Wednesday 21 November 2018

To take the biscuit after Faker Baker

Ciaran Brennan

SO HOW do Jacob's get the figs into the Fig Rolls?

Unfortunately, Jacob Fruitfield chief executive Michael Carey remains tight-lipped on a question that has baffled generations of Irish families. After all, it's probably not beyond the realms of possibility that Faker Baker might try to pass himself off as a journalist to get his hands on Ireland's best-kept secret.

It would be fair to say that fig rolls, like most of Jacob's brands, are iconic in Ireland and their familiarity to the Irish public was one of the key attractions for Michael Carey when the company had come on to the market. He is particularly enthused by the Fig Rolls ads.

"It's a wonderful campaign that started in the Thirties," he says. "Jacob's is the number one brand of food products in Irish grocery outlets according to Checkout, the bible of the Irish grocery trade. Brands like Kimberley, Mikado, Club Milk, Fig Rolls - household names, fantastic brands that dominate the Irish biscuit market."

He should know. Around 10 years previously he had spent a couple of seasons as marketing director for Jacob's. His background includes senior management roles with a number of global food companies such as Kellogg's and Groupe Danone.

"It was strange to buy the business and walk back in as majority shareholder and chief executive," he says.

But it was nothing new for Carey. Before snapping up Jacob's, Carey had already taken over another of Ireland's food companies whose products are household names - Fruitfield, manufacturer of Little Chip and Old Time Irish marmalade, Silvermints and Double Centres. When Nestle announced plans to sell off its loss-making Fruitfield Irish operation in January 2002, Carey (with the backing of some colleagues in corporate finance and bank debt) stepped in.

"The management team that was in place ended up working with us," he says. "It wasn't a case of changing the guard. The big difference was we were focused on that business.

"Nestle management was distracted by international imported Nestle brands like Polo mints and the Irish brands didn't get the attention.

"A brand like Silvermints in the Nestle stable was competing against the Polo brand. For us, Silvermints is obviously a key big brand and we focused a lot of attention on it. The big difference was focus."

Within a year, he had turned the company around and brought it to profitability. Today, it has a turnover of ?110m and of that about ?10m is exported - no mean feat for a small Irish company competing with global brands.

"We're minnows in brand terms, in the sea of great sharks," says Carey. There are huge multinationals we compete with - brands like Heinz, McVities, Cadburys.

"They are identical in terms of categories and we compete with them and in many cases we win that battle. I think it is because we are a local company.

"We've got the unique position of being able to tailor everything we do for the Irish market. Every decision we make is made in Tallaght. We don't have to seek approval from the US or Switzerland or the UK.

"So we can make decisions a bit faster and react faster. We can avoid a lot of waste. Big multinationals waste a lot of money on bureaucracy. We don't have that bureaucracy. That gives us an advantage."

There are, of course, huge disadvantages - the scale of manufacturing of those competitors is enormous compared to Jacob Fruitfield, and the Irish manufacturing environment is a very difficult place to work.

"It's not getting any easier, and it's going to get worse," concedes Carey. "The cost environment is out of kilter - the cost of power, electricity, gas. The inefficiencies of some of those companies is passed on to us. Our competitors don't have that. Labour costs are much higher than for some of our competitors."

The cosy consensus that the demise of manufacturing in Ireland is unavoidable angers him.

"There seems to be a blase feeling of saying, 'Well, traditional manufacturing has no future so why bother supporting it?'" he says. "I think that is inappropriate. I think there is a future for traditional manufacturing and food manufacturing if we focus on things we can do better than other people."

Nor is he enamoured by theories that food companies in Ireland are creaming it at the expense of the consumer.

"The hype caused by someone like Eddie Hobbs, as popular as he might be, is causing real problems for manufacturing firms in all sectors. None of these firms is profiteering.

"The competition for our products and the strength of the retailers and the pressure we are under to supply products at good value is extraordinary.

"I think the expectation that prices won't go up in the food sector is daft. It's inept economic thinking and it is dangerous for an industry to be under that kind of pressure."

Nevertheless, Jacob Fruitfield is making progress in a tough environment and Jacob's is unlikely to be the last food company that Carey will buy.

"There is more likely to be consolidation in the sector, where more companies will come together. We have a list of companies we maintain all the time. Any food company of reasonable scale would be on the list of companies we would be interested in if it had good synergies."

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