Sunday 17 December 2017

Irish brands box above their weight

From Avonmore milk to the pint of stout, Irish brands are holding their own against global rivals, writes Harry Leech

Kilkenny won't be the only Top Cats in Croke Park when they play Waterford in the All Ireland semi-final this Sunday -- Kilkenny's shirt sponsor Avonmore is the country's top domestic grocery brand, according to recent Nielsen research. Avonmore was just beaten for the overall top spot in Ireland by Coca-Cola. As Coke is the world's biggest brand, it's a good showing by the Kilkenny-based dairy.

The Irish milk market is one worth dominating -- it is worth €396m annually, and the Irish are the third highest consumer of milk products in the world after the Swedes and the Finns (the milky complexion has to come from somewhere).

Avonmore has a whopping 25.1 per cent of this market, which is part of the reason why parent company Glanbia's share price is so healthy. As well as its high-profile sponsorship of Kilkenny, Avonmore spent a sizeable chunk of change (€750,000) on advertising last year to reinforce their brand dominance.

According to Jonathan Joyce, broadcast director at Magna Ireland, even in a fragmented market, "the Irish brands that are doing well are the ones that are using higher production values and using homegrown creative talent to make their ads".

There's truth in what he says: Ireland's strongest brands are arguably found in the food sector, and other Irish brands who also advertise heavily, such as Brennan's, Tayto and Denny, also make it into Nielsen's top five Irish brands. Denny, no stranger to advertising on TV and radio, is the number one player in the packaged meat category, which was worth more than €211m in Ireland last year, according to Nielsen.

Despite facing stiff competition from imported brands in recent years, Mr Tayto is holding his own and is no slouch when it comes to sales; the Tayto brand has 31 per cent of the €197m Irish crisps and snack market.

And while both Brennan's and Irish Pride are cagey about releasing sales figures or market share, the Irish baked goods market is estimated by Bord Bia to be worth a whopping €496m -- it seems there's serious dough in bread.

But man does not live by bread alone, and when the president of America exclaimed: "You guys are keeping all the best stuff here!" it was a line that sunk the hearts of Diageo marketing execs in North America.

It was no coincidence that when Obama visited Ireland in May, he popped into Ollie Hayes' pub to down a pint of Guinness for the cameras.

Irish connections do no harm to a presidential re-election bid and Guinness is the brand most Irish-Americans recognise as truly 'Irish'.

Despite losing share to imported lagers during the Celtic Tiger, Guinness is still the top dog of the Irish beer and cider on-trade, with 32.5 per cent of a market that is worth €2.4bn each year.

The big story for Guinness, however, is the export market -- St James' Gate brews a billion pints a year, of which 70 per cent is exported, predominantly to the US and the UK.

The black stuff isn't the only Irish success story for Diageo -- Smithwick's has seen its popularity surge over the past year, due to a clever rebranding, which has attracted more consumers in the coveted 18-24 target market.

The ale now has a 6 per cent share of the Irish on-trade in beers and ciders.

For good or for bad, many of Ireland's most recognisable brands are alcohol products; and after stouts, Irish whiskey is top of the heap.

While they may have multinational parent companies, Bushmills, Powers, Jameson, and Tullamore Dew are all unmistakably 'Irish' brands and all trade well on their Irishness abroad.

For instance, Tullamore Dew, which was sold with Irish Mist and Carolan's to William Grant & Sons for €300m in 2010, is the top selling whiskey in Germany, Denmark, the Czech Republic and the Baltic countries, beating many prestigious Scottish and American whiskey brands into runner-up position.

The Irish whiskey market has a fantastic potential for export led growth -- the sector grew by 10 per cent last year alone and by 22 per cent in the US. Irish whiskey sales accounted for approximately €1.8bn worldwide.

However, they still have a long way to go before they overtake the Scotch market, which was worth an estimated €35bn last year alone. Best get Obama on the line . . .

Of course, there have been notable failures among Irish brands.

Ten years ago brands like AIB, Bank of Ireland and Anglo-Irish were some of the strongest indigenous brands in the Irish market.

The common perception was that you could never lose money on bank shares or Irish property, a perfect example of companies whose brand was completely at odds with their business reality.

Irish bank shares were worth about €59bn at their peak in February 2007.

Today they're practically worthless -- the biggest collapse ever seen in any sector in Ireland.

Sunday Indo Business

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