Belfast briefing: Kitchen Bakes on rise despite sour taste of Brexit

Francess McDonnell A sprinkle of coconut when exporting to Cork has proved to be a recipe for success for a Portadown firm with a growing appetite to do business in the Republic.

According to Kitchen Bakes, anything with a coconut flavour sells like hot cakes, literally, in Cork. But when it comes to Dublin, there is a definite lean towards the high-end traybake with millionaire shortbread at the upper end of the list of favourites.

Dean McCullough, managing director of family owned Kitchen Bakes, may be something of an expert in identifying someone's home county by their choice of treat, but when it comes to predicting what may be on the menu for local food producers post-Brexit he is not so sure.

McCullough is hoping to expand his wholesale grocery business of desserts, tray bakes and frozen baked products in the Republic by at least 50 per cent this year.

The firm supplies a range of independent retailers and outlets and is developing its relationship with larger food providers while also moving into the café and deli sector.

Nostalgic tastes

McCullough says there is a definite taste for what he terms nostalgic Northern Ireland produce – such as his mother’s apple tart and also for its latest on-trend traybakes – in the Republic.

“My parents founded this business and it has been built, and continues to enjoy its success today, on the ethics they had. We believe in using only quality ingredients and producing only quality products. We bake everything in Portadown and hand finish everything and I feel strongly that our family ethos sets us aside from the competition.

“The Republic of Ireland is a natural market for us to export into, it’s on our doorstep and they have very similar tastes to us. A lot of our traditional favourites in Northern Ireland work very well there too – who doesn’t like a cup of tea and a wee bun?” McCullough says.

But like hundreds of other food and drink producers in Northern Ireland, the Brexit vote could not have come at a worse time for his ambitions. According to UK trade statistics, food and drink exports south across the Border are worth around £850 million a year. Cross-border trade with the Republic represents 65 per cent of all food and drink exports from Northern Ireland and is worth 10 times the value of exports to the North’s biggest non-EU market – the USA, which accounts for £80 million exports in that sector.

Figures from HM Revenue and Customs trade statistics unit suggest that between 1998 and 2014 exports across the Border to the Republic grew by 86 per cent in real terms.

Rising costs

As it stands, local farmers and producers can easily sell in to the Republic, enjoying tariff-free access to the market and the benefits of EU-wide common standards when it comes to labelling, safety and welfare regulations.

For firms like Kitchen Bakes, which has been in business for 30 years and employs 25 people locally, there is no sugar-coating the uncertainty that now exists.

McCullough says the firm will “have to just get on with doing what we do best” but says he has already noticed that some costs have started to rise.

“We’ve seen an increase in the price of some of our raw materials and, while we have seen benefits from the weakness of sterling (it has made us more competitive for our customers in the Republic) there is an element of waiting to see what will happen over the next three to four months after Brexit.

“Costs are always a big concern for small businesses like ourselves and we have to stay competitive,” he warns.

McCullough’s family firm was first set up by his parents Hal and Gladys as a high-street bakery in Portadown in 1986. Today, it operates from a 5,000sq ft (464.5sq m) facility and makes, on average, 650,000 products a year. As well as its independent customers, it also supplies organisations such as Musgraves, Hendersons, Costcutters and Nisa.

Whatever Brexit might mean for Kitchen Bakes in the short term, he is confident that his export ambitions – like his best selling madeira cakes – will not fall flat.