Greencore CEO David Dilger wants to be a class act in food, and not just in sandwiches. He speaks exclusively to Liz Hamson
It takes chutzpah to make a connection between sandwiches and the gastronomic delights of Moro’s on Exmouth Market in London. But that is what David Dilger, CEO of Greencore Group, does in our interview at the restaurant. “We are trying to imbue the business with good food values,” he says as he picks through a starter of butter beans and morcilla sausage with mint dressing. “We spend a lot of time trying to inculcate the business with the culture of great food, great processes and great people.
“This is one of the restaurants our development teams keep an eye on. We have workshops here.One of our aspirations is to improve our products to restaurant quality. We are all about quality and increasing awareness of what consumers put in their bodies.”
It is a bold statement of intent from the man who has been with the E750m Dublin-based group since 1992 and steered it through the takeover of convenience business Hazlewood Foods in 2001. It is Dilger’s plan to turn the group, which is not only the world’s biggest supplier of sandwiches but also has a rapidly growing chilled ready meals business, among other interests, into the biggest convenience food company in the UK.
He is not the only member of staff searching for inspiration outside the Greencore box. Staff regularly attend workshops and classes and are sent on R&D trips overseas - to New York, Paris, Morocco, Italy. “Our culture is the only way to differentiate ourselves from our competitors,” he says, and beating the competition is all. “I am deeply competitive. It’s all about winning. The only constraint is that our behaviour must reflect our values.”
Dilger, who was last week awarded an honorary CBE, prides himself on Greencore’s stringent standards and admits the Sudan 1 crisis was his “worst nightmare”, hitting its cooking sauces business hard, though not touching its chilled ready meals business. Greencore is now understood to be pursuing a six-figure sterling claim with Premier. Dilger is reluctant to go into detail, but says: “The six-figure sum in sterling is currently in the process of being recovered from suppliers.”
He adds that the incident has been a big wake-up call to the whole industry. “It goes to show the importance of provenance in the food chain.”
That said, he concedes: “From a cost point of view, the amount involved in checking everything, while an attractive notion, would be massively prohibitive.”
Not least for a business that took on E950m debt with the Hazlewood acquisition. Prior to the deal, Greencore was known predominantly in the Irish Republic. It started life as the Irish Sugar Company and was the first Irish state company to be privatised in 1991. With life in agribusiness increasingly precarious thanks to the constant price fluctuation, it began to invest in higher-growth areas, culminating in the Hazlewood deal.
Greencore had to make some ruthless decisions when it swallowed what was effectively a food conglomerate with 38 individual businesses, he admits. Along with number one and two positions in convenience food in the UK and to a lesser extent on the Continent, Hazlewood brought with it the headache of having to offload a raft of 28 non-core interests.“There were sleepless nights,” Dilger says of the debt, which has since been slashed to E387m. “It was part of the reason the rationalisation had to be done so quickly.”
The group has also had to adjust to life with 8,500 of its 9,000 staff based in the UK. Dilger doesn’t see any problem in remaining Dublin based - in fact, rather the reverse. “We’re Irish-bred and proud of that, but this (the UK) is the market we’ve invested our whole future in.”
Chilled ready meals are central to that future. Following its £19.5m investment in new facilities at Warrington and Wisbech three years ago, Greencore plans to double capacity of chilled meals with a new facility near its Warrington base within the year.
“Chilled food will be the core of growth in this and other northern European markets,” says Dilger, who adds that Greencore is keen to extend business into “adjacent categories” and to extend geographically.
He is also keen to further diversify its customer base. Greencore is unusual in that it has a mixture of retail and foodservice customers. The multiples currently represent around 70% of its business and growing the rest of its customer base is “a really important part of our risk diversification strategy,” he says. He adds that though it makes sense to do less business proportionately with the multiples, he is in no way critical of their tactics.
