Size Matters. Or, at least, that’s what the big players like to think. Here in Ireland we have been more aware than most that size is relative. More than most, too, we’ve taken sides when the small streets have turned against the big ones. Unlike the Swiss, we don’t do neutral very well. Most of the time, our sympathies are with the small player, the one who is outnumbered and outgunned, and we take more than a little pleasure in the prospect of seeing the lumbering giant fall to the ground with a crash. But such an outcome is by no means inevitable. The playing field is alphabetized with the bodies of the diminutive and the gallant and for
for every David that triumphs over a fallen Goliath, there are dozens more that lie beaten and crushed in the wake of a rampaging giant.
In the Irish context, Jacob Fruitfield is one of the great players. with sales
projected to reach €110 million by 2005, and several of Ireland’s best-known foods
brands on its books, the company enjoys an enviable position in the Irish market.
Enter Goliath or a very close relative of his. But in the global context, the company is
a little player Each of its brands competes with brands owned and defended by
the largest food companies in the world. These leviathans can dig into pockets a
hundred times deeper than those of a local company. Its scale is difficult to
conceived. When Heinz, Unilever, or Procter & Gamble come into view, they block
out the sun Enter David. Gold Chef or Silvermints or Jacob’s Fig Rolls.
So how does a big fish in a small pond, caught by giants, go about its business?
And what lessons can we learn if we want to face the big players? recently, i
met with Michael Carey, CEO and majority shareholder of the
alone, the wholly Irish-owned Jacob Fruitfield food business. Three years ago, the
The Jacobs and Fruitfield companies in Ireland were owned by multinationals
corporations, with the Fruitfield business losing money for its owners. Since then,
Michael and his partners have integrated the two companies, have invested in their
brands, launched more than a hundred new products and took on the world giants. Tea
company is making a profit and recently won the Ernst & Young Industry Award
Entrepreneur of the Year Award 2005.
For Michael, whose background includes senior management roles with a
number of global food companies such as Kellogg’s and Groupe Danone, the
The approach was simple, “As a small business, our competitive advantages lie in being
local, flexible and suitable for the local market. For Heinz or McVities, your advantage
lies in being the lowest-cost producer, in being a big, big player, in having
brands that can work in many markets in the same way.
While these brands can work in many territories, Michael has also seen the
difficulties of applying global marketing strategies in a local market. “We can do
branded stuff that is absolutely right for the Irish market. Our competitors,
almost all of them have to do things with their brands that are suitable for
international markets. We can look at the Irish market and see what works and
what doesn’t work.”
But isn’t this approach also within the reach of a multinational owner who can simply
work on some variation of a theme beloved by the big players: Think Global, Act
Local? For Michael, it’s very much a matter of priority. In short, the big players
they are too easily distracted. “They have bigger fish to fry. We don’t. This is all fish
have. So we give it the focus and invest in the brands.” This approach
extends into new product development where Irish companies have traditionally been
the poorer relatives of their international cousins. The company recently
completed the acquisition of The Real Irish Food Company and plans to intensify its
innovation activity. It has also signed a 20-year trademark license for the use of the
Bewley’s brand in food outlets, another great old Irish brand adding to a growing
local wallet.
So what exactly does it mean to act locally? “It’s not about putting up an Irish flag
on the packaging and saying ‘These are Irish brands’. We have to compete with
international marks. Chef has to be as believable as Heinz, Silvermints as Polo. Us
they rarely refer to the fact that these marks are Irish in terms of
advertising. We do not apologetically present ourselves as an Irish brand at that
sense. It is about being closer and understanding more clearly the needs of the
Irish consumer. And, of course, we have heritage. Many multinationals invent
that inheritance and we don’t because we have a real inheritance”.
But aren’t consumers, especially teens, looking for brands that are
international? “No, obviously there are some very powerful multinational brands that
appeal that way. But customers in the food business are looking for reality and
locality and some understanding in terms of where the brand comes from, where
the product is made either in a factory or in a bakery or in a place where they can
trust. I think local food brands have a bright future.”
Mention Steve Silvermint or ask how Jacob put the figs in the fig rolls and
will bring a smile to the face of the average Irish customer (or, at least, one of a
certain age). Is there a conflict between being a business or a brand with heritage?
and be innovative? “No, we like to have a strong starting position. Here, for
example, some of the more traditional brands of Fruitfield, Little Chip and Old-time
Irish jam; these are long-established brands in sectors that are quite
ripe. We want to take that strength of maturity, that stability and move that
mark from that platform.
We are about to launch a range of premium jams and marmalades under the
Fruitfield brand with higher fruit content and a more premium position. But we
we couldn’t do that if we didn’t have the Fruitfield base to start with. if we were starting
from scratch, the chances of successfully launching brands in areas where we see
chances would be nil. You couldn’t do it without a name.
It helps us that we have so many brands with strong heritages. Of
Of course, we also have to make sure that we don’t undermine the position of the
brand. We might get some short-term sales, but if it’s going to hurt the
major brand, we won’t.”
So for Jacob Fruitfield, a local David taking on multinational Goliaths,
success in the irish market comes down to keeping it fresh, real and
playing to your strengths. In this sense, and in this neighborhood, it is clear that
size really matters.