Food companies push back boundaries

30 Oct 2003

If the department is now leading the way in applying smart ICT to the whole field of agriculture, the giant Irish food companies — with their proud heritage in the co-operative movement — have also been pioneers. Glanbia, formed by the merger of Avonmore and Waterford, and the Kerry Group plc (which more recently acquired Golden Vale) have grown rapidly to become major multinational food and ingredient companies. These are major Irish business success stories.

Kerry had sales of €3.75bn last year, Glanbia of €2.3bn, yet both have majority shareholdings by Irish farmers. Because of the sheer range and geographical spread of their operations and close involvement with the famously competitive grocery distribution chains in the US and European markets, these and all Irish food companies have invested seriously in world-class IT systems. But the grass roots are intact and management’s feet firmly planted upon them, because on this island it all starts on the farm with the cultivation of grass and the livestock that thrives on it. Each plc has an agribusiness division, dealing with and serving its milk suppliers. These farmers are usually shareholders, which makes for a relationship that managements in other industries might find difficult but in fact is clearly healthy in our Irish context.

Communications are vital and at quite an early stage Glanbia identified the internet as the channel of the future for its dealing with farmers who are, by definition, somewhat isolated, as group IT head Tony Minogue points out. “Agri-Link is a secure internet service for the farmer suppliers and customers of the Glanbia agribusiness division. Agri-Link is updated daily and a Glanbia milk supplier can access a variety of key information such as milk supply details, the latest milk test results and copies of milk statements. A super-levy statement is updated after every milk collection,” he explains. Similarly, Glanbia grain suppliers have access to their test results (moisture content and so on), volume and value of grain supplied with details for each variety and Glanbia branch involved.

But suppliers are also customers in agribusiness, buying their farming requirements from Glanbia stores, from feed to fence wire. “Our trading account holders can view their current balance, receive a monthly summary of the farm inputs purchased from Glanbia by total value and by product group and receive copies of their overall trading statements,” adds Minogue.

In another part of the south, Kerry Group’s agribusiness division extends to about 50 locations and a current complement of 4,500 milk suppliers. Currently in the throes of a division-wide programme of upgrading its IT resources and integrating the infrastructures of Kerry and Golden Vale, it has not followed the same internet path as Glanbia. “About three years ago we launched a programme to help our farmers get into the information age with PCs, farm management software, training and support and finance packages,” explains Niall Shanahan, IT manager of the agribusiness division. “About 350 farmers signed up through that deal and of course there are a lot more online today. But we use the website primarily for information services, mostly technical and advisory.”

Kerry’s investment in systems is in a sense more direct. The milk collection tankers are equipped with automatic testing systems for the milk being collected with a printed record for the farmer. The milk suppliers receive the updated information they might need, from test results to cumulative totals to trading accounts, by telephone through a sophisticated interactive voice response system with individual PINs. “It’s quick, easy and does not require any investment in technology,” says Shanahan. The division is now looking at ways to complement this service with SMS, so that total figures can be confirmed or specific queries made and answered automatically by SMS. “Most farmers use their mobile phones all day long, so it is actually the channel of preference for them.”

By Leslie Faughnan