As a Dubliner with no farming or nursery-keeping background, Tom O’Hanlon stood out among his peers studying horticulture at Warrenstown College in Co Meath. Most of his fellow students had family farms to go to when they graduated. O’Hanlon had to find his own direction.
He started growing herbs in his back garden in 1988 and, over the last 27 years, O'Hanlon Herbs has become a substantial enterprise employing 55 people at its two-acre herb farm in Glenealy, Co Wicklow.
The company's biggest customers are Tesco, Dunnes, Aldi and Lidl. All are exacting operators that drive a hard bargain but O'Hanlon is not complaining.
“Supplying the multiples is not without its challenges but overall it’s good for your business because quality expectations are so high. You can only meet their requirements if you’re a professional, quality driven team pulling in the same direction,” he says.
He became an herb grower by accident. “I wanted to grow produce but only had a small space and not a lot of money. That ruled out anything needing scale and resources.
“My neighbour was really into herbs – well before they became fashionable – and I thought there had to be potential there and began growing and selling potted herbs door to door. I worked part-time elsewhere to support myself but it was a good way to cut my teeth.”
In 1992, O’Hanlon found a suitable site in Wicklow and began commercial herb production. He approached the buyer in what was then Quinnsworth and, following an initial trial in 10 stores, the company’s products became fully listed.
Quite daunting
“That gave us the all-important traction a start-up needs,” he says. “When Quinnsworth became Tesco, it was quite daunting but they saw something in us and have been extremely supportive and encouraging ever since.”
By 2008, O’Hanlon Herbs was producing about 1,000 pots a week. This has now grown to 65,000 pots.
Weekly sales of packet herbs have gone from some 20,000 in 2000 to about 80,000 now. The potted herbs come in 10 varieties and the packets in 15 varieties. Some specialist herbs are produced for O’Hanlon by satellite growers.
He says herb sales took off in Ireland around 2000 as people became more adventurous in their cooking. In theory this should have been good for the business. In fact, the growing demand created a lot of pressure, not least because herbs are picky about their conditions and without a temperature-controlled environment are a seasonal crop.
O’Hanlon knew the company needed to take a quantum leap in order to produce the volumes required year round. On the cusp of the financial crisis in 2008, he invested €2 million in state-of-the-art glasshouse facilities with grant assistance from the Department of Agriculture.
“It was pretty scary going from pedal power to turbocharged power overnight but it gave us everything we needed in terms of temperature control, automatic irrigation, and heat and light control,” he says.
Just a year later, however, the company felt the full force of the recession when a number of contracts were lost, essentially on price. This led to redundancies and a reining-in of costs.
Large players
“Losing contracts makes you very aware that you can never assume your business is stable when you’re dealing with large players. However, we couldn’t have the scale we have just supplying corner shops. We have independent customers and they are very important to us, but when exporting is not an option, you need all types of customers.”
As the recession deepened, O’Hanlon decided a radical initiative was needed to ensure the company remained competitive. Heating is one of the company’s biggest overheads and in 2012 he converted the farm from oil to woodchip. It was a big investment but it meant the company’s products remained price competitive. This proved key to new business wins with both Lidl and Aldi.
In the last three years, employment at the company has risen by 10 people while glasshouse space has been increased twice in recent years.
The company has also become far more pro-active in terms of getting its name out there. “It was Dunnes who suggested that we should really step up our branding – which we have done – and they gave us the platform to promote it,” O’Hanlon says.
In an effort to deepen the company’s relationship with Tesco and with an eye to the future, O’Hanlon also signed up for the Tesco Taste Bud/Bord Bia supplier development programme. This helps indigenous food producers to secure their listings with Tesco here and overseas.
“Participation was a real eye-opener because it challenged how we thought about the business,” he says. “It emphasised that we needed other strings to our bow and that we should take our established reputation for fresh produce and build on that.
“A key differentiator between our herbs and others is their Irish provenance,” he adds. “But we need people to know we’re Irish so we are investing in new packaging to include the Love Irish Food logo where appropriate.
“I think customers want to support local producers.”
