tournaments in theinter-club calendar, being regarded asthe biggest amateur golfingcompetition in Europe and includedIrish golfing star Padraig Harrington asone of their competitors in his days asa young amateur.

2010 also saw Bulmers sponsoring theLive At Leopardstown music festival,which featured acts like Fun Lovin’Criminals, Mundy, Aslan, Duke Special,Paul Brady, Delorentos, Alabama 3,Sharon Shannon Big Band (featuringShane MacGowan) and many more.

Bulmers Light also looked at ways ofincreasing the profile of their companyin 2010 by teaming up with well-knownIrish fashion retail brand, A|wear, tosupport a series of customer events instores nationwide. Samples of BulmersLight were offered to customers inDublin’s Henry Street and GraftonStreet; Wexford, Waterford; Cork andGalway. These particular events were

promoted in-store and via socialmedia; print advertising and PR, withshoppers enjoying shopping discounts,as well as makeovers and goodie bags.

WKD

Ireland’s current best-selling PPSbrand is WKD, and they are nowbranching out into the cider marketwith the launch of their new WKD Coreselection. This is a new apple cider thatwas launched in July 2010, it isintended to bring a new dimension tothe highly successful WKD range, and itis also hoping to shake up the cidermarket in Ireland at the same time.

WKD Core is packaged in 500ml greenbottles, and can be found on-shelf, butalso in chillers, next to ciders, in bothon and off-trade. It offers a refreshingtaste, which consumers can choose todrink with or without ice, which is thesort of choice that will get consumersinterested. The launch of WKD Corewas met with an eye-catching outdooradvertising campaign, in addition topromotional sampling in pubs aroundthe country. In general, the brand hasbeen heavily supported, and seems tohave grown fast in the months thathave followed its release.

Until now, WKD has been seen mainlyas a brand of alcopop, which wasproduced on a worldwide scale byBeverage Brands. The United Kingdomis probably where the brand is mostprominent, and it is heavily marketedthere with the slogan ‘Have you got aWKD side?’ (as in, Have you got awicked side?), and is also sold in manycountries in mainland Europe. It wasranked by AC Nielsen in 2006 as thenumber-one UK ready-to-drink brand,and the move into the cider marketshould be of extreme benefit to themin ensuring that they stay ahead oftheir nearest competitors.

DRUIDS

Druids Celtic Cider is another popularbrand in the Irish cider market, and isproduced by Aston Manor Brewery inTrimbleton Lane, Birmingham.

However, in spite of this UK base, theRepublic of Ireland is where it isprobably most popular, with youngpeople in the areas of Dublin and Corkbeing particularly interested in thebrand.

It has attained this popularity largelydue to the high alcohol content that ithas, but also because it can bepurchased at a relatively low price. Atypical can of Druids Cider wouldcontain around 6% alcohol by volume,and also possesses sulfites, which are agroup of naturally-occurringcompounds used as preservatives infruit-based food products. It alsocontains 285 calories per 500 ml, aconsiderable amount for a beverage ofits kind.

The Druids brand is the biggestgrowing cider on the Irish market atthe moment, and is currently in thenumber two position overall, behindthe clear leader in the Cider industry,Bulmers. It offers a top quality recipe,designed specifically for Irish consumertastes, and will continue to offer value€1.59 per can, but it is also onpromotion during the summer at sixcans for €8, when it tends to performbest.

Druids seem to have attained cultstatus amongst certain student groups,who are attracted by the cheapness ofthe products that they supply. Theyhave a very simply, but very direct,motto which is as follows:“This premium, full flavoured Celticcider has been inspired by divine fruitof the ancient druids and captures themagic of apples, harvested at the pointof ripe perfection”.

This motto has been extremelyimportant to them down through theyears, and has helped them in theirefforts to constantly produce top of therange products for their many buyers.

Spirits is a lively and vibrant member ofthe drink industry and, by 2012, it isexpected that spirits consumption inIreland will have increased by 10.99%to reach 3.11 million cases (or 37.3million bottles) from a period datingback to 2008. These findings, whichwere conducted in a Vinexpo/IWSRstudy, also revealed that the Irish drank2.68 million 9-litre cases of spirits in2007, which was 26.6% more than in2003, which shows the kind of increasein popularity that spirits have had inrecent times.

With 1.1 million cases consumed in2007, which was up 45.3% comparedto 2003, vodka was the leading tipplein Ireland during this time in terms ofvolume, and cover around 40% of thismarket alone. It has been forecastedthat, between the years of 2008 and2012, that vodka consumption willhave grown by almost 17%, with theconsumption of all spirits in Irelandgrowing by 11%.

Thus far, it looks like it will come prettyclose to reaching these figures, thoughthe next 12 months will be extremelyimportant for this market, as it will formany others. Gin consumption actuallylost a considerable amount of groundbetween 2003 and 2007 (dropping bysome 15%), but it is expected thatvolume will have stabilized come 2012.It is also expected that rum will haveregained 10.5% between 2008 and2012 to reach a volume of 147,000cases by the end of the period, whichcould return them to the consumptionlevel of 2003.

