Supermarkets give helping hand to new brands and food producers

When Maxine Hyde was a child she used to travel with her mother Yasmin in a battered old Lada to agricultural fairs around west Cork and watch as farmers were encouraged to taste a newfangled thing called relish.

She recalls that farmers, reared on singularly smooth sauces that were identified exclusively by their brown or red colour, looked at the funky chunky relish with suspicion.

Some tried it. Many did not. The relish was made in the grounds of Ballymaloe with tomatoes from the farm and using a recipe devised by Yasmin’s mother Myrtle Allen in her grand country house in the 1940s.

“My mum almost had to beg people to taste it,” Hyde recalls.

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After trialling Ballymaloe Relish among wary west Cork farmers Yasmin called to her local supermarket in Midleton, which was coming under the umbrella of the recently rebranded SuperValu chain.

The shop agreed to stock some of the relish. “Because of the way is it run, individual SuperValu’s are allowed to buy a certain percentage of products direct from suppliers and it is just one of the most wonderful things,” says Hyde.

The old Lada

Her mother drove “to a few back doors of supermarkets” in the old Lada “to kick off a bit of demand and that gave us a chance to realise what we could improve on”, her daughter continues.

Then Ballymaloe Relish “got a bit of trial in a Quinnsworth in Dublin in the run-up to Christmas 1990.

“It sold very well and then there was the famous Roches Stores who opened their arms to us. But it was very hard work and it was very gradual. People weren’t really that familiar with relishes and if there was any in supermarkets, there would be just a few dusty jars in the corner of a shelf.”

Things started to take off for the brand when O’Brien’s Sandwich Bars started adding Ballymaloe to the fanciest of its deli sandwiches at the turn of the millennium, while Centra also started boasting about its appearance in its deli-rolls. “The rolls were the height of fashion back then and they gave us a massive boost,” Hyde says. “We didn’t have money for national advertising.”

She credits supermarkets with helping her family to grow the brand including Tesco Ireland which, she says, has been massively supportive of getting Ballymaloe into its UK stores . “If you don’t have outside investors and a lot of marketing money then taking it slow by getting a little bit of space in a supermarket is brilliant,” she says.

A far more recent addition to supermarket shelves across Ireland is a range of beers from the Porterhouse Brewing Company. This time last year the beers – beloved among beer, stout and ale purists – were mainly available in the handful of bars owned by the company.

Shift from the pubs

Company director Elliot Hughes says the sudden shift from the pubs owned by the Porterhouse to supermarket shelves was a “pretty big departure and was certainly accelerated by Covid-19. It quickly went from something we had casually discussed pursuing to one which we actively went out to achieve”.

Its craft beers are now being listed in supermarket chains including Lidl, Tesco and SuperValu, a step which almost immediately makes the brand “accessible nationally”.

He says it should help it to grow its off-trade business “which has become increasingly important due to Covid-19. It also meant that we could continue to produce and safeguard jobs at a really difficult time for the hospitality sector”.

He describes the biggest challenge the company has faced so far as making sure it has “the volume of beer to fill initial orders nationally and then following that there is nothing too different from other partners we have”.

Things have gone as smoothly as a fine stout so far and Hughes is optimistic the supermarket sweep could see the brand grow even bigger. “Our beers are marketable across the EU and we have had success there with different partners, and a multiple-deal with the likes of Lidl can only help that.”

For her part and having travelled a long road to grow the Ballymaloe brand, Hyde stresses the need for people to take it slow. “If for instance you can get to all the supermarkets in Cork and making it work there, then that is a healthier way to grow than trying to take a brand national too fast.”

Taking chances

SuperValu, which took a chance on the unfamiliar relish in the 90s is still in the business of taking chances on local suppliers although that business has got much slicker in recent times.

Last month it announced 45 new Irish food producers who have completed the Food Academy programme, supported by Bord Bia and the Local Enterprise Offices (LEOs).

Now in its eighth year, Food Academy is a food business development programme between SuperValu, Bord Bia and the Local Enterprise Offices. Participants in the programme receive training in food safety, market research and branding, marketing, finance, sustainability, and business development.

