Retailers put Irish goods centre stage
Consumers keenly search for value when shopping, but outlets are also having to react to customer scrutiny over whether food is produced in Ireland
LIDL, THE German discounter, and Tesco, the third largest retailer chain in the world, have been wrapping themselves in the tricolour in recent weeks and urging consumers to keep the local economy going by going through their doors.
Throughout August, many members of Tesco’s Clubcard scheme have been getting an interesting brochure along with their vouchers which highlights many of the Irish foods the State’s largest supermarket has on its shelves.
It repeatedly reminds shoppers of its commitment to buying locally produced foods. The high quality of “Irish produced” is referred to over and over again, and a quick flick through its pages would have you believe that Irish produce is the best in the world.
Mind you, if you lived in the UK, you would get quite a different impression. Tesco there is running an almost identical promotion as part of a campaign which is dubbed “Love British Food”.
It is showcasing 4,000 local produce lines in stores and reminding would-be shoppers that it is the biggest retailer of locally sourced foods in that country too.
Tesco probably doesn’t care that much about Irish food or British food. What Tesco cares about is making money. And it knows that now, more than ever, consumers here and there want to buy local – and it is falling over itself for us to do that.
Research carried out three years ago found 25 per cent of consumers made their choices on the basis of where food was produced. According to the Government, the figure is now 35 per cent.
It would be easy to be cynical about such a campaign. Easy, and probably wrong. The retail giant has many critics in Ireland – and much of the criticism directed its way is entirely warranted – but to its credit, it does buy a lot of Irish food.
In fact, it buys more Irish products than Germany, France or the United States, and the export value of Irish produce sourced by the Tesco group is more than €700 million. The total economic value of Tesco to Ireland is about €2 billion a year.
That is, by any measure, a lot of money.
Over the past 15 years, Tesco has worked with Bord Glas and food producers to improve the supply chain and it points out that as a result of its efforts, 100 million tomatoes are produced in Ireland annually while 80 per cent of the onions it sells are grown here too.
Tesco is not, of course, a saintly operation. Far from it. It is a very tough company to do business with and puts huge pressure on producers to deliver exactly what it wants at the lowest possible price. Meanwhile, it makes margins here that its counterpart in the UK could only dream of – we are not called “treasure island” by the large international retail chains for nothing.
Lidl, for its part, is also very heavily pushing the Irish origins of much of its stock, while Aldi has over recent years spent a lot of time, effort and money building up its locally produced stock and has secured contracts with many artisan producers that are of benefit to the retailer, the producer and – ultimately – the consumer.
But if we want to buy local, should we not concentrate on buying directly from farmers and local retailers? It is not easy to do.
Ronan Byrne is a poultry farmer from Galway who has over the past five years been selling directly to the public through farmers’ markets and online.
“I have noticed a huge shift in the last five years and more and more people want to buy local,” he says. “The big retailers have noticed that, and that is where their big push is coming from.”
He trades at two farmers’ markets in the west and sells into some small retailers. “It takes a lot of effort. The goal is to get my products to consumers in an easier way – but that is a very tough nut to crack. Distribution is the real challenge.”
But are farmers’ markets, with their higher-than-you-might-think prices, not a luxury in post-Celtic Tiger Ireland?
“My free range chickens cost the same as the ones in the supermarkets, and my bronze turkeys last Christmas were the same price too. People think farmers’ markets should be cheaper than supermarkets because we are selling direct and cutting out the middle man, but there are also the costs. I would have to pay two people for a whole day to sell to between 100 and 200 people, and then there is the diesel costs. We also produce to a higher standard, which drives up the cost too.”
He says business is good, although his customers are shopping more carefully, setting themselves budgets and then sticking to them. “The first concern is value, and after that people want local,” he says.
“I think it is good to see the big retailers wrapping themselves in the green flag and running these campaigns saying they support local producers. It is a really good thing and they are buying a lot of locally produced foods.”
Ardkeen Quality Food Store is an independent food retailer in Waterford which was founded in 1967 as a small grocery store with petrol pumps out the front. It now specialises in sourcing the best fresh produce and local foods from artisan food producers that the owners know and trust. Director Colin Jephson says his shoppers want to buy Irish products, but stresses the quality has to be there – as does value.
He makes a distinction between value and price.
“A lot of the locally produced products are a bit dearer than the stuff from big producers, but you are not really comparing like with like. You can buy a Mueller yoghurt for 40 cent, and a Glenilen one might cost twice that. But they are not comparable – and there is a huge difference in quality.”
He says that in spite of the ongoing recession, most of his Irish suppliers are maintaining their market share and there are a growing number of entrants into the market.
“There is a plethora of really good local producers and we are doing well with them. The bottom line is you have to offer value. You can charge a bit more as long as the value is there.”
The feel-good focus does not apply only to the end product.
Brian Whelan is in the process of launching an Irish ice cube product called Crystal Cubes and he says doors have been opening because it is an Irish company. “Although we are mainly aiming for frozen food wholesale distributors and not so much the end user, we haven’t have had a knock back yet. I have found the most important thing is price, followed by the fact that we are an Irish product.
“On approaching one supermarket chain I was told they were actively looking for an Irish ice product and would pay us more than they are currently paying to get our ice. They said they would be able to charge more because it’s Irish.”
While the Irish claim to love Irish food, we also buy a lot of food from elsewhere. While this island could and should be self-sufficient when it comes to feeding ourselves, we are a long way away from that point. Ireland imported about €5 billion worth of food and drink last year.
Admittedly, we are not ourselves going to be able to produce some of the food and drink we imported – olives, oranges and wine, for example, but we also spend hundreds of millions of euro importing food that is widely available here. Irish consumers spent almost €1 billion on imported vegetables and fruit and more than €283 million on overseas poultry.
A further €200 million was spent on imported pig meat. And despite being surrounded by water, we also imported almost €190 million worth of fish.
We imported about €100 million worth of apples last year, and Irish apple growers produce less than 10 per cent of the apples we eat. This is partly explained by the world we live in. It costs less to produce apples in eastern Europe and India because of lower labour and production costs.
Good Food Ireland, which supports buy Irish, says an absence of transparency over labelling makes it more difficult for consumers to keep it local. It points out, for instance, that Irish oak-smoked salmon and oak-smoked Irish salmon are very different things and wonders how many consumers would be able to tell the difference.
When it comes to meat it is easier to buy Irish, as long as it has not had value added. Some 95 per cent of the pork and poultry from Ireland carries the quality assurance mark and if the symbol is not there then it’s more than likely not Irish.