In early 2012, Tom Keogh’s new premium brand of crisps, Keogh’s Crisps, was just a few months old when a sizeable slice of fortune fell his way.
The buyer had invited the fledgling brand to picturesque Clontarf Castle for a meeting with Philip Clarke, who was then the head of the Tesco group.
Keogh’s sister, Tina, was at the booth when Clarke stopped by to try her fries.
To say that Clarke enjoyed the show is an understatement.
“He turned around and said, ‘These are the best fries I’ve ever had,’” Keogh recalls. “That led to phone calls from Tesco’s head office in Dún Laoghaire asking, ‘what the hell just happened?’
“It led to us getting Tesco listings across the UK, I think it was 75% of all their (store) assets by the following St Patrick’s Day.
“At the time, I had a small fryer,” he adds with a laugh.
Keogh’s job was cut out for him. But, like the oil that fries thinly sliced potatoes to their crispy mark, the heat was on, and the temperature was certainly high.
“I had to decide: are you going to risk this exposure? If there had been a wrong digit in a date code on those bags, I was out of business.
“We keep going. We work day and night for weeks to produce that order. I will never forget the bins lining up at the farm here and loading all the lorries to go to the UK to supply Tesco.
“They sold well in stores and we got paid,” he adds. “I was doing cartwheels, it was amazing.”
Considering Keogh’s growth since those heady days in 2012, Keogh must still be doing somersaults.
His gamble in 2011 to start an Irish brand of premium crisps in a market dominated by the likes of Germany’s Tayto and Britain’s Walkers has paid off: Keogh’s now accounts for around 10% of the crisps market here.
Keogh’s Crisps, which also recently launched a popcorn brand, posted a record year of sales last year with profit for the 12 months to the end of March 2021 up 14% to €113,408.
The company, which employs more than 100 people, currently has cumulative profits of €1.34 million and is investing €2.5 million to expand production capacity by 50% in response to growing demand.
Tom Keogh says that in his last fiscal year, which ended in March, business continued to grow by 20-30%, with exports rising rapidly. Nationally, Keogh said the market growth had been “extraordinary.”
He is now taking a deep dive into the business to identify future opportunities and says they are plentiful.
His strategy is already taking off.
Last week, Keogh’s reached an agreement to supply Singapore Airlines and is already looking beyond its recently announced production expansion.
Keogh says Keogh’s Crisps is considering opening a US sales office in the medium term. From an operations standpoint, Keogh said the company could also move to a greenfield site on the family farm within the next three years.
However, the cost of building materials is clouding that ambition for now.
A career in the potato world has always been in the cards for Keogh. She grew up on the same nearby potato farm that her family has farmed for more than 200 years.
Walking through the main potato storage and chip manufacturing facility, it’s clear to see the affinity Keogh has with the area.
The family home is right behind the brand’s packing line. What is now the manufacturing plant was once a warehouse full of potatoes that Keogh and his brothers used to play in.
However, it wasn’t always time to play on the potato farm. Keogh worked hard from an early age, developing a genuine interest in the business, instilled by his enterprising parents.
“I think that every farmer in the country has to have a head of business. It’s in the genes.”
After school, Keogh decided college wasn’t for him. Instead, in 2000, he opted to work in the family’s potato distribution business.
After several years of grinding its teeth in distribution, the recession hit in 2008. Its potato business remained strong, but Keogh’s suffered from some bad debt like many food companies.
“We’ve had some really big customers go into receivership or refuse to pay their bills,” he says.
“Just for the family business that went into that recession with serious reservations behind us, it would have been really hard to pull through.”
However, Keogh was having a great idea. He noted a 50% drop in consumption of fresh potatoes among Irish consumers between 2002 and 2012.
“The writing was on the wall,” he says. “We had to do something.”
Keogh argued with a buyer about selling Irish potatoes to the US, thinking Irish Americans would buy in bulk.
There was some interest, but bureaucracy killed the idea until a US official recommended cooking the potatoes and ultimately circumventing regulations.
“So I went and set up a neat business,” he says with a smile.
