Country Crest ploughs ahead with €6m plan
The Hoey brothers sowed a seed in the Lusk soil a quarter of a century ago that has flourished, writes Fearghal O’Connor
PRODUCE company Country Crest is brushing off concerns about bad weather and Brexit with an ambitious €6m investment programme.
The family-owned business, which last week celebrated 25 years, has just finished a €3m expansion of its chilled ready meals producer Bally maguire Foods, boosting output by 20pc. It is now planning a similar spend on its Country Crest potato and onion supply business.
Earlier this year the North Co Dublin-based Country Crest announced a €60m extension to its 20-year produce supply deal with retail giant Tesco.
In an interview with the Sunday Independent, managing director Michael Hoey said that the company always prioritised investment to keep pace with the latest technologies and that this had been the trend in the Irish food industry since the recession.
“I think the confidence is back now. If you are serious at looking at your whole customer base and expanding that then you have to invest,” he said.
He also confirmed that the company had bought a site for a new sugar processing plant on the Carlow/ Kildare border as part of long-term plans by a range of stakeholders to restart that region’s sugar beet industry.
NORTH county Dublin agrifood business Country Crest turned 25 in recent weeks, but its co-founder Michael Hoey barely had time to celebrate.
Few winters in those 25 years have been quite as challenging as the one just past. Between hurricanes, snow storms and incessant wind, rain and cold, the Country Crest planting schedule ran a month later than normal. And since the sun finally came out, Hoey has spent long hours on his tractor playing catch up in the fertile fields around the village of Lusk, where the company is based.
“A month ago there were no potatoes in the ground and everything has had to be planted in the last month,” says Hoey, who set up the company with his brother Gabriel. Despite running one of the country’s largest food suppliers, the pair still take a very hands on approach to the business.
“The weather has had a huge effect on the crops going into the ground. We have only just finished planting. It has been trying and difficult and hard on the nerves at times, as it has been for all sectors of agriculture. All the crops are in the ground now. Please God they’ll grow properly, but it definitely is a late year.”
But, says Hoey, the company has seen this before and is well able to cope with whatever the weather throws at it.
“It’s been hard on any producer this winter, regardless of their size. But that’s the produce industry. It is not like making chocolate bars where you put in the ingredients and get the same results every time.”
The Hoey’s operation is actually made up of two separate entities. Ballymaguire Foods is the largest chilled ready-meals producer in Ireland, while Country Crest itself is one of the biggest suppliers of potatoes, sweet potatoes and onions to Irish retailers. Earlier this year it extended a 20-year relationship with Tesco in a €60m deal.
Both businesses are growing strongly. To enable this growth, the family-owned company will invest almost €6m this year. A €3m phase of its investment plan to give Ballymaguire an extra 20pc output has just finished in recent weeks. But it is not pausing for breath. A similar amount will be invested into the produce side of the business, Country Crest.
During the recession years, the company kept investing but, says Hoey, it kept things tight.
“I think the confidence is back now. If you are serious about expanding your customer base then you have to invest. We make lots of mistakes, but it is about learning from them and driving on.”
The business has been very good for the area. Locals speak of the generosity of the Hoey brothers, with older residents nearby sometimes finding a bag of potatoes or a tray of vegetables left quietly and anonymously on their doorstep at Christmas.
There have been more tangible benefits for locals too from Country Crest’s growth. The company now employs 340 full-time staff, up by close to 100 people just two years ago.
“Even during the recession years, thank God, we never had to let anybody go. It is challenging now to find people but we are very lucky to have a young, energetic team that has driven our success,” he says.
Hoey says that he and his brother are also very grateful to their customers — who range from the various big supermarket giants to smaller but exciting food companies like The Happy Pear.
Country Crest’s investment decisions are driven by its customers’ needs and expectations.
“The supermarkets have a tough job these days because competition is fierce. If we’re not there to support them as suppliers it would be very difficult for them. We have to have the latest technologies.”
The modern consumer is extremely discerning in terms of the food they buy, says Hoey, and therefore it is up to suppliers like Country Crest to ensure high standards and full traceability. The Lusk company built its reputation and its business on operating to the highest standards but “the day of any company in business pulling the wool over a customer’s eyes is well and truly gone”.
“As producers, we need stay up to date with things like precision farming, completely integrated crop management and ingredient selection.
“People have become very health conscious. I heard someone say recently that millennials are the most looked after generation ever. A lot of businesses are now trying to grasp that opportunity.”
