Flahavan’s is the number one organic oat product in the UK
Based in Kilmacthomas, Co. Waterford, Flahavan’s – the sixth-generation family business – has moved with the times and it looks to be paying off.
20 years ago, 95% of the company’s produce was porridge oatmeal. Today, it has ventured into organics, granola and baked goods. It has also hit the number one spot for organic oats in the UK.
John Flahavan (pictured above) spoke at the recent Goldcrop Open Day in Shanagarry, Co. Cork. He explained how the company took a big gamble by moving completely to the agri-food trade.
“A few years ago, we would have been in the merchant trade as well; selling animal feed, seed, fertiliser, chemicals and the whole lot.
“We had a major trade back in 1999, nearly 20 years ago, when we decided to focus completely on the consumer food side of the business.
“It was a big gamble because at that time – when we got out of the feed and agri-trade – half of our turnover was gone. Half of our business was gone in one fell swoop. So, we had to sink or swim with the consumer food trade and with the porridge oats.”
Diversifying the business
John explained that, in recent years, Flahavan’s has tried to diversify its business and product portfolio. The company went in two directions – producing convenience products and organic products.
“If we look at the regular porridge oats, which most people would be very familiar with, that would have been 95% of sales back in those years; but as things went on, we ended up having to change our focus.”
Looking back at the customer base that Flahavan’s served, he explained that the demographic was older and more rural customers. However, moving toward ‘Quick Oats’ and microwaveable oats changed that demographic.
“We were missing out completely on the younger customers and the urban area, who weren’t eating porridge. That whole convenience oats area opened that market up for us,” John explained.
If you go into any of the big offices in Dublin and there’s a press in the canteen, half the products will be Flahavan’s.
Adding to the convenience side of the business is the production of flapjacks and granola.
Anything to do with oats, we want to be involved in.
When Flahavan’s first started making flapjacks the production was contracted out and the product was inconsistent. As a result, the company set up its own production facility for both flapjacks and granola.
“We put in a new facility about three years ago and that has the capability to produce both the flapjacks and the granola.”
Growers who supply Flahavan’s are typically within a 100km radius of Kilmacthomas, Co. Waterford. John listed east Cork, south Tipperary, south Kilkenny and into Co. Wexford as the main growing regions outside of the company’s native county of Waterford.
“We have a few hundred growers at this stage. The commercial growers would be bigger; the organic growers would be smaller.”
Organic oats was the second change that Flahavan’s made to its product range in 2002/2003. This part of the business is thriving. Half of the company’s organic sales are attributed to Ireland, while half are attributed to the UK. The UK market is growing and Flahavan’s is the number one organic oat product in the UK.
“A lot of people might regard it as being a niche area in terms of the Irish food industry. For us, 25% of our production is now organic, so it’s actually quite a high proportion of our business,” John added.
When we look at the UK market, it’s actually a growing market that’s been good to us.
John did state that Brexit has resulted in the company taking a hit because of the reduced value of sterling.
He also noted that 15-20% of oat sales in Ireland are organic, while 5% of oat sales in the UK are organic. Although it’s a smaller sector, he said: “To be able to say you’re number one in anything is great.”
However, there’s one problem with the organic oats section of the business, Flahavan’s cannot source enough organic oats here in Ireland.
The company has been importing oats for the past number of years and while John stated that he gets the market before the growers, he cannot get enough growers in Ireland at present.
“The department hasn’t opened up the organic scheme. It won’t be open until 2020. There’s a possibility it will open it on a partial basis in 2019.
“From a conventional point of view, we’re not looking for extra growers at the moment,” he added.
“Oat quality is good; last year was a good year. No one can really tell what it’s going to be like this year, but we’ll keep our fingers crossed.
“We’re very happy with the way it’s gone; it’s about the only product in the whole breakfast cereal area that’s actually made in Ireland,” John concluded.