Glenilen Farm signs €500,000 yoghurt deal with Sainsbury’s

Glenilen Farm in Cork has signed a major contract with leading UK grocery chain Sainsbury's to supply five lines of yoghurt to up to 350 stores in Britain and Northern Ireland.

The contract is worth about €500,000 a year to the Irish business and will boost its annual turnover by 10 per cent.

It will also further diversify its revenue stream into the UK, which currently accounts for about 16 per cent of its turnover. The Irish company already has contracts with Waitrose, Selfridges, Harvey Nichols, Fortnum & Mason and online supermarket Ocado.

Glenilen's owners and founders, Alan and Valerie Kingston, are also investing €1.2 million in their facilities in west Cork, with assistance from Enterprise Ireland. This will boost their volumes, introduce a new unit for butter production and expand their office space to include a visitor facility.

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The Sainsbury’s deal will involve about 14,000 units of product a week.

"It's a big win for us," Mr Kingston told The Irish Times. "It's proven to us that there's a market for premium Irish branded food products in the UK."

Brexit impact

Mr Kingston said Brexit had impacted the company, particularly the fluctuations in sterling versus the euro but said its business in the UK was profitable at current exchange rates.

“If we have hurdles to jump [at the time of the trade deal between the UK and the European Union], we’ll find a way around them,” he said. “The UK will always be an important market for us. Their taste profile is similar and UK consumers like Irish food. They view it as local, whereas they see French food as imported, which is interesting.”

Based in Drimoleague, Glenilen produces a range of dairy-related products, including yoghurts, butter, cream and desserts. It made an after-tax profit last year of €800,000 on turnover of €16 million.

Glenilen’s other export market is the UAE, which accounts for about 1 per cent of its business.

In the light of Brexit, Mr Kingston said it would look to continental Europe for growth opportunities, notably Germany, where Kerrygold is the leading branded butter in the market.

“There might be an opportunity to piggyback off the success of Kerrygold,” he said.