19 Jan Interview with John Jordan, CEO of Ornua, Ireland
BF: Ireland’s dairy sector is a significant part of the nation’s economy, bringing in €5 billion in 2019. In 2021, Irish dairy farms produced more than 8.8 billion liters of milk and sent dairy products to 147 global markets. To begin the interview, can you tell the reasons Ireland’s dairy sector is so popular worldwide? What are its strengths and how does it differentiate from nearby markets?
John Jordan: As Ireland’s largest exporter of Irish dairy products, we connect with consumers in over 110 countries worldwide, and one of the things that always surprises me, is that if you ask a consumer to draw a picture of a cow, they all draw the same picture, a cow standing in a field.
In fact, there are actually very few countries in the world where the cow’s diet primarily consists of grass. In most countries, cows eat grain, but here in Ireland we have a fantastic climate for growing grass, and this is where this image originates from. There are approximately 18,000 family farms in Ireland; the average herd size is less than a hundred cows and the farms are generally run by the family, with up to three generations on most farms. They operate as small enterprises that have been passed down for generations.
Irish milk is produced in line with grass growth, which is seasonal. As grass grows during the spring and summer months, the milk output increases. A perfect climate for growing grass means a perfect climate for dairy.
As a large milk producer, up toward nine billion liters, we export a large percentage of that throughout the world, to over 110 countries. The beauty of our product is that we’re very different than most butters around the world. If you look at our market in the US, there is a substantial contrast. Grass fed cow’s milk gives the Kerrygold butter its rich, golden color and soft texture which adds to a creamier taste. Because of the grass in the cow’s diet, we have a product that has a unique taste and appearance that consumers throughout the world have responded positively to. By contrast butter made from cows that eat a lot of grain tends to be white and more brittle.
BF: The dairy market is experiencing volatility due to price and supply chain obstacles linked to Brexit, the pandemic and now the conflict in Ukraine. What specific challenges are Irish dairy farmers facing today, and what needs to be done to balance the market and continue the sector’s popular branding at home and abroad?
John Jordan: Four years ago, Brexit was the big looming topic that Irish companies were most concerned about. Fortunately, the UK had signaled to us far enough in advance, so we had plenty of time to prepare for what was to come. Yet, in a very short space of time, we had a global pandemic and were faced with disruptions in supply-chain, massive volatility in dairy market prices, and the Airbus-Boeing trade dispute, which put tariffs on EU products shipping to the US. We had to navigate those challenges and move forward, creating greater value and growth and we did that successfully by flexing and adapting our business model accordingly.
Globally, the challenge for dairy going forward will be centered around sustainability and climate action. Consumers today are holding organizations to a higher standard and we must all adapt and progress as well. Ireland is very fortunate in that we operate one of the most carbon efficient farming systems in the Northern Hemisphere. Typically farms in Ireland only change hands every 400 years. A family-owned farm that has been passed down from generation to generation is cared for by farmers who are said to be the custodians of that land. Their job is to pass the farm on to the next generation in a better condition than they took it in. From an environmental perspective, they are dedicated to making the farm more sustainable.
As a small country, we are very connected and dairy is a crucial sector for Ireland, therefore it has huge access to government. Ireland has taken a leap by publishing a climate action bill and putting into law, Irish climate targets. These are not ambitions; we must achieve them. There are very clear strategies from government down through industries on how we would achieve the reduction of GHG by 2030.
BF: With roots going back to the 1960s, Ornua is now the country’s largest exporter of dairy products and represents the livelihood of around 14,000 dairy farming families. What recent milestones has Ornua passed that best showcase its success, and what does it hope to achieve with its Ornua 2025 strategy?
John Jordan: In 2019, Kerrygold, became Ireland’s first and only billion Euro food brand. When you hear blue chip companies talk about having billion Euro brands, it puts such a massive achievement in perspective. It took us over 50 years to get to one billion Euros, but it will take us less than five to get to the two billion Euro mark.
Globally, we sell over eleven million packets of Kerrygold butter and cheese each week. We are the number one butter brand in Germany, and our 250-gram packet of butter is the most frequently scanned product in German supermarkets. We’re number two in the US and number three in the UK. As a company, we purchase over a billion euros worth of dairy products per year. That has an economic value of almost €3 billion which goes back to every rural community in Ireland and puts real money back into people’s pockets. It’s great that, globally, consumers recognize the exceptional product that Irish dairy is. That success goes right back into the farming families across rural Ireland.
BF: Part of the Ornua 2025 strategy is the promotion of human capital in the dairy sector. You recently announced Ornua’s 2023 graduate program, and you yourself began at the company as a graduate. What programs has Ornua put into place to promote higher skills and fill in the necessary gaps in Ireland’s dairy sector?
John Jordan: Like a lot of businesses in the world today, attracting talent is a major challenge. Ireland has attracted incredible foreign investment which has employed thousands of people. As an Irish business, managing the company brand is essential to attracting and retaining that talent. Graduate programs play a role in this, as well as making sure our diversity and inclusion program is really strong. Four years ago, our leadership plan was 83% male and 17% female. Today its 62 and 38. We still have a way to go, but we’ve moved the needle in terms of people getting engaged and implementing real plans around how we diversify our talent agenda.