At the virtual graduation ceremony of the new recruits, Tánaiste and Minister for Enterprise Leo Varadkar said the combination of Brexit and Covid-19 had “truly tested Irish food producers, our supermarkets and their supply chains. The industry has remained remarkably strong and resilient, throughout what has been a really challenging period, adapting and responding as things have changed. Ireland’s food and drink producers are known around the world for the quality of their produce.”

He said the Food Academy programme was a “fantastic example for those with smaller operations to sell to a wider audience”.

Future growth

According to recent research by SuperValu, Irish food and drinks start-ups are optimistic about their future growth with 93 per cent indicating they expect revenue growth in 2021, while 71 per cent said they would hire more people this year. The study showed that increased consumer demand for Irish products was the number one driver of growth.

The programme currently supports 290 Irish food and drink producers, including 140 female entrepreneurs, generating €170 million in sales. In 2020, there was a 15 per cent growth in SuperValu Food Academy sales, with participants earning €28 million. The Food Academy programme supports 1,500 jobs in local communities nationwide.

“Food Academy is a very important brand asset for us,” says SuperValu’s Anne Hurley. “Local has had whole new push since the start of Covid and that has made the academy even more important.”

This year’s batch of graduates joined the programme last autumn and took part in an online learning programme. “The topics have evolved over the eight years,” she says. “Sustainability is a huge part of the programme now as is selling yourself online.”

Would be food producers also learn about packaging, branding and have ongoing mentoring before they are released into the retail wilds. “They go on to the shelves of a couple of stores in their area to see how they work, it is a safe place to try their products.”

The producers can then establish a rate of sale in a few SuperValus. If things go well or if they have the ambition to scale up then can tweak their supply chain and sell to a wider circle of the shops before eventually making into into the national food chain.

“After the trial period there is mentoring and then it is based on rate of sales and what the brand wants to do and if they feel they are ready they can go into the next tranche of stores,” she says.

She has a note of caution. “There have been times when people have been very ambitious and raced to get into loads and loads of stores but brands don’t happen over night.”

While SuperValu is all about the Food Academy, the route taken by Ballymaloe Relish also remains open because of the unique structure of the store network. “The back door is still there and that still happens. The Food Academy was born out of that and really it was created to give the producers their best shot and the retailers their best experience.

“This is where the food ecosystem comes from, these are the brands and producers of the future and that is why we need to support them. We have seen what Brexit can do and it so important to support the indigenous proposition. We need to maintain the integrity of the food chain here in Ireland because it is unique and it is special.”

Damien O’Reilly is a retail analyst and TU Dublin academic and he echoes much of what is at the essence of the SuperValu Food Academy model. “It can be very important to local economies. If a small brand can get onto the shelves of a big supermarket, they can expand and then create employment. If people chose to spend just an additional €5 of their grocery spending on Irish sourced product then that could lead to as many as 30,000 new jobs being created. If you are selling into a supermarket and it is working then it benefits all the people in the supply chain.”

He does have some caveats and notes that while getting into bed with a supermarket can be hugely rewarding for a small supplier, it does not come without its challenges.

“The challenges are big and the margins are low and the costs of operating in that market can be high. Often companies are not properly prepared and they can run out of money or they can run out of stock,” he says.

Apart from all that he says they are “fantastic”. He points out that if a brand can establish a presence in the top three supermarkets they can ensure their products “are seen by 70 per cent of shoppers and that is a big deal”.

He notes that in the SuperValu Food Academy, producers are expected to “bring in your product and maintain your own shelf space and if you have a small space that can be very demanding”.

He says that while some businesses might think having their products in large supermarkets, “will open avenues but ultimately it closes them down and maybe they would have been better off in smaller outlets where they could get a better price because supermarkets work off very small margins. It is excellent but you have to work it very carefully maybe not overly ambitious at the start”.

Lidl and Aldi development programmes

When it comes to leaning on locals to boost business, SuperValu is not alone. Lidl has a KickStart programme. Its 2021 programme saw 46 suppliers added to it with 71 products going onto the shelves including 48 which are new to the retailer.

