Close to you, because it belongs to you.

ADM Londis plc is the only symbol group to offer retailers ownership and profit sharing through shareholding in the group. So the more we grow, the more your profits grow.

Working together with Londis, you will gain a partner that listens to your needs and understands today’s competitive marketplace.

You can benefit from our tailored range of services including logistics, unique store design, marketing, retail information systems and quality retail management support systems in

addition to extremely competitive terms.

If you would like to learn more about our unique approach to retailing, please contact eitherJerry Mc Donnell, Sales Manager East or Joe O’Connor, Sales Manager West on 1890 33 33

73 or email jerry.mcdonnell@londis.ie / joe.oconnor@londis.ie for further details.

Over 50 years in the business, working hand

in hand with our retailers.

In this months issue

October 2009

2 NEWS

- SOUP

36 - FUEL

38 - TOBACCO

8 COMFORT FOOD

10 NEWS

16 DEALING WITH THE HANGOVER

19 DRINKS NEWS

24 KRAFT BURY COMPETITION

M.D/Editor: Frank MaddenDeputy Editor: Ruth TimminsBsn. Dev. Managers: Niall P. Madden

Sarah GriffinContributors: Emma Maguire

Tomas O’BrianCirculation: Margaret CorryDesign: 90% Proof

Todays Grocery Magazine Tel 2809466 (6 lines)The Mews email: info@todaysgrocery.comEden Road Upper editorial@todaysgrocery.comDun LaoghaireCo. Dublin www.todaysgrocery.com

Small PrintTodays Grocery Magazine is circulated to all proprietors, directors and managers of allrelevant manufacturers and distributors, to every cash and carry, every multiplesupermarket, group head office and wholesaler, all group affiliated shops and Londis outletsin addition to over 6,300 unaffiliated independent retailers and the country’s leading off-licence outlets. All articles are copyright of Todays Grocery Magazine and cannot bereprinted without the written permission of the editor. All letters to the editor of thismagazine will be treated as having been submitted for publication. The magazine reservesthe right to edit and abridge them.Disclaimer While every effort has been taken to ensure that all information is accurate atthe time of going to press, neither TGM Ltd or Todays Grocery Magazine acceptresponsibility for any inaccuracies or omissions. Please note that the opinions expressed inthe articles are strictly those of the authors.

26 - CONFECTIONERY

34 FLOGAS GET EXCLUSIVE ON SUPERSER

30 NEWS

N E W S

2 TGm

Tesco spent €16.2mchanging the stock in itsIrish stores under its price-cutting programme, theretailer said.

Tesco, the world’s thirdlargest retailer, said its netincome totalled Stg£1.03billion for the six months toAugust 29th compared withStg£1.01 billion a yearearlier.

Tesco, which runs morethan 4,300 shops in 14countries including Ireland,said it made profit beforetax and one-off items ofStg£1.57 billion. Sales rose9.3 per cent to Stg£27.8billion.

Second quarter sales inTesco’s key British market,which accounts for abouttwo-thirds of its business,rose 3.1 per cent in storesthat had been open for atleast a year.

Tesco said the the pricesof 12,500 products inIreland were reduced by anaverage of 22 per centfollowing the introduction ofits price-cutting programmeearlier this year as a

response to the “dualchallenge” of the recessionand a rise in cross-Bordershopping.

Suppliers havecomplained that the spaceallocated to Irish brandshas fallen significantly afterTesco decided to integrateits brand-buyingprogramme in Ireland withits British business.

The change in supplytactics required Tesco totemporarily close and thenreopen each of its Irishstores.

The company said thatIrish customers hadresponded enthusiasticallyto the price-cutting planwith “significant uplifts involumes, offsetting much ofthe impact of lower prices”.

It said the changes insupply, combined with thecost-reduction programme,had allowed Tesco Ireland“to deliver a steadyfinancial performancedespite the economic headwinds and significant self-imposed price deflation”.

Stock change cost Tesco €16.2m Volume sales fall at Britvic IrelandSoft drinks group Britvic

Ireland saw sales volumesplummet almost 14 percent over the three monthsto the end of September,and said the market “showsno indication of a return togrowth in the short term”.

The lower volumes ledto a 16.3 per cent declinein revenues at the Irishdivision of Britvic, whichowns the Ballygowan waterbrand and the Club brands.

”We’re certainly findingthe pub sector in particulara challenging environmentat the moment,” saidAndrew Richards, ceo ofBritvic Ireland.

About 40 per cent ofBritvic’s sales volumes inIreland come from the on-trade or bars andrestaurants sector. Volumesof Britvic’s bar sales havefallen 20 per cent, whilegrocery volumes slid 0.5per cent and conveniencestore sales fell 1.7 per cent.

Britvic Ireland was theworst performing division of

the British soft drinks groupover the period, accordingto the full-year-tradingresults issued by thecompany.

Overall, group volumesat Britvic, which distributesPepsi in the UK and Ireland,increased 1.6 per cent inthe three months to the endof September compared tothe same period in 2008,while total revenuesincreased 4.2 per cent toStg£246.5 million.

Esso profits slip for 2008

Fuel retailer EssoIreland saw its profits fall to€3 million last year, down

from more than €5 millionin 2007, as increasedcompetition resulted inlower margins at the groupand an operating loss.

Turnover at Esso Irelandsoared 42 per cent to€838 million in 2008, ayear that saw sharpvolatility in crude oil priceson global commoditymarkets.

However, the higher costof sales left gross profitsreduced. Disruption costsand administrativeexpenses left the companywith an operating loss of€5.9m, compared to aprofit at €2m the yearbefore.

4 TGm

N E W S

The new managementteam at C&C has improvedits stall with the addition ofTennent’s to its portfolio,but cracking the Britishmarket with Magnersremains central to itsstrategy.

The company isdeveloping plans to take yetanother bite of the appleas it repositions itself in themarket. But after alreadyfailing to win over Britishcustomers, can Magnersever make it big there?

In the British drinkstrade, the phrase ‘theMagners effect’ iscommonly used to describethe marketing whirlwindwhich saw the Irish cidertake drinkers by storm fouryears ago.

But chief executive JohnDunsmore reflected on howthat backfired - it developedthe cider market, ratherthan making Magners the‘must drink’ brand.

“To some extent, theimpact of the success of theprevious advertisingcampaign was generic inthat it built the category,”

he said. “So we now need tore-establish the distinctionof what makes Magnersuniquely great, so we havesome clear, blue wateragain ahead of the otherbrands.”

Quite how the companywill do that is unclear.Previous managementrealised that they had notsucceeded in makingMagners special enough tohold onto customers.Strongbow and the BritishBulmers brand successfullypiggy-backed on theMagners ‘over ice’ message,with rival brands havinggone on to outstrip C&C’ssuccess.

“In Britain, we are failingto get our fair share of whatis a growth category,” saidDunsmore.

The challenges faced byC&C were reflected in itsrecently released results.The company reportedrevenue of €257 million,which was down 15 percent, while operating profitwas €57.4 million Theimmediate aim is to stopthe fall in sales, with growth

expected next year.The company has more

than €25 million to spendon marketing in Britain, andmay focus on point-of-salecampaigns in pubs, ratherthan traditional advertising.

Focusing on Magners’uniqueness in order to winback customers will be ahuge challenge for themarketing team. The lasteffort to do so under oldmanagement emphasisedthe brand’s Irishness andhigh quality due to itsbrewing techniques.Dunsmore and his team willhave to make Magnersstand out all over again.

“We need to make surethat we are communicatingthe intrinsic strengths ofthe brand, rather than justits association ‘over ice’.Ultimately, ‘over ice’ iscopyable,” said Dunsmore.

The company wants topush out the Magnersbrand internationally, butwill learn lessons from thedisappointing forays intoGermany and Spain underthe old guard. It may optfor acquisitions in the future

to help grow abroad.In the long term we

want to internationalise thebusiness. We might welllook at acquisitions toachieve that using thestrong cash flow of thebusiness,” said Dunsmore.

“In the short term ourfocus is to stabilise andbuild the strength of ourbusiness both in Irelandand in Britain.”

C&C ready to reinvigorate Magners

The Love Irish Food initiativehas attracted another 14 brands,including Coole Swan Liqueur,Energize Sport and Cidona. Thenew recruits brings the numberof brands taking part in theinitiative to 60, double thenumber when the organisationwas launched on September 1.Love Irish Food is anindependent group establishedby the food and drinks industryto promote Irish brands.

Chairman Jim Power said thatthe significant growth in thecampaign’s membership showed theindustry’s commitment to creating asustainable future of the sector.

“I look forward to working with

them to achieve our mutual goal ofprotecting Ireland’s largestindigenous industry and employer ofupwards of 230,000 people,” saidPower.

Aryzta chief executive Owen Killian waspaid almost €2.8 million last year, accordingto the baked goods group’s annual reportwhich was published recently

The company, formed from last year’smerger of IAWS and Swiss food companyHiestand, said it paid Killian a basic salary of€850,000, performance-related pay of thesame amount and a further payment of€870,000 as part of an “executive incentiveplan”.

Killian’s pay package accounted for 40per cent of payments to executivemanagement, which totalled €6.7 million. AsAryzta was incorporated in Switzerland tooversee the IAWS/Hiestand merger thecompany is not subject to Irish disclosurerules that require all payments received byindividual directors to be published.

Love Irish Food€2.8m payout

6 TGm

Almost 200representatives from over90 companies gathered inthe IMI Conference Centre,Sandyford, Dublin for BordBia’s 9th annual Food andDrink Industry Day.

Some 200 one-to-onemeetings were held betweenIrish food companies andBord Bia’s network ofoverseas offices to discussthe challenges, issues andopportunities companies arefacing in their exportbusiness. During a lunchtimeceremony, the Minister forAgriculture, Fisheries andFood Mr Brendan Smith TDaddressed delegates andannounced the winners ofBord Bia’s Food and DrinkIndustry Awards 2009

Speaking at the eventDan Browne, Chairman,Bord Bia said

“This has been anexceptionally challengingyear for the Irish foodindustry, a period in whichthe marketing landscape haschanged dramatically. Theeconomic downturn hasprompted significant shifts inconsumer behaviour and in

shopping patterns. Foodand Drink Industry Daypresents an opportunity forreflection and evaluation aswe seek to sift through theimplications of these trends,and adapt our strategies todeal with the changedenvironment.”

Keynote speakersincluded Austin Hughes,Chief Economist, KBC Bankwho reviewed the challengesfacing the industry,strategies for survival andopportunities for growthwithin the sector. Bord Biaalso presented its newconsumer trends research,results from a benchmarkingdistribution study focusedon Continental EU markets,and used the event to assistcompanies in theirpreparations forMarketplace, a keyupcoming trade eventscheduled for February2010.

Aidan Cotter, ChiefExecutive, Bord Biacommented “As industryseeks to reposition itself inthe midst of dramaticchange in its marketing

environment, innovation inproducts and marketing hasnever been more urgent.Bord Bia’s tracking research,for Ireland and the UK, aswell as our global consumertrend work, point tosignificant shifts in consumerattitudes and behaviour.The extensive data bankarising will give important,fresh insights to enablecompanies focus theirinnovation on changingneeds. He added“Meanwhile as Eurozonemarkets become relativelymore attractive our casestudy research ondistribution in ContinentalEU markets sets out somekey requirements that arecritical to success.”

Trends UpdateAs delegates arrived at

the IMI Sandyford, they wereinvited to participate in a‘Trend Trek’ – a 30 minuteinteractive tour and visualdisplay of Bord Bia’s latestconsumer trends. Accordingto Helen King, SeniorBusiness Analyst, Bord Bia“Our Consumer LifestyleTrends programme allowsIrish food and drinkcompanies to better predictand prepare for consumers’future needs and wants.They are outward looking,future focused andconsumer driven. Since theprogramme’s initial launch in2006, the trends havechanged, new themes haveemerged, some themes havebecome stronger and otherthemes have waned.”

The research carried outin association with theFutures Company,highlighted the potentialimpact on the environment;the pursuit of better valueand the need for greaterconvenience, at no greater

cost, as just some of the newconsumer trends.

Participants wereencouraged to think aboutthe relevance of the trendsto their individualbusinesses and how theycould be incorporated intofuture planning and longerterm strategies.

PERIscopeBord Bia also revealed

its latest PERIscope**findings – a comprehensivereview of Irish, NorthernIrish & British food attitudes,shopping and cookingtrends. Cooking from scratchis back on the menu with 63percent of those surveyeddoing so at least a few timesa week, up from 56 percentin 2005. Cookery classes arealso in vogue with 9 percentof those surveyed taking aclass in the last three yearsand at least one in five nowclaim to be entertainingmore at home.

The research also foundthat quality, local foods areincreasingly important toIrish consumers. Seventyone percent of thosesurveyed look for a qualitylabel when shopping,compared to 49 percent inthe UK. The significant roleof country of origin labellinghas increased to 71 percentcompared to 50 percent in2001. This is encouragingnews for Bord Bia’s profilingof its quality assurance markhighlighting origin.

Irish consumers aresignificantly more aware ofthe environmental impact oftheir purchases. Consumers’knowledge andunderstanding ofenvironmental terminologyhas increased significantlysince 2007 – with 41percent of Irish consumersnow aware of the term

BORD BIA’s FOOD AND DRINKS INDUSTRY DAY 2009

Anne Hogan, Brand Manager Bulmers Pear Cider andAidan Cotter, Chief Executive, Bord Bia

N E W S

‘sustainability’, compared to27 percent in 2005; ‘carbonfootprint’ is up to 64percent, from 30 percentand ‘food miles’ up to 44percent, from 30 percent.

