Closing on the €4 billion target for annual turnover, the Musgrave group is a major force in the Irish food business. But that’s not all, says chief executive Chris Martin in this Q&A.

How did Musgrave perform in 2018?

Last year was another successful year for Musgrave, with the business recording a 3.8% increase in turnover to €3.9 billion and profit before tax of €84.5m. This is the fourth year in a row where we reported increased profit, with all our brands performing well and growing. 

Our performance underlines the success of our Growing Good Business strategy, which is on track to deliver long-term growth. It has three strands — to grow our existing brands, create new brands and look for opportunities to build or acquire businesses in new and emerging sectors of the food industry.

We had a series of notable milestones which reflected all this. For example, SuperValu and Centra both achieved record sales in 2018; our Daybreak brand in the symbol market added 17 new stores last year, bringing the network to 237 stores, and our Spanish business performed well.

Musgrave’s wholesale and food service business also continued to perform strongly, with sales spiking upwards by 13% last year. This is as a result of Musgrave MarketPlace’s evolution from a cash and carry offering into Ireland’s leading wholesale business for retailers and a one-stop shop for Ireland’s growing hospitality sector. 

In Association with

The acquisition of fine food specialist La Rousse Foods saw Musgrave broaden its presence in the restaurant market, allowing it to find and supply the highest quality produce for Ireland’s top chefs. 

We also introduced a variety of new brands and ranges last year including Moo’d – an ice cream brand that combines the best Irish dairy and Italian ingredients; Caramico – a premium pizza range which will be freshly cooked in stone-based ovens in-store at select Centra stores; and Green Kitchen – a new brand that allows customers to create their own salads from a wide selection of fresh ingredients.

We also purchased Donnybrook Fair as part of our focus on identifying new growth opportunities in line with our overall strategy.

Musgrave is making a strong push to embrace eco-friendly packaging and disposable products. How is that going?

Musgrave’s sustainability strategy, ‘Taking Care of Our World’, is aligned with the UN’s Sustainability Development Goals. It has a clear and committed approach to sustainability in every area of our business and brings our partners on this journey with us. We have already made a number of significant achievements in this regard, including a commitment to reducing packaging in-store and to making 100% of own brand and fresh produce packaging reusable, recyclable or compostable by 2025. 

We have already moved to biodegradable fruit and vegetable bags, which has resulted in 2.7 million plastic bags being removed from our supply chain. We completed the roll-out of 100% compostable coffee cups and lids in Frank and Honest, the first coffee brand in Ireland to do so. 

We are also committed to making SuperValu and Centra stores greener by reducing energy usage by 20% by 2020. We are on course to achieve this thanks to a number of measures such as investing €3m to install solar panels on stores and revamps that include retro-fitting energy-efficient refrigeration, lighting and fans as well as changes to freezers.

Musgrave MarketPlace has also been responsive to its customers’ demands for sustainable products and launched its eco-friendly range, comprising over 100 packaging and disposable products. The use of sustainable products has become a key issue for food service, retail and SME businesses and Musgrave Marketplace’s sales of eco-friendly products, packaging and disposables more than doubled last year. 

This strong uptake has continued so far in 2019, and we predict that eco-friendly packaging will account for 6.9% of total packaging sold by the end of 2019. The biggest areas of product growth within the Musgrave MarketPlace eco-friendly range are coffee cups and lids, takeaway containers and cutlery and straws, which have all enjoyed a spike in sales. 

How important are the Cork and Munster regions for your business, and what trends are you seeing there in terms of your business?

Cork is core to our business, with Musgrave originally founded here in 1876 by Thomas and Stuart Musgrave. What makes our retail brands different is that they are independently owned and operated by local community retailers. In Cork, we are represented by some of the best retailers in the world such as Quish’s in Ballincollig, Scallys in Clonakilty; Ryan’s in Glanmire and Dano’s in Mallow, which were all recipients of awards for retail excellence at last year’s Best in Fresh awards. Dano’s was actually our store of the year.

Cork is also hugely important for us in terms of suppliers, as we work with a range of Irish companies both big and small who help differentiate us from the competition such as Union Hall and the West Cork Brewing Company. 

What pleases you most about the general business climate and landscape in the region?

The confidence of the business community in Cork and across Munster is inspiring. While the economy remains robust, there are a series of international factors including Brexit that could have a negative effect on consumer confidence, but from discussions I have had people are clearly planning ahead for how to navigate through any potential challenges. 

In this evolving retail and food environment, there has never been a better time to be part of independent retailing and our partners are benefitting as they adapt and react to consumer needs and changing food trends. Their enthusiasm and the success of the broader agri-food sector give me confidence as we look to the future.

You also act as a significant support for smaller food and drink firms looking to get a foothold in the market. How does Cork fare generally in this sector? 

Cork’s food industry has a rich heritage and fantastic reputation, with a range of local success stories such as the Clonakilty Food Company and their famous black pudding or Tom Durcan Meats at the English Market with their renowned spiced beef.

There’s a flurry of firms established and emerging in the county, and we have been actively helping firms grow their business. First and foremost, we source Irish wherever possible, so we have a range of products from Cork on our shelves. We also give emerging food companies the chance to get their first retail listing through our Food Academy programme, which lets suppliers start small by getting their product onto one SuperValu store’s shelves before growing their business by supplying to a cluster of stores, with the ultimate ambition of selling across the entire network.

Union Hall is a great example of a local Cork supplier that secured a listing through the Food Academy programme. Based in west Cork, it was set up in 1987 by Elmar and John Nolan and is now run by their son Seanie. Specialising in farmed salmon, mackerel, tuna, kippers and trout, it now supplies a range of oak-smoked fish products nationwide after SuperValu agreed to sell it.

What do you think is Cork’s biggest advantage over other areas in Ireland when it comes to its available talent pool and business environment?

Cork naturally has advantages over other regions due to the scale of the local economy and the array of different sectors that are thriving.

It’s a great place to do business and more competitive than Dublin, along with the benefits of being highly connected to the country and the world in terms of infrastructure. Major improvements are planned in terms of broadband connectivity, with gigabit speeds more widely available.

Cork also has more than a million square feet of office space due on stream, with rents less than half the equivalent space in Dublin; a 23% lower cost of living; and a talented workforce — half the Cork population is under 35.