As far as its own low-cost agenda goes, Greencore continues to strip out the “bad costs” he says, stressing that it has nothing to do with lowering the price of ingredients, and everything to do with streamlining the business’s processes and management structure.
Greencore must now do so without chief finance officer Patrick Kennedy, who is leaving for Irish bookmaker Paddy Power. Dilger is sorry to see him go, but is confident that Greencore will live up to the tenets in its new three-leaf logo: innovation, customer care and total lowest cost. He certainly sees no reason why it cannot double its market cap to o1.5bn within the next few years: “There are companies that produce great growth and no cash and others that produce great cashflow and no growth. Very few have managed both over a sustained period of time.”
We’re Irish-bred and proud of that, but we’ve invested our whole future in the UK. Chilled food will be the core of growth
Q&A
What is your typical day like?
“This week has not been typical but it illustrates the kind of pressures the job puts you under. My alarm clock went off yesterday at 4.03am. I flew from Dublin airport to East Midlands airport where I met chief operating officer, convenience food division, Tony Hynes, and the managing director of our cakes and desserts team. I then saw the cooking sauces team in Selby and met with the HR team. Then I had dinner with Phil Taylor, the MD of the chilled meals business. We eventually left the table at 11.10pm, so a pretty long day.
But then, I’m basically on 24-hour call. How could I expect my staff to work more or less 365 days of the year while I’m in bed?”
Do you have any major bugbears?
“Waste: it’s a national disgrace, whether you’re talking under-utilisation of labour or food waste. People accept 5% - it’s an absolute outrage.”
How did you feel when your CFO, Patrick Kennedy, announced he was leaving?
“He was a brilliant strategist and the youngest Irish CFO in a listed company at 35. Now he is going to be the youngest MD. I almost cried in frustration when I heard the news, but on reflection, I think it is a compliment to us that other people value him so highly as well.”
Why do you place so much emphasis on culture?
“It’s not comfortable to work in a chilled food factory. It is important to build a social dimension. We have a fantastic culture. It’s the only way to differentiate ourselves from our competitors.”
It takes chutzpah to make a connection between sandwiches and the gastronomic delights of Moro’s on Exmouth Market in London. But that is what David Dilger, CEO of Greencore Group, does in our interview at the restaurant. “We are trying to imbue the business with good food values,” he says as he picks through a starter of butter beans and morcilla sausage with mint dressing. “We spend a lot of time trying to inculcate the business with the culture of great food, great processes and great people.
“This is one of the restaurants our development teams keep an eye on. We have workshops here.One of our aspirations is to improve our products to restaurant quality. We are all about quality and increasing awareness of what consumers put in their bodies.”
It is a bold statement of intent from the man who has been with the E750m Dublin-based group since 1992 and steered it through the takeover of convenience business Hazlewood Foods in 2001. It is Dilger’s plan to turn the group, which is not only the world’s biggest supplier of sandwiches but also has a rapidly growing chilled ready meals business, among other interests, into the biggest convenience food company in the UK.
He is not the only member of staff searching for inspiration outside the Greencore box. Staff regularly attend workshops and classes and are sent on R&D trips overseas - to New York, Paris, Morocco, Italy. “Our culture is the only way to differentiate ourselves from our competitors,” he says, and beating the competition is all. “I am deeply competitive. It’s all about winning. The only constraint is that our behaviour must reflect our values.”
Dilger, who was last week awarded an honorary CBE, prides himself on Greencore’s stringent standards and admits the Sudan 1 crisis was his “worst nightmare”, hitting its cooking sauces business hard, though not touching its chilled ready meals business. Greencore is now understood to be pursuing a six-figure sterling claim with Premier. Dilger is reluctant to go into detail, but says: “The six-figure sum in sterling is currently in the process of being recovered from suppliers.”
He adds that the incident has been a big wake-up call to the whole industry. “It goes to show the importance of provenance in the food chain.”