These are, of course, difficult times for alot of businesses, and this market is nodifferent. The Christmases of 2008 and2009 saw independent off-licencessuffering as people traveled across theborder which, on top of fiercecompetitions from supermarkets, sawsales drop by some 40% for these off-licences.

2010 was no different, as supermarkets

still pose a major problem forindependents, which means that it isimportant for consumers to takeadvantage of any promotions ormerchandising material from thebrands during the holiday season sales,in particular. In this regard, spirits areamong the most versatile products onthe drink market. The cocktail culturecontinues to grow, as does thepopularity of flavoured drinks, so spiritsare in a rather healthy position at themoment, something that the majorbrands have sought to take advantageof.

ABSOLUT VODKA

As the fourth best-selling premiumspirit worldwide, and the number onebrand of premium vodka worldwide,Absolut Vodka is an extremely popularchoice with Irish consumers. Originatingfrom Sweden, Absolut Vodka is apremium vodka that was firstintroduced in 1879 by Lars OlssonSmith, whose face appears on eachbottle of Absolut Vodka in the 126markets that it is available in aroundthe globe.

Absolut Vodka has a natural heartytaste, which is a quality that embodieswhat a vodka is supposed to be i.e. aspirit that is smooth but stillaccentuates any potential cocktailswithout disappearing into the mixer. Itforms a perfect base for creative drinkmixing, but is also it more thanadequate as a beverage that can beenjoyed neatly or on the rocks.

Indeed, Absolut Vodka is the brand thathas pioneered the flavoured vodkacategory and, over the past 25 years orso, they have strived to create bold andcreative flavoured vodkas. This hasenabled them to come up with nineAbsolut flavours, which are currentlyavailable in Ireland. Included amongstthese flavours are the likes of AbsolutCitron, Absolut Raspberri and AbsolutKurant.

Flavoured vodkas such as these havehelped to energise a wide variety ofcocktails, such as ‘Absolutcosmopolitan’ (Absolut Citron,cranberry juice, orange liqueur and limejuice), ‘Absolut citronic’ (Absolut Citron,tonic water and a slice of lime), as wellas ‘Absolut high heel’ (Absolut Kurant,crème de cassis, lemon juice andblackcurrant).

Absolut citronic is particularlyimportant, as it is positioned as “arefreshing cocktail that is ideal for anysummer get together with friends orfamily. Simple to make, this cocktail setsthe tone for an Absolut great summer”.With so much variety to choose from,consumers would be well advised to findfurther information on their websitewww.absolutdrinks.com.

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Christmas 2010 was an interesting onefor Absolut, as it saw them tweakingtheir iconic bottle design by modifyingthe finish of the glass for a limited timeperiod. It consists of numerous prismsthat enable them to break and reflectlight, Absolut Glimmer (as it was knownduring its release) is an enhancedversion of the Absolut bottle, andhelped to add an extra shine to thefestive period.

Absolut have had previous specialedition offerings, such as Absolut RockEdition, Absolut Masquerade andAbsolut Disco, which shows howcreative Absolut have been in the past,and it is important to note that all ofthese offerings have been popular withboth trade personnel and consumersalike.

BARRY & FITZWILLIAM

Barry & Fitzwilliam are one of the majordistributors in the spirits market, andthey offer a wide range of premiumspirits to consumers right acrossIreland. Included amongst theirportfolio are the likes of TeachersScotch, Courvoisier Cognac, RémyMartin Cognac, The Famous GrouseFinest Scotch Whisky, Jim BeamBourbon, Vladivar Vodka, Boru Vodkaand Stolichnaya.

Another one of the brands under theirguard is Cointreau, which has beendescribed by Barry & Fitzwilliam as acook experience on ice with a warmafterglow, surrounded by the scent oforanges while maintaining its elegantFrench heritage. It is seen as the perfectpartner for cocktails, particularly usefulfor adding to a margarita, while it alsomakes 7Up a longer drink than itnormally would be on its own.

Jagermeister, the famous Germanschnapps, also appears to be a popularchoice from the Barry & Fitzwilliamcannon, and it is a huge seller in theshooter market, especially amongstudent trend setters, which is helpingthe brand to grown internationally. It is

a half-bitter German schnapps with aunique blend of 56 herbs and spices,making it ideal to be served chilled,with the new phenomenon of mixing italso an available option. Sales ofJagermeister were up 10% for the firstquarter of 2010, so it is clear that it isa very big seller in this category, andone that should continue to grow.

Barry & Fitzwilliam have also welcomedtwo new additions to their product linein the shape of Tia Maria andDisaronno. Tia Maria is a hugely

popular coffee liqueur worldwide,thanks largely to its mixability incocktails, with coffee or in desserts, ormixed with milk and ice as a luxuriouslong drink.

Disaronno has been described as a‘cool’ brand, as it possesses a uniquesquare glass decanter and a smoothalmond flavour. It also contains a secretrecipe, which is believed to include thepure essence of 17 selected herbs andfruits with an infusion of apricot kerneloil.