Distribution StudyAs part of its strategic

priority to broaden theexport reach of Irish foodand drink manufacturers,Bord Bia recently carried outa research study* to assistcompanies identify the keycriteria that need to beconsidered when choosingtheir distribution option.The study analyses thedistribution strategiesemployed by companiesoutside of Ireland forsuccessfully enteringmarkets in France, Spain,Holland and Sweden. Duringhis presentation PadraigBrennan, Senior BusinessAnalyst, Bord Biaemphasized the importanceof a local presence in themarket; the level ofcompetition in one’s chosenmarket channel and theacceptable costs andtimescales to developdistribution.

Ireland’s LargestIndigenous IndustryFollowing two years of

substantial growth whichsaw €1.4 billion added totheir value, Irish food anddrink exports dropped backby 6.5% in 2008 and afurther decline is anticipatedin 2009. The declinereflects continued sterlingpressure, severe difficultiesin the global dairy market,and the impact of theeconomic downturn which isbringing pressure on returnsacross all sectors. However,there is some prospect for areturn to growth in 2010.

Ireland’s agri-food sectorplays an important role inthe Irish economy,accounting for almost 9% of

employment and 10% ofIrish exports. As much as65% of manufacturingexports by Irish-owned firmsare estimated to consist offood and drink. The UK isthe main destination for Irishfood and drink exports,accounting for 45% of thetotal; 32% go to ContinentalEU markets with theremaining 23% going tonon-EU markets. The Irishfood and drink sector hasthe highest usage of Irishproduced inputs acrossmajor sectors in the Irisheconomy with close to threequarters of the sector’sinputs sourced domestically.

October 2009 7

TGM

The winners of Bord Bia’s Food and Drink Industry Awards 2009

1. The Born Global award, recognising outstanding achievement in the challenging exportmarket, went to KKeerrrryy FFooooddss for its Cheestrings product.2. OOaakk PPaarrkk FFooooddss, Cahir, Co. Tipperary won the Consumer Focus award, recognisingproduct innovation, for its pre packed bacon rib product launched earlier this year.3. The Thinking Big award, for small businesses demonstrating exceptionalentrepreneurial spirit, was presented to AABBCC NNuuttrriittiioonn, a human nutrition company basedin Shannon, Co. Clare. ABC manufacture and distribute nutritional powders, vitamincapsules, and spray vitamins.4. GGllaannbbiiaa’s rebranding of its fortified milk – Super Milk – won the Spotlight award, anaward that appreciates the vital role that branding and marketing play in making aproduct a success. 5. The Home Grown award, recognising companies who have adapted and innovated inthe light of changed economic circumstances, was presented to CC&&CC for its recentlylaunched Bulmers Pear Cider.6. HHiigghhffiieelldd NNuurrsseerriieess, based in Oldtown, Co. Dublin won the New Perspectives award forits Living Flavour fresh herbs product. This category recognises products that have beenrepositioned to meet changing consumer demands through new approaches and smartmarket adaptation.7. The Environmental Enrichment award, for leadership in promoting the principles ofsustainability was presented to GGlleenniisskk, based in Killeigh, Co. Offaly.

NAME

Eabha Last (6) with (right)Dan Browne, Chairman,Bord Bia and (left) DenisO’Riordan, MarketingDirector Kerry FoodsCheese

Eabha Last (6) and NessaLast (3) with Joe Collum,Glanbia Consumer Foods

Mark Long, ManagingDirector of HighfieldNurseries

8 TGm

The leaves are falling, theweather has turned cold and allthings wintry are upon us onceagain. This time of year brings tomind warm comfort food and whatsays this more than a bowl of soup.Unilever has led the charge with anational campaign focusing on itsknorr soups. The group’s heavyinvestment proves that soup is onthe agenda and the kitchen tableonce again.

The value of the Irish soup market isunderstood to be worth in the region of€70m, with Campbell’s Soupaccounting for 30% of the market withits Erin and Campbell’s brands. Thechilled soup market has a value of€19m. Fresh and chilled brands likeAvonmore Fresh Soups are extremelypopular and influenced by a number ofconsumer assumptions. The main driverin the soup market remainsconvenience, coupled with theperception that chilled foods are oftenof a higher quality than other preparedfoods.

A number of factors have given arenewed focus to the soup marketwhich had slowed in growth in recentyears. Ambient manufacturers havefocused on healthy eating, theintroduction of more filling ‘meal’ soups,and the increasing demand for highervalue fresh soups – all of which haveincreased stimulation of the market inrecent times.

Chilled soup is one of the mostprogressive segments of the soupmarket, although the larger ambientsector also returned to a positiveperformance in recent years. Sales ofdried soup are in long term decline.Chilled soup continues to maintainstrong growth both in the long term and

the short term and continues tooutperform the overall soup market. Inthe context of the overall soup market,this is a strong performance given thatthe market as a whole is declining involume.

Avonmore, Cully Sully, Private Labeland Searstar are growing and havebeen in growth since the beginning of2009. Browne’s was showing stronggrowth but this has been in declinesince July 2008. Dingle Bay andOrganic harvest have been in decline,according to sources, since thebeginning of 2008.

New entrants to the chilled soupmarket remain small. Paul Rankin andBia Kids are the only new entrants tothis sector and between them havecontributed €94k to the chilled coupcategory to date. The Paul Rankin rangetook a 2.2% share of the chilled soupsector when on promotion following itslaunch, but share dropped off followingthe promotion.

Healthy eating has driven newproduct development (NPD), leading tothe introduction of recipes which arelower in salt, sugar, fat and free fromartificial colours, flavours, preservativesand MSG.

Some soup brands have had a poorreputation in recent years, and alongwith sectors like cereals were criticisedas containing unhealthily high levels ofsalt. Brands are increasingly adapting amore natural and wholesome image.

Several manufacturers areattempting to extend consumptionbeyond the lunchtime/snackingoccasion by positioning their brands asmore filling meal options. Thecommitment of leading manufacturersto both NPD and main media supportis making a significant contribution tosales growth.

Less formal eating occasions, thegrowth of the light lunch and grazinghave also influenced NPD’s in the soupmarket. Soups in plastic bottles for

example, allow users to help themselvesto soup as they fell like it. Once opened,the remaining contents of these bottleslast up to five days in the fridge.

Microwaveable products also offerconvenience. Recent data showed thatover half of consumers asked agreedthat soup is a good snack. Most alsoagreed that chilled soup in cartons werebetter quality than canned soups.

Homemade soups are an importantfactor in the soup market with tradeestimates suggesting that as much asone third of all soup consumed byhouseholds is accounted for by home-made soup. Consumer research showsthat 30% of all adults make their ownsoups during the year and 19%consumed home-made instead ofbought soups.

Introducing new flavours into themarket has been another way in whichsuppliers have sought to create furthersales growth. They have also attemptedto de-seasonalise the market (almosttwo-thirds of sales occur betweenSeptember to March) by encouraging

Comfort Food

October 2009 9

the idea of soup as a summer product,with flavours designed to be served aschilled, such as gazpacho.

While some more exotic flavourssuch as spiced lentil have madeimportant inroads, consumer researchshows that a few traditional recipes,such as tomato, chicken, mushroomand vegetable, are both the favouriteand main flavours bought byconsumers. In addition, organic flavourshave become more widely available.

The seasonal nature of the soupmarket is reinforced by consumersstocking soups, particularly cannedsoup. This demonstrates the flexibilityand convenience of soup as a cookingingredient at home. Up to 25% ofconsumers asked said they used soupas an ingredient in cooking at home.Moreover, for many years, Campbell’shave encouraged the use of itscondensed soups range as aningredient for cooking.

The light lunch is an importantsource of demand. Apart from in-homeconsumption, out-of-home situations

also present opportunities for furthergrowth. As the ‘soup & salad’ light lunchcombination is de rigueur in countlessbistros and cafe’s many consumers maywish to recreate this eating occasion inthe home. As recession sinks in formany consumers the fall in restauranteating is a certainty, in-home cookingwill increase s well an attempt toemulate restaurant quality and style.Soup manufacturers would be wise tooffer more restaurant and gourmetrecipes at reasonable prices, combiningboth quality and economy.

Aside from the obvious issue ofconvenience, taste and nutrition othersignificant factors contribute to whichhouseholds buy certain products. Forinstance it is hardly worth mentioningthat fridges and microwaves are notonly found in most homes but areessential when buying fresh or chilledfood products like soup.

Ownership of refrigerators isgenerally very high across Europe,above 90% in all instances. Householdpenetration is lowest in France at

around 90%, which is due in part to thehabit of buying fresh food on a dailybasis in many of the southerly and morerural parts of the country. In Northerlycountries like Ireland and the UK,consumers have less of a daily freshshopping mentality and tend to bemore weekly shop hoarders, where cansof goods are stored in cupboards forrainy day occasions.

Data regarding freezers remainsmore ambiguous, primarily since manyhouseholds now own combinationfridge/freezers. Overall ownership tendsto be highest in Northern countries andfalls in Mediterranean regions.

Household penetration ofmicrowave ovens is more varied acrossWestern Europe. At more than 80%, itis particularly high in more Northerlycountries such as Ireland, the UK, theNetherlands and Sweden. This reflectsthe general popularity of conveniencefoods like soup in these markets, withmany products now designed for easeof cooking within the microwave.

At the other end of the scale,household penetration of microwaveovens is unsurprisingly low inMediterranean countries like Italy(35%) and Greece (36%) where homecooking using fresh ingredients is moreprevalent.

Dry soup is the most popular soupin European countries, although inFrance, cartons, jarred and bottled soupsell the best. Home-made soup is alsomarginally more important in countrieslike France, Italy and Spain, although itis as popular in Ireland as quality andtaste grow in importance among Irishconsumers.

New ideas are currently the order ofthe day in the soup market. Foreigntravel has broadened consumer tastes.Exotic varieties of soup have had a bigimpact on the market. Pre-prepared‘fresh’ chilled soups, soups in jars,organic and gourmet, even soup aimedat young consumers have all provedincreasingly popular in recent years, aswell as meat-free soups aimed at thegrowing number of vegetarians.

The future success of the soupmarket will depend on how wellmanufacturers can respond toconsumer preferences and tastes. Inorder to do this, they must continue toshow a good understanding of changesin consumer behaviour.

TGM

10 TGm

N E W S

Heineken Ireland’salleged breaches of a jointventure agreement haveresulted in well over €10million losses for the Nashdrinks company, it has beenclaimed before theCommercial Court.

The proceedings byHartside Ltd an Isle of Manbased company, againstHeineken Ireland Ltd, weretransferred to theCommercial Court by Mr.Justice Peter Kelly.

Hartside claims it andHeineken, then namedMurphy Brewery IrelandLtd, entered into a jointventure with several otherparties in November 1996for the acquisition andownership of NashBeverages Ltd.

A number of ancillaryagreements were alsoentered into, including amanagement agreementbetween Hartside andHeineken and a kegdelivery agreement, it isclaimed.

Hartside claims thebusiness of the jointventure, including kegdelivery and wholesaledrinks distribution, was to

be conducted under theterms of the joint venture.The intention was tomanage the business inaccordance with bestbusiness practice and tomaximise the value of thecompany, it said.

It is claimed Heinekenhas breached the terms ofthe joint venture agreementand the managementagreement in taking stepswhich had, and have, theeffect of advancingHeineken’s value of NBLand consequently Hartside’sinterest in Nash Beverages.

Such steps includeHeineken, whether by itselfor through its nominees onthe board of Nash

Beverages or through theNash Beverages generalmanager, restricting thecompany engaging inparallel importing;preventing meaningfulreform of the company’swholesale distributionbusiness; and failing toensure control systemswere put in place to preventstock fraud and other stockdiscrepancies.

It is claimed Heinekenalso passed onunauthorised costs to theNash company. Heineken isalso alleged to haverestricted Nash Beveragesfrom sourcing cheaperproduct via parallel importswhich would have increased

Nash Beverages’ profits.It is also alleged

Heineken has procuredand/or conducted themanagement of thewholesale distributionbusiness of NashBeverages in such a wayas to needlessly incurlosses.

Hartside claimsHeineken has failed toachieve lowest cost andbest practice costs in, forexample, refusing toprogress the

subcontracting out of NashBeverages’ logistics andwarehousing against advicethis would have resulted invery substantial savings forthe company.

Heineken has also beensupplying its own productsto Nash on less favourableterms than to othercompanies, it is alleged.

In its action, Hartside isseeking orders compellingHeineken to comply with itsobligations under the jointventure.

Hartside claims theNash Beverages business isviable and can flourish ifthe joint venture isoperated as intended.

Dunnes Stores hasbelatedly agreed to sign upto the voluntary code ofpractice governing the saleand display of alcohol.

Dunnes signed up thecode in recent weeks, aftermonths of pressure byother main retailers.Dunnes had previouslysignalled that it had nointention of signing thecode. The code waslaunched in May as acompromise agreement

between retailers and thegovernment over a numberof controversial elements inthe Intoxicating Liquor Bill.

In return for thegovernment agreeing todrop proposals that wouldhave forced shops toseparate outlets sellingalcohol, the industry agreedto implement the codegoverning the sale anddisplay of alcohol.

The deal was predicatedon all retailers signing up

the code, and otherretailers have beenlobbying Dunnes in recentmonths to sign up.

Under the code, alcoholcan be displayed only inone area of a store, andcustomers should not haveto pass through that area toreach other products.Alcohol will no longer bedisplayed in shop windows,and in-store advertising ofalcohol will be confined tothe area where it is sold.

