Hoey’s winning formula: ‘Face your crisis. Address it. Drive through it’
Reporting from Lexington, Kentucky, US.
Starting out as “the new kid on the block” and dealing with the horsemeat scandal of 2013 have been “the toughest hurdles” for Michael Hoey, managing director at Country Crest.
The co-owner of the north county Dublin based agri-food business reflected on these challenges as he addressed hundreds of successful, advancing and aspiring agri entrepreneurs at ONE19: The Alltech Ideas Conference in Lexington, Kentucky, this week.
Hoey – who first established the business to grow and pre-pack fresh potatoes for the retail sector alongside his brother Gabriel – offered a detailed insight into how the enterprise has developed into a multi-million euro food company over the last 26 years.
The main message he wanted to get across to the floor was: “In business, you will have crises. You must face your crisis. Address it. Then, drive through it to fix it.”
Looking back to 2007, when Hoey was first asked by a customer if the company would consider cooking proteins, such as beef and chicken, putting them onto a fresh tray and selling it as a product, he admits that, at first, he was repeatedly “warned off” such a move.
“Everybody said to me ‘it will break you’.
The investment is huge and there are big players there like Greencore Group, Heinz and Kerry Group. Everyone is in that market and they are going to crush you.
“We would be the new kid on the block and people would be told to go out and shut that down. But it was about how we could try to get around those problems,” he said.
The Hoeys started to examine their competitors’ products searching for “weaknesses”.
“One of their main weaknesses was their ability to turn around research and development into real products on the shelf.”
A year later, Country Crest’s sister company Ballymaguire Foods was formed.
“We started pulling the business back from them, and like Dr. Mark Lyon’s said earlier today, our business is now the largest consumer fresh-food business on the island of Ireland.
“Today, we’re making in excess of 300,000 meals per week on average,” he said.
Hoey says the modern consumer wants to understand “where every morsel” of their food comes from.
“They want to know where every ingredient comes from, and so we now have full traceability down to every gram of pepper that we use, so our customer has that assurance,” he said.
Sticking with the importance of attention to detail, Hoey highlighted that a lot of their initial competitors “fell down” on transportation and logistics.
“This was something that we drilled into and we tried to perfect; being on time all the time, never letting the customer down and keeping your delivery of product.
“That gives your customer the confidence that they don’t have to worry about the product not hitting the shelves on time.”
He advised the budding agri innovators present – including participants of The Pearse Lyons Accelerator, a late-stage ag-tech accelerator programme – that they “must ensure” that sustainability is ingrained into their business plan.
The importance of corporate social responsibility (CSR) was also stressed.
“Agri-food companies need to understand their planet. They need to understand the finite resources we have and how they influence our market. That must be ingrained into your team and make sure that it works.
“When you’re fortunate enough that your company is up and running and that things are going well for you, it is also important that you give back.
“There are a lot of people on this planet that are not as fortunate as we are. Being able to give them your knowledge and expertise is vital and what they will give back to you, you won’t ever replace it.
Country Crest is currently involved in projects and foundations on the ground in Haiti and Ethiopia, among other locations.
When it came to discussing perseverance, Hoey didn’t hold back.
He vividly remembers the dark days of the horsemeat scandal in 2013 when some foods advertised as beef were found to contain undeclared horsemeat – as much as 100% in some cases – throughout some European countries.
The horsemeat crisis almost killed our business – we lost half our business in one week.
“We had no association whatsoever with horsemeat in our product; but we had to go back to basics to build our business back.
“And what we did was we built a state-of-the-art feeding unit. We brought cattle back onto our own farm that had been gone for many years,” said Hoey.
The company also started to build a traceability system in partnership with its associated companies.
“A lot of people who run companies try to go for the cheapest product they can find or something that doesn’t have the backup behind it. I would say get the best you can find because it will pay for itself in the long run.
“Through our own farm we can demonstrate a true farm-to-fork opportunity, reclaiming our own beef with assured traceability and we champion local artisan producers – helping those trying to get on the ladder,” he said.
In society, Hoey says people are becoming more and more time poor. As a result, food is increasingly consumed outside the home.
“As a company we need to focus on where people are consuming their food – and there are loads of opportunities in those food-supply chains.
“Places like nursing homes and hospitals they do not have the time or technology to put systems in place; but we can do it for them.”
Having a deep understanding and appreciation of the needs of Country Crest’s customer base has been key to the company’s long-term success, according to the businessman.
“Have your own innovation team. It’s so important that you understand where the market is going and keep developing products that are going to fit those markets.
Develop products that are so far out that they are stupid.
“Embrace your audience, you need to understand who that consumer is. Be out there talking to them, the millennials – everybody that you are selling products to.
“You need to understand your consumers’ lifestyle trends, their responsibilities of getting the family out to school every morning, their struggles of paying their mortgage, and the values that enrich their lives.
“Embrace healthier food options because people are living longer now, they need healthier food.
Our consumer of today is getting further and further away from the farm – and we need to bring them back.
“We need to educate them on where their food comes from, where their pint of milk comes from, how the cow is nurtured to produce that milk.
“You need to understand why your customer buys food from you – not just because you are a producer – if you understand the reason you will keep that consumer for life,” he said.
Finally, he said, “never be ashamed of making a profit”.
“If you don’t make a profit you can’t invest in your research and invest in your new technologies.
Your buyer will not have a problem once you can justify what your cost is because in the long run, they will be the real winners.
“And don’t be afraid to tell your story because if your story is authentic and credible people will want to hear it and understand how you got there and how you are producing the food that they want to consume everyday.”