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However, one of Barry & Fitzwilliam’smost impressive brands is Stolichnaya,which they believe is one of the besteveryday spirits on the market when itcomes to taste, price and availability.The red label is the flagship of thebrand as a whole and is available rightacross the country.

This vodka, which originates fromRussia, is distilled four times fromwheat and rye, mixed with artesialwater from the Kalingrad region, and isfiltered through quartz, sand, activatedcharcoal and woven cloth before beingbottled at 80 proof. The Barry &Fitzwilliam Company regardsStolichnaya as a great example of whatto expect from good vodka from Russiaand, priced at around €24.99 a bottle,is quite easily affordable to a lot ofpeople across Ireland, and representsexcellent value for money.

JAMESON/POWERS

Jameson is the world’s number oneIrish whiskey, and has been regarded asthe number one value and volume spiritat Christmas, whilst earning upwards of53% in shares of Irish Whiskey sales inthe past few years. Christmas 2010 wasa lively one for the brand, as they weresupported by on and off trade with highvisibility point of sale.

Their off trade Christmas offeringsincluded a new single bottle carton andgift pack, which featured two Jamesontall glasses. The smooth taste ofJameson meant that it was possible forconsumers in this category to enjoytheir Jameson drink neatly, on the rocksin a cocktail or with a mixer, making itthe perfect drink for all celebrationsduring the busy Christmas period.

Jameson are distributed in Ireland bythe number one spirits and winessupplier, Irish Distillers Pernod Ricard,who are always working closely withretailers and publicans to get the mostfrom spirits and wine in the run up toChristmas. For instance, September of2008 saw the launch of the newJameson advertising campaign ‘It’s a

Jameson thing’, focused on outdoor, on-line, premium lifestyle print and leadingnational broadsheets.

Interestingly, it also delved into theoutdoor media sector during thisperiod, which included a 3D special 48sheets and new ‘metropole’ sites, whichwere used to further enhance thecampaign. In the off-trade, thisparticular aspect of the campaign wassupported with special window displays.Jameson was available during thisfestive season in single bottle cartonsand a gift pack, which featured aJameson hip flask, a very popularventure by the company.

One of Irish Distillers Pernod Ricard’sother whiskey brands include the likes

of Powers, who have had a number ofsuccessful advertising campaigns in thepast few years under the banner of‘Pure Gold’, featured in both outdoorand print nationwide. This enabledconsumers to buy Powers single bottlecarton and gift pack (featuring twopremium Powers tumblers) in off trade,offering plenty of convenience forwhiskey enthusiasts.

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There has been strong growth in winein recent years, and market dataidentifies changing consumer tastes asbeing one of the main reasons for this.Indeed, according to figures that weregathered by the Irish Wine Board,volume sales in the wine marketincreased by around 81% between theyears of 2000 and 2007, withsignificant growth during 2007 of 6%,which represented an increase of half amillion cases from the previous year.

Obviously, with huge increases like this,there is going to be something of aleveling off, but the wine market is stillperforming pretty well, and is in a solidposition to push forward during what isa very difficult time for a lot of sectors.There tends to be certain times of yearwhen wine, and alcohol in general, canbenefit in terms of sales, and Christmasis seen as a key peak trading time formany wine brands right across Ireland.

For instance, Red Bordeaux and similar,cabernet-based styles are traditionallyvery popular at the busy Christmasperiod, while big white styles likewooded chardonnay from Australia andCalifornia offer plenty of weight andcomplexity for white wine drinkersaround the nation.

However, Christmas is also animportant occasion for sparkling winesand Champagne, with excellent stridesbeing made to produce quality productsworthy of special celebrations in manynew world regions. They are also aimingthese products at customers who maybe attracted by great value prices, andit is with a similar vein that port, sherryand fortified wines are coming into theirown during the festive periods, asmanufacturers are examining ways ofbroadening the target market for thisindustry.

Many are looking to grasp the attentionof younger consumers, and with anumber of key brands continuing toperform strongly (as well as showingastute innovation), this may wellhappen.

ARNISTON BAY

Arniston Bay are a very importantbrand in the Irish wine market, and theyfurther enhanced their reputation bymoving towards a more modern,contemporary style in 2009 with theintroduction of a number of newvarieties, as well as a new screw capclosure and an evolving label design,which reflects a more premium positionfor the brand.

This proved to be extremely importantto the company, as they had alsointroduced a few new blends during2008 in the shape of Chenin BlancChardonnay, Pinotage Rosé andCabernet Sauvignon Merlot. This gaveArniston Bay more confidence that theycould drive consumer demand headinginto 2010, and they are currently in agood position to improve further intothe latter parts of 2011 and 2012 aswell.

This new screw cap packaging, whichcan be found on a vast variety ofArniston Bay products, replaced theexisting flange packaging, a feature thathad been part of their bottles for a longtime. Research revealed a number ofreasons as to why consumers preferredthe screw cap to the flange packaging.These included: convenience, freshness,resealability, and also the potential toeliminate the risk of cork taint andoxidation, which has quickly become amajor issue for the industry in recentyears.