Dunnes Stores belatedly sign code

Nash claim Heineken breached agreement

Margaret Heffernan

Leaders in Children’s Confectionery Since 1928

Unit 40 Broomhill CloseTallaght Dublin 24Tel: 01 4517642

www.swizzels-matlow.comwww.lovehearts.com

From 2009 all Swizzels Matlow Irl products will be produced with NO ARTIFICIAL COLOURS.Swizzels Matlow Irl views this as an important step forward in responding to consumers needs and tastes.

This process has been considered very carefully so as not to compromise the quality of our products.

Available from your local Cash and Carry or Wholesalers Nationwide.

12 TGm

N E W S

Marketing know-howcan be applied to anyproduct, anywhere – and agood marketingprofessional will always getthe message on targetregardless of whether theproduct in question is apopular beer or apotentially life savingvaccine for new-borninfants. And it wasexpertise gleaned in thedrinks industry that cameto be deployed to infantnutritionals in the case ofSMA – the infant nutritionmanufactured and sold inIreland by globalpharmaceutical giant,Wyeth.

When Wyeth-SMA’sMarketing Manager tookmaternity leave, thecompany had to find areplacement with theability, expertise andexperience necessary totake over the running of asmall business marketingunit, meet the dailyrequirements of the role,and keep in tune with theobjectives set in SMA’s five

year marketing plan. AsWyeth HR Director, LorraineKenny says: “We wantedsomeone as good as theincumbent, if not better;someone who could make apositive impact from thevery outset”.

Kenny asked LukeFreeley, a senior consultantwith InterIM Executives Ltd,to supply a suitable interimmanager for the role and henominated MaeveO’Connell, a widelyexperienced marketingexecutive who hadpreviously worked withDiageo and the Kerry Foodssubsidiary, Mastertaste, aswell as working as anindependent consultant.

As Freeley points out, amajor benefit of interimmanagement is that thoseworking as ‘interims’ bringto the task a depth ofability backed by a wealthof experience. This allowsthem apply lessons learnedin one industry or sector toanother realm entirely andO’Connell’s time spent withDiageo, it later transpired,

would prove invaluable.SMA is a global brand,

trusted by millions ofparents and healthcareprofessionals to safelydeliver the nutrition youngbabies need. Thereputational capital tied upin the brand is impossibleto estimate and O’Connell’sexpertise was to proveinstrumental in ‘lending’that capital to a campaignthat would safeguard scoresof infant children againstserious illness.

Wyeth at the time hadjust launched itspneumococcal vaccinePrevenar, which protectsvery young children againstpneumococcal meningitisThe HSE decided that thisshould be administered,free, to all newborns, butwas concerned to ‘catch up’on all children under twoyears old that had notreceived the vaccine.

The potential for a tie-inbetween Prevenar and SMAwas obvious, but the issueswere less thanstraightforward: both infant

nutrition and childhoodvaccines are extremelytightly regulated andcontrolled; the investmentin brand integrity on bothsides is immense, and theproducers and marketers ofboth products workindependently of each otherto their own aims andobjectives.

Although the drinksindustry is as far removedfrom child nutrition as ispossible to imagine, soundmarketing practice hasuniversal application, andO’Connell’s breadth ofexperience allowed her toapply past experience to awhole new set ofcircumstances.

While working withDiageo, she had overseen aproduct tie-in betweenBudweiser beer andSuperquinn pizzas. Indriving that particular jointventure, she acted asfacilitator, takingcognisance of eachcompany’s marketingpriorities, their individualbrand strategies, and thecommon ground that wouldprovide a single platformfor two otherwise unrelatedproducts. Her success incrafting a joint venture dealthat suited the needs of allconcerned was central to itssuccess, so much so thatthe initiative was reprisedlater in a separatearrangement with Unileverfor the ‘Gino Ginelli’ pizzabrand.

In Wyeth’s case, the endresult of her efforts wasrelatively low profile – anawareness-raisinginformation leaflet onPrevenar, inserted into thelid of SMA packaging forparents of young babies toread.

INTERIM MANAGEMENT DELIVER SUCCESS FOR WYETH

Luke Freeley, senior consultant with InterIM Executives Ltd

Do you sell or intend to sell tobacco products by retail?You must register with the Office of Tobacco Control. Section 37 of the Public Health (Tobacco) Acts, 2002 and 2004, provides for the establishment and maintenance by the Office of Tobacco Control of a register of all persons who carry on in whole or part the business of selling tobacco products by retail.

All retailers wishing to sell tobacco products must register with the OTC. It’s the law.

Download “Guidance for those selling Tobacco Products” at www.tobaccoregister.ie

What does this mean for Retailers?

If you sell or intend to sell tobacco products by retail whether over the counter or from a self-service vending machine you must register with the Office of Tobacco Control (OTC).

A person who, prior to 1 July 2009, carries on the business of selling tobacco products by retail must apply to register with the OTC between 1 July and 1 October 2009.

A person who proposes to commence the business of selling tobacco products by retail from 1 July 2009 must register with the OTC before they can sell tobacco products.

In relation to self-service vending machines, both the owner of the self-service vending machine(s) and the holder of a license for the sale of alcohol for a licensed premises or the person entered in the register of clubs in which the machine is located must register. Tobacco products can only be sold when both parties have registered and are entered on the register.

To register online visit: www.tobaccoregister.ie or lo-call 1890 333 100

To keep the register up to date you are required to notify the OTC of any change in particulars.

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14 TGm

As O’Connell observes, ‘anawful lot of work went intoone piece of paper”. Butthat one leaflet meant thatSMA could use theinformation campaign tohighlight its scientific,pharmaceutical origins anddistinguish itself from itsfood industry competitorsby presenting itself toconsumers and healthcareprofessionals as beingdedicated all aspects ofinfant care and nutrition. Itwas also the first time SMAdecided to market aninformation leaflet underthe lid of their cans in sucha way.

For Lorraine Kenny, thisoutcome highlights animportant aspect of interimmanagement, i.e., thatinterim managers bring nocareer or ‘political’ baggagewith them and so are morelikely to be seen by thosearound them as honestbrokers with no hiddenagendas. As such, they canpromote corporateobjectives with theminimum of fuss andmaximum speed. This ispart of the matrix ofattributes – personal andprofessional – that hasseen the group engageinterim managers for avariety of executivefunctions in the past, shesays.

Like many globaloperators, Wyeth has beenlong aware of the benefitsof this particularmanagement tool and moreand more indigenousoperators are following suit,and the current downturn -where cost-effectivenesstakes on a particularimportance – looks set toaccelerate the trend.

Maple Leaf Bakery UKLtd is investing in itsleading New York BakeryCo.™ bagels with thelaunch of the brand’sbiggest ever on-packpromotion.

The high profile NewYork Weekend Break give-away will appear on packsof New York Bakery Co.’s™Plain and Cinnamon &Raisin bagel varieties andwill run from the beginningof November for eightweeks. There will be 250prizes consisting of a threenight weekend break fortwo people in New YorkCity, staying in a luxury fourstar hotel, including airporttransfers.

Special on-shelfpromotional packs havebeen designed to catch theattention of consumers, aswell as detailing the prizesand rules. Each pack willalso feature a unique codewhich consumers enteronto the promotion’sdedicated micro-site wherethey will be notifiedimmediately of a win!

Also creatingexposure for thepromotion is acomprehensive TVadvertising campaignwhich will run on allmajor channels,including ITV1,Channel 4, Channel 5and a range of digitalstations. The 30second commercialruns from 12thNovember to 18thDecember.

Bob HedleyDirector, Marketingsays: “We are thrilledto offer a promotionthat offers consumersthe opportunity toexperience the thrillof New York City andits diverse bakeriesfirst hand. There are250 trips available soconsumers have agood chance ofwinning, which willnot only appeal toexisting consumers,but also encouragefirst-time buyers to the NewYork Bakery Co.™ brand. “

NEW YORK BAKERY BIG BREAK GIVEAWAY

Artisan food producerKnockanore FarmhouseCheese has its sights set onthe US market, with amajor distribution deal onthe cards for the Waterfordfirm.

Dairy farmer EamonnLonergan establishedKnockanore in 1987 toproduce a range of luxury

hard cheese for the Irishmarket.

The company has sinceexpanded in to the Britishand Danish markets, andhopes to secure moreoverseas distributors in themonths ahead.

Knockanore sells arange of six hard-pressed,mature cheeses made withraw cows milk.

Exporting successfullyto the US market requires astrategic approach to newproduct development,Lonergan said.

“When you’re talkingabout entering the USmarket, you are talkingabout having half a palette

of cheese going onto acontainer, so in a way youare piggybacking yourproducts,” he said.

At home, Lonerganbelieves that the changingconsumer habits of recentyears will continue despitethe recession.

“Although there is adownturn, there are stillopportunities out there.Because of the Celtic tiger,our palate has beenbroadened - and that won’tdisappear overnight,” hesaid.

“People want to knowwhere their food is comingfrom nowadays, and thereis a demand for homegrownfoods.”

KNOCKANORE CHEESE FOR US MARKET

N E W S

16 TGm

D E A L I N G W I T H T H E H A N G O V E R

Oversupply, drought and a strongdollar won’t stop Neil McGuigan doingwhat he does best - producing goodAustralian wine for under a tenner.

The Australian winemaker hasscooped the title of White Winemakerof the Year at the International WineChallenge in London. McGuigan is thebest-selling Australian wine brand inIreland and the grandson of the originalwinemaker is clearly at home here.

“They say my Irish great-grandfatherwas shipped to Australia for stealing abottle of wine,” he said with a grin. “Sothe family have been workiing to payback for the crime ever since.”

It’s a nice story, but an unlikely one.The award has certainly cheered hisspirits. For once, being away fromAustralia is offering some relief. In themid-1990s the Australian wine industrywas booming, helped by the low valueof the Australian dollar. Anyone withwine-making pretensions boughtthemselves a vineyard and rode thewave.

“Everyone thought this is nevergoing to stop, and they kept plantingmore and more vines,” said McGuigan.“Now a few things have changed and it’sgotten extremely tough.”

Last year, at 1.9m tonnes, theAustralian wine harvest was 25%higher than the previous year. It wasmuch greater than anticipated - and farmore than the market demanded.Throw in a strong Australian dollar, anda drought that drove up the cost ofwater, and it has left the industry withone hell of a hangover.

The saving grace for winemakers

has been increased consumption inmarkets, including Ireland. TheMcGuigan brand has grown 35% year-on-year in the Irish market. Off-licencesand supermarkets represent 75% ofthe business, with the rest sellingthrough the on-trade, mostly in quarterbottles consumed in pubs.

The most popular price point for abottle of wine, accounting for about80% of the market, is between €7-€10.

Wines in McGuigan’s Black Labelbrand retail at €10. Several white winesthat won awards at the recentInterantional Wine Challenge are in, orclose to, that price range.

“This is what people want - goodvalue wines for under a tenner. We’retaking a bit of a hit with this becausewe’re ridiing the exchange rate. Butwe’re prepared to put the effort in andmaintain a long-term policy in thismarket.

“We’re a big product in this country,so we’ll suppport this country,” he said.“We’ll keep you in wine.”

We can take the man at his word.The McGuigan name is synonymouswith Australian viticulture. Neil’sgrandfather, Owen, the son of an Irishmigrant, was a poor dairy sharecropperwho supplemented his income bylabouring on the vineyards of theHunter Valley in the 1860s.

Owen died young, but his youngestson, Perce, entered the trade andworked his way up to become managerat Penfold’s Dalwood winery. With hissons Brian and Neil, he purchased thewinery in 1968 and built the Wyndham

Estate label into one of Australia’sbiggest brands.

Pernod Ricard bought the winery ina hostile takeover in 1880. Two years

Dealing withthe HANGOVER

MORE SUBTLETY. WE’RE GOING TO GIVE YOU AUSTRALIA WITH CLASS.”“WE’VE BEEN ADDING

Neil McGuigan

later, McGuigan Wines was set up as aa rival venture, and is now part of thepublicly quoted corporation AustralianVintage.

As production manager, McGuiganwas less exposed to the corporatebattles. He is regarded as one of themost brilliant wine-makers of his

generation and a key figure in the hugerise in the gobal popularity ofAustralian wines.

“The reason Australian wines

October 2009 17

MORE SUBTLETY. WE’RE GOING TO GIVE YOU AUSTRALIA WITH CLASS.”

18 TGm

became such an export success isbecause we delivered what theconsumer valued,” he said. “That wassimplicity in labelling - no domaine thisor chateaux something or other.

“We didn’t expect people to beexperts. So you don’t know whatChablis is? We said, it’s Chardonay. Andmost of all we gave them flavour.”

This democratisation of theinternational wine market was arevolution in its time. But McGuiganadmits that the Australian winemakersalso got carried away.

“We listened to what consumerswanted. They said they wanted bigwines and we gave them big fruitywines. Then we thought gee, if they likeit this big, they’re going to love it evenbigger.

“What we did with red wine is madeit more and more alcoholic. When it’syoung, the more alcohol you’ve got, thefruitier it is. But the alcohol starts tostick out. It shortens the palate. Ittastes tarry.”

Such oversimplification and givingthe consumers what they wanted alsohelped, unjustly, to make Chardonnay abyword for naffness in some quarters.

It is still the most popular seller forthe winemakers, however, and accountsfor about 80% of the white winemarket. It’s also the most popularAustralian varietal.

According to McGuigan, who had abrief stint at another vineyard, thetrend now is to make more elegantChardonnays.

