Rising to the challenge
Consumers are increasingly searching for new discoveries and flavours that also improve their health. We spoke to three leading businesses to find out how they are responding to the challenge.
“Ultimately we want to be part of every eating occasion. That means constantly looking at what we sell and how we sell it, reaching consumers via whatever channel they are using, and understanding exactly what consumers are looking for.”
Setting himself the challenge is Oliver Sutherland, Chief Commercial Officer and Managing Director of Irish-based Findlater & Co, a €100m group manufacturing and distributing premium coffee, wines and spirits, along with bakery and culinary ingredients to the hotel, restaurant and café trade.
He says that as our working lives and lifestyles have transformed, rising to these challenges has become that much tougher. “We see it every day as we deal with rapidly changing tastes driven by an increasingly health-conscious consumer.”
In his home market he says consumers seem particularly alive to these trends. “Part of the reason is that cities like Dublin where we are based have a very young population. But also Ireland is coming from a bad place in the past in terms of poor obesity and alcohol levels. There is a real feeling that younger consumers are very aware of this.”
Sutherland says health trends are even upending the traditional coffee market, and in response Findlater has developed its own commercial artisan brand. “One trend we see there is the increasing popularity of plant-based dairy free milks such as soya milk or coconut milk which are perceived as much healthier. In response we have been working successfully with the likes of Alpro, the largest plant-based milk brand.”
Consumers are also prepared to try new flavours. “With our own brand we are sourcing the beans from Ethiopia which gives a very different flavour profile and which is less bitter than more traditional blends such as from Colombia.”
With coffee you also have to think about what people are eating with their drink too, he adds. For instance, Findlater recently developed a very well-received cookie range, while its gluten-free snack bars are also proving popular.
Sutherland is seeing similar trends with wine, epitomised by the increasing popularity of organic wines and by a rising demand for new flavours from countries such as Wales, Greece and China.
The increasing tendency of millennials to abstain from drink – latest figures suggest as many as one in five millennials do not drink alcohol – is also having an impact. “Our non-alcoholic wines are doing very well at the moment.”
Talking of wine, another trend is the huge growth in premium sales. “It might sound a cliché but people still want to treat themselves. It comes back to these other wider food retailing trends we are seeing. When it comes to the weekly shop people are after the best value possible. But then they will make sure they treat themselves every now and again too.”
Steve Evans, Managing Director of UK-based Freshtime, is seeing similar trends. Freshtime supplies chilled, ready-to-eat salads, snacks, prepared vegetables and sandwich fillers to retailers, and began life more than 20 years ago as the East Lincolnshire Farmers Cooperative selling vegetables direct to retailers.
One of the keys to the company’s original success was that farmers realised there was money to be made out of making use of all vegetables and not just the unblemished, perfectly shaped ones that the supermarkets wanted to put on their shelves.
As Evans says, the idea was that nothing went to waste. “The retailers soon realised that in a convenience-driven industry there was a market for the whole product. Freshtime went from being a farmer-led business to a consumer-led business built around the convenience trends that were emerging at the time. The business started working with multiple retailers at precisely the time that consumers were experiencing ever busier ‘on the go’ lifestyles.”
Evans says the vegetable market remains core to this day, but the make-up of the business has completely changed. “We have gone from 100% of the business selling fresh produce to about 40% today as the trend for food-to-go salads becomes increasingly popular.”
The company continues to source many of its products from the Lincolnshire farmers who set up the cooperative, but at certain times of the year does have to import products which cannot grow in the UK winter.
Echoing Sutherland’s comments, Evans says his business also has to be “right on trend” to react to fast-changing consumer habits. “The challenge is that you have to constantly innovate to keep the consumer interested in what is an increasingly competitive market. If you take salads there are more and more choices on the high street, not just in terms of the food itself but in terms of the different outlets from where you can buy the product. Salads aren’t just sold in supermarkets anymore.”
Evans says the defining trend is that consumers are now far more healthconscious. “They are not necessarily dieting, instead it is often more about being careful about what they eat, and vegetables and salads play a major part in that. For instance there has been a notable move towards ‘meat-free’ in recent times, epitomised by the Veganuary campaign which encourages people to try vegan just for the month of January. We saw a notable spike in demand.”
Another trend is flexitarianism or ‘casual vegetarianism’, an increasingly popular plant-based diet that is mostly vegetarian yet still allows for the occasional meat dish.
Adds Evans: “This is something we are seeing a lot of, people happy to move between vegetarian and meals containing meat. I read a recent survey that 30% of evening meals now contained no meat or fish which is actually a very striking statistic. More and more people are mixing vegetarian and meat meals, it’s no longer an either/or. Demand for meat is still strong and the best-selling salads still contain chicken and prawns, but consumers are increasingly looking for protein-replacement products such as lentils, chickpeas and kidney beans in their salads.”
Consumers are increasingly looking for protein-replacement products such as lentils, chickpeas and kidney beans in their salads.