The summer of 2009 also saw thebrand offering an on pack consumeroffer, which acted as an excellent way tofurther drive growth in what isbecoming an ever more competitivemarket. Free charms, a method to helpconsumers to identify individual wineglasses, were made available with everypurchase of Arniston Bay, with a total ofsix charms being on offer.

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This promotion enjoyed a strong shelfstandout, thanks in no small part tosome strongly branded point of salematerials. This was something of aunique offer, which was set-up as a wayto encourage consumers to try thewines they have on offer and, of course,to increase sales.

Another sharp innovation in recentyears from Arniston Bay has been theirpouch ranges, which are light,convenient, easy to carry, and easy topour packaging formats, which haveproven to be popular with a number ofconsumers who are on the go, andshould continue to grow in the next 12months or so. They are ideal for picnics,music festivals and a number of otheroutdoor activities.

The following comment from RosemaryLyster, marketing manager at FindlaterWine & Spirit Group from 2009, is asharp indication as to how Arniston Bayhave been performing in recent years,with the Irish market being one of theirstrongest areas.

“With new packaging and strongmarketing support, we are confidentthat these changes will be successful indriving sales and attracting newcustomers to the brand in 2009.Arniston Bay is one of the best-sellinginternational brands in the UnitedKingdom, the Far East and parts ofEurope, and has proved very successfulon the Irish market”, Lyster stated.

BLOSSOM HILL

Blossom Hill, who is manufactured byGilbeys, has gone from strength tostrength in recent years, and 2009 sawthem becoming the number one winebrand in Ireland. This was a massiveachievement for the brand and, tocelebrate this feat, Gilbey launched ‘TheBlossom Hill Summer Season’. Theyhave also acted in the past couple ofyears as the official wine of theacclaimed Wimbledon Tennistournament and, closer to home, as thesponsor of Ladies Day at the Failte

Ireland Dublin Horse Show in August of2009.

In celebrating these events, and nodoubt future events to come, BlossomHill offered a neck-collar promotion thathas given consumers the chance toglam themselves up during ‘TheBlossom Hill Summer Season’. Some ofthe offers that have been on sale duringthese campaigns include the likes of a‘Pure Indulgence Day’ at House Of

Fraser in Dundrum, which is worth upto €1,000. This particular prize includesa shopping gift certificate of €500, amake-over with the make-up brand ofthe winner’s choice, while the luckyentrant was also able to avail ofpampering treatments in the ClarinsSkin Spa, and a luxurious Clarinshamper.

Finally, to top everything off, the luckywinner was able to enjoy a cool glass ofBlossom Hill itself. This proved to bevery popular with consumers, andshoppers can expect more offers likethis from Blossom Hill in the future.Their neck-collars can be seen on theirMerlot and Sauvignon Blanc, but havealso been viewed on a Wimbledon‘Special Edition’ White Zinfandel bottle,which featured an image of a tennisball.

2009 also saw Blossom Hill rolling outtheir new International Range, whichwas formally introduced at the presslaunch of Ladies Day in July of that year.This new range comes from countriesaround the world, including a Shirazfrom South Africa and a Pinot Grigiofrom Italy.

As is apparent from their classic range,the international selection is derivedfrom a single grape variety, offering apure, intense fruit aroma. Only thehighest quality fruit selected, meaningthat the fullest and finest expression ofeach variety is made available.

LINDEMANS

Recognised around the world as one ofthe best wines when it comes down tovalue-for-money, Lindemans Bin 65Chardonnay is renowned for providingconsistency and quality to consumers inmany different areas. Lindemans wasfounded in 1843 when Dr. HenryLindeman planted his first vines atCawarra in the Hunter Valley. Hispassion for wines had been very muchmaintained by the company today, inboth the winery and the wine bottlesthemselves.

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58 TGm

The Lindemans Bin range offersgenerous flavours and a contemporary,easy-drinking style, which combineseasily with food, as well as many othersocial occasions, to deliver maximumenjoyment from the very first glass tothe very last. This particular rangeincludes, apart from Bin 65Chardonnay, Bin 95 Sauvignon Blanc,Bin 45 Cabernet Sauvignon, Bin 50Shiraz and Bin 35 Rosé. The LindemansBin range has been on promotion in thepast couple of years, during thesummer months, with up to 25% off thenormal retail price of €10.99.

2008 saw Lindemans pioneering theincreasingly popular low-alcohol winesector in Ireland with the introductionof Lindemans Early Harvest SemillonSauvignon Blanc, Shiraz and Rosé,which contain just 9% alcohol. With awine that is 25% lighter in alcohol andcalories, it delivers crisp, light, easydrinking, and fresh fruit flavours in avery formidable style.

Lindemans Early Harvest has just fivepoints per bottle, which comparesfavourably to the seven points that canbe found in a standard bottle of wine.This has enabled Lindemans to workclosely with Weightwatchers in theireffort to give consumers a greatalternative that won’t compromise ontaste and will, in addition, deliver thequality and enjoyment that consumershave come to expect from Lindemans.

