Farm to Fork
September 20, 2019
We were delighted to have this great article included in the Irish Farmers Journal in association with Enterprise Ireland.
On the outskirts of Wexford town, you will find Drover Foods, a family-run business that’s been making pork sausages since the early 1980s. Yet despite its long heritage in the pork sector, Drover Foods is a business that finds itself moving further and further away from meat processing as it responds to rapidly changing consumer trends. Right now, the biggest driver of sales growth in Drover’s business are its new lines of vegetarian products such as falafels, fritters and Indian pakoras. According to Anne Smyth, managing director of Drover Foods, the company is simply adapting its business to meet changing consumer trends in the food industry. However, the root of the company’s decision to start making veggie products was Brexit. “In 2016, when the Brexit vote happened, all we made at Drover were cooked sausages and stuffing with 83% of our sales coming from the UK market,” says Smyth. “Straight away, I knew we needed to get into new markets in mainland Europe but I had no way of getting into those markets with the products we were making. We were going to have to diversify our product range” she adds. At the same time, Smyth was taking part in Enterprise Ireland’s Leadership 4 Growth programme, which is Enterprise Ireland’s flagship programme for managing directors and CEOs looking to develop their business. As part of the course, Irish executives from all business sectors receive training at the IESE business school in Barcelona, which has been ranked first in the world for customised executive education by the Financial Times for the last number of years. “We were having a discussion group one week on the course and I was asked to outline to executives from the other companies a problem that my business was facing. So I explained that I needed to diversify my business,” says Smyth. “And I was asked a very simple question in response. What does Drover Foods actually do? I replied that we make cooked sausages for the B2B market in the UK but the more I thought about it, the more I realised I didn’t know exactly what the company did. When you peel back the layers of the onion what do we really do?,” she adds. That evening, Smyth sent an email to the senior management team at Drover Foods asking for a one line answer to the same question. What does Drover Foods do? “The answers I got back were all the same as what I had originally said. I knew we needed to be clearer on what this business is really about,” she says. After some further thought, Smyth and her team finally got to the core of what Drover Foods was about. She describes her family company as a food business that makes pre-portioned, fully cooked, food ingredients that are sold B2B to food companies. “Everything we make ends up as an ingredient in sandwiches and ready meals sold by supermarkets. We supply the ingredients for the own-label sandwiches you get in Tesco, Waitrose, Asda, Costa, Boots and others places,” says Smyth. Greencore, the UK-listed convenience foods manufacturer, is Drover’s largest customer, while the company’s second largest customer is Samworth Brothers, which is a privately owned company with 15 factories in the UK making private-label convenience foods. Domino’s Pizza is also a large customer with Drover supplying sausage toppings for its meat pizzas.
Clarity viewing her family business as a supplier of preportioned and cooked food ingredients allowed Smyth and her management team to see the business in a new light. They could now see the company’s position within the food supply chain was not simply confined to pork. “I was flying out of East Midlands Airport in the UK one week and I saw this fried food ingredient,” says Smyth. “I asked a colleague what the product was and she told me it was a falafel, which is made from minced chickpeas. I’d never heard of a falafel before but I instantly knew we could make it with the equipment we had in the plant.” “None of us knew the recipes or flavours that went into making a falafel so we employed a Lebanese chef from Dublin and within six weeks we were making falafels. And we didn’t have to spend any money because we already had all the necessary equipment in the factory,” she adds. While she had some awareness at the time of the growth in plant-based foods and flexitarian diets, Smyth says it was never intentional to move into the space. However, when Drover approached its customers with its new range of veggie ingredients it became clear there were opportunities to grow this new product range. Demand for the new range of veggie food ingredients has grown rapidly. If you buy a hummus and falafel wrap in Tesco supermarket anywhere in the UK today, the falafel ingredient will have been made by Drover. “Right now, all our sales growth is coming from our veggie products. There was a 4% decline in sausage consumption in the UK last year, which is a huge number when you think of how big sausage consumption is in the UK,” says Smyth. “Today, most of our growth is in our veggie range of products and we see this continuing into the future. “Thirty years ago, this factory only made raw sausages. Twenty years ago, we started cooking sausages and, 10 years ago, we started making pork-based stuffing. And now we’re moving into veggie products,” she adds. Importantly, the transition to making falafels and other vegetarian food ingredients has opened up new possibilities for Drover Foods as regards finding new business and markets away from the UK. The company recently attended the Internorga show in Hamburg, which is Europe’s largest trade fair for the foodservice sector. “We went to Internorga to see how our products would be received. It was purely exploratory but we got a really good reception for our falafels,” says Smyth. “All our data and marketing information tells us that ready-to-eat falafels, fritters and pakoras will sell better in northern Europe. This is because there is huge cultural diversity in markets such as Germany where Middle Eastern cuisine has a big influence,” she adds. Drover is very much on the start of its journey to diversify its sales into export markets and it will take time to build customer relationships in markets such as Germany. With the support of Enterprise Ireland, the company has just completed a €4m investment in its Wexford facility that will add capacity and allow Drover to produce oven-baked products. On top of this, Drover has recently employed a European business development manager to try to grow sales into Germany and other northern European markets. However, the company is not prepared to give up on the UK market either, no matter what Brexit may bring. Drover has long established deep relationships with customers such as Greencore and Samworth Brothers, and the reality is the UK market will always have a reliance on food imports. “I suppose Brexit has brought some good things in that it has forced us outside our comfort zone in the UK. But that’s not to say the UK has not become a bad market overnight,” says Smyth.This is especially true when you consider a recent YouGov study, which found that almost 15% of the UK population identify themselves as having flexitarian diets. The study also found that more than one-quarter (26%) of UK meat eaters said they plan to reduce their level of meat consumption in the next year, with health concerns the primary reason provided. As such, it will be interesting to see where the next 10 years takes the Drover Foods business. Anne Smyth and her senior management team have redefined the business as a supplier of fully cooked and pre-portioned food ingredients, which means the company has the adaptability and agility to follow consumer trends long into the future