Exactly the same trends can be found on the continent. For instance Boris Bourdin, Managing Director of the food division of €1.5bn French agricultural and food cooperative giant Euralis, says he has especially noticed the rise of flexitarian trends too. “It means consumers are increasingly willing to try these ranges of new products. People want fresh food, they want to be cooking at home, they want to be consuming natural foods.”
To be successful in this climate Bourdin says it comes down to offering “transparency and choice” for the consumer. “They want to know exactly how products are made and where they are coming from. It’s really important to build up that trust and the way you do that is by consistently delivering on what you say. Our vision as a business is to be best in class and we have the capability to follow these trends and respond appropriately to them.”
Bourdin says the sheer pace of change in markets is a huge challenge in itself. “Natural barriers between certain food markets are disappearing fast, and that goes for where consumers are buying products from too. Today everyone wants these products at their fingertips. That means they could be going to a supermarket, to a butcher, to a restaurant, to a fast food chain. It’s a complete mix, and given the size of our business that actually represents a big opportunity for us because we have the scale to respond.”
Within its agricultural division alone Euralis works with 12,000 farmers across the southwest of France in diverse sectors such as field crops, seeds, vegetables, wine, cattle and poultry. Meanwhile its food division operates eight factories across France, supplying a vast range of meats to the domestic, European and international markets.
Among its best-known brands are the Montfort and Rougie foie gras products, where the company works with hundreds of specialist fattened duck farmers. In recent years international expansion has further bolstered the company’s position as world leader in foie gras, with sites in Bulgaria, Canada and China.
Another of the group’s brands is Euralis Semences, a European leader in multistrain seeds such as maize, sunflower, rapeseed, sorghum and soya. The company’s seed business has developed strong international credentials with ten European subsidiaries and two seed production sites in Spain and the Ukraine.
Bourdin says having a strong digital offering is also key to success. “Our job today isn’t just to get the right product into the right outlet at the right time, but also to help our consumers along their own digital journey. Countries such as the UK are still ahead of the game in terms of its online retail market, but here in France we are following the same trend and catching up quickly. Even more specialised and luxury products such as foie gras can now be bought online.”
For all three businesses these are exciting times as they relish the opportunities that these different challenges bring.
Given it is nearly 200 years since Alexander Findlater established his first whiskey store in Dublin, Sutherland says the Findlater name has a lot of resonance in Ireland and he is looking forward to further leveraging the brand.
Findlater is all about building a platform that really nails this market and exploits the potential for growth.
Back in 2014 the business was part of tea and coffee maker Robert Roberts which was then acquired, along with health food company Kelkin, by Valeo Foods. Since then Sutherland, who was formerly Chief Commercial Officer at Valeo and is also a previous MD of Nestlé Ireland, has been busy integrating the businesses into the wider group and defining a portfolio strategy.
“By bringing together these already successful businesses we’re really widening our footprint, while we are of course also getting the benefits of scale. As a business, Valeo was often selling coffee or wine to the same buyer so there was a real consolidation opportunity in terms of the channels we bought into.”
However he stresses that it is not just about adding scale but value too. “Valeo’s private equity owner CapVest is a long-term player in this market and Findlater is all about building a platform that really nails this market and exploits the potential for growth.”
Meanwhile, Freshtime supplies to retailers ranging from high street chains to convenience stores to foodservice groups, many of whom package the product as own brand. Evans says the company’s point of difference is the huge range of capability it has at its Lincolnshire factory from which it sells around 60 million units a year. “The business has been through significant growth over the last three or four years and last year we invested in increasing capacity at our factory. In terms of possibly expanding the site further we are currently reviewing our options.”
He says keeping a mix of products is central to its strategy. “We are never going to supply to huge numbers of retailers with just one specific product, that is not our model. We are always looking out for further channels of expansion.”
Evans says one of the key innovations that Freshtime has made is to employ its own chefs who spend time not just in the UK but also abroad looking at latest trends. “We also invest a lot in consumer insight and research while we also do our own market research, regularly talking to shoppers. It’s important to invest in understanding these food trends and what consumers are looking for.”
Innovation also extends to packaging. “As a business we have been really proactive in terms of reducing plastics in packaging, taking more than 10% out of the business in the last two years alone. We have also been moving towards making all of our packaging recyclable and today more than 80% of the plastics we use are recyclable. As a society we will probably never fully remove plastics but we can certainly cut it down significantly.”
Meanwhile, Sutherland is having to deal with the particular challenges that Brexit poses for Irish business, and the impact that the fall in sterling has already had. In particular he says competitors supplying to the Irish market from the UK have seen their prices fall by up to 20% in Ireland. “That creates challenges when you have to be competitive on the shelf. One has to assume that the 2019 Brexit deadline is the deadline that we are working towards. We have to assume that World Trade Organization tariffs will come in at that point and have to plan for what that might look like.”