Friday 21 June 2019

Yogurt company's culture blends tradition with modern thinking

Killowen Farm

Nicholas Dunne, CEO of Killowen Farm, with some of his herd of cows on the farm near Courtnacuddy, Enniscorthy. Picture: Frank McGrath
Nicholas Dunne, CEO of Killowen Farm, with some of his herd of cows on the farm near Courtnacuddy, Enniscorthy. Picture: Frank McGrath Business

Farms are valuable assets and, as with any business, maximising the value from that asset makes good commercial sense. Dairy farmers, in particular, make their money from the milk produced. But the holy grail for some farmers is to make the transition from traditional farming to further up the value chain. If they can produce saleable products that utilise the asset and the manpower of the people, that has to be a good thing.

Of course, that's easier said than done. However, there are countless success stories of iconic Irish agri-businesses that are now significant brands on the world stage. Kerry Group, Glanbia, Dawn Foods and Queally meats all started on an Irish farm.

From Caterpillar to Butterfly

Wexford man Nicholas Dunne considers himself to be very fortunate. This humility is genuine. But in my view, it masks the real drive, passion and entrepreneurship that has turned his family farm into a powerhouse for making yogurt. After spending a year in Australia, Nicholas returned in 1991 to take over the family farm of 80 Friesian cows from his dad, Tom Dunne. Within five years, he built the stock to 200 cows. He immersed himself in learning by being on the board of Wexford Creamery, doing a one-year part-time diploma in corporate direction in UCC and visiting Kerry Foods' plants in the US.

This opened his eyes and made him realise the 'art of the possible' and that there were other ways to get a return on his investment, time and effort. Nicholas the entrepreneur started to explore other options.

The Killowen Purchase Milestone

When your lifetime is spent around dairy cows, the business ideas obviously centre on milk. Nicholas investigated and just as quickly turned away from cheese, frozen yogurt, ice-cream and more.

In 2003, his sister Pauline (who now works with him in a sales and marketing role) told him about a local yogurt-maker called Killowen that was closing down. That evening Nicholas made contact with the owners and within days he was in the yogurt business. It seemed that all the time spent exploring his options was paying off.

Paul and Laura Kinsella, the previous owners, were passionate about quality and Killowen had been a premium product since the 1980s. After renting their premises for a year, Nicholas moved the plant to its current site, the Dunne family farm. This was essential for control and to reduce the transporting of milk. It also removed the split focus on two locations. The next couple of years were a huge learning curve for production, quality control, dealing with state agencies and banks, sales, marketing and so on.

Strategy and Scones at the Kitchen Table

By now the business was expanding at pace. Pallas Foods became an important customer for their food service division, which put the Killowen brand into hotels across Ireland. The large multiple retailers also became very interested and the brand is now listed in many of the leading chains around Ireland.

All major meetings and decisions are made at the kitchen table of the original family home. Nicholas' mother and father greet every visitor with a cup of tea and a scone. I myself was charmed on my visit with their warmth and hospitality. Inside, the kitchen is like a time warp, yet across the yard is a sophisticated and modern facility making the creamiest and best-tasting yogurt I've ever come across. A retail buyer was so intrigued that he took photos to share with his colleagues back home.

Scaling Up

Two significant milestones are worth mentioning. One is the debate around private label. Many retailers like to have a product with their own label which they promote heavily. Nicholas's view is that it brings volume and cash to the business. That then gives him the resources to invest in his own brand. For me, any company in this situation ought to consider this seriously. I guess the percentage split between private and own label is the watch-out for the long term.

Secondly, Fine Foods Eire is a Dubai-based agency specialising in introducing Irish produce to the Middle East and Far East markets. Nicholas gives full credit to it for Killowen Yogurt now being available in the Burj Al Arab in Dubai and in the first-class cabin of Emirates airline. That company is marching east and has secured listings for Killowen in Singapore, Hong Kong, Malaysia and Japan.

The Last word to Nicholas

Nicholas acknowledges that there were many times during the years that were particularly tough. Cash has been tight, but the farm as an asset was a great cushion for bank borrowing. He has no problem giving personal guarantees to whoever he owes money to, as he sees it almost as a moral duty to honour debts.

His one piece of advice is to ensure you partner up only with people that have a mutual ambition for success. For him that includes Enterprise Ireland, Teagasc, Bord Bia, bankers and accountants. He lives and breathes win-win thinking. That, of course, requires trust and reciprocal thinking.

Sunday Indo Business

Also in Business