From small beginnings Cork-based Castlecor Potatoes has transformed itself into a successful agribusiness, meeting Lidl's demanding standards for suppliers.
Ned English is passionate about spuds. He has been growing them for four decades and Castlecor Potatoes is now a €5.5 million turnover company with 17 employees.
Castlecor is every bit the modern food producer, with state-of-the-art facilities at its premises in Mallow, Co Cork. English says investment in the business has run into millions over the last number of years. For example there was no change out of half a million euro for an optical sorter (it grades potatoes by size) and Castlecor is about to sink another €400,000 in costs to start growing onions for Lidl, its biggest customer.
The company’s packing area is also due to double in size by 2018 and it has been quick to introduce new technologies, such as machines that can detect defects under the potato’s skin.
Castlecor has 500 acres under potato cultivation and English’s wife, Mary, and his children, Edward and Niamh, work alongside him in the company. His young grandson, Alan, is the latest member of the family to show an interest.
English puts the company’s longevity down to perseverance.
Market collapsed
“Things didn’t always go according to plan but we stuck at it,” he says. “We started out in dairy farming, but no sooner had we made the investment than the market collapsed and we lost a lot of money. We then changed direction into potato farming and at the time potatoes were selling at £350 [Irish] a tonne. The year we started this dropped to £20 a tonne. However, we felt that potatoes still had potential and that it was a crop we could ultimately do well with. Potatoes are a very true market, with a delicate balance required between demand and supply.”
For many years Castlecor supplied the packing trade and had no direct contact with retailers. This suited many traditional growers, but it got in the way of English’s desire to grow his business.
“We were well down the supply chain and couldn’t get any further without direct access to the market,” he says. “At that point we decided to expand into packing and distribution. This meant a big shift in perspective and turned us from potato farmers into an agribusiness.”
Castlecor’s decision to expand coincided with the arrival of the low-cost German food retailers in Ireland. English wasted no time knocking on Lidl’s door. The relationship blossomed and almost 100 per cent of company’s output now goes to Lidl.
English acknowledges that this could make the company vulnerable, but he has an answer for those critical of the arrangement. “If we do our job properly at the right price, then why would they change? It’s up to us to work as efficiently as we can. We have what I call an ‘uncomfortable’ margin. This makes it very difficult for someone to come in below us.
“Lidl gave us a tremendous opportunity to transform our business and we seized it with both hands. It was a big challenge but we overcame it. They can see that we’re a very committed supplier, willing to invest to maintain the relationship. It cuts both ways.
“They have asked us to look at growing additional crops, as they want to source more locally. Anything we make, we pump back into the company, and as far as I’m concerned, prudent reinvestment is the best way to futureproof a business.”
English says that one of the biggest challenges of changing the business model was nailing continuity of supply.
Quality
“You are responsible 24/7 and you don’t have the safety net of a distributor being able to get product from someone else to fill a gap,” he says. “You’re also thinking differently because you’re dealing with the end user and what matters to them. Another change was that Lidl sells our product in plastic bags, so quality becomes even more important. That said, we had always been very quality-conscious and our potatoes had always gone to the upper end of the market.”
Irish people still love their potatoes, but not as much as they used to, English says. The attractions of curries and pizza have led to a drop in consumption and those pedalling what English says is “misinformation” about the nutritional benefits of eating spuds are not helping.
“There are lots of myths put out there by those with an interest in selling other products,” he says. “But as slow-release carbohydrates go, the potato is right up there. In fact it was first introduced to this hemisphere as a medicinal food.
“People talk about wanting convenience foods. Produced properly with washing and grading as standard, it doesn’t get more convenient than a potato.
“To grow a business, I think you need to know where you are, where you want to go and what you need to do to get there,” English adds. “Central to this is your team. Our employees are fiercely loyal ‘can do’ people. To this you have to add being up to speed with all the right systems and technology – for example we’ve recently put in a new reed bed for water management – and to realise that things are constantly changing in business and that you have to keep changing with them.”