That said, he concedes: “From a cost point of view, the amount involved in checking everything, while an attractive notion, would be massively prohibitive.”
Not least for a business that took on E950m debt with the Hazlewood acquisition. Prior to the deal, Greencore was known predominantly in the Irish Republic. It started life as the Irish Sugar Company and was the first Irish state company to be privatised in 1991. With life in agribusiness increasingly precarious thanks to the constant price fluctuation, it began to invest in higher-growth areas, culminating in the Hazlewood deal.
Greencore had to make some ruthless decisions when it swallowed what was effectively a food conglomerate with 38 individual businesses, he admits. Along with number one and two positions in convenience food in the UK and to a lesser extent on the Continent, Hazlewood brought with it the headache of having to offload a raft of 28 non-core interests.“There were sleepless nights,” Dilger says of the debt, which has since been slashed to E387m. “It was part of the reason the rationalisation had to be done so quickly.”
The group has also had to adjust to life with 8,500 of its 9,000 staff based in the UK. Dilger doesn’t see any problem in remaining Dublin based - in fact, rather the reverse. “We’re Irish-bred and proud of that, but this (the UK) is the market we’ve invested our whole future in.”
Chilled ready meals are central to that future. Following its £19.5m investment in new facilities at Warrington and Wisbech three years ago, Greencore plans to double capacity of chilled meals with a new facility near its Warrington base within the year.
“Chilled food will be the core of growth in this and other northern European markets,” says Dilger, who adds that Greencore is keen to extend business into “adjacent categories” and to extend geographically.
He is also keen to further diversify its customer base. Greencore is unusual in that it has a mixture of retail and foodservice customers. The multiples currently represent around 70% of its business and growing the rest of its customer base is “a really important part of our risk diversification strategy,” he says. He adds that though it makes sense to do less business proportionately with the multiples, he is in no way critical of their tactics.
As far as its own low-cost agenda goes, Greencore continues to strip out the “bad costs” he says, stressing that it has nothing to do with lowering the price of ingredients, and everything to do with streamlining the business’s processes and management structure.
Greencore must now do so without chief finance officer Patrick Kennedy, who is leaving for Irish bookmaker Paddy Power. Dilger is sorry to see him go, but is confident that Greencore will live up to the tenets in its new three-leaf logo: innovation, customer care and total lowest cost. He certainly sees no reason why it cannot double its market cap to o1.5bn within the next few years: “There are companies that produce great growth and no cash and others that produce great cashflow and no growth. Very few have managed both over a sustained period of time.”
We’re Irish-bred and proud of that, but we’ve invested our whole future in the UK. Chilled food will be the core of growth
Q&A
What is your typical day like?
“This week has not been typical but it illustrates the kind of pressures the job puts you under. My alarm clock went off yesterday at 4.03am. I flew from Dublin airport to East Midlands airport where I met chief operating officer, convenience food division, Tony Hynes, and the managing director of our cakes and desserts team. I then saw the cooking sauces team in Selby and met with the HR team. Then I had dinner with Phil Taylor, the MD of the chilled meals business. We eventually left the table at 11.10pm, so a pretty long day.
But then, I’m basically on 24-hour call. How could I expect my staff to work more or less 365 days of the year while I’m in bed?”
Do you have any major bugbears?
“Waste: it’s a national disgrace, whether you’re talking under-utilisation of labour or food waste. People accept 5% - it’s an absolute outrage.”
How did you feel when your CFO, Patrick Kennedy, announced he was leaving?
“He was a brilliant strategist and the youngest Irish CFO in a listed company at 35. Now he is going to be the youngest MD. I almost cried in frustration when I heard the news, but on reflection, I think it is a compliment to us that other people value him so highly as well.”
Why do you place so much emphasis on culture?
“It’s not comfortable to work in a chilled food factory. It is important to build a social dimension. We have a fantastic culture. It’s the only way to differentiate ourselves from our competitors.”
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