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Swapping the multinational for the indigenous

Conor Kilduff, sales and marketing director, Keelings and non-executive director, FMI

Conor Kilduff has left his position as managing director of Unilever Ireland to follow a new path and has found two very different, but equally exciting endeavours

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13 March 2012

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The food and drink sector saw some significant mergers and acquisitions in 2011. Valeo Foods acquired biscuit and jam-maker Jacob Fruitfield and Boyne Valley Group bought the Irish brands of Premier, while Greencore finally acquired UK convenience food firm Uniq. With an increasing number of businesses centralising their operations overseas or merging with similar type companies to create economies of scale, it’s hard not to wonder whether this kind of activity can eventually alienate some of the brand’s core consumers through a lack of localised marketing initiatives. 

 

Kilduff’s long career with Unilever showed him both the positive and negative effects of a small indigenous company merging with a multinational and the after effects on the core business when it becomes just a small part of a global entity. His first job in 1987 was as a marketing assistant with CPC Foods which was subsequently bought by Unilever in 2000. He held numerous roles over the 24 years with the company including sales director of the food division, business unit director and marketing manager of Unilever Ireland.

 

When leaving Unilever Ireland in 2011 and looking for his next venture, he says his one stipulation was that he wanted to work for someone that he could see everyday, a telling statement pointing to the fact that much of the day to day processes of a multinational happen in other jurisdictions with centralised decisions taking the control and expertise from the local hub.

Being promoted to managing director of Unilever in 2009 was somewhat of a poisoned chalice for Kilduff. Obviously it was a great role and one which he fully deserved and was proud to accept, but the company and the economy were going through some major upheaval and it was a very uncertain period.

 

“It wasn’t the most ideal time to get that job because our Irish grocery industry was in a big transition period. At the time there were some big strategic moves being played out – Tesco’s Change for Good policy, the growth of the discounters and I think something that affected our industry much more than people talk about was the devaluation of sterling. One euro was equal to 69 pence sterling for about five years and in a period of about 13 months it moved 24%. So immediately the competitiveness of the Irish industry got challenged so therefore every part of the Irish industry had to ask is our pricing correct?  Is our cost base right? And what do we need to do to correct both?”

 

With the huge growth in own brand products, Irish consumers were falling a little out of love with the brands they had always supported so vehemently and companies had to respond. In a series of two relatively significant price decreases, the company initially dropped prices in the region of 8/9% but found it wasn’t enough and subsequently dropped by an average of 11%.

 

“It was about making sure that our customers could buy competitively from Unilever. And what do I mean by that? We owe it to our customers because we are selling the same products in the UK and Ireland and we needed to get the pricing right or else we wouldn’t have a business. But subsequent to that you had to get your cost base right.”

 

The UK business was buying in euro and selling in sterling so it had different problems, says Kilduff. “They [the UK business] needed to lift their prices because they weren’t making money anymore. Yet how do you go to a market in a recession and start lifting prices – it’s quite difficult so that’s been quite a gradual process over time, which is generally what happens when currency moves. Markets correct themselves over 2/3 years but the suddenness is very difficult to fix.”

Kilduff was aware that his position might not always be there so decided it was time to consider a move outside the company. “There were originally eight Irish board directors but in the UK and Ireland change process, six of those colleagues left the business because when you are combining two boards that has to happen. I always felt that at some point in time, it might be my turn because we might get to the end of needing me, because maybe we would have a more fluid UK and Ireland business.”

 

While he felt that it was time to move on, Kilduff wasn’t sure what direction he should take. “I took about a month off and then went on holidays with my wife. I got advice from a friend, to take time and not worry. In that process, the one thing I heard myself saying to people was that I wanted to work for someone I could see on a daily basis which to some extent meant I wanted to work for an Irish business. I’ve worked for a multinational that’s been really good to me and I’ve enjoyed every bit of it but equally thought let’s do something a bit different. What could you do to help an Irish business develop and grow and all of those things?

