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Having joined the West Cork Co-op 39 years ago, Dan MacSweeney served 13 chairs over his 25-year tenure as CEO of ingredients and flavours group, Carbery. He also sat for 25 years on the board of Ornua. He stepped down in December but leaves a business with a great foundation to achieve further growth and value in the future.
A west Cork man at heart, he shares a proud heritage of ambition, drive and determination with many of the farm families that supply Carbery through its four shareholding co-ops of Barryroe, Bandon, Lisavaird and Drinagh.
When asked what the business has delivered for Irish farmers under his leadership, he says: “From a West Cork perspective, I think we built a business that the milk supplier and shareholder is rightly proud of.” And that it should be. Not only does it employ 230 people locally, it employs 600 people globally and processes over 500m litres from its 1,300 milk suppliers.
Like many remarkable leaders, he says his biggest achievement was building and retaining an exceptional team. He credits this team with defining the strategy that delivered asset value and the consistent competitive milk price value to West Cork milk suppliers. No one can argue with that. Carbery suppliers Lisavaird, Barryroe, Drinagh, and Bandon have consistently shared the top four positions in the annual KPMG/Irish Farmers Journal milk league for the last 10 years.
He says the key to doing this was diversifying the ingredients business beyond dairy and into flavours and natural extracts. That proved to be a very significant move and a game changer for Carbery.
We recognised in the mid-90s that there were major challenges coming down the line
“I think we recognised in the mid-90s that there were major challenges coming down the line. In hindsight, they don’t seem so great now, but at the time we as a European industry were highly supported with export refunds, high intervention prices, casein aid, etc.”
They realised they had to do something as supports were ending and world market prices at the time were not going to keep our farmers in business. “We needed to up our game,” says MacSweeney. “We looked at our strengths and capabilities. We saw margins in dairy ingredients. It was a margin-driven decision that would add as much value as possible to the local milk supply. It was also a decision to diversify our risk into other food ingredient sectors. But we never risked the business. We went small into the UK first and three years later into the US. It was manageable. It was conservative”.
Yet for all its success, MacSweeney doesn’t see any major difference to other co-ops, other than its structure. “We are the processing arm of four shareholding co-ops and our job has been essentially, to process their milk and to solely focus on adding value to that.”
We are all very much together in the West Cork industry
He credits the four co-ops in supporting the Carbery project. He says: “We are all very much together in the West Cork industry. Sometimes I think people looking in don’t fully understand.” But it was not without its challenges. Before 1992, Carbery was owned by Express and Grand Metropolitan. He says it was a small part of a very large multinational. However, “when the four co-ops took over the business, we became a small player with the challenge and opportunity of developing the business on our own”.
He says the board at the time put its faith in a young team recognising the energy, talent and ambition of the people. He says one of the biggest challenges was establishing their credentials as a young leadership team and proving to the markets, customers and shareholders that they intended to be serious operators.
With Ireland likely to continue to expand production beyond 10bn litres in the future, he believes we should review market opportunities before we produce more. “Be market-led rather than production-led,” he says.
Luxury products
Like many leaders he is an optimist and sees more opportunities than challenges for the future of the dairy industry. “The market is growing and we supply a range of products that are seen as healthy, nutritious and even luxury. We have an ever increasingly efficient processing sector. We have strong market positions individually and collectively through Ornua. We have a very supportive Government who realise that agri-food is a key, sustainable driver of the economy.”
Global dairy consumption is growing at 1.5% per annum, he says, adding “as we increase output, as we inevitably will, we should continue to focus on our point of difference, our sustainable grass-fed production”.
He believes that will differentiate us in the market. But farmers may ask how they benefit.“It helps us enter and sell in key markets such as Germany and the US” adding that “grass-fed is also the lowest cost”.
National grass-fed standard
He warns that the industry needs to resist the temptation to get too intensive. “While it may increase output and short-term return, it may sacrifice our market differentiation and put pressure on environmental issues,” according to MacSweeney. To capitalise on this, he believes Ireland needs a national grass-fed standard. He’s strong on delivering on promise. “If we promise it, we must deliver it. We cannot have distractions.”
He also believes in industry collaboration, saying: “There is more room to go forward together rather than apart.”
Carbery has worked closely with Ornua on sales and marketing for its cheese and fat products. He credits the last eight years under the leadership of Kevin Lane as the period of greatest transformation. He says Ornua will play a key role in the future, particularly in consumer food and food service where its brand strength can make a real difference in returns.
But as the businesses are getting more complex, he believes farmer representatives play a key role on co-op boards. However, they need more longevity where a member serves a minimum of four years. Then, if they are doing a good job, this should be extended. He believes such a structure would better represent the milk supplier.
The Brexit challenge
Brexit is a challenge, according to MacSweeney. But he says that if we build on our strengths together such as our low carbon production, top-class animal welfare, grass-fed and highly sustainable production, that we can succeed.
On regrets, he highlights “you always think, maybe we could have done more”. After 25 years at the helm and having built a business farmers can be proud of, maybe it’s time for him to relax, spend more time with family, walk a bit more and continue supporting his local GAA team, Kilmeen/Kilbree.
But he may not be quiet for too long. He hints that he has a few projects in the pipeline which may draw on his experience in the food space. He concludes: “The greatest learning is that you never stop learning”, adding “you have to keep building your knowledge and keep growing”.
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