“With KickStart the focus is not just on getting products onto shelves – we really want to help suppliers get more out of the experience so we hold seminars every year on topics such as packaging, labelling, quality and marketing/PR,” spokeswoman Aoife Clarke says. “As we needed to host these online this year we took it once step further and introduced bespoke digital marketing training in conjunction with Facebook and gave each supplier free ad credit to practice what they learned.”

She said that it has “been working even harder also to facilitate exports abroad into the Lidl group. A 42 per cent increase in exports of Irish beef is planned for 2021. Last year ourselves and our exclusive beef supplier, Cavan-based Liffey Meats, secured exports to the value of €14 million despite the ongoing challenges of Covid-19 and the uncertainty Brexit was bringing to the agricultural industry. We have 21 fresh items and nine frozen items being delivered to 20 countries across Europe and USA – in total we will be exporting over 20,000,000 Irish beef burgers all over Europe and USA”.

Notable export stories

She said other notable export stories from the past 12 months were in the drinks area where they had a substantial investment totalling more than €50 million with supply contracts in 27 countries for suppliers of craft beers, cream liqueurs and spirits. “Last year also we were aware through Bord Bia about how many artisan cheesemakers were left without business due to hospitality being closed, so our buying team quickly pulled together an Irish cheese promotion with five producers supplying 11 cheeses to us.”

Then there is the Grow With Aldi producer development programme which, a spokesman says is “specifically designed to give small and medium Irish producers a leg up and the chance to have their products listed nationally across all our stores”.

It was introduced four years ago in partnership with Bord Bia and has delivered more than €3 million in sales for Irish producers

The spokesman said this year had been the biggest year for the Grow with Aldi programme so far with 289 companies applying, up by more than 30 per cent on last year.

He said that 57 of Ireland’s “most innovative producers won a place on the programme, with 108 of their exciting Irish-made products being placed on sale in our 145 stores last Sunday, June 6th, for two weeks as part of our Grow with Aldi Specialbuys event.

“The food service sector was also encouraged to enter. The sector has had such a difficult time due to Covid-19, providing an opportunity for them to diversify into retail was something we wanted to support. We have some amazing products on sale created by restaurateurs including a spicy Carolina Style BBQ sauce and Kansas City Style BBQ Sauce produced by White Rabbit, which is a family-owned restaurant based on MacCurtain Street in Cork city,” the spokesman said.

After the two-week Grow with Aldi Specialbuys event, five of these Grow With Aldi suppliers will be given a further opportunity to win a long-term 12-month contract with Aldi. “The real impact of the programme lives beyond the Specialbuys event and the suppliers that secure the long-term contract. Grow with Aldi has put additional Irish producers on our radar and presented us with more opportunities to work with the applicants at different stages of the year.”

He pointed to Pascal and Sinead Gillard of Jinny’s Bakery. They run holiday cottages and tea rooms in Leitrim. They initially supplied Aldi as part of the 2020 Grow With Aldi programme. They were outside of the five suppliers that received a 12-month contract, but they were listed again as a Specialbuy in our stores this year. Likewise, Ballyvourney Pudding entered right back in 2018 and was listed as a Specialbuy in June 2018. They won a 12-month contract for 2019 and returned again in 2020 with a different product.

“The programme has produced some real, long-term success stories. Take Walls Honest Chips, based in Whitegate, Co Cork, for example. It is run by Kieran Wall who developed chips to rival any chipper in Ireland. The ‘fakeaway’ chips are made with potatoes and beef dripping, meaning customers can have the authentic ‘chipper chips’ taste at home. One of the overall winners in the 2019 programme, Kieran recently signed another contract with Aldi worth more than €1 million to his growing business, which continues to go from strength to strength. Based on the reassurance of this long-term contract, he has had the security to expand his production facilities and hire more employees.”

We also contacted Tesco and Dunnes Stores because they also have support schemes for local producers but at the time of writing we had heard nothing back from either.