Size matters. Or, at least, that is 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 have taken sides when the little streets have hurled themselves against the great. Unlike the Swiss, we don’t do neutral terribly well. Almost always, our sympathies are with the small player, the one who is outweighed and outgunned, and we take more than a little pleasure at the prospect of seeing the lumbering giant brought to earth with a crash. But such an outcome is by no means inevitable. The playing field is littered with the bodies of the diminutive and the gallant and for every David who stands triumphant over a fallen Goliath, there are dozens more who lie beaten and crushed in the wake of a rampaging giant.
In the Irish context, Jacob Fruitfield is one of the big players. With sales projected to hit 110 million euro in 2005, and a number of Ireland’s best-known food 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 small player. Each of its brands competes with brands owned and championed by the largest food companies in the world. These leviathans can dig into pockets a hundred times deeper than those of a local company. Their scale is difficult to imagine. When Heinz or Unilever or Proctor & Gamble lumber into view, they block out the sun. Enter David. Or Chef or Silvermints or Jacob’s Fig Rolls.
So how does a big fish in a small pond, fished by giants, go about its business and what lessons might we learn if we wish to take on the big players? Recently, I met with Michael Carey, Chief Executive and majority shareholder of the stand-alone, wholly Irish-owned Jacob Fruitfield food business. Three years ago, the Jacobs and Fruitfield companies in Ireland were owned by multinational corporations, with the Fruitfield business losing money for its owners. Since then, Michael and his partners have integrated the two companies, invested in their brands, launched over a hundred new products and taken on the global giants. The company is turning a profit and has recently won the Ernst & Young Industry 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 approach was simple, “As a small company, our competitive advantages are in being local, flexible and right for the local market. For Heinz or McVities, their advantage lies in being the lowest cost producer, about being a big, big player, about having brands that can work in lots of markets in the same way.”
Whilst these brands can work across many territories, Michael has also seen the difficulties of applying global marketing strategies in a local market. “We can do things with a brand that is absolutely right for the Irish market. Our competitors, pretty much all of them, have to do things with their brands that are right for international markets. We can look at the Irish market and see what’s working and what doesn’t work.”
But isn’t this approach also available to the multinational owner, who can simply work on some variation of a theme beloved of the big players: Think Global, Act Local? For Michael, it is very much a question of priority. Put simply, the big players are too easily distracted. “They have bigger fish to fry. We don’t. This is all the fish we have. So we give it the focus and we invest in the brands.” This approach extends to new product development where Irish companies have traditionally been the poorer relations of their international cousins. The company has recently completed the acquisition of The Real Irish Food Company and plans to step up its innovation activity. It has also signed a 20-year brand licence for the use of the Bewley’s brand in food outlets, another great old Irish brand adding to a growing local portfolio.
So what exactly does it mean to act local? “It’s not about putting up an Irish flag over the packaging and saying ‘These are Irish brands’. We have to compete with the international brands. Chef has to be as credible as Heinz, Silvermints as Polo. We very rarely make reference to the fact that these brands are Irish in terms of advertising. We don’t apologetically present ourselves as an Irish brand in that sense. It’s about being closer to and more clearly understanding the needs of the Irish consumer. And, of course, we have heritage. Lots of the multinationals invent that heritage and we don’t because we have got real heritage.”
But aren’t consumers, particularly teenagers, looking for brands that are international? “No, there are obviously some very powerful multinational brands that appeal in that way. But customers in the food business seek out realness and localness and some understanding in terms of where the brand comes from, where the product is made whether that is in a factory or a bakery or a place they can trust. I think local brands in food have a bright future.”
Mention Steve Silvermint or ask how Jacob’s put the figs into the figrolls and you 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 being innovative? “No, we enjoy having a strong starting position. Take, for example, some of the more traditional Fruitfield brands, Little Chip and Old-time Irish marmalade; these are long-established brands in sectors that are pretty mature. We want to take that strength of maturity, that stability and move that brand on from that platform.
We’re just about to launch a range of premium jams and marmalades under the Fruitfield brand with a higher fruit content and a more premium position. But we couldn’t do that if we didn’t have the Fruitfield base to start from. If we were starting from scratch, the chances of successfully launching brands in areas where we see opportunities would be nil. You couldn’t do it without a name.
We’re helped by the fact that we have so many brands with a strong heritage. 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 do damage to the core brand, we won’t do it.”
For Jacob Fruitfield then, a local David taking on the multinational Goliaths, success in the Irish market comes down to keeping it fresh, keeping it real and playing to your strengths. In that sense, and in this neighbourhood, it’s clear that size really does matter.