Having scooped several key awardsrecently, he claims the company is bangon trend for the market again. “Ourcompetitors would say it’s all aboutterroir (regional climate and soil type.)We say it’s all about fruit. what we’vegot to do - what we’ve been doing - isadding more subtlety. We’re going togive you Australia with class. That’s ournext step”.

For the past few years, McGuiganhas focused on the company’s red winesand is aiming for “intense laid-in flavour,structure and palate but more subtle”.

Financially, McGuigan accepts thatthe industry in Australia “is very muchon the edgge”. In 2001, the Australiandollar was worth about US50c. It’s

currently trading in the mid-90c. Inlandwater dams in Australia - the ones onwhich most vineyards rely - are at just35% capacity.

Australian vintage has posted lossesin three of the past five years. Followingthe 2008 harvest, it had to write downthe value of its stocks by €78m.

“Last year’s harvest meant greatvalue for the consumer, but madethings extremely difficult for thewinemakers. The biggest issues arebeyond winemakers’ control - thestrength of the Australian dollar and thedrought.”

The international wine market hasalso become more competitive. SouthAmerican producers such as those inChile are pegged to the US dollar, whichmakes them good value for money.South Africa, too, has emerged as asignificant player.

The key is giving consumers whatthey want at the righht price, but it’s nota race to the bottom of the vat. Apartfrom a steady increase in the sale ofcheaper wines, there has been a newspike in the mid-range €14-€15bracket.

“I think that’s being caused bypeople who would normally go out toeat, but are instead staying at home.They treat themselves by getting adecent bottle of wine to drink.”

The convenience market is alsothriving. “Single people are buying their

ready-made meals and a bottle of winein the evening. Again, I think it’s insteadof going out. They don’t seem to be tooprice-sensitive either.”

Next year’s harvest, which begins inmid-January, will be a crucial period forMcGuigan and other Australianwinemakers. There’s a three-monthwindow for catching the grapes at justthe right point.

“I’m out in the vineyards, tastingfruit, understanding what the weatheris going to be doing, where the grapesare up to. It’s about managing the risk,”he said. “You need to start the harvestjust before the grapes hit the spot andfinish before the spot is over. If you waittoo long, you’ll miss it. We’re workingweeks out. We take from warm climate,cool climate and cold climate in thatperiod.”

The key issue for this year’sAustralian harvest will be the volumeproduced. Some estimates still put thelevel of oversupply in the Australianwine industry as high as 30%.McGuigan said the only course of actionfor his firm is to focus on producinggood wines. “If you produce good wine,it will always sell. You might not get themargins you want, but at least it willsell.”

As for the drought, McGuigan saysthere is rain predicted for March.“That’s a long way out, of course,” hesaid. without batting an eye.

D E A L I N G W I T H T H E H A N G O V E R

In times of recession,spreading your risk andexporting are two ways toensure survival. ForHot Irishman, co-owner BernardWalsh, the two-pronged strategy haspaid off.

The whiskey andliqueur producerexports 80 per centof its products to 23countries, includingthe US, Australia andSouth Africa.

Walsh hopes toboost exports by afurther 10 per centthis year, with salesto six new markets,including Finland,Denmark, Ukraine andHungary.

Hot Irishman is alsoplanning to launch the newpremium whiskey brand

Writer’s Tears.Walsh established the

Carlow-based company,

with his wife Rosemary in1999 to sell a pre-mixedversion of their own Irishcoffee recipe.

The couple approached

a research anddevelopment team inDublin Institue ofTechnology to kick-start theventure, and launched the

company nine monthslater.

In addition to Irishcoffee, Hot Irishmansells French andCalypso coffees,mulled wine, creamliqueur and twowhiskey products,Single Malt and 70.

The companyexported to theBritish market initially,seling through localdistributors. In 2001,it expanded its salesreach further withoverseas sales toFrance and Germany.

Today the companyemploys 17 people at itsheadquarters in Urglin.

Based on his ownexperience, Walsh advised

other entrepreneurs to planfor long term growth, evenin the early years.

“The excitement andenthusiasm in the earlyyears wil get you throughalmost any problem, butyou need the managementdiscipline at all times toplan for and manage theopportunities and thechallenges,” he said.

Rapid growth, althoughwelcome, creates its ownchallenges.

“The first three years isabout enthusiasm, butthere-after it is aboutpersistence - continuing todo the right thing,” saidWalsh.

“Your sales are growingat a pace. Therefore, youneed to produce more. It isimportant to keep on top ofthe growing cashrequirements to fund yourstock needs.”

Milk and cream fromNorthern Ireland will, evenif processed in theRepublic, be excluded froma new packaging markdeveloped by the NationalDairy Council to informconsumers they aresupporting jobs andfamilies in the Republic.

Helen Brophy, chiefexecutive of the NDC, saidconsumers seeing the“NDC-Farmed in theRepublic of Ireland” markcould be assured they werebuying milk or creamfarmed and processed inthe Republic.

“The new markempowers consumers tomake more informedchoices when they areshopping about supporting2,193 Irish dairy farmersand 2,483 jobs in Irish

dairies and co-operativeswhich they can nowidentify,” she said.

“The mark allowsconsumers to selectproducts which contributeto our own tax returns,which contribute to our owneconomy, and which alsocontribute to our owncommunities throughincentives such as theschool milk and dairyprogramme,” she added.

The packaging markcurrently applies to 340milk ad cream products. Bythe end of the year theNDC hopes to extend it tocheese and yogurtproducts.

Brophy said the schemewould change the way dairyproducts were beingretailed in the Republic,and already companies not

involved in the NDC hadexpressed an interest intaking part in the scheme.

The 10 co-ops anddairies which are NDCmembers were collectivelybuying about 500 milliionlitres of milk annually from

dairy farmers involved inthe scheme.

She said the co-operatives and dairies hadgone to considerableexpense in acquiring newpackaging for thepromotion and hadconsidered this a veryworthwhile exercise in thedairy industry.

Research from Nielsenin June this year claimedstrong support for Irishproducts, which was beingbacked by actual purchases.

“The research showedthat 70 per cent to Irishconsumers believe it isimportant the milk they buyis sourced in the Republicof Ireland and 81 per centof consumers polled lastspring said they beiieved alabel showing the sourcewould be a good idea.”

NI EXCLUDED FROM NEW MARK FOR MILK

HOT IRISHMAN

October 2009 19

D R I N K S N E W S

83% of women thinkthat they cope with a Coldor Flu better than theirmale counterparts

50% of Irish peopleclaim that they are ashealthy or healthier inwinter than at other timesof the year, yet only 9% ofIrish people consider wintertheir favourite season. Anew survey, conducted onbehalf of Danone Actimel tomark the launch of itsWinter Defences Guide,finds that those that lovewinter said that theyexercise more (27%) andeat healthier (17%) inpreparation for the season.

Winter-lovers statedthat cold crisp weather(33%); crackling fires (23%)and Christmas (21%) weretheir favourite elements ofthe season. In contrast,those who respondednegatively towards winterwere asked why theydisliked the fast-approaching season and65% said it was becausethey are outdoors less andexercise less.

When asked about coldsand flu there was a hugedisparity between the sexesas to who is perceived todeal better with winterailments. 83% of womenfeel that they deal with acold or flu better than their

male counterparts, whileonly 37% of men agreewith this point of view. Menwere more inclined to bediplomatic, with 41%stating that men andwomen were similar in howthey coped. Interestingly,the vast majority ofrespondents (79%) statedthat they ‘carry onregardless’ when they havea cold or flu.

Paula Mee, Nutritionistexplains: “To help us stayhealthy during the wintermonths it is important thatwe look after our diet. Whatwe eat can have a directinfluence in supporting ouroverall health – ourimmune system inparticular needs a gentlesupport to prepare it forthe challenging weatherand busier days ahead. Aswell as traditionalpreventative techniquessuch as wrapping up welland washing our handsregularly, we can helpourselves to stay well bymaking sure we eat a goodbalance of nutrients fromeach of the four foodgroups; wholegrains,antioxidant-rich fruit andvegetables, low fat dairywith probiotics, and omega3-rich seafood.”

Jill McCarron, HealthAffairs Manager, Danone

said: “We want to helppeople love winter and ourresearch shows that thosewho get out and enjoythemselves are likely to behealthier and to be morepositive about the wintermonths. Our Actimel WinterDefences Guide is full oftips and ideas on how tohelp look after yourself thiswinter. A healthy, activelifestyle, supplemented witha daily probiotic drink, suchas Actimel, can help us

prepare to love winter.”Some of the Tips and

Guidelines included in theActimel Winter DefencesGuide, include:

* Take exercise and get outmore* Be positive and reducestress* Stay warm* Eat well and keephydrated* Sleep well* Keep hands clean

22 TGm

N E W S

PREPARATION KEY TO LOVING WINTER

GlaxoSmithKline is setto launch one of its best-known consumer brands inChina by selling the energydrink Lucozade through aShanghai-based partner.

The move marks a shiftin strategy for thepharmaceutical groupunder Andrew Witty, theceo appointed last year, tospread risk and diversity by

expanding sales of itsconsumer goods as well asmedicines into emergingmarkets.

Lucozade, first launchedin the UK in 1927 as aglucose-based drink to helpthe recovery of patientstreated in hospital, haslargely remained focused ona residual “imperial”market, in particular Hong

Kong and former Britishcolonies in Africa.

In the 1980s. Lucozadewas relaunched to target awider consumer market as

an energy drink. The 1990ssaw a new formulationintroduced to capture themarket’s growingenthusiasm for soft drinks.

GSK hopes to plug intothe fast-growing cold drinkssector in China, which itestimated at Stg£16bn insales a year.

More than 85 per centof last year’s Stg£382m inLucozade sales weregenerated in the UK andIreland.

Lucozade launch in China

Lennon Black, A

oibhín Dow

ney, with Margaret B

yrne (centre)

Food and Drink IndustryIreland, the IBEC groupthat represents food andbeverage companies, todaycalled on the Governmentto reduce excise duty by20% and the VAT level to18% in advance ofChristmas. These reductionswill help reduce prices toconsumers and curb theexpected exodus of Irish

shoppers to the North overthe Christmas period.

FDII Head of ConsumerFoods Shane Dempsey said:“The recent TNS WorldPanel research showed that250,000 Irish people travelto the North to shop. It isestimated that this has costthe Irish exchequer in theregion of €430 million. Inaddition, cross-bordershopping has contributedto significant job lossesamongst retailers andsuppliers as companieshave cut costs, droppedprices and restructured tosurvive. Many food brandsare reducing prices in aneffort to offer even greatervalue to Irish consumers.These measures reflectretailers and brands’ effortsacross the economy to

bring prices into line withthe North.

"Retailers and suppliersalike are depending on theChristmas period toalleviate the pressure of theeconomic downturn andstave off further job lossesin 2010. A reduction inexcise and VAT on affectedgrocery items and alcohol inparticular will encourageIrish consumers to carry outtheir Christmas shoppinghere.

"The major factorattracting Irish consumersacross the border for theirshopping is lower alcoholprices. There is knock-oneffect on the grocerymarket estimated to be inthe order of hundreds ofmillions of euros in lostsales south of the border.

"The Government alsohas a major role to play inreducing the costs tobusiness that it has controlover, such as energy costs,waste costs and rates.These costs remain out ofline with other similar sizedeconomies and must bereduced. Urgent action isneeded to help companiesreduce prices andencourage consumers toshop locally during thecritical Christmas period.

"A strong Christmasperiod will boost confidencein the economy and staveoff significant job losses inthe food sector next year.The speed and strength ofIreland’s recovery isdependent on our ability tokeep people in jobs now,"Dempsey concluded.

FOOD INDUSTRY CALLS FOR IMMEDIATE VAT CURB

October 2009 23

Shareholders in Irishwhiskey maker CooleyDistillery must havebeen clinking glasses atits recent agm followingthe publication of itsannual report, whichshowed that profits hadmore than doubled to€3.3 million in 2008.

However, there is nodividend to keep themwarm this winter as thecash-hungry businesscontinues to invest in itsthree distilleries - about€3.5m is being spenton refurbishment - andmarketing activities.

John Teeling,chairman, told investorsthat the group’s profitshad been boosted by a“serious scarcity ofScotch” worldwide,which Cooley helped tofill from its “substantialstocks” of agedwhiskies.

Cooley, a nicheplayer in the Irishwhiskey market,recorded sales of €18million in in 2008, a 61per cent jump on the€13 million in theprevious 12 months.The jump in revenueswas largely the result ofan increase in bulkunbranded sales.

“We’ve had a good18 months in terms ofprofitability,” Teelingsaid.

The Clontarf-basedbusinessman, who isbetter known as a serialinvestor in listedresource companies,said 2009 would bemarginally lessprofitable - probablyabout €3 million andturnover would bedown.

Cooley’s 68 staff gotan average 3.5 per cent

pay rise in 2008 and inspite of the dip inprofits and sales thisyear, Teeling said wageshave not been cut orfrozen.

SHOT IN THE ARM FOR COOLEY

There was strong marketspeculation that Greencore may sellits malt business. The division, whichhas delivered a mixed performancerecently, has long been seen as apossible target for disposal.

Market sources suggested thatsome talks had taken place in recentweeks, but it is not clear at this stagewhether a deal will be reached.

The malt division delivered profitsof €22 million last year, and losses of€2 million the previous year. Profitsare expected to fall this year and nextas demand for malt weakens.