WOLF BLASS

As one of the leaders in the Australianwinemaking business, it is no surpriseto see that Wolf Blass is continuing tomove forward as we now move into2011. Having been founded in 1961with a tin shed in the Barossa Valley,with the dream of a better life spurringon its founder, Wolf Blass hasprogressed to become one of theworld’s greatest wine producers.

Since 1966, Wolf Blass, has receivedover 4,000 awards, as well as accoladesat top international wine shows.

Included amongst their honours is the‘Jimmy Watson’ Trophy, which isAustralia’s most prestigious wine award,with Wolf Blass having secured it on noless than four occasions. Most recently,in 2008, Wolf Blass were honoured withthe International Red Winemaker of theYear award at the International WineChallenge (IWC) in London.

One of their most popular ranges is theWolf Blass Yellow Label selection, wherethey offer premium single varietal winesfrom South Australia, which epitomizesthe quality and consistency thatconsumers have come to expect fromWolf Blass. The Wolf Blass Yellow LabelSauvignon Blanc is a bottle that is newto Ireland, and it provides a refreshingalternative to the Yellow Label division.

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Blooming record for BordBia

N E W S

Bloom, Bord Bia’s gardening, food and family festival nowin it’s fifth year, has been its most successful yet. Bloom

attracted almost 90,000 visitors to the 70 acre site at thevisitors centre in the Phoenix Park Dublin over the June

Bank holiday weekend.

June 2011 59

President of Ireland and Patron ofBloom, Mary Mc Aleese and herhusband, Senator Martin McAleesevisited Bloom to mark the closing dayof the event. President McAleese spentone hour at the event visiting theshowgardens, meeting the designersand members of the public. ThePresident addressed a large crowd atthe Chefs Summer Kitchen, part of the

new Bord Bia Food Village. CelebrityChef Neven Maguire presented thePresident with a hamper of artisanproduce from the Food Market.

Speaking at the event Aidan Cotter,CEO, Bord Bia said

“Over these last five days the spiritthat had lifted the nation in recentweeks was once again in evidenceamong almost 90,000 visitors whocame to witness and applaud themagic and creativity of our gardendesigners, of our artisan foodproducers, and our craftsmen andwomen who remind us of the richnessof resource that resides within andaround us.”

A total of 78 medals were awardedon the first day of the show to gardendesigners, nurseries and floral artistsand the international judging panelcommented that the gardens weresome of the best they had seen in thehistory of the event.

The overall large garden categoryaward went to To The Waters Edge, avisually striking garden featuring asunken seating area, designed byOliver and Liat Schurmann, MountVenus Nurseries, Dublin. Visitors to theshow over the 5 days were encouragedto vote for their favourite garden and

today the Peoples Choice award wentto An Adventure with Thumbelinadesigned by first-time Bloom designerJack Harte, New Ross, Co.Wexford.

The new Bord Bia Food Village wasa key attraction at this year’s show,bringing all of the food aspects of theshow together in one central locationfor the first time. Exhibitors reportedthat the new feature was aphenomenal success providing themwith an opportunity to showcasebrands, interact with new and existingcustomers and sell large quantities ofproducts.

TGM

62 TGm

The latest grocerymarket figures from KantarWorldpanel in Ireland,published for the 12 weeksending 15 May 2011, showDunnes Stores hasincreased its market sharefor the first time sinceAugust 2009.

Dunnes Stores hasposted sales growth of1.4% and increased itsmarket share from 23.6%last year to 23.7% for thesame period this year,following 21 months ofstagnation.

David Berry,Commercial Director atKantar Worldpanel Irelandexplains: “The return toshare growth for DunnesStores has been fuelled bystrong sales in traditionalareas such as frozen food,household cleaning,

biscuits and confectionery.By using the strongpresence of leading brandsin these areas the retailerhas been able to drivesales.

“Dunnes Stores hasalso benefited from adedicated customer base.Over this period it hasregained its position as theretailer with the most loyalshoppers, demonstratingthe importance ofreturning customers in thismarket.”

With value at the top ofthe shopper’s agenda, Aldiand Lidl continued to bethe main beneficiaries ofgrowth during this period.Both retailers postedrecord share performances,powering ahead withdouble digit value salesgrowth of 27.7% and

10.6% respectively. Aldiincreased its share from3.4% last year to 4.3%and Lidl built on last year’s5.6% share to achieve6.1% of the market.

Elsewhere, Tesco grewslightly ahead of themarket and posted anincrease in market sharefrom 27.1% last year to27.3% for this period.SuperValu continued toperform slightly behind themarket this month,dropping market sharefrom 20.0% last year to19.6% for the same periodthis year.

Growing speculationabout the future ownershipof Superquinn has donelittle to halt its salesdecline, with a loss ofmarket share from 6.8%last year to 6.2% this year.

Grocery inflation is at4.9% for the 12 weekending period 15 May2011, down from 5.4% inthe previous period.

