Ian Toal: all change, please

Ian Toal doesn’t hesitate when asked to sum up his leadership qualities. “I’m a change manager - that’s my role in life,” he says. “I change things when they need to be changed.”

Toal knows first-hand what it feels like when drastic change is needed. Back in the 1980s, he had to “change-manage” his own career from that of an aspiring pop star to a life in the food industry, helped along by some firm encouragement from his father - a food retail industry veteran - and his brother Sean - now chief operating officer of The Co-operative Group’s food business - who both convinced him he was “a crap singer” and should try food instead of Howard Jones-style bands.

These days, Toal’s love of music is consigned firmly to his spare time, but that’s not to say the showbiz aspirations of his youth don’t occasionally shine through in his day job. Under his guidance, Adams Foods’ annual conference was liberally sprinkled with celebrity appearances - including Vernon Kay and the Spice Girls’ Mel C - and one of his recent staff-bonding exercises involved Toal and his colleagues creating a spoof version of Nickelback’s Rock Star music video, complete with air-guitar poses and custom-written lyrics extolling Adams Foods’ “fridge block star” ambitions.

But such lighthearted capers belie the serious job Toal has got on his hands, and dramatic change is - as you’d expect - the order of the day.

Since joining as CEO in August 2011, he has put forward an ambitious growth strategy for the business, with plans to increase turnover from £335m today to £500m in 2015. Just as importantly, he wants to completely change how Adams Foods is perceived in the marketplace - and the way it thinks about itself.

“When I first came here, we spent a few hours trying to ascertain who the market leader was, and after about three hours we realised we were,” Toal says. “That kind of explains where we were culturally - we are 50% of the own-label market in cheese, but we weren’t acting like a market leader.”

To change this and get Adams the recognition it deserves, Toal believes the company has to become more “enterprising” in everything it does - from NPD and category management to how it presents itself to the outside world. But developing an entrepreneurial streak during an economic downturn is a big ask for a company whose profitability has been under pressure, and Toal makes no bones about the fact he’s had to make some difficult structural changes to get the company to a position where it can start thinking about market leadership.

Last December, he closed Adams’ factory in Wincanton and made 250 people redundant so as to consolidate the company’s operations at its £30m plant in Leek, and he has implemented a rigorous lean manufacturing programme to maximise output and minimise costs.

These changes were painful but unavoidable to make much-needed savings and free up cash to invest in Adams’ future, Toal says. “Adams had a bad year last year, but now it is viable and profitable again, and we’re in the right position for NPD and innovation, which is something we haven’t previously been known for.”

Proper support

Following the restructuring, Adams now has a team dedicated to innovation, research and category insight, and it is able to support its main brands with sizeable marketing and advertising budgets. The company will spend £10m on Pilgrims Choice and Kerrygold this year, including TV campaigns for both brands - a 10-fold increase on its marketing spend in previous years.

It’s a big change for Adams and its owners at the Irish Dairy Board, who will be spending about 50% of their annual global marketing budget on the UK, but one which was long overdue, says Toal. When Kerrygold was scrapped from Tesco last September, it lost its listing partly because Adams had failed to support the brand, he admits, and he is determined not to let that happen again. “Historically, we made promises that we would support our brands with a full marketing package and above-the-line advertising, and then chose not to,” he says. “Our customers complained to us that we didn’t act like power brands, made too many false promises and hadn’t delivered.”

It’s early days, but the new approach seems to be working. Toal got Kerrygold back into Tesco in April and, following a packaging overhaul at the beginning of the year, secured a listing for Pilgrims Choice in Asda in March - the first time the Cheddar brand has been in Asda in five years.

Now that Pilgrims Choice has better distribution, Toal says he wants to “challenge” Cathedral City’s number-one spot and, at the very least, become the “very clear number two” in the Cheddar market within the next five years. He also sees great potential for Adams’ Mu Cheddar brand, which was launched in partnership with Tesco last year and is on track to generate about £6m in sales by the end of the year.

Beyond brands

But brands alone won’t be enough to get Toal to his £500m turnover target acquisitions will also play their part. Toal says he’s got clear instructions - and a war chest - from the IDB to “buy something” and is currently reviewing Adams Foods’ creamery strategy.

One area that could prove interesting is foodservice - a sector that Adams currently has limited exposure to, but in which Toal is keen to build up a greater presence. He set up an Adams foodservice team at the beginning of the year, which he says has already brought in £10m of new business, and now plans to create a £100m foodservice business within the next five years.

The rationale for focusing on foodservice is simple, says Toal. As the UK arm of the Irish Dairy Board, Adams’ raison d’être is to find a route to market for Irish dairy products, but the opportunities in UK retail are limited. “We will be putting Irish through our brands and probably through the value, bottom-end of the own-label market, but the bulk of own label is going to be British for political reasons and I can’t really see that change during my tenure here,” he says. “A lot of the British cheese has been sucked out of the foodservice market to meet the demand of the retailers, so we do see this as an important strategic opportunity for Irish dairy.”

As for his own future, Toal already has one eye on the next big change. “I won’t be here forever that’s an absolute fact,” he says. “When this business is at the size I want it to be and it’s stable, you will need a very different manager - someone who is happy sitting in a recording studio twiddling the knobs rather than someone who wants to be in a train signalling box, changing the direction of the business.”

Until then, Toal has plenty of work on his hands. As he admits: “We’re trying to take something that used to be a bit average and turn it into a company that’s best in class, and that doesn’t happen overnight.” But he is confident Adams is now on the right path, and if more changes are needed along the way, Toal clearly isn’t going to be shy in coming forward.