Investors have been watching tosee when someone would make amove to buy Liam Carroll’s 29 percent stake in Greencore. Theuncertainty over this sizeableshareholding creates something of anoverhang in the stock.

Greencore may disposeof malt business

Shane Dempsey

John Teeling

TGM

24 TGm

Unlike some of the great takeoverbattles of the last decade, the first highprofile merger dance of the recessionbetween Kraft and Cadbury is failing tolight any fires.

One investor summed up withlacklustre apathy;

“This is lining up as a typical M&Aplay; unsolicited bidder lobs areasonable, but not yet full price. Targetbalks. Bidder will likely tweak the priceor the mix of securities being paidenough to trigger a negotiation. Dealhappens. Pretty cut and dry.”

Last month Kraft unveiled its€10.8bn bid for Cadbury which wassubsequently rejected by the UKconfectionery group. Cadbury’s sharesrose over 40% after the September bidand have grounded above the value ofKraft’s bid, estimated at 730p in cashand stock. US investors believe that

despite the bid, Cadbury’s was already‘pricing in a lot of optimism, and couldlimit profits if the company accepts adeal below investor expectations.

In addition, some of the moreprolific investors in Cadbury haveexpressed concern that ceo Todd Stitzermay be presumptuous in trying to get abetter deal for the group. In earlyOctober Stitzer clarified comments hemade that analysts thought suggestedhe was more open to a Kraft takeoverby claiming that the deal made nostrategic sense.

Conversely Kraft investors have saidthat they don’t believe that Kraft hasthe scope to meet any higher bid. Oneinvestor stated that Kraft ceo, IreneRosenfeld “will have to go a little bithigher but what’s my threshold of pain.Maybe its 10 or 20 per cent more. Anyhigher than that and I probably won’t

be a shareholder anymore.”Over 280 million of Cadbury’s

shares have traded since the deal wasannounced on September 7th. Whilemany of those trades probably involvedthe same shares changing hands acouple of times, that volume accountsfor about 20% of the UK’s companyshares.

In another twist, thousands of USsuppliers are being squeezed by Kraftsparking fears that a similar shake upwould occur should the US giant get itshands of Cadbury. Kraft announced itwas slashing stg£180m of costs fromits supply chain in the States whichaffects thousands of suppliers.

Kraft Food and drinks company inthe US, and produces Dairylea,Philidelphia cream Cheese and Terry’sChocoltae Orange.

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26 TGm

The Irish confectionery market hasan estimated value of €600m and thismarket has grown by 12% over the lastdecade. There are two distinct sectorwithin the market; chocolate whichaccounts for the largest at 69% andsugar which racks up 31% of themarket. One of the reasons that thismarket continues to grow is due theportability of brands which are aconvenient accompaniment to ourhectic lifestyle.

There is no doubt that increasinghealth concerns about diet and whichfoods we should be eating have been achallenge to manufacturers. However,there is always an innovative way out formost markets and there is a strong linkbetween effort (healthy diet) and reward(treat) as well as seeing confectionery asa lifestyle enhancement and a sensory

experience. If chocolate and sweets aremarketed as a stress-busting aid tosharing pleasure and nostalgia asopposed to a health wrecker,manufacturers can face up to thechallenges it faces.

Since the early part of the noughtiesconsumers have been warned about theeffects of food and diet on overallhealth. During this time, researchindicated that there was evidence ofconsumers cutting back on chocolatebut trading up into premium pricedsectors in order to maximise theirenjoyment of chocolate. In other wordsconsumers stopped casually eatingchocolate everyday and saved up theirchocolate experience by buying moreexpensive luxury chocolate brands lesscasually. Manufacturers at the timeexperienced declines in volume sales,and some responded by downsizingproduction while others formed ‘mega-brands’ to bring economies of scale inmarketing and create brand blocking atthe fixture.

Aside from economic changes,manufacturers have implemented anumber of measures to avoid poorpublicity in the health debate such aslimiting advertising to children andimproving pack labelling.

Irish consumers attitude tochocolate has evolved beyond bars andsweets. Along with coffee, wine andcheese, handmade chocolate occupies aunique place on the Irish palette. Therehas been a swathe of handmade andluxury chocolates in the last number ofyears encircling the confectionerymarket taking on a mass-produced feel,becoming more mainstream, with lessroom for something artisan andcreative.

The Irish chocolate market at€544m is the 12th biggest in Europeand the UK’s biggest export market.The market share of luxury chocolate

confectionery products grew by 20% in2007. Despite the sales figures, thepeople want substance and validityfrom their food, hence the rise offarmers markets and free range andorganic produce. In addition, asconsumers become more aware of foodquality, there is a correspondingdemand to know the origin ofingredients particularly in the premiumend of the market.

Within the handmade chocolatesector, the optimum product is onewhich can sell all year round, as themarket is very seasonal. Sales of boxedchocolates have increased in generaland now represent a 25% share of thechocolate market, however, Valentine‘sDay, Easter, Mother‘s Day andChristmas are still the big seasonalhitters in terms of sales. There is nodenying the power of chocolate, itsquintessence is recession- proof, idealwhen a small piece of luxury is requiredthat does not involve a flinching creditcard.

According to recent consumerresearch, Irish consumers have shiftedtheir tastes for chocolate and are nowseeking more innovative flavours;exhibiting a tendency towards moreluxury products spending more onindividual purchases than ever before.Although trends show consumers ingeneral are cutting back on chocolate,sales for 2007 actually see a 10%increase in value.

This ‘cutting back’ has had a rathernegative impact on the confectionerymarket as a whole but has impactedpositively for the handmade chocolate

The Irish are renowned for having an extremely sweet tooth and we are amongthe highest consumers of chocolates and sweets in the EU. Only the UK andGermany are ahead in terms of consumption, which in Ireland is a rather hefty8.2kg per head every year.

Confectionery

TGM

market. An emphasis on health andwellbeing has seen dark chocolate takeon a new precedence as its rich in anti-oxidant health credentials, influencesales. All of Rochfords’ chocolate rangehave a dark chocolate version includingits Premium Truffle Selection whichincludes dark truffles and Dinner MintSelection which also has darkchocolates.

The obvious market leader in theIrish confectionery market is Cadbury’swhich has a host of yummy favouritesincluding Cadbury Dairy Milk, Flake,Crunchie, Wispa, Heroes, DoubleDecker and Milk Tray to name but a few.

Among its top selling brands isFlake whose delicious unique texturewas inspired by a Cadbury employeeback in 1920. His job was to pourchocolate into chocolate moulds. Oneday he noticed that excess chocolatespilled over the tops of the moulds andfolded down into a stream of chocolate.The new Flake product was created asthe texture had many thin layers ofchocolate with an irresistibly crumblyand flaky texture. These days Flakecomes in many shapes and formsincluding Flake Classic, Flake Praline,Flake Dark and Flake Dipped.

Crunchie is another firm favourite.The bar was originally launched in1929 and was initially launched by Fry’s– a separate business which later joinedwith Cadbury. Crunchie is available is arange of sizes of multipacks, includingtreatsize and snacksize bars.

Another favourite is Heroes whichwas first launched in September 1999.A mix of Cadbury bars packed in a tubformat that is ideal for sharing;consumers love to rummage in the tubto find their favourites. These includeamong others; Cadbury Dairy Milk,Cadbury Dairy Milk with Caramel,Cadbury Dairy Milk Whole Nut, Twirl,Timeout.

Some of the world’s best knownchocolate bars and confectionery canbe found in the Mars portfolio. Amongthem are of course, Mars, Starburst,Snickers, Twix, M&Ms and Skittles.

Originally made in Britain but nowsold all over the world, the Mars Bar isone of the confectionery industry’sgreatest success stories. As many asthree million Mars bars a day are madeat the company’s Slough plant in theUK.

Twix is another big player in thismarket. The chocolate bar has twinfingers of biscuit, caramel andchocolate. Snickers is crammed withpeanuts, caramel and nougat thencoated with milk chocolate. Snickersquickly became one of the world’sfavourite treats after it was firstintroduced in 1930.

Nestle’s family of confectionerybrands include KitKat, Aero, Smarties,Milkybar, Rowntrees, Quality Streetand After Eight, Lion Bar and Yorkie toname but a few.

KitKat was developed as a fourfinger wafer crisp, initially launched inLondon in 1935. Over the years KitKathas appeared in Orange and Mint

versions. A Caramac variant waslaunched in 2005 and has proved themost successful version to date. Othervariants include KitKat 4 Finger FineDark, its 2 finger range Kit Kat Chunkyand KitKat Chunky with Peanut Butter.

Yorkie was first launched in 1976 to

take on brands such as Cadbury’s DairyMilk. Names which were originallybeing considered at the time were‘O’Hara’, ‘Trek’ and ‘Rations’. It hasbecome firmly established as a solidchunky eat with a clever advertisingcampaign aiming it ‘uniquely for men’.

Aero is another brand with a longhistory. Launched in 1935, it wasoriginally to be named Airways. AeroChunky was launched in 1982 forconsumers looking for a snack on themove. It has appeared in a number ofvariants including orange, andcappuccino. Its peppermint variant hasbeen a success since its launch in the1970s. Since then we have seen Aeroexpand its range to include AeroCaramel, Aero Truffle, and AeroBubbles.

The Green & Black’s Brand hasenjoyed huge success in the Irishmarket. The brand was launched in1991, and is now the UK’s fastestgrowing confectionery brand. Green &Black’s Maya Gold chocolate was thefirst product to be awarded theFairtrade Mark in 1994. The Green &Black’s product range now includes150g, 100g and 20g chocolate bars aswell as premium organic ice cream,biscuits, drinking chocolate, cookingproducts, gift boxes and Easter Eggs.

Clarendon Confectionery is part ofthe Jacob Fruitfield food groupmanufactures popular brandsSilvermints, Scots Clan, Double Centreand Yorkshire Toffee. This year,Clarendon Confectionery introduced an

Aside from economic changesmanufacturers haveimplemented a number ofmeasures to avoid poorpublicity in the health debatesuch as limiting advertising tochildren and improving packlabelling.

October 2009 27

28 TGm

extension to the Scots Clan brand withthe launch of Scots Clan bar. Thisenabled the brand to move into the fastmoving counter unit for the first timeconsisting of six individual bite sizeScots Clan sweets.

The Silvermints brand introduced anew confectionery in a furtherdeparture for he classic brand and it isnow available in a ‘mini’format. The MiniSilvermints are packedin 12 eye-catching,compact tin with aresealable flip top tin.

Robt. Roberts’srange of confectionerybrands includes Lemon’s,Chewits, Topp’s, ElizabethShaw, Fisherman’s Friend,McGowan’s and ZedCandy. Lemon’s is an Irishbrand which is wellestablished in theconfectionery market.Earlier this year, Robt.Roberts launched a newrange of Lemon’s ‘Better for You’ bagsthat have proven to be a huge success,according to the company.

Lemon’s range carry’s a newproposition of being 99% fat free, withno artificial colours or flavours and aremade with natural fruit flavours. Therange includes 5 varieties in 200gpacks plus the leading varieties of fruitjellies and orchard jellies also in 100g

packs.Swizzels Matlow have been

operating in Ireland for over 35 years,and its’ flagship brand Love Hearts hasbeen in existence for over 70 years.

Over the last year Swizzels MatlowIrl extended the success of Love Heartbrand with the launch of additionalproduct types, while keeping the

heritage and nostalgicappeal of the originalbranding. This includedLove Heart Dip and LoveHeart Lipstick

Swizzels Matlow Irelandproduce products withinthe following categoriespositioning itself as a ”OneStop Shop Solution” forChildren’s confectionery:Love Hearts: 20c Roll, 35cGiant Roll, 15c Lipstick, 30cLove heart Dip. Chew Bars:5c Refresher Chew, 20cStinger, 20c Refresher, 35cRe f r e s h e r /D r ums t i c kStickpack. Pops: 10c

Drumstick Lollie, 10c Double LollieWrapped, 15c Chunky Drumstick, 15cChunky Refresher Pop, 35c MegaDouble Lollies, 15c Giant Fruity Pops.Sherbet: 2c Rainbow Dust Straws, 15cMega Rainbow Dust Straws. Gums &Jellies: 20c & 35c Fun Gum bag range.2c, 5c, 10c, 15c, Fun Gum Tubs.Grocery Bags: Love heart MultipackVariety Bag, Chew Mix, Double lollie,

Swizz Kid, Lots of Lollies, BumperBag, and Monster Mix. From 2009 allSwizzels Matlow Irl products will beproduced with NO ARTIFICIALCOLOURS. Swizzels Matlow Irl viewsthis as an important step forward inresponding to consumers’ needs andtastes.

Kerins foods is the brainchild ofJohn Kerins which he established in2006 along with his sister, Theresa. Thecompany sells, markets and distributesconfectionery and has its productslisted in Donnybrook Fair, the Butler’spantry and Morton’s in Ranelagh.Kerins Foods imports Delaviuda, aproduct of the Madrid basedconfectionery company of which KerinsFoods has the rights for in Ireland.Delaviuda dates back to 1883 andtoday it exports to over 60 countriesworldwide. Delaviuda’s range ofconfectionery is competitively pricedand is renowned for its chocolatetruffles, pralines and biscuits. The rangeif competitively prices and there aresugar free options also available.

Rochfords Handmade Chocolates, isa new Irish made artisan chocolaterange produced by BR Marketing.William Rochford with his brotherMichael run a very successful foodimporting and distribution business, BRMarketing, based in Dublin for the last25 years employing over 50 staff. Theyhave built some very successful brandson the Irish market which have nowbecome household names.