*This figure is based onover 75,000 identicalproducts compared year-on-year in the proportionspurchased by Irishshoppers and thereforerepresents the mostauthoritative figurecurrently available. It is a‘pure’ inflation measure inthat shopping behaviour isheld constant between thetwo comparison periods –shoppers are likely toachieve a lower personalinflation rate if they tradedown or seek out moreoffers.

Dunnes Stores return to growth

•PercentageShareofTotalG

rocery

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Tubs Sweets, a new confectionarycompany based in Rathnew Co.Wicklow, have grown from a simpleidea to rolling out Tubs Sweets to all110 Topaz Forecourts in a deal worth€750,000 and stocking all 26Superquinn stores in a deal worth€500,000.

The company is lead by Wicklowman Kevin Ginty. After losing hisbusiness early last year due to the

downturn in the economy anddesperately seeking newopportunities Ginty spotted a smallplastic tub on the kitchen table andthe Tubs Sweets concept was born.

Kevin Ginty is delighted to besupplying both Topaz andSuperquinn, “This is an amazingopportunity for a start-up companylike Tubs Sweets. The company wasdeveloped from a simple concept –

tubs are a handy and portablepackaging option so why not putsweets in them! Superquinn was thefirst retailer I approached and it wasfantastic when they agreed to roll outthe Tubs brand in every Superquinnstore in the country just three monthsafter the concept was realised. In theearly days I did everything myself andjust under a year later I now have 20staff in my factory in Rathnew andmerchandising on the road”.

Michael Keenan, ConfectionaryBuyer from Superquinn said,“Superquinn has had great success inour trading relationship with Kevinover the last 12 months with salescontinuing to grow. This success hasbeen achieved by a combination of aprofessional direct to store servicefrom Kevin and his team and thecontinued appetite amongst our owncustomers to support Irish productsand Irish suppliers. At Superquinn wetake pride in supporting Irishproducers and look forward toworking with Kevin and the team inthe future”.

Judy Wilson, Category Manager,Confectionary from Topaz said, “Wewere instantly struck by thesecharming packages of ‘sweets in tubs’and felt our customers would beequally so. We were also impressedby Kevin’s own work ethic andpositive ‘can-do’ attitude. The Tubsare not long in our stores and alreadythe sales are phenomenal with thedemand for the product increasing allthe time. As a 100% Irish ownedcompany we, at Topaz are very keento support home-grown initiatives andwe encourage other businesses to dolikewise. We are delighted to sell TubsSweets through our network of 110shops and look forward to workingwith Kevin and the team in thefuture”.

Tubs Sweets supplies 60 differentvariations of sweets including fizzyjellies, cola cubes, bon bons, fudgeand marshmallows to name a few. Alltasty treats are packaged in handyTubs for easy transportation whetheryou’re in the car, on an outing orbringing a gift.

The Nations ‘Sweet Heart’Kevin Ginty

64 TGm

In 2007, JohnO’Connell, Denis McCarthyand Gerard McCarthy werestruck by a new businessidea. An exciting joinedbusiness venture thatwould see them apply theirlocal knowledge and theirindividual entrepreneurialskills.

The idea resonated withall three men – a premiumspirit made locally in WestCork, created using localspring water and utilising aunique proprietary oak

wood maturation method.Aimed at both the

domestic and exportmarkets, this new premiumdrink would embody thesincere and hopeful spiritof camaraderie, convivialityand celebration.

And the name…?Having grown up in UnionHall, just a short distancefrom one of Ireland’s mostmagnificent archaeologicalstructures, the brand namewas easily chosen – it hadto be Drombeg.

That very week in late2007, John, Denis andGerard set aboutestablishing DrombegPremium Irish Spirit™.

Just over three yearslater, the three friends(who have known eachother since childhood) arethrilled that their extensiveresearch, planning andpreparation has culminatedin the launch of Ireland’snewest premium drinkproduct.

With a lucrative

distribution deal now inplace, these innovativeWest Cork entrepreneursare confident that all theirhard work has certainlypaid off.

John O’Connell, saysthat while it’s been anarduous and challengingjourney at times, theirdecision to launch theirown product hasunquestionably been worththe long hours and thetireless perseverance.

Drombeg inspiresnewbusiness venture

Gerard McCarthy

D R O M B E R G I N S P I R E S N E W B U S I N E S S V E N T U R E

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June 2011 63

“When you start a newbusiness or launch a newproduct, you definitelyexpect it to be ademanding process. In ourcase, it was particularlydemanding - we setourselves extremely highstandards and we wantedto get the product exactlyright.

For example, we werekeen to ensure that ourproduct stood out in thecompetitive internationalmarketplace. We wanted tocreate unique selling pointsthat would give us adistinct competitiveadvantage.