The Irish dairy sector is a male dominated industry at the farm level. In the last five years, we’ve seen a recognition of the role that women plan within those family businesses. We’ve seen an increasing number of women step into roles within their individual cooperatives and onto the boards of those cooperatives, and I truly believe it is all for the greater good of the sector.
BF: In 2021, Ornua set a 25% reduction target on scope 1 and scope 2 emissions by 2025 along with its commitments to cut down on waste and packaging. What changes will be required for Ornua to meet these goals, and what greater challenges exist in the dairy sector in bringing down the national and global carbon footprint?
John Jordan: In terms of the entire supply chain for Ornua, we’ve done a tremendous amount of work on this: the scope 1 and scope 2 of that entire supply chain is in the single-digit percentile. We have a very clear roadmap to exceed our 25% reduction targets by managing our internal energy use and switching to green energy providers. For scope 3, the biggest challenge is at farm level, both in Ireland and abroad. Achieving scope 3 targets requires a much broader industry engagement.
Ireland is one of the most integrated food and dairy countries in the world, from farmer, to processor, to government. Along with implementing the Irish Climate targets, the government hosted a round-table discussion with the dairy processors, farming organizations, universities, researcher organizations, and lobby groups, with the purpose of discovering ways to achieve this goal.
Two requests were made: greater scientific investment (putting the science into action on the farm), and supplying farmers with funding to help grow to an improved position. Our government and industry work hand-in hand and we are strongly connected.
BF: The US market is extremely important for Irish dairy farmers. Along with the recent Whitehall Specialists acquisition, Kerrygold is now the number two butter brand in the US. In terms of worldwide exports, how important is Ornua’s US portfolio to the local dairy sector, and what kind of synergies and investment opportunities do you see possible between the two markets?
John Jordan: It’s one of those great stories that looks like an overnight success, but it’s taken nearly 30 years. We sent a single person out to the US in the late 1980’s, and we started selling Kerrygold cheese and then introduced Kerrygold butter in the late 1990’s. A lot of people would assume that our market appealed to the great Irish community in America, but the consumer for Kerrygold in the US is actually the foodie. It’s the American foodies who understood the difference in the taste and texture and valued that premium product. We still invest a large amount into in-store tastings, which have been really powerful for us.
Last year, Kerrygold achieved 12% volume growth, outperforming the retail butter category and strengthening its position as the no. 2 butter brand in the US. We introduced new products including our Kerrygold Butter with Olive Oil, which was awarded Best Butter in the PEOPLE Food Awards 2021.
Along with America’s healthy economy, it’s a key market for us because they clearly understand and appreciate high-quality food. We see enormous growth opportunities for Irish dairy in the US. In the business-to-business space, we supply a range of dairy ingredients to some of the largest blue chip companies in the US. In 2021, we acquired Whitehall Specialties, a leading cheese manufacturer, adding 450 people to our workforce and doubling our production capabilities in the US. In less than a year, we’ve yielded significant profit, making it one of our most successful acquisitions to date. Overall, across the US we see a lot a success in terms of partnerships around innovating products and helping them with their retail-facing business. Overall, the US is an essential part of Ornua’s business, and a major destination for Irish dairy with significant and continued growth opportunity.
BF: You stepped up into the role of CEO in 2018, just before 2019 and all the challenges global markets have recently been facing. You’ve done a great job despite all these hurdles and posted a positive group turnover of €2.5 billion last year! What are your current top three goals as CEO of Ornua, and what kind of vision do you have for Ireland’s dairy sector in the next five to ten years?
John Jordan: We’ve been very lucky with all of the opportunities that have presented themselves to Ornua and our team has taken them. This year we will finish with over €3.5 billion in sales. In terms of growth, this a remarkable success story.
I’m very proud to have taken this job. I joined as a graduate trainee, so I grew up in this company. Ornua has always played an enormous part in our family life, with my youngest son being born in Chicago while we were living there, working with Ornua. It’s an honor for me to be in this position but I feel a responsibility, being the incumbent, to ensure that I hand the business over to whomever comes next and in a better position that when I took it on. There’s a real family culture around Ornua so for me, it’s about people. Are we giving people the opportunity to be themselves? I often talk about running a business where people can be themselves. I dread to think that someone would have to leave themselves at the door when they come into work. So, whoever you are, bring yourself to Ornua, partake in Ornua, and enjoy it!
It’s also about helping talent develop through the organization to ensure that we’re growing. We’re ambitious in terms of where we’d like to go, and we will get there through our talented people.
BF: Is there anything that you feel we haven’t cover that you’d like to mention?
John Jordan: In Europe, there were milk quotas introduced in 1984 which meant that if you were a farmer, the volume of milk that you produced was fixed. It was fixed up until 2015, so you couldn’t grow your herd and you couldn’t produce more milk. If you can’t grow your business, it’s a very difficult place to be. From 2015 on, there was no limit to production.
For most countries in the EU, that didn’t make a difference. In Ireland, there was latent capacity because we had plenty of land, exceptional grass growth, and farmers grew their output. We grew from five and a half billion to nearly nine billion liters of milk, which was very prosperous for our farmers. It also coincides with the sustainability challenge that we are currently facing. We don’t have heavy industry like coal mining and metal production. Dairy and agriculture are high up on the sustainability agenda in Ireland.
Irish farmers have the opportunity to be the hero of the story, not the villains. The way they talk about their connection to the land and what it means to them is extremely powerful. We, as a sector and as a business, give them the tools and support to nurture and care for their land.