Confectionery

Irish consumers haveshifted their tastes forchocolates and are nowseeking more innovativeflavours; exhibiting atendency towards moreluxury products spendingmore on individual purchases than everbefore.

TGM

In addition to selling in the Irishmarket, William sees a huge potentialabroad due to the vision people have ofIreland as a place where passion andexpertise inform our food industry. Thisis certainly true when it comes to thehandmade chocolatemarket. Chocolate isbig in Europe andthere is a strongmarket for premiumand artisanchocolates.

Chocolate claimsthe largest share ofthe Europeanconfectionery market.By 2010, the totalmarket is expected toaccount for over 55%of the Europeanconfectionery market.The European marketis currently valued at€30bn.

The top fivecountries in thechocolate market including the UK,France, Germany and Italy, account for71% of the total European market sizeby value.

In the US, 4.3% growth is accountedfor through the rise in popularity ofpremium chocolate. It is also worthnoting that 51% ofthe US food anddrinks market isconsumed outside ofthe home. The marketis expected toexperience strongeraverage annualgrowth compared toEurope reaching$33.0bn in total by2010.

H o m e m a d eproduce is rising inimportance to theIrish shopper. Datashows that 72% ofIrish people agreedthat food producedlocally results inhigher qualityproducts

Rocheur Ltd has been establishedfor over 20 years having been setupfrom small beginnings and since thenhas enjoyed progressive andsteady

growth in the Irish market.Rocheur Ltdspecialise in importing children'sconfectionery, and distributing it to allchannels – direct Retail, WholesaleCash & Carry and the Multiple trade.

Rocheur Ltd has many differentagencies and constantlyintroduce

new products andimprove product rangeand distribution. Thecompany haveestablished the Spanish"Fini" brand in Ireland.This range has excellentquality confectioneryand

innovative packagingand is verycompetitively priced.Rocheur Ltd also have alarge range ofinteresting products forall seasons –Christmas,Halloween and Easter.

The Irish chewinggum market has a value

of €45.5m and is growing 4% year onyear (YoY), with bubblegum accountingfor €2.9m. Wrigley’s has 87% of thesugar free market. The mints market isworth €26.3m and has a YoY growth of5%; while Wrigley’s extra is thecountry’s number one countline and

enjoys a value of €26m. It would not be an

overstatement tosuggest that chewinggum would scarcelyexist if not for Wrigley’s.It is the name leapingout from shops acrossIrish towns and villages.The Wrigley’s companyis the recognised leaderin the confectionery fieldand the world’s largestmanufacturer ofchewing gum with salesof more than $4bn. Thecompany markets itsarray of brands to over180 countries.

With an eclecticportfolio of brands,there are a few

favourites in this part of the worldamong them, Extra Sugar-free gum,Orbit, Juicy Fruit and Hubba Bubba.The Extra range of sugar-free gum,

which comes in seven flavours includingSpearmint and Peppermint, was thefirst sugar free gum launched byWrigley’s in the US and was firstintroduced in 1984.Juicy Fruit isanother familiar brand with Irish gumchewers. It is the number one fruit gumbrand and is the number one gumbrand with kids. Orbit, available inseven flavours first launched on shopshelves in 2001 to rapid success and isamong the top five gum brands,enjoyed by millions across Europe andthe Middle-East. The Hubba Bubbafamily of products has also becomewell-recognised brand across the globe.

October 2009 29

In Europe only 10 percent of board directors arefemale - and elsewhere thefigure is lower. However,Indra Nooyi, chairman andchief executive of PepsiCo,

put much of her successdown to place.

“Where I am has a lot todo with the United States. Ithink the United Statesrepresents the greatestmeritocracy in the world.”It’s the US, of course, wherePepsiCo started, with theflagship cola brand, beforegrowing into a global leaderin the food and drink sector.Its portfolio includes suchsnack standards as Lay’s(Walkers in the UK) andDoritos, as well as thekitchen staples made byTropicana and Quaker Oats.

Nooyi is credited withputting the fizz into profitsat the company, which hasseen annual revenueincrease during her tenure.But she’s quick to dispelany notion that she did iton her own.

“So many people herementored me...the US is acountry that likes to seeothers succeed. That’s beenmy experience in the last30 years.”

Nooyi was born insouthern India and heldmanagerial positions atJohnson & Johnson, thepharmaceutical group, andMettur Beardsell, a textilecompany, before heading to

the US to earn a master’sdegree in private and publicmanagement from Yale. Themove led to a profound shiftin her thinking.

“You come from India offthe boat, you go tobusiness school and yourealise that you come froma fairly sheltered life,” shesays. “I learnt everythingover again.”

On graduating in 1980,she took key marketing andstrategy roles at AseaBrown Boveri, BostonConsulting Group andMotorola before joiningPepsiCo in 1994. She rosequickly, becoming the chieffinancial officer in 2001 andchief executive in 2006. Enroute to the boardroomNooyi spearheaded theacquisition of Tropicana andthe merger with QuakerOats.

According to Hindutradition, Indra means ‘godof war’, and Nooyi has hadto battle adversity to leadPepsiCo through thedownturn. She says peoplelook for three things attimes like this: realismhand-in-hand withoptimism, visibility (“ceos interms of downturns shouldnever hide”) and a sense

that the organisation willtake whatever actions arenecessary in good time - “asopposed to after you hit awall”.

Along th way, Nooyi haslaid off 3,300 employeesand offered $6 billion tobuy PepsiCo’s two biggestbottlers. She is alsochampioning a move tohealthier products and isoverseeing a push intophilanthropy: PepsiCo isworking with the Britishgovernment to develop aprogramme to bring “highlynutritious snacks to theundernourished”, a projectalready in earlydevelopment in Nigeria,Mexico and India.

As for life after PepsiCo,she is quick to dismissreports that she might gointo politics. “In the future Iwould like to give back tothe (US, but) I have beenvery clear in saying I am notin the politics arena at all”.

She credits here familyas being integral to hersuccess - and she remainsintegral to their lives. “Atthe weekends, I’m cookingat home in the kitchen,” shesays.

“I’m doing everythingthat normal people do.”

FIRST AMONG EQUALS

Clare Spring Water is tocreate 100 new jobs at anew water bottling facility6km from the Co Clarevisage of Lissycasey.

Air travel technologyprovider SITA, whichalready employs 73 peoplein Letterkenny, is recruitingfor 80 new positions as partof an expansion of its Irishsoftware developmentcentre.

Family owned Clare

Spring Water was foundedafter the discovery of theunderground source by awater diviner, using atwisted metal coat hanger.The €4.2m bottling plantemploys 10 people, but thisis expected to grow to 100over the next three years.

“At the moment ClareSpring Water has a team of10 producing a range ofstill and sparkling waters intraditional recycled bottles

which have provided verysuccessful,” said PaulConnelan m.d.

“However, the Wellnessbrand has been created inresponse to the need for apure spring water from anorganic source andpresented to the customerin the most environmentallyfriendly bottle that we canfind.”

SITA, which was set upby 11 airlines in 1949provides services for 550air transport members and

provides what the companyterms “the backbone of theglobal ar transportindustry”.

The Letterkenny facilitywill focus on three areas: e-commerce solutions, airportmanagement solutionsystems and bordermanagement solutions.

The employees are partof transnational teamsworking on thedevelopment andinstallation of specialist ITsystems for airlines.

New jobs for Clare Spring Water

N E W S

30 TGm

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Dunnes stores directorMargaret Heffernan hassaid that the companywould remain independentand fully Irish-owned as sheofficially opened thecompany’s newlyrefurbished outlet at PatrickStreet in Cork city centre,with an estimated cost of€30m.

Heffernan said thecompany founded by herlate father, Ben, wouldremain Irish-owned amidmuch speculation in recentyears that internationalretailers such as Asda/Wal-Mart were interested inacquiring the company.

“I am confident that wewill stay in Irish hands andcontinue to give value tothe Irish people,” saidHeffernan.

“Our aim is to keep it asa family-run company and Iam confident that the nextgeneration will be able todo that with the supportand dedication and loyaltyof a fantastic workforce.

“It could not be donewithout the fantasticsupport of the people whowork with us,” she added.

Heffernan admitted thatit was a difficult time for theIrish retail sector but sherecalled that when her latefather opened his first storeat the same site on PatrickStreet in Cork on March31st 1944, he too faced ahuge challenge.

“My father started thebusiness in 1944 in the waryears and they were veryhard times.

“Now we are reopening

Patrick Street in very toughtimes,” she said, addingthat the 1950s and the1960s were also tough butthe company didn’t face thesame competition it doestoday.”But with the supportwe have had from all ourcustomers all over Irelandand above all the peoplewho work with us, I amconfident we wil go fromstrength to strength,” saidHeffernan.

“They were differenttimes than we have now”she said.”I think Ireland isgoing through a really,really difficult time and atough time for lots ofpeople...but we will onlydeserve to continue if wegive the Irish public bettervalue which is what myfather founded this

company on.”The newly refurbished

store, which will employsome 200 people, features10,000 sq ft of retail spacewith a 22,000 sq ft foodhall situated at basementlevel, with a further 78,000sq ft over three floorsdedicated to fashion,homeware and a cafe.

DUNNES TO REMAIN IN IRISH HANDS

Oat producer Flahavan’sis investing €1.6 million inits Waterford mill to boostsales of organic oats.

Investment of€500,000 has gonetowards environment-friendly equipment to rampup production at the facilityin Kilmacthomas.

The next phase of theproject will see thecompany plough a further

€1.1 million into newstorage units with capacityto hold up to 4,000 tonnesof organic oats.

A sixth-generationfamily-owned firm,Flahavan’s employs 52people and has revenues of€12.6 million.

Chairman John Flahavansaid the investment in thecompany’s Kilmacthomasplant would support sales

of organic oats, whichaccount for 15 per cent ofcompany revenues atpresent.

“This is one of thelargest strategic investmentplans that we haveundertaken at the mill andsecures futureemployment,” saidFlahavan. “We are alwaystrying to encourage Irishfarmers to grow organicoats for us to meet theincreased demand.”

FEEDING THE NATION FOR SIX GENERATIONS

The number of peoplecooking at home ratherthan going out for a mealhas risen sharply, accostingto new research publishedby the Irish Food Board.

Some 63 per cent ofthose surveyed said theycooked a meal at least afew times a week, up from56 per cent in 2005.

The PERIscope review ofconsumers on the island of

Ireland and Britain, alsofound cookery classes werein vogue, with 9 per cent ofthose surveyed taking aclass in the last three years.

According to Helen King,senior business analyst withBord Bia, the biennialsurvey found at least one infive of the 1,000 consumersinterviewed in the Republic,Northern Ireland andBritain claimed to be

entertaining more at home.King said the recession

accelerated the trend ofpeople going back to familyand home values, quality oflife and buying localproduce.

The research confirmedIrish commitment to localfoods with 71 per cent ofthose surveyed looking for aquality label when shoppingcompared to 49 per cent inthe UK.

SHARP RISE IN COOKING AT HOME

N E W SJohn Flahavan

`Margaret Heffernan

October 2009 33

TGM

Angel Delight. WagonWheels, Even those palatescorching Crispy Pancakes.Why are we turning tonostalgic nosh to help uscope with recession?

Do you fancy a WagonWheel with that cup of tea?Go on. You know you wantone. Just sink your teethinto the famous, individuallywrapped mallow biscuitwith its ominous-sounding‘chocolate flavour’coating.

Feel betternow? You shoulddo. For you havenot merelysatisfied a sugarcraving, made aninterestingbreakfast choiceor plugged thepost-lunch/pre-theatre hungergap. You have just indulgedin what food experts callrecessionary-inducedemotional eating.

Wagon Wheels are justone of the food items thathave rolled right back intofashion as beleaguered anddepressed consumershanker after the nostalgia,flavours and carbo-richcomfort flavours ofyesteryear.

Sales of long-forgottenfood-stuff, such as ArcticRolls, Cadbury’s Wispabars, Angel Delight, theSteakhouse brands andFindus Crispy Pancakes arefuelling an edible nostalgiaboom worth more thanseveral hundred millionpounds.

So what exactly is goingon?

A tanking economy,global warming, assortedwars, the terrorist threatand a general feeling of

impending doom have allhad a big effect onconsumer needs andchoices. All that standsbetween us and the end ofcivilisation as we know it isa tube of banana toffos!

Subliminally, we want topretend that we are living inanother age eating anddrinking retro foods andbeverages is the most direct

and sensory way of foolingourselves that everything isfine.

So as the going getstough, the tough get stuckinto a glass of dandelionand burdock and head forMemory Lane.

For recessionary-induced emotional eating iseverywhere. One whiff of aBird’s Eye Chicken Piecrisping in the oven isenough to transportthousands of us back to achildhood of scraped knees,Clarks sandals andafternoons dappled withsunlight.

Strawberry AngelDelight, as pink as Barbie’stutu, still seems likedecadence beyond allcompare - even if the sugarhit tastes very different toan adult palate than it didto a child’s. Yet somenostalgic tastes never losetheir appeal.

Waitrose has tapped

into the nostalgia boom byreintroducing a boiledsweet range.

Customers have beenvoting for their favourites,from a short list thatincluded old timers such askola kubes, pineapplechunks, lemon sherbertsand rhubarb and custards.The supermarket chain alsoreports heavy sales of other

childhood staples, such ascloudy lemonade, BaconFrazzles and Penguins.

One of the biggestboom areas is frozen partyfoods, which have seen anincrease of over 25 percent. Frozen party foods?That can only mean onething. Hang onto to yourtuna mornay recipe andtinned asparagus spears,swingers - the vol au vent isback in town.