There are numerous bigplayers in today’s drinksmarket – it was vital for usto differentiate DrombegPremium Irish Spirit™ bydeveloping a fantastic-tasting product andfocusing on brand

provenance and heritage.That’s why we took the

time to choose the imageryand branding that fits bestwith our product and willappeal to our targetmarket. What’s more wenow have our very ownproprietary oak wood

maturation method. Usinglocal West Cork springwater, we’ve introduced aunique production and oak-aging process that offers adistinct character andflavour. The result is theexclusive taste of ourDrombeg oak wood-

matured Premium IrishSpirit.

During the productdevelopment cycle weworked with some of thepremier industry expertswho were incrediblyimpressed with thesmooth, subtle anddistinctive smoky flavourthat we’ve achieved”, Johnexplains.

A recently-confirmeddistribution agreementwith Cork-baseddistributor, Barry &Fitzwillliam Ltd, means thatthe Drombeg label isbecoming a familiar sightat a growing number ofselect bars and off-licencesthroughout Ireland.Furthermore, exportdistribution agreements forcontinental Europe andNorth America areexpected to be securedover the coming months.

When you start a newbusiness or launch a

new product, you definitelyexpect it to be a

demanding process.In our case, it was

particularly demanding...”

“

(l-r): Johnny O’Connell’ Ger and Denis McCarthy

66 TGm

N E W S

The PhiladelphiaWholesale Produce Market(PWPM), home to twenty-six fresh produce merchantsin a 700,000 square footfresh produce wholesalefacility, is proud toannounce that the newmarket, located at 6700Essington Avenue inPhiladelphia, PA officiallyopened for business.

“We are thrilled to beofficially operating in ournew market,” said SonnyDiCrecchio, CEO of thePhiladelphia WholesaleProduce Market.

“The years of planningand building have certainlybeen challenging, but in theend, we have a one of a kindfacility that is open andready to service customers.”

The new PhiladelphiaWholesale Produce Marketprovides high quality, freshproduce to customers withina 500-mile radius. With astate of the art cold chainmanagement system inplace, the facility maintainstemperature effectively,thereby supplyingcustomers of the PWPMwith fresher products and alonger shelf life.

“The delayed move tothe new market simplyprovided the merchantswith an opportunity tofurther plan logistically for asmooth transition,” saidJohn Vena Jr., PhiladelphiaWholesale Produce Marketboard member andpresident of John Vena Inc.“It was great to see theexpression on our client’sfaces yesterday as weopened the doors to thenew facility. It is a day thatwe will not soon forget andI’m honoured to have beena part of this historical day.”

The previous market,

located on South Gallowaclosed on June 2, 2011. Themerchants of PWPMproudly welcomedcustomers inside the firstand largest fullyrefrigerated wholesaleproduce market in the worldon June 5, 2011.

Open for Business The World’s Largest Fully Refrigerated Fresh ProduceWholesale Market Officially opened. The PhiladelphiaWholesale Produce Market (PWPM) is the future of

fresh in wholesale produce distribution with anextended history serving customers within a 500-mileradius with high quality fresh produce. The 700,000

square foot facility provides customers with the freshestproduce, in the most efficient manner at competitive

prices.

68 TGm

N E W S

A shareholder in thegroup behind the Moy Parkpoultry business is suingthe company and its otherowners, members of theCarton family, for allegedlybreaking the terms of itsoriginal €4 millioninvestment.

In 2004, Gharion acompany owned bybusinessman John Gilroy,paid €4 million for a 40per cent stake in CartonGroup Holdings, owner ofthe Moy Park poultrybusiness, which is one ofthe biggest operators in itsindustry with sales of€168 million a year.

Over the last two years,Gilroy and the Cartonshave been in dispute over aplanned sale of thebusiness, payments tofamily members who arenot involved in thecompany and a €600,000loan from its pension fundto a number of thedirectors.

At a brief hearing theHigh Court was toldarbitration efforts hadfailed and that Gharion isclaiming that theshareholders’ agreementhas been breached to thepoint where its rights arebeing suppressed. TheCarton Group wants thecase referred back toarbitration.

Charion and the CartonGroup originally agreed thecompany would be sold in2009 and that bothparties would make everyeffort to boost its valuebetween 2004 and thatdate.

However, Gilroy, who isone of the company’sdirectors, and Gharionclaim the Cartons haveresisted this and continue

to run the company as afamily concern.

According to Courtdocuments, Gilroy is alsoconcerned at a number ofother issues. In 2006,directors and shareholders,Vincent Carton and JustinCarton, borrowed€600,000 from thegroup’s pension fund.

Gilroy did not find outabout this until August2007. The money has sincebeen repaid. The Cartonsborrowed it to fund theirshare of a €1 millioncapital investment requiredto combat the impact onthe business of the avianflu outbreak in 2006.

The group has alsocontinued to pay around€220,000 a year tomembers of the Cartonfamily who are not involvedin the business. Gilroy wasaware that one such familymember was receivingpayments from thecompany when Gharionoriginally invested, but didnot find out about theothers for some time.

Carton Group has yet tomake an ex-gratia paymentto a group of workers laidoff as a result of theclosure of one of MoyPark’s hatcheries inCarrickmacross, CoMonaghan, in 2007, and

could be facing legalaction.