Keogh started with a small fryer, turning a ton of potatoes into fries per week. Now he consumes 14 tons a day.
Although he initially pitched his idea as focused on Ireland’s food markets, supermarket listings came in fast and plentiful. Keogh got his first with JC’s Supermarket in Swords and major Irish retailers soon followed suit.
International interest also began to grow. Keogh’s won several contracts with buyers around the world, including with Emirates airline in 2016 and several in the vast US market.
Costco’s purchasing manager once visited the farm, Keogh recalls. The numbers still ring in his head.
“That shopper was in a potato field with me when he told me the value of the fries he buys for Costco. I almost fall. It was amazing.
“It gives you an insight into the Irish market and how small it is.”
Understanding the importance of international scale, Keogh’s Crisps is now found in around 17 markets, accounting for around 25% of revenue and growing.
Since its first expansion in 2012, the company has reinforced production capacities multiple times.
The most significant was in 2016 when it added an extensive bagging line. He also added more fryers in 2018.
“Here we are in 2022, and we’re increasing all of that by 50%,” says Keogh.
Getting to this point was helped by a record year that coincided with the Covid-19 pandemic.
During the pandemic, Keogh’s share-bag and multi-pack sales soared, fueling a strong year as consumers sought out premium treats while sheltering at home.
However, other parts of the business suffered, particularly its boost business in food service and international exports.
Keogh now says that the impulse business, which is closely associated with hungry office workers, rebounded in the last quarter.
However, while Keogh’s Crisps may have jumped out of the frying pan by Covid-19, it now finds itself in the fire of high inflation like many other food producers.
“Going forward, we’re in completely uncharted territory,” Keogh says of the cost pressures facing the company.
Looking at the components used to make his fries, Keogh says there has been a 300% increase in the cost of sunflower oil and the fertilizer used to grow potatoes. Gasoline prices are also now a considerable concern, with Keogh’s investment in the factory aimed at bolstering efficiency to combat price pressures.
So are price increases possible?
“We are working with reservations,” he says.
“While we are talking about the pandemic, the Irish consumer has been extremely good to our brand. I would be very reluctant to turn around and return price increases to the market for cash-strapped consumers.
“That’s our plan at the moment,” he adds.
“Obviously if this continues as it is, that’s not going to be feasible in the long run. So at some point we’re going to take a look at what we do from a product cost structure.”
The changes are underway. Keogh said manufacturers are reducing the number of in-store promotions.
Supply chains are also extended throughout the sector. Russia’s war in Ukraine has drastically reduced the availability of sunflower oil, although Keogh has still been able to source some from the war-torn country.
The most significant change for Keogh has been overseas shipping and logistics. For example, he says the price of shipping a container of French fries to the US East Coast has risen from €3,000 to about €12,000.
“It’s not about how much you’re making, it’s how much you’re losing,” he says.
Keogh has continued to invest in the US market despite the problems. He admits that he has been forced to raise his prices there.
While continuing the US business, Keogh’s Crisps is now focused closer to home, bringing cause for cheer amid signs of economic gloom. It is refocusing on the UK market, having recently struck a deal with Waitrose and in Europe.
The success of Keogh’s Crisps has drawn attention, admits Keogh. However, a sale or equity investment is out of the question.
“I have been approached several times about the possibility of selling the business,” he says. “But it’s not something I would ever consider.
“I’m enjoying this too much to even consider selling it,” he adds. “That’s a great thing to be able to say.”
Even with those economic clouds looming, Keogh believes the sun will continue to shine on the crisp mark that began in 2011 during the dark days of the last economic downturn.
“We are really well positioned to deal with the challenges that will come our way in the coming years,” he says. “And there are considerable challenges there.”
Founder and CEO of Keogh’s Crisps
Westpalstown, Oldtown, Dublin
Wife Eimear and children Peter (6) and Heather (4)
Gormanston College and Smurfit School of Business
He has worked on the family farm since he left school.
morning gym session
Enjoy many of the Star Wars deliveries.
Favorite flavor of Keogh’s Crisps?
Keogh’s Atlantic Sea Salