Article appeared in issue 3, 2022

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Ireland has an enviable track record of producing private label products for the Irish, UK and international markets. This experience, combined with its future focus on sustainable growth, is the key advantage Irish businesses bring, according to Lian Enters, Market Specialist Netherlands for Bord Bia (the Irish Food Board). 

“Europe is one of the most dynamic and active regions for private label in the world, with shares averaging between 30% and 50%. The Schwarz group, Aldi and Tesco feature among the top five suppliers of private label worldwide,” explains Lian. Ireland has one of the highest private label shares in Europe at 45% and consequently is well positioned to understand customer needs. “Irish producers’ extensive experience in servicing the top retailers at home and in the UK means they can meet the high demands and expectations of a broader range of European retailers.” 

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Understanding the market

Irish food and drink producers offer innovative product ranges that meet new consumer needs through bespoke formulation, while addressing emerging issues such as sustainability. “Consumer demands and expectations are constantly evolving, and retailers are seeking new products to meet these increasingly sophisticated and considered needs. Bord Bia and Irish food companies have invested heavily in market research to understand both the consumer and the category across international markets. Our latest global research on dietary lifestyles surveyed over 18,000 people across nine countries and revealed valuable insights for Irish food and drink companies on the significant market opportunities offered by new dietary dynamics.”

The agility, creativity and expertise developed in the Irish category over the past 40 years, she adds, means that Irish private label suppliers can develop product solutions that deliver optimum quality and add value and choice to retailers seeking to grow their private label category shares.

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Addressing trends 

‘Free from’ is a growing food trend, accelerated by the pandemic, in which consumers look for foods that answer a health or an ethical need. Irish manufacturers are ahead of the curve as, due to Ireland’s relatively high level of coeliac customers, they have been meeting the demand for gluten-free products in the UK and Ireland for many years. “Irish private label exporters have developed a wide range of offerings which compete with mainstream products on quality and taste. These products offer strong appeal to lifestyle shoppers who appreciate the broad range of options.”

Meat-free is another area of opportunity for Irish food and drink producers and by 2025, the market for alternative protein, including meat, eggs, dairy, and seafood products, could reach at least $290bn.** “Ireland’s long history in catering for its coeliac customers has seen private label companies take this exemplary record of accomplishment and use it to bring an equally innovative approach to other categories. Within the health and fitness sectors, for example, producers are introducing new on-trend and in demand protein products.” 

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The challenge of price and quality

New product innovation, matched with operational excellence, is needed if Irish producers are to overcome the issue of price. “Delivering a competitive price proposition for retailers and discounters whilst maintaining a premium quality offering remains a constant challenge,” explains Lian. “Research undertaken by IPLC show that retailers have been actively seeking to reduce the price gap between themselves and discounters. Compared to national brands, standard private label was 47% cheaper in 2021, a significant shift from 2016 when it was 33% less expensive. The average price gap between Lidl and national brands has remained almost the same at 55% cheaper.” 

To address this challenge, Lian says, retailers were not simply reducing their prices but had adapted their private label architectures. “In many instances, retailers have removed their value tier or reduced the number of products offered under this tier and frequently re-position the remaining value label products to match both the quality and price of the discounters. On the other hand, discounters are focusing intently on increasing their service and their branded offerings. According to Nielsen, the branded offering of discounters rose again in 2020 to 31.8%. The ongoing battle between retailers and discounters ensures sustained pressure on profit margins, making it more important than ever to differentiate. With price increases on all fronts and with consumers having less spending power, we will have to see how this will develop.” 

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Our decades of experience can also help to set us apart. “Irish producers in the prepared consumer foods (PCF) sector have demonstrated proven capability in supplying key retailers in several markets, including a large presence in the extremely competitive UK retail channel. Continual investment in operating machinery and processes have enabled companies to remain competitive in this channel. Our island may be small, but we have large high-tech production facilities,” says Lian. 

Our ability to offer tailored solutions can open doors to new supplier partnerships she adds. “The private label landscape is continuously changing. Pure online players, such as Picnic, are performing strongly on an international scale and strong new buying alliances are being forged as a result (Epic Partners). Artisan positioned start-ups such as Crisp (Netherlands), La Belle Vie (France) and fast delivery players, such as Gorillas, have introduced new standards for mainstream retailers. Irish private label suppliers understand the importance of providing bespoke products, and have the flexibility required to deliver these products.”

