Irish biscuit maker East Coast Bakehouse has started carrying higher levels of product and is stockpiling certain ingredients as contingency measures against a no-deal Brexit, its co-founder has revealed.
"We are hedging our bets in the event of a hard Brexit," Irish food entrepreneur and former Bord Bia chairman Michael Carey told The Irish Times.
The UK accounts for half of East Coast Bakehouse's business, which was established in 2016 by Mr Carey and his wife Alison Cowzer.
“The Irish market would be the only game in town in the event of a hard Brexit. The opportunities in Britain are much better for us with a soft Brexit.”
East Coast Bakehouse had originally planned to sell 80 per cent of its product into Britain but was forced to revise its original business plan following the Brexit referendum result in 2016.
Mr Carey said currency movements connected with Brexit could make the UK uncompetitive for the business, and there are “major concerns” about disruption to ingredients supply.
East Coast Bakehouse also decided to put a greater focus on “high value-added” products for the UK, such as a high protein biscuit and low sugar products. “The UK is still half of our business and it’s a natural market for us regardless of what happens with Brexit,” he said.
Mr Carey also revealed that East Coast Bakehouse has reached break-even, and is poised to report “positive profitable growth in 2019”.
He said revenues are growing year-on-year by 300 per cent, with the company targeting turnover of between €10 million and €12 million in 2019. “We expect that [growth] run rate to continue this year,” he added.
“Brexit completely changed everything,” Mr Carey said. “The domestic market suddenly became more attractive to us and to our customers who wanted to mitigate their Brexit risks.”
In spite of dire warnings in some quarters of food shortages in the UK, Mr Carey said “biscuit shelves won’t be empty”. Some €5 million worth of biscuits are imported here from the UK each week.
The brand is also now exporting its cookies to 25 countries, including the United States, the Middle East, and mainland Europe.
The company has received €20 million in investment to date, covering site acquisition, equipment, product and brand development, and accumulated losses during its start-up phase.
Investors include Stephen Twaddel, a former Kellogg's executive, Patrick Joy of Suretank, Mary Ann O'Brien, founder of Lily O'Brien Chocolates, Richard Cullen, who set up the Jelly Bean Company, and Neil O'Leary of Ion Equity.
The Drogheda facility is capable of producing 10,000 packets of biscuits every hour. The plant recently extended its opening hours and employs 75 staff.
To help manage its growth phase, East Coast Bakehouse plans to appoint a managing director to run the day-to-day operations, with Mr Carey becoming executive chairman.