An old-fashionedcustard tart has just beenmade pudding of the year,while a national newspaperis releasing a free classiccomic every day for a week.

Of course, there iscomfort in the familiar, butthis much nostalgia issuffocating. Too much of itcan only afford emotionalrefuge to fools, no matterhow funny Space Dustseemed at the time. Andthe idea that things werealways somehow better

once upon a time than theyare now certainly hits thebuffers when it applies tofood.

Yet while the Seventiesfade to grey under a slurryof chemicals and traybakes, it is nice to enjoy theinnocence of the age oncemore.

Wagon Wheels, forexample, were first

advertised morethan 20 years agoas ‘an epicexperience’.

After Eights?Back then, theywere supposed tobe the last wordin sophistication,advertised bysupplicant-looking womenin eveninggowns and

hostess ringlets. Alpen! Remember when

this weird, dry muesli fromthe peaks seemed alien andincomprehensible?

When we hanker for thecomforts of recessionary-induced emotional eating,what we really long for isthe safety of childhood. It’snot the suck of mallow orthe crunch of a Findussavourypancake that wewant; it is for someone elseto cook and shop, to feedus and make all thedecisions.

Yet just when you thinkit is safe to go back to thefuture, someone comesalong to spoil it all. Forbiscuit boffins have, whenno one was lookingintroduced an oblong JaffaCake. Its enough to makeyou reach for a refreshingglass of Um Bongo.Apparently, they drink it inthe Congo.

BACK IN FLAVOUR

34 TGm

The ‘Super’ big news this Autumn andWinter season is that Flogas is now theexclusive distributor for Superser mobileheaters in Ireland and the UK. TheSuperser brand name is the original andthe best quality mobile heater on themarket today. Up until now, Superserheaters were distributed through a numberof companies but Flogas are now delightedto announce that they have secured anexclusive distributorship with themanufacturers.

“We have been promoting and sellingSuperser heaters for the past 30 years,”said Eoin O’Flynn, Flogas. “This, combinedwith our track record in the LP Gas sectorand the strong Flogas dealer and appliancecentre network across Ireland were criticalfactors in us being awarded the exclusiverights to distribute Superser heaters inIreland and the UK.”

Over the years, Flogas has noticed thatduring an economic downturn, sales ofSuperser mobile heaters actually increase.Commenting on this trend, Eoin Flynn,said, “Superser heaters provide the perfectsolution for cost-conscious customerslooking to control their heating bills.Superser mobile heaters are extremelyuseful as an instant, economic and portableway to ‘spot-heat’ a room quickly, as manycustomers find it far cheaper than turningon the central heating for an hour or two.”

Eoin Flynn also found that stockingSuperser heaters increased bottled gassales. “Customers who buy a Superserheater from a particular store tend to comeback to the same place to get their bottledgas refills so you benefit from repeatbusiness.”, said Flynn. Model mum Ruth Griffin, wife of Munster rugby player Alan Quinlan, and little son AJ

highlighting the news that Flogas is now the exclusive distributor for Superser mobileheaters in Ireland and the UK.

gets exclusiveonSuperser

F L O G A S G E T S E X C L U S I V E . . . . . . . .

October 2009 35

Retailers looking to stock up onSuperser mobile heaters for the wintermonths will be now able to sourcethem exclusively from Flogas on 041-9831041 or www.flogas.ie

Superser heaters – choice of twomodels

For homeowners who want instantheat that’s both stylish and useful,Flogas supplies two very contemporarylooking and stylish mobile heaters, theSuperser Radiant and SuperserCatalytic. In particular, the SuperserCatalytic burns without a flame andhas lower touch temperatures, makingthem safer and it’s fitted with easyglide castors, which allows for trouble-free moving from room to room.

Natural Gas for Business CustomersAnother big development of

interest to retailers is the recentannouncement earlier this year of theFlogas move into the the commercialnatural gas market nationwide. It iscurrently offering businesses a 15%saving on the price charged by BordGais Energy Supply for its natural gas.Flogas entered the natural gas marketfollowing its deregulation a few yearsago and has been supplying naturalgas via the existing Bord GaisNetworks pipeline to over 11,000homes in the North-East, Midlandsand the West. “Our guaranteed 15%price saving on the price currentlycharged by Bord Gais Energy Supply isthe most competitive offer in themarketplace for business customersand this has been reflected in a largenumber of high-profile new customersignings, including Nature’s Best inDrogheda,” said O’Flynn.

Light my Fire….Very little beats a real coal fire in a

home but increasingly fewer peoplewant the hassle that comes with it, sogas fires have become a veryfashionable lifestyle choice. Thesolution for those homeowners whoare not on the natural gas grid is tohave it piped in from their own backgarden using stand-alone propanecylinders. Two are usually installed withan automatic changeover device sowhen one cylinder runs out, thecustomer can phone for a replacementcylinder. Flogas operates a nationwidenetwork of distributors in strategiclocations to ensure constant and

speedy deliveries direct to customers,whatever the weather.

Propane direct dealers have beenreporting strong annual sales growthand many of our customers want thebenefits of gas in the home for firesand cooking but are either not on thenatural gas grid or don’t want to gothrough the hassle of changing, so findpropane cylinders in a discreet cornerof their back garden a very practicalalternative.”

Something’s Cooking!Professional chefs always prefer to

cook on gas and Flogas customerNeven Maguire of MacNean House &Bistro, Blacklion in Cavan said “Manypeople are opting for gas to cook uptasty dishes for family and friends as itoffers clean and controllable heat.”

As the population around majorurban centres continues to spread intosurrounding counties, so too has thegrowth of restaurants and othereateries all looking for gas and drivingsales of propane cylinders.

Changes in eating habits and thetrend towards stir-fry dishes whichwork best when cooked on gas hasmeant that many people are looking atthis option either for existing or newhomes.

A nationwide network of Flogasaftersales personnel are on 24-hourcall for appliance repairs andmaintenance. For further informationon Flogas products and services, justcontact 041-9831041 or visitwww.flogas.ie.

Flogas is one of Ireland’s largestsuppliers of bottled gas which itmarkets via a nationwide networkof dealers in Ireland.

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36 TGm

Many factors predetermineconsumer choice of fuel. For instance,gas is still a dominant force in today’smarket but solid fuel fires have alsobecome popular once more, with 70%of homes boasting one, whilst at thesame time electricity is beginning topose a significant threat to gas.

If homes are built with a gas-onlypre-cast flue, solid fuel isn’t an option.Conversely, a home that doesn’t havea gas supply and considers bottledgas too expensive, then solid fuel maywell fit the bill. If there is no flue, thereis the option of something powered byelectricity.

The average Irish household isresponsible for emittingapproximately 8.1 tonnes of Co2.Reasons for this include largeraverage dwelling size in Ireland.Differences in the fuel mix with ahigher proportion of solid fuel use inIreland and a higher proportion ofdistrict heating systems in EUcountries where emissions areaccounted for in the transformationsector than in the residential sector.

Considerable expansion hasoccurred in the residential sector withthe number of permanently occupieddwellings up by 43% to reach 1.46bn.A report by Sustainable EnergyIreland (SEI) says of these dwellings,that about 144,171 homes areexperiencing fuel poverty, with thelowest earners spending an average of13% of their disposable income onenergy while the highest earners spent1.7% of their disposable income onenergy. We have also endured sharpincreases in electricity and fuel pricesfrom June 2000 to January 2008.Household electricity, for example,doubled during the period while theprice of kerosene rose by 78% andnatural gas by 87% during thatperiod.

There is an interesting trend

emerging in the solid fuels marketfrom Europe - a return to coal.Countries like Italy are returning tocoal for power generation to 33% upfrom 14%, despite climate changeconcerns. Italy is not alone in its returnto coal. Driven by rising demand andrecord high oil and natural gas prices,up to 38% of global electricity isgenerated from coal. Australia,Poland, South Africa and China all relyon coal to produce over 75% of theirelectricity, India over 60%, and the USand Germany more than half.

The total domestic ignition marketin Ireland is growing at 11% andreached €30m in 2008. Bord naMona continues to be the marketleader with its range of solid fuelproducts including Bord na monaFirelogs. In 2009, the companylaunched its range of Eco FriendlyFuels, which are all made from naturalrenewable resources. The rangeincludes Premium Wood Pellets, Bord

na Mona Wood Logs, Bord na MonaFirelighters and Bord na Mona EcoFriendly Real Logs.

One of Bord na Mona’s mostpopular products is the firelog. Thelaunch of Firepak has performedstrongly in the convenience real-firemarket. The Firepak is a quickinnovative product, placed in the firegrate and simply lit. Both the Firelogand Firepak are seen as an essentialfor all retailers to stock, with PeatBriquettes offering an easy and quickto light alternative.

Bord na Mona manufactures andsells quality firelighters under theBord na Mona brand name. 2008 sawthe introduction of Bord na Monaindividually wrapped firelighters madefrom Irish peat.

Firelighters account for over halfthe solid fuels market and are growingat 7.3%. Wrapped firelighterscomprise 9% of the total ignitionsector with growth of 13% . Standard

Heating one’s home has endured extreme ups and downs in the last year. From record highs in oil, gas andelectricity prices to record lows at the beginning of 2009, consumers are, naturally, keen to see a little morebalance.

Fuel

October 2009 37

The total domestic ignition market in Ireland is growing at 11% and reached €30m in2008. Board na Mona continues to be the market leader with its range of sold fuel

products.

firelighters account for 59% of thetotal market in value terms followedby convenience logs at 23% and bulkfuel/coal bags at 11%. In value termsBBQ comprise 6% of total ignitions.

Zip is the global leader in themanufacture and development offirelighters. Last year Zip launched anew block firelighter on the Irishmarket called New Energy.

The product uses proprietarytechnology to deliver the renownedZip quality in a smaller cube size andat a lower price point. Energy +Firelighters are available in packs of15, 30, and 48.

Modern high efficiency heatingsolutions represent the future for Irishhouseholders. As fuel costs continueto show erratic patterns since January2008 consumers are looking for acost-effective way to heat their homesin these economically challengingtimes.

Calor Gas has developedinnovative heating solutions for thedomestic and business markets thatare both environmentally friendly andcost efficient. Spot heating providesinstant heat when and how consumers

want it. With spot heating consumersdo not need to have to central heatingturned on all day. This not only helpssave energy, it reduces energy costsand is good for the environment. CalorGas mobile heaters provide instantheat and its range provides topperformance with style, mobility andcost efficiency to suit all budgets.

The Provenance, from Calor Gas, isan addition to the spot heatingmarket. It has been specially designedto blend in with the layout of anyhome. Developed in Ireland, theProvenance is 100% portable whichmeans the installation costs orassociated works such as the need fora socket or flue chimney. The Provenceis fuelled by the well-known Calor Gas11.34 kg butane cylinder houseddecoratively within the stove. Thismeans excellent efficiency with amaximum heat output of 3kw forsafety, the Provenance features aSafety Oxygen cut-off which cuts-offthe appliance of carbon dioxide levelsin the room rise above a safe levelallowing peace of mind for consumers.

Flogas is one of Ireland’s largestsuppliers of bottled gas which it

markets via a nationwide network ofdealers. A nationwide network ofFlogas after sales personnel are on a24 hour call for appliance repairs andmaintenance. Flogas supports all itsproducts, services and plans throughinnovative dealer promotions point ofsale, targeted advertising and publicrelations.

The Superser heater range fromFlogas Ireland is an instant,economical and portable way to spotheat a room quickly without having toturn on the entire central heatingsystem. The range includes thepopular and stylish designed FlogasSuperser Radiant heater and FlogasSuperser Catalytic heater. Inparticular, the Superser Catalyticburns without a flame and has lowertouch temperatures, making it safer.Both heater models are fitted witheasy slide castors for trouble-freemoving from room to room.

In addition to heating, the demandfor accessible and affordable gas inthe leisure market has risen sharply,particularly for usage of barbequesand patio gas heaters in the summermonths.

TGM

38 TGm

The reality for tobacco companies isthat almost one in four cigarettessmoked in Ireland is not bought from anIrish shop.

Laying down a minimum price oncigarettes distorts competition, so saysthe European Court of Justice. TheCourt’s advocate general, JulianeKokott said the practice bygovernments of binding prices restrictsmanufacturers freedom to set pricesand is, consequently imposing oncompetition. This all comes on the backof a case taken against Ireland in 2008by the European Commission over itspolicy of setting a minimum price oncigarettes and tobacco products inorder to protect public health.

The opinion of the advocate generalalthough not a conclusive opinion thatwill be reached in March. Howeveraccording to those familiar with theprocess, the current belief is expectedto hold next March.

Back home the Department ofhealth said it was examining theopinion; It stated;

“This opinion is at an intermediatestage in the process and the judgementof the court is still awaited.”

In an agreement with the IrishTobacco Manufacturers AdvisoryCommittee, the department has aminimum price for 20 cigarettes of anestimated €1.30. This was set withinformation on volume sales given bythe tobacco companies on filtered andunfiltered cigarettes. The governmentargued that this practice was to stoplow cost selling of tobacco products inIreland.

The belief is that the practice ofsetting a minimum price for cigarettesweakens retailers chances of offeringcut down prices on some brands of

cigarettes. The practice of price controlis further viewed as an effective methodin preventing children from taking upthe habit of smoking.

However, the Court believes thatminimum prices are not necessary andprotecting public health can beachieved more effectively by increasingtaxes.