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Sustainable suppliers

Irish food and drink producers are ready and able to meet the sustainable targets and goals set by retailers, through the Origin Green programme. The world's only national food and drink sustainability programme, it enables the industry to set and achieve measurable sustainability targets that respect the environment and serve local communities more effectively. “In a recent Bord Bia survey amongst buyers, the importance of sustainability to retailers was emphasised and it has become an integral part of their business to continue to improve and instigate positive change in this area.” To date, 324 Irish food and drink companies have signed up to the programme, and manufacturing members have set a total of 2,779 sustainability targets and established 13,600 sustainability initiatives since the programme launched nine years ago. 

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On the consumer side, shoppers want to make choices that are better for their environment. “Consumers will become more aware of the carbon footprint of their food as retailers and brands develop labels clearly specifying the Co2 emissions of the products. As a result, there will be a growing emphasis on practical ways to reduce Co2 levels and thus minimise the impact on the environment.” 

Here too, Origin Green is addressing this concern, as larger member companies within the programme are required to comprehensively assess their entire carbon footprint, including value chain emissions, which incorporates all indirect emissions (scope 3) associated with food manufacturing such as freight and travel.

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Meet the makers

A total of 16 prominent Irish companies will participate in PLMA and this year we will have a more spacious and open exhibition area to facilitate meetings in a safe environment. For further details or introductions to innovative, sustainable suppliers, visit the Origin Green pavilion in Hall 5, stand #6455 at PLMA. “We are very much looking forward to seeing you there!”

Sources: IPLC research Close the Gap May 2021; Nielsen IQ Retailer’s brands in Europe 2020 - April 2021

*Exploring opportunities in the Chilled Ready Meal sector in the UK, 25th November 2020, Bord Bia Thinking House ** Boston Consulting Group, 2021

Premium product 

Fusco Foods specialises in hand-crafted cakes and desserts. In the Irish market, it manufactures private label hand-rolled meringue cream roulades for Lidl, SuperValu and Dunnes Stores, and international customers include Albert Heijn, Jumbo, Aldi, Detailresult (The Netherlands), Lidl (Romania and Sweden), Foodstuffs (Pams brand) in New Zealand, Jacobs in Norway, and Coles, Australia. In 2021, the company won a PLMA award for its SuperValu Raspberry and White Chocolate Roulade.

 

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Premium product 

Fusco Foods specialises in hand-crafted cakes and desserts. In the Irish market, it manufactures private label hand-rolled meringue cream roulades for Lidl, SuperValu and Dunnes Stores, and international customers include Albert Heijn, Jumbo, Aldi, Detailresult (The Netherlands), Lidl (Romania and Sweden), Foodstuffs (Pams brand) in New Zealand, Jacobs in Norway, and Coles, Australia. In 2021, the company won a PLMA award for its SuperValu Raspberry and White Chocolate Roulade.

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Custom made

ABC Nutritionals manufactures sports nutrition, weight management, and health and wellness nutritional products at its facility in Co. Clare. Its target market includes health food stores, current distributors of sports nutrition products or health nutrition products, and brand owners of health or sports nutrition products, as well as major online retailers of food and nutritional products. All of its products can be customised to be vegan, gluten or dairy free, offering customers a unique range of products under their own brand. 

 

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Sustainability in action

Glenilen Farm is a family-run business, producing yoghurt, cheesecakes and country butter, as well as a range of other high-quality dairy products, using milk from their own and neighbouring farms. Glenilen is one of the leading Irish yoghurt brands and is stocked in Tesco, Dunnes Stores, Aldi, Lidl and SuperValu in Ireland, and Waitrose and Sainsburys in the UK. The business is an Origin Green Gold member and sustainable practices have always been at the forefront of their business. Currently, its glass yoghurt jars are both recyclable and up-cyclable, while its cheesecake tubs are made from 100% recycled water bottles. Glenilen Farm owner and co-founder, Alan Kingston, says: “To help reduce our carbon footprint, we’ve planted nearly 8,000 native Irish trees on the farm, including sessile oak, hazel, downy birch, cherry, Scots pine, holly, hawthorn, crab apple, and rowan. Energy efficiencies are also front of mind. The business uses solar panels, which produce 60,000 kWh and save 26 tonnes of carbon emissions each year, plus the company swapped all its lightbulbs to less power-hungry LEDs. It harvests all the rainwater on the roof of the dairy, which equates to about 320,000 litres per year for use around the farm. All of which cements its mission statement: “We can’t change the world, but we can change our small corner.”

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