 

“I like the grocery industry and it is part of my competence set and I didn’t want to change everything. So two things happened at the same time, one was the Keelings position and the other was the FMI (Field Management Ireland) position and I was intrigued by both. What I like about both is that they are run by Irish people and they are both very ambitious businesses.”

 

Keelings, although it describes itself as a multinational, is a 100% Irish family owned business. It sources, grows and distributes fresh produce around the world for Irish, UK and European customers. FMI is a wholly different business, a field management company that recruits, trains and manages teams of field sales personnel and implements projects across the Irish FMCG sector.

 

Kilduff joined Keelings as sales and marketing director on 16 January and his appointment as non-executive director at FMI happened shortly after. Charley Stoney, FMI’s managing director said of the appointment: “We’re absolutely thrilled that someone with so much experience, knowledge and gravitas with the FMCG industry has decided to join us.”

While still in the settling in period, Kilduff already feels like he is back working in the engine room of a company, a place he really enjoys being. “Coming from a multinational environment where globally decision making has been centralising which I believe is correct, many of the day to day decisions I was making 24 years ago, I’m back to being able to make because the decision rests in this office as there is no other office.”

 

Kilduff says that it’s very much a family business. It was originally started by Jo Keelings’ parents in the 1930s when they used to sell their fresh goods in the Smithfield Market. As the multiples were growing in Ireland, Keelings began to supply them and now services all the supermarkets in the country. The company has an annual turnover of €300 million and employs over 1,400 people in Ireland and a total of approximately 2,000 people across the group.

The company was headlining the news last month for capitalising on the visit of Xi Jinping, the Chinese vice president, when it sold its stock control system to a number of Chinese farmers. The computerised system ensures maximum yield from highly perishable fruit.

 

Kilduff praises the efforts of Caroline Keeling for this. “Our group managing director Caroline Keeling is a terrific woman and a lot of this development has come from a want and a willingness to create that opportunity and conversations she’s been having with the Department of Agriculture about the opportunities we can create. She’s one of those people who believes if you want something to happen then you have to make it happen. The Chinese were very impressed with how the business is run.”

 

Keelings also agreed a deal to import exotic pears from China with proposed sales of around €4m here over two years. The company also hopes to supply China with Irish strawberries, raspberries and blueberries.

 

Keelings grows a little over 30% of the fruit, vegetables and flowers it sells in the Irish market place. A big development was the launch of the Keelings brand in the last year. Kilduff explains: “We think the brand is important because the consumption and penetration of fruit remains very low, particularly things like berries (soft fruit) but it’s growing very quickly and when you apply classical branding techniques into a business like this you start to think about the consumer insight that’s needed and we have a lot but we could have a lot more so we could get even better at driving consumption and penetration.”

 

Kilduff admits he still has an awful lot to learn about the business. “Every meeting I go into I’m still asking questions for example if you have a field full of strawberries they need to be sold now, there is an urgency and if the sun shines a week earlier, you’ll have fruit a week earlier so in terms of managing your promotional cycle it has to be on a much more fluid basis than the ambient industry. You can plan further in advance in the ambient market.”

Working with two companies is quite a commitment so it begs the question, how does one juggle the two? Kilduff says the FMI position is purely advisory and most of it will be done on his own time.

 

“I’m getting a real kick out of helping to grow a family business and getting a real kick out of helping FMI run a service business without being the person with the final piece of responsibility. I will probably spend 12 half days a year in business hours working with FMI. The remainder will be during nighttime and weekends. It’s an advisory role. From FMI’s perspective, the benefit for the business is that I’m someone that can act like a client on the board.”

So does it feel like he made the right decision leaving the head job at Unilever Ireland to get back to basics?

 

“I’ll measure that by my happiness. I feel very happy. Both teams at Keelings and FMI are impressive and really nice people to work with and highly ambitious. At times I’m a bit of a dreamer and it’s nice to be back in creating the dream rather than implementing someone else’s dream and best of all I can see the people I work for everyday.”