Bad weather might come and go, but one dark cloud from which there is no likely break is Brexit. Hoey says that Country Crest is in a constant state of preparation for what that might bring.
“We just don’t know what it looks like yet. Take the regulations around seed movements for instance. We have quite a few growers in Donegal and we’d be concerned as to how they are going to manage machinery movements and sanitary certs going from one jurisdiction to another.”
Much of the seed potato used in Ireland by growers like Country Crest is grown in Scotland, where the cooler climate is ideal for ensuring there are no pests and diseases. If Brexit creates a blockage to the import of that seed then Country Crest would have to look for it elsewhere in Europe where conditions are not as ideal, he says.
“We are anxious that those things are dealt with. We are in constant communication with the Department of Agriculture to try and understand where this is going,” he says.
Nevertheless, Hoey believes the dark Brexit cloud also has a silver lining for Country Crest and others in the industry in Ireland: “It’s about finding opportunities in, for example, import substitution. There’s always opportunities.”
Irish supermarkets, he says, ship huge amounts of product across the Irish Sea every night.
“There’s gaps that we can fill. And when I say we I am not talking about just Country Crest — I’m talking about all the Irish people in produce. There are absolutely fabulous food producers in Ireland. Brexit is a negative — there’s no point in saying it is not — but there are also opportunities in it and the industry has to harness them before they’re gone.”
In total, less than a fifth of Country Crest’s business is with the UK so Hoey is not overly concerned. He also feels that Irish standards will help the industry as a whole retain much of its business with Britain regardless of the outcome of Brexit.
“They talk about the UK sourcing cheap food all around the world and I know that the buyers in the UK are concerned that they are going to have to start going elsewhere for food. I don’t believe that is ever going to happen. They need to have a confidence in their supply chain 365 days a year. The UK has the highest food standards in the world and British people are simply not going to just abandon those standards for cheap food from wherever they can get it. They buy Irish food and Irish beef because they trust it and they know that Irish producers understand their quality systems. That is not going to dwindle away overnight.”
Nevertheless, Hoey is passionate about the need for constant development in the Irish food industry to stave off challenges such as Brexit. He is actively involved in encouraging a resumption of the sugar beet industry in the southeast of the country and thinks Brexit will only further increase the rationale for doing so. Irish farmers, he says, were some of the best sugar beet growers in Europe and, after lobbying by himself and others, are no longer barred from the industry by quotas.
“The sugar industry was a living and a way of life for a lot of people in that part of the country and I think it was wrong that it went away.”
The Hoeys have done more than pay lip service to the issue. In January they bought a site in Castledermot on the Kildare/Carlow border, which they have earmarked for a future sugar plant. For the plan to move ahead it will require a major financial commitment of as much as €300m, which is a level of investment that could only be raised with backing from something like the National Pension Reserve Fund and perhaps a major sugar industry operator.
“It is a big sum of money but this is an industry for the next 50 to 100 years,” he says.
There is no definitive plan as yet as to how the project moves to the next phase, but Hoey believes that the idea of a farmer-owned sugar business can work here and already works successfully across Europe. Given that sugar beet can also be used for bioenergy and animal fodder, rising oil prices and the animal feed crisis only add to the rationale for a resumption of sugar growing.
“We want to facilitate the farmers in this. It was always our idea that the farmers would own a significant piece of this business. We have had lots of talks with the local farmers and I think they are definitely very interested. If the growers want this badly enough it can happen. It can’t be left too long because the knowledge of the growers will disappear but it is one of the best things that could happen for those communities in that area.
“We have put a lot of the pieces of the jigsaw in place and I would love to see it up and running again, for young farmers and for keeping people on farms. I think there is going to be a huge problem here in the future with a scarcity of professional expert farmers and growers. We need the likes of the sugar beet sector to keep this industry going.”
For Hoey, resurrecting such an important industry is just the latest challenge from a lifetime of building a hugely successful and sustainable agri food operation: “Myself and Gabriel have had to jump off a lot of ledges over the years. There have been a lot of sleepless nights and we’ve put a lot of strain on our families at times. I don’t know how they put up with us.”
But Hoey is blessed with the matter of fact nature native to rural north county Dublin: “This is only a success as long as we keep putting the work in,” he says like a sunbaked weatherman, eyes watching for clouds on the horizon. “We never lose sight of the fact that failure is only a step away.”