By 2013, husband-and-wife team Jimmy and Rosie McLoughlin could see that their business had a problem. Growth was slowing.
After more than 15 years of sales growth, it became apparent that their family-owned business, Rosie & Jim, had reached a point where winning new customers was proving difficult.
“We had reached a level where the business was starting to plateau,” says Jimmy McLoughlin, chief executive of Rosie & Jim. “Since we started out in 1997, the business had experienced growth every year. But we could see that growth was slowing and finding new customers was becoming a challenge,” he adds.
Run by McLoughlin and his wife Rosie, Rosie & Jim produces breaded chicken products such as goujons, strips and kievs for supply to restaurants and butcher shops all across Ireland.
“Our business was mainly supplying butcher shops with our range of breaded chicken products. But there are only so many butchers in the country and we were in practically all of them,” says McLoughlin.
“It’s very hard to get into foodservice because those companies mainly use breaded chicken from Thailand and Brazil. And getting supermarket listings for your products was also very difficult because of a perception that we didn’t have enough point of difference from any other breaded chicken product,” he adds.
To reset the business on a growth trajectory once more, the McLoughlins took a bold step which carried significant risks for the business that they had built together. Rosie & Jim would transition to a manufacturer of gluten-free chicken products.
“We had enough customers enquiring if we could make a gluten-free version of our chicken products that we sensed a worthwhile gap in the market. Gluten-free meant huge changes for our business. It created a lot of challenges swapping the component ingredients of our breaded coatings for non-wheat ingredients,” says McLoughlin.
“Gluten acts as the glue. When you take it away, flours are much dustier and batter thins out much more quickly. The ability to bind carbohydrates to protein becomes far more complex and additionally coating equipment suddenly began to act up in ways it never did before,” he explains.
“But with 15 years of manufacturing experience under our belt and a highly skilled and experienced team behind us, we were able to overcome these challenges which justified our very significant capital investment. Our priority was that the taste and texture of our product could not suffer in this transition,” he adds.
On top of this, non-wheat ingredients are three times more expensive than standard wheat flours and batters. However, the McLoughlins were confident the move to gluten-free would propel the company’s sales to a new level.
As a client of Enterprise Ireland, Rosie & Jim was able to lean on the state agency for support during the transition to gluten-free. The company availed of a €200,000 R&D grant to help fund the project and has since drawn down €250,000 in capital funding for the extension of the production facility in Dublin 12.
The transition to 100% gluten-free took almost two years and created many challenges for the business but it is starting to yield results. Suddenly, Rosie & Jim is in high demand from both supermarkets and foodservice in Ireland and further afield because gluten-free has given the product range a real point of difference in these sectors.
“The move to gluten-free has opened a lot of doors for us. Supermarkets who never would have dealt with us are now very interested in our product because it’s got a real point of difference,” says McLoughlin.
Right now, the company’s range of gluten-free chicken products has listings with Dunnes Stores and SuperValu here in Ireland. The strategy is to build the Rosie & Jim brand of gluten-free chicken over time.
At the same time, the company has also started building its export business.
“Exports now account for 8% of the business and we’re very focused on building export sales,” says McLoughlin.
“We’re doing quite a bit in the UK market at the moment but we could be doing so much more. With Brexit hanging over everyone, there’s a lot of nervousness among UK retailers and foodservice operators to take on new Irish suppliers,” he adds.
Outside of the UK market, McLoughlin says the company has well advanced export plans for Scandinavia, Germany, the Netherlands and Belgium.
“The Scandinavian market should be a really good market for us. Gluten-free is a very popular consumer trend in those countries because they have a higher instance of coeliac disease,” says McLoughlin.
“Right now, we’re working on our supermarket packaging designs for the Scandinavian market. It will be an ideal first market outside of the UK. But we’re also working with an agent who has had big successes in Europe and we’re targeting winning new export business in Germany, the Netherlands and Belgium,” he says.
In time, McLoughlin believes export sales will grow to account for 50% of the business. Rosie & Jim is now producing 50t of breaded chicken products each week and has invested in the necessary extra capacity needed for future growth.
Amidst all the change and expansion over recent years, the company has remained disciplined and closely monitors production costs.
Since 2014, Rosie & Jim has been implementing lean principles across the business.
Working with Enterprise Ireland, the company achieved savings of almost €0.5m from 2014 to 2017 through the Lean Start and Lean Plus programmes. In 2018, Rosie & Jim started Lean Transform, which is Enterprise Ireland’s most advanced level of lean. Lean Transform is a large-scale and extensive transformation programme for the business but is significantly funded by Enterprise Ireland.
While it carried many risks, the decision by Jimmy and Rosie McLoughlin and their team to transition Rosie & Jim to a producer of 100% gluten-free chicken products looks like a masterstroke. The company has retained its core business here in Ireland supplying butcher shops and restaurants, while at the same time it has opened up new routes to market that carry enormous potential.
The company has recently taken on an additional 15,000sq ft of capacity in the facility next door thanks to R&D and capital expansion funding support from Enterprise Ireland. This extra capacity will be used to accommodate the company’s future expansion into new markets. The free-from consumer trend is here to stay and food companies such as Rosie & Jim that have adapted to this change are reaping the benefits. It will be interesting to monitor the company’s progress over the next 10 years as exports become a much larger part of the business. While exporting brings new challenges, it also offers exponential growth opportunities that simply do not exist in Ireland due to our small population. The strong focus on R&D and new product development at Rosie & Jim means the company is well positioned for its next wave of growth.