Gharion’s action isagainst Carton GroupHoldings and Vincent,Justin and ElizabethCarton.

It is understood theybelieve that, as a result ofa number of developmentsoutside the company’scontrol, it would not havebeen possible to sell thebusiness at a profit in2009.

Charion wants theCourt to order the Cartonfamily to sell their stake inthe business to it or to buyout its 40 per cent stake.

Moy Park shareholder sues

Over 4,000 primaryschool students from 520schools around Irelandmade a poster or created afigurine of sporty LeCrunch Bunch characterusing one of the sixvarieties of Le Crunchapples as well as otherhealthy foods. Thechildren’s creations had topromote healthy eating,active lifestyles and nature.

A panel of judgesselected three finalists in

each category. Photos oftheir entries went ondisplay in Dunnes Storesgrocery outlets duringMarch and the shoppingpublic were invited to votein-store for their favourites.As an added incentive allvoters were entered into afree draw to win a luxuryweekend break for two atInchydoney Island Lodge &Spa. The winner is MartinaVenneman, Galway.

Daniel Corbel,

President of the FrenchApples MarketingCommission, said, “Theobjective of thecompetition is to instill inthe next generation asense of responsibility, ofenvironmental stewardship,so they can understandhow their choices affectthemselves and the worldaround them. It is veryrewarding and inspiring forus to see, through thewonderful creativity and

talent displayed in theentries we receive eachyear, that this message isgetting through loud andclear”.

Pictured above are:(l-r): Maurice Coffey, AsstMgr, Dunnes Stores,Ashbourne; ClaireColeman, Le Crunch; TobyClarke-Carr, Age 9 - 10category winner; PhilOsman, Fruit & Veg Mgr,Dunnes Stores; Leila Clarke-Carr, winner's sister.

TGM

June 2011 67

Le Crunch Heroes

Minister for the Marine Simon Coveney has approvedState aid for a seafood processing initiative which isexpected to create 158 new jobs.

The aid of €1.7 million has been approved as part of atotal of €7.4 million investment in seafood processing,Coveney said in Killybeggs, Co Donegal, recently.

AtlanFish in Donegal, Rockabill Shellfish in Dublin andFastnet Mussels in Cork are among the companies targetedfor the coastal initiative.

A “focused expert group” is to identify a series ofopportunities in what was the largest Irish seafood port onthe west coast, which has been hit by EU quota restrictions.

158 Seafood sector jobs

70 TGm

After spending five years studyingagriculture in the UK, Ed O’Donnell, a28-year-old crisp maker, came hometo Kilsheehan, Co Tipperary, in 2006with a plan to tackle the challenges offarming.

“We were coming towards the tail-end of the boom and farming lookedbleak. Prices were low. Young peoplewere drifting towards building sitesbut I saw how people in the UK werebuilding on their commodities.

“I firmly believed there was a nichemarket for a gourmet, hand-cookedcrisp made from my own potatoes.”

The O’Donnell family has beenfarming since the 1700s, and the ideaof making their own crisps posed aradical departure. O’Donnell’s parentsfelt that crisp making was somethingyou couldn’t do.

Rather than give up on the idea,O’Donnell would quietly slip away todo market research. Visiting over 200shops and pubs around Ireland,quizzing shop managers and scanningtheir shelves to compare the prices,flavours and bag sizes.

“I had no bags, no samples,nothing,” he said. “At the time Ithought I was wasting my money but itwas probably the best thing I couldhave done.”

With his resolve boosted, all heneeded was to learn how to makecrisps. He found what he wantedonline: a crisp-making course at OhioState University. For two weeks, from8 to 8, O’Donnell sat alongsiderepresentatives from multi-milliondollar snack manufacturers in the US,most of whom were there to refreshtheir understanding of a particulartechnical aspect. The lone foreignerconstantly raised his hand, enquiringabout every aspect in the process,from ground to bag; the technicalissues, the nutritional analysis theprocessing, the oil temperature.

At home while the O’Donnell familywere warming to his commitment, still,a factory was a tough sell.

O”Donnell turned to the banks andpotential investors, seeking €1.7million to set up production andstorage facilities at home on Seskin

Farm. the response was blunt. “Nochance,” he recalls.

He approached Largo Foods, thesame manufacturer in Meath thatmakes Ireland’s main commercialbrands and asked whether they couldmake crisps to O’Donnell’sspecifications.Largo Foods agreed todo so.

After six months of developing thelook of the bags and holding focusgroups in Cork and London,O’Donnells crisps launched in June

2010 with two flavours - cheese andonion, salt and vinegar - in 50g bags,gradually expanding to 125g bagswith a hot chilli flavour launching soon.

Employing a team of six,O’Donnells claims 1.5 per cent of thecrisp market, shifting 27,000 bags aweek to Irish outlets such as Centraand Londis as well as stockists inLondon and Vienna. So far thebusiness has covered its costs andloans, and it aiming for a profit in itsthird year.

N E W S

A lesson inmaking crisps!