A spokesperson for cigarette firmJohn Player & Sons said the principaldifficulty for the industry was the blackmarket selling of cigarettes. Hecommented;

“While we don’t oppose thecommission’s view that tobaccomanufacturers should have the freedomto determine retail prices for theirproducts, the fact remains that the realminimum price for 20 cigarettes inIreland is the street price of €4-€5, dueto widespread illegal trading. “

He continued;“This greatly incentivise criminals by

giving them huge margins while denyingGovernment badly needed revenues.One in four cigarettes smoked inIreland today smoked is not evenbought in an Irish shop.”

The economic reality is a contractingmarketplace with companies having torestructure and cut jobs. The tobaccoindustry is certainly no exception.Tobacco group PJ Carroll is set todownsize its operation in response todeclining sales and an increase in theavailability of cigarettes on the blackmarket.

While the company hasn’tcommented on the restructuring it’sbelieved that up to 10 job losses areexpected with 14 sales position to beoutsourced. The company employs 62people in Ireland and it has said it willengage in a 30-day consultation period

with staff;“PJ Carroll has announced

proposals to restructure its business.This is in response to a number oftrends not least of all the growingproportion of the total tobacco marketwhich is now illicit. We believe the illegalmarket now represents around 30% ofall cigarettes consumed in Ireland. “

According to accounts published,the company’s sales declined 2.2% to€223.9m in 2008, with the companyselling 85 million less cigarettes. Astronger grip on costs promoted itsafter-tax profit by 36.7% to €9.3m lastyear. It paid a dividend of €7.8m to itsparent company British AmericanTobacco.

The recession brings out many newtrends in consumers and it seems thatthe roll your own sector of the marketis making a comeback. A surveyrecently published showed that Irishpeople are smoking more than ever,with one third still maintaining thehabit, which is an eleven year high.Customs seized 3,144kg of roll-your-own tobacco in the first nine months,double the amount in all of 2007.

An analysis of smoking discoveredthat there is a cultural shift in the useof tobacco with more than one in fouradult smokers using roll-ups. One in fivewhite collar professionals who smokenow use pouch tobacco, as do one infive female smokers compared with onein 50 in 1990. According to VincentJennings of the CSNA (conveniencestore newsagents association);

“Rolling tobacco has becomefashionable in certain quarters. I thinkthat for most smokers its aninconvenience and they only go for itbecause of the value for money.”

The Irish tobacco industry is back in the news. Like all manufacturers the industry is dealing with its ownchallenges and illegal trading seems to be its perpetual Achilles heel. In addition, the European Court ofJustice took a case against the Irish government for its practice of price setting, claiming it distortscompetition. Coupled with the contraction of some tobacco firms and the future seems like tough terrain.

Tobacco

The tobacco market continues to becharacterised for many by theworkplace smoking ban as well as theexclusion of advertising andsponsorship. However, despite theserealities, smoking in this countryremains static. Its worth consideringthat to maintain a static position, newsmokers must enter the market.Consumption patterns have alteredwith fewer smokers likely to be heavy ormedium users and a trend towardslighter products with 17 cigarettes perday being the average.

Consumption of cigarettes is stillvery much in existence, the industry hasundergone radical restructuring; withJohn Player following the lead ofGallagher’s closing its Dublin plant andmoving production to the UK. Whileinitial claims that the workplace ban onsmoking had hit the market badly; thishas been revised during the subsequentyears with industry players insisting themarket has actually grown.

Although smokers are now confinedto outdoors, they continue to light upand contribute an estimated €1.8bn tothe government’s coffers in excise duty.This accounts for 80% of the price of apacket of cigarettes. In retail termstobacco is worth over €2bn. Depsitethe eradication of tobacco advertisingand the introduction of the ban,consumption levels have remainedrelatively steady.

According to data, each smokerspends €5,000 a year on cigarettes. Inaddition almost one million smokersgenerated 550,000 shopping visits perday. Up to 38% of smokers visit theirfavourite store at least once a day tobuy cigarettes; 29% do so every fewdays; and 12% weekly. Where mostregular brands are not available 52% ofsmokers will buy alternative brands;48% will go elsewhere to look for thebrand.

Up to 90% of purchases by smokersare pre-planned. As well as buyingcigarettes these shoppers are likely toalso purchase, bakery goods, softdrinks, confectionery and newspapers.An average of €6 is spent per personon other goods. This indicates thatcigarette shoppers purchased anadditional €3m on other items.

According to research, the mainreason for 70% of smokers visitingstores is to buy cigarettes; papers and

magazines represent 8%, food to go6%; petrol and diesel 4%; bread andbakery goods 4%; soft drinks 4%;groceries 2%; and others 2%.

Cigarette shoppers spend €21.80on petrol/diesel; beers €14.80; phonecard top-ups €12.50; cigarettes€6.60; lotto €5.20; food to go €4.20;bread/bakery €2.60; tea & coffee;confectionery €2; soft drinks/juices€1.70; papers & magazines €1.60;Milk €1.40; crisps/snacks €1.10; andothers €4.60.

Smokers' frequent conveniencestores the most when buying cigarettes,which represents 56.1%; this isfollowed by multiples 4.6%; petrolforecourts 8.9% and others 30.8%.

The number of cigarette seizureshas increased by 290% from 3,969 in2004 to 15,497 in 2006, representinga substantial 1,300 seizures a month.A total of 50 million seized in 2006could have cost the Exchequer as muchas €15m. While there are no definitivefigures to show smuggled cigarettesimpact on retail sales, Gallaher’s claimthere are 500 million cigarettes in lostrevenue to stores. This is the equivalentof 25 million packets of 20 cigarettes ayear; a loss of 68,000 shopper visits aday.

The industry itself says it does notencourage anyone to take up the habitof smoking. In fact it claims anypromotional work or advertising isaimed at getting smokers to switchbrands. The industry is dominated bythree players Gallaher, the maker of SilkCut and Benson & Hedges with 48%market share, followed by John Player& Sons at nearly 37% and Carroll’s atnearly 15%.

The overall percentage of cigarettesmoking in Ireland is 23.6%, accordingto the Office of Tobacco Control (OTC). Ahigher percentage of men (24.4%)report as smokers compared to women(22.8%). These results show that asignificant decline has occurred insmoking rates among women duringthe last twelve months to March 2008,whereas there has not been asignificant change for men.

The largest change occurred among15-24 year olds with a statisticallysignificant decline from 29.5% to23.45% during the twelve months toMarch 2008. The age groups 25-34year olds and 35-44 year olds also

showed a decrease with the remainingage groups showing an increase insmoking prevalence.

Smoking prevalence peaks amongthe 25-34 year old age group, withalmost 31% reporting as smokers.Prevalence is lowest among the over 65age group, with one in eight smokers inthis age group.

In terms of social groups, thehighest cigarette smoking prevalencerate is in the C2 category at 28.8%although this group is the only socialclass that has experienced a statisticallysignificant decline in smoking ratessince March 2007.

There are four categories of smokersidentified by the OTC includingOccasional (between one and fivecigarettes a day); Light (between sixand ten per day); Regular (betweeneleven and twenty a day); and heavy(twenty-one or more a day).

The majority of smokers (44.9%)indicated that they were regularsmokers. A further 47% of smokersclaimed to be either occasional or lightsmokers. Heavy smokers account forthe balance.

There has been little movement

October 2009 39

TGM

40 TGm

across the categories during the lasttwelve months. Close to 50% ofsmokers fall within the combined 25-34 years (26.6%) and 35-44 (21.2%)with fewer than 17% of Ireland’ssmokers are aged over 55 years old.

In 2007, cigarette smokers spent€12 which is the equivalent to€816,000 in retail sales per day. Thecombined value of other key categoriescompeting for checkout space is€604m compared with cigarettes to€682m. Other categories competinginclude confectionery €155m; chewinggum €23m; soft drinks €284m; icecream €31m; snack food €98m;batteries €14m.

Another interesting fact forconvenience retailers is how muchadded volume festivals bring to theirsales. For example, during the CorkJazz Festival there is increased trafficof 40,000 and consumer purchasingincreased by 43%. Equally impressiveis the Galway Races which brought220,000 extra traffic to the cityincreasing sales by 30.2%. The All-Ireland Football Final brings 80,000people and generates increased salesof 16.5%

Of the top five most popularbrands, the Gallaher group distributesthree of them including Silk Cut Purple,Benson & Hedges, and Silk Cut Blue.Over the 12 month period endingMarch 2008, Gallaher had 48.5% ofthe market; John Player & Son 34.6%and PJ Carroll 14.9%. (Source Nielsen30th Nov.)

The roll your own tobacco marketis worth €20m with 11% of allsmokers also smoke roll your ownproducts. Interestingly 8% of cigarettesmokers changed to roll you owntobacco after the phase out of thepacks of ten cigarettes. John Player &Sons has the number one and twobrands, Drum and Golden Virginia withover 60% of the market. Amber Leaf’sconvenience style packaging,competitive prices and the inclusion of50 cigarette papers make it a popularchoice, according to the company. Alsoincluded in the Gallaher Roll Your Ownportfolio are Samson, Condor, MellowVirginia, Old Holborn and Rolled Gold.

Cigars:Ampersand’s latest addition, the

Ritmeester range of cigars hasundoubtedly strengthened theirsignificant stake in the tobacco andtobacco accessories sector. In Augustthis year, Ampersand launchedEurope’s largest selling aromatic filtercigar onto the Irish market,Ritmeester Moods. RitmeesterMoods has a unique aroma describedas tropical, mild and vanilla-like.Today Ritmeester offers the Irish cigarsmoker a wide range of fine Dutchcigars which includes - Pikeur, Tip,Half Corona, Miniatures andMiniatures Blue, another newcontender from the range.

Also available from Ampersand’scigar range is Agio with the biggestbrand in the Irish tip market, AgioFilter Tip Blue. The Agio range alsoincludes Clair Tip, Sweet Tip and HalfCorona. Ampersand also distributeKing Edward Cigars and dominate thepremium cigar market with Havanaand Dominican hand-made cigars.Brands include Cohiba, Montecristo,Romeo y Julieta, Partagas, Balmoral,Don Miguel and Davidoff.Ampersand’s eye-catching acrylicdisplay cabinet which contains aselection of bar-coded tube cigars hassignificantly increased consumerdemand and continues to be a big hitwith the trade.

Ampersand have an extensiveassortment of cigarette papersavailable within their TobaccoAccessories range. Since the launchin 2006, the Smoking brand of rollingpapers has been a great hit with thetrade and roll-your-own consumer.Smoking offers excellent value to bothretailers and consumers with highermargins on offer to the retailer and20% extra leaves for the consumeragainst competing brands.

In addition to Regular and Kingsize booklets Ampersand also offersome specialist lines such as SmokingHemp, Smoking Eco, Smoking Rolls,Smoking Double Pack, and SmokingMaster. Today the Smoking brand ismarketed in more than 30 countriesworld-wide by Miquel y Costas whocontinue to develop new varieties ofpapers and booklets capable ofsatisfying the most demanding

smoker. In more recent times Ampersand

has also gained the distribution rightsfor Zig-Zag Papers since acquiring theagency in May 2008. Zig-Zag has aloyal following in Ireland and is theNo.2 cigarette paper brand in the UK.All Zig-Zag cigarette papers are madefrom only the finest ingredients andwith over 100 years of commitment toproviding superior quality, Zig- Zagpapers take pride in continuing tooffer their consumers a consistentslow burning smoking experience.

It appears that the smoking andcigarette market has settled into astagnant position. As smoking hastransported to the great outdoors, allof the government bans have weededout any chance of casually picking upthe habit, making it as difficult anduncomfortable as possible. Despitethis, there is still a comfortablemarket of smokers who keep theindustry above water and ticking over.

Tobacco

TGM

Tobacco Accessories:Ampersand have an extensive

assortment of cigarette papersavailable within their TobaccoAccessories range. Since the launch in2006, the Smoking brand of rollingpapers has been a great hit with thetrade and roll-your-own consumer.Smoking offers excellent value to bothretailers and consumers with highermargins on offer to the retailer and20% extra leaves for the consumeragainst competing brands.

In addition to Regular and King sizebooklets Ampersand also offer somespecialist lines such as Smoking Hemp,Smoking Eco, Smoking Rolls, SmokingDouble Pack, and Smoking Master.Today the Smoking brand is marketedin more than 30 countries world-wideby Miquel y Costas who continue todevelop new varieties of papers andbooklets capable of satisfying the mostdemanding smoker.

In more recent times Ampersandhas also gained the distribution rightsfor Zig-Zag Papers since acquiring theagency in May 2008. Zig-Zag has aloyal following in Ireland and is the No.2cigarette paper brand in the UK. All Zig-Zag cigarette papers are made fromonly the finest ingredients and with over100 years of commitment to providingsuperior quality, Zig- Zag papers takepride in continuing to offer theirconsumers a consistent slow burningsmoking experience.

In terms of social groups, the highest

cigarette smoking prevalence rate is in the

C2 category at 28.8% although this group

is the only social class that has experienced

a statistically significant decline in smoking

rates since March 2007. There are four

categories of smokers identified by the OTC

including Occasional (between one and five

cigarettes a day); Light (between six and ten

per day); Regular (between eleven and

twenty a day); and heavy (twenty-one or

more a day).

The overall percentage ofcigarette smoking in Ireland is23.6%, according to the Officeof Tobacco Control (OTC). Ahigher percentage of men(24.4%) report as smokerscompared to women (22.8%).

October 2009 41

Working with our local partners, we are committed to helping people participate

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Local storesowned by

Community retailersserving

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