Business Irish

Monday 25 September 2017

Sweet smell of success at Mondelez

Brexit and healthy eating trends are on the agenda for Eoin Kellett, MD of the Cadbury owner

Eoin Kellett at the Cadbury plant in Coolock, Dublin. Photo: Damien Eagers
Eoin Kellett at the Cadbury plant in Coolock, Dublin. Photo: Damien Eagers
Samantha McCaughren

Samantha McCaughren

Eoin Kellett has adopted a very useful philosophy, given that he is constantly exposed to the mouth-watering smells which waft into his office from the Cadbury plant in Coolock, Dublin. "I'm a firm believer in "calories in, calories out" says the managing director of Mondelez Ireland, which owns the chocolate maker, as well as a host of other food brands.

"I love sport, I love being active," he says, mentioning that he often goes for a run in between meetings if there is enough time to spare.

It is a healthy approach for a man who oversees a company which makes and sells almost half the chocolate consumed in Ireland.

The Coolock plant makes several of the most recognisable chocolate products in Ireland and the UK. Among them is Twirl, which was invented in the plant and is now is the biggest selling Cadbury product in the UK. The technique for making the flaky layers of chocolate is one closely guarded by the company.

The chocolate factory itself is more 'Transformers' than 'Willy Wonka' and is one of the most technologically sophisticated food factories in Europe after completing an €18m investment.

Lines and lines of chocolates are melted, coated and chopped into the various recognisable Cadbury's bars, with robots deftly performing complex tasks, such as building boxes around batches of bars.

Despite the intense automation in Coolock, which runs 24/7, the business employs 700 people between Dublin and a plant in Kerry. Turnover for the company is around €200m with a small amount of growth last year.

Kellett says that chocolate sales have remained quite steady, contrary to a perception that we are consuming ever-increasing quantities of food judged to be bad for us.

Kellett (49) has been familiar with the Cadbury factory all his life, having grown up in nearby Clontarf. Around the Cadbury's site are locations of former food factories.

"Look out the window you'll see where the Tayto factory used to be and you'll see where the Chivers factory used to be and both of them are boarded up and closed for years," he says.

Kellett credits the Irish milk used in production for the enduring success of the Irish chocolate business, which has been there in some form for 60 years.

The company uses 74 million litres of milk a year, accounting for 1pc of the milk produced in Ireland.

"There has to be something in the ingredients, in the milk, and no matter where you go in the world people are saying there is something about the Irish chocolate. And the fact that Twirl is number one in the UK must have something behind it, so maybe a little bit more than just a gut feeling," he says.

As well as producing bars for the UK, the company exports to the Middle East and further afield, producing variations to meet local tastes. 5 Star is a variant of Boost, with a smoother filing. "I often see a container being filled by 5 Star that's going off to Brazil. It's brilliant," says Kellett who is in the job just over a year.

Indeed, in his first week in the new role, the Brexit vote came through shocking him as well as most of the world.

"I couldn't believe it," he recalls. "I was in the office in London and they could not believe it."

For now, Kellett is taking a practical approach, pointing out that the impact of Brexit and the various agreements that will follow are as yet unknown.

"Hardly a meeting goes by with our customers that we don't talk about it," he says. "I was at a meeting last Friday with one of our biggest customers, it was key on their agenda as well.

"So as an industry, we are absolutely conscious of it, and doing everything we can with the limited information we have at the time, to see how this can play out.

"We have a team in northern Europe that are working on Brexit that I would join for separate sessions," he says.

As it is, the business is constantly competing with rival locations within the group. "If we are not providing the adequate return for the global business, we're competing with other markets who could be, and that's where investment will go.

"Without going into any detail, pricing or anything like that, you always have to be competitive. And if we don't remain competitive, our customers will vote with their feet, really."

As a child, Kellett harboured ambitions to become a journalist. Sports journalism appealed to him in particular and while be blagged his way into a few events by posing as a bona fide reporter, his writing career never took off.

"Unfortunately it didn't work out, I didn't get whatever points I needed. So it was plan B then and plan B was kind of a bit of anything you could get really. You are talking about 1986/1987."

"I went into the civil service for a while and I hated that and left that," he adds. "And then I started working in a clothes shop in town for a while. Anyway, eventually I joined a company called RHM which was a food company in the Irish market."

The managing director was the father of one of his friends and Kellett thought he would enjoy a sales role.

"I walked in on my first day and I was handed the keys of a big, bright blue Renault Traffic van with rainbows all over it and Capri Sun written over the rainbows and sent off packing the shelves of the supermarkets here on the north side of Dublin," he says.

"That was day one and I thought 'I'm not hanging around here too long'. Thirty years later I'm still in the same business."

He moved up the ranks to run RHM's cake division which sold the likes the Gateaux cakes range and Mr Kipling.

Then Premier Foods in the UK took over the business, leading to some consolidation. There was a plan to combine the roles of sales and marketing director.

"That was the push I needed. I went off and got my marketing degree in DIT in Mountjoy Square, studying at night for four years."

By the times he had completed his studies, the decision to join the two roles had been reversed. He got the sales role, a major step up for him in the organisation.

However, Kellett was only into the role about 12 months when the crash came in 2007/2008. The food business felt it early.

"The biggest trigger for an Irish business, particularly an Irish distributor, was when the euro went to parity with the UK," he said.

"We needed to get our cost structure right in the Irish business. We weren't competitive with UK companies and we needed to get our prices right and the structure didn't allow for that at the time."

Among the difficult decisions was his realisation that several jobs could not be sustained - including his own.

He left after 25 years with the company to take an extended break. But that was not to be and he was quickly snapped up by Cadbury. It was then bought by Kraft which spun the division out into a new vehicle, Mondelez. Among its other brands are Oreos and Belvita.

Kellett went for the MD role some years ago but was advised that he might need to broaden his experience through group roles in Northern Europe.

He made a decision that he would not uproot his family and stayed put. However, he developed his managerial skilsl and succeeded in getting the role last year.

There was the initial shock of the Brexit vote when he took over. And more recently Mondelez was hit by the worldwide cybersecurity attack which followed Wannacry.

"I was sitting in a big room in London, went out for a cup of coffee, came back in and my laptop screen was black," says Kellett. "It was incredible the way people here reacted though."

The factory was able to continue to manufacturing, in some cases turning to manual solutions. "We didn't drop a box in terms of supply," says Kellett. Some deliveries may have been slightly delayed, but not by much, he adds.

At a group level, the impact was more severe, Mondelez estimates the attack will shave off 3pc of second-quarter revenues.

Health and wellness has been a key trend impacting on people's eating habits in recent years and the state has become increasingly involved in this area of people's lives.

A sugar tax on soft drinks has been mooted as well as other measures aimed at tackling obesity.

He points out that the company pioneered calorie labelling on the front of its products and that all single servings are less than 250 calories.

"There's some very tangible evidence of how we are addressing this, whether it's a reduction in saturated fats ... by 2020 we'll have reduced saturated fats by over 10pc, we'll have reduced sodium by over 10pc, we'll have reduced the calories in each purchase significantly."

But at the end of the day, chocolate will never be a health food.

Kellett recalls eating a so-called healthy soup which included one of your 'five-a-day' vegetables.

"I was buying that for a while every day, and then this programme was on showing how calculate your sugar. I looked and the thing was full of sugar.

"If somebody buys a bar of chocolate they know that they're buying a bar of chocolate as a treat," he says.

"If somebody's buying a healthy option soup and it's perhaps not as healthy as they thought, then that's a different issue."

Sunday Indo Business

Also in Business