Sam’s Cookies, a well-respected bakery firm in Bray, Co Wicklow, just south of Dublin, which has been trading since 1992, is about to face the challenges of exporting for the first time.
The firm was founded and is still run by husband and wife team Keith and Sam Johnson. Keith, the managing director, had been in the clothing trade, but when his wife won a contract to supply an Irish retail chain with handmade biscuits, he joined the bakery operation.
Until 2006, Sam’s Cookies operated out of a facility built at the back of their house in Kiltiernan, Co Dublin and, by then, their previous factory had grown to 300sq m, larger than their house. At this stage, they had run out of space, so they moved to a new 1,000sq m factory on an industrial estate in nearby Bray, less than 10km away. There, they make cookies, biscuits, cakes and puddings from natural ingredients.
"We bake in small batches and the aim is to replicate, as far as possible, home-baked, handmade products," says Keith. About 35,000 biscuits and 7,000 cakes are made each week. Seasonal products include Christmas and plum puddings and all products are clean-label.
The Johnsons invested €0.5 million in new equipment for the bakery. Turnover has doubled over the past two years and is now between €2.5-€3m. What was once a two-person operation now employs 24.
Keith says it hasn’t been hard to grow the business, but controlling that growth is a constant challenge, as is ensuring that quality stays at the top. Sam’s Cookies produces own-label products for leading supermarkets, such as Dunnes Stores and Superquinn and for coffee shop chains throughout Ireland, such as O’Brien’s Sandwich Bars and Insomnia, as well as baking under its own name for speciality food shops.
Recently, the firm has started to supply outlets in Northern Ireland belonging to three of its main customers in the Republic: Avoca Handweavers, Dunnes and O’Brien’s.
== NEXT STOP BRITAIN ==
The next stop is Britain, where the firm is planning to start exporting a biscuit and cookie range with a 12-week shelf-life, concentrating on selling them through coffee shops and upmarket multiples. For the past two years, the company has done well in the Great Taste Awards in the UK, winning a number of gold medals.
For the Johnsons, two major and vital sources of advice have been Enterprise Ireland, which supports indigenous SME companies, and Bord Bia, the Irish food board. Keith explains that a wide range of support is available, including help with trade shows; market and technical feasibility studies; taking part in international trade missions and introductory seminars to meet foreign trade buyers. The firm also gets financial support to help pay the cost of a person to develop export sales and R&D grants to develop products for exports.
A huge amount of information on specific export markets and product sectors is also available, including data on competitors; the supply chain; distributors and agents; transport costs; retail markets; retail margins; discount structures and promotional costs. But, as Keith points out, the commercialisation of export projects cannot be state-aided under EU competition rules, so the firms have to fund the costs of packaging design, advertising and promotion.
Getting products noticed in export markets is down to good marketing and good product quality. Keith says that recipes can be altered to suit local tastes, such as developing products with an Irish twist, such as Porter cake and oatcakes, for the US market, which is next on the agenda after the UK.
Customer focus groups are important, as are eye-catching packaging and in-store promotion and tasting. Publicity in trade magazines and retail publications dealing with food products is also vital. The Johnsons plan to operate through local agents and distributors in export markets and working with key retailers will also generate marketing momentum. As Keith says, "Sam’s Cookies in Wal-Mart could be a neat association!"
For Sam’s Cookies, the big costs in exporting will be transport to market, rebates and commissions and finding the right agent or distributor. "Additional capital investment may be required for items such as pallets or stillages to protect goods in transit, as well as extra labelling and packaging," says Keith.
The most important issue for the company is whether it can afford the time and finances to develop export markets. "How long will it take to recover our investment and will there be a sustainable and profitable market to justify the initial investment?" asks Keith, pointing out that the management structure of the company has to be capable of expanding the business to incorporate the growth and expansion from exports. But the dividends, including expanding its sales base and widening its client list, are many.