Innovation key to food giant’s success
With revenues near €3bn Glanbia’s road map is moving the firm the right way
ANALYSIS: Fourteen years ago, the former chief executive of Glanbia Ned O’Sullivan said the food industry would have to innovate to survive in a global competitive environment, adding that managers would have to become astute in reading the international markets, in developing new markets and in promoting product development. Glanbia did exactly this, and it would seem these are the reasons behind the company’s success.
However, at the turn of the millennium, success was not looking too likely. Glanbia’s share price had bombed out, the company had exited the British milk market at a hefty price, and pre-tax losses were close to £70 million. Its dedication to innovation, focus on international markets and ability to adapt to changing consumer needs and trends ultimately paid off though, helping power the group into one of Ireland ’s most successful multinationals, with revenues of nearly €3 billion last year.
The company has grown from a co-op in Waterford and a dairy processing plant in Kilkenny to being the largest producer of American-style cheese in the United States and one of the largest whey ingredient manufacturers. It is the leading producer of mozzarella cheese in Eu rope and has also branched out into powdered sports nutrition products.
And the company’s innovation doesn’t stop there. The food group commenced the construction of an $11 million cheese innovation centre in Idaho last year, which is expected to be completed in the first half of 2013. This centre is aimed at enhancing the company’s product development capabilities.
Last July, the company commissioned a new €20 million plant in Germany to enhance the group’s ability to serve customers across Europe, Asia and the Middle East, and to help consolidate Glanbia’s position as a leader in the global pre-mix solutions market. The company has constantly been looking for new markets and currently exports to more than 100 countries worldwide. It has also developed a prominence in many countries through the acquisition of nutritional solutions and food companies including Kortus Foods in Germany, Seltzer Companies in the US, and Pizzey's Milling in Canada.
Ever looking to the future, Glanbia yesterday said it was “reviewing its longer term strategy with the aim of designing the group’s strategic roadmap for the next decade”.
With the future in mind, the company reorganised its Irish dairy processing business last year, an important move as it reduced the group’s exposure to global dairy markets and potential earnings volatility. It is also preparing for the abolition of EU milk quotas in 2015 by increasing its processing capability to handle more capacity with a €180 million investment programme.
"We are in a stronger position than ever to capitalise on the competitive advantages we have in high growth markets. Our focus in 2013/14 will be to refresh the group’s strategy so that we prioritise growth opportunities in terms of a long-tem plan,” group managing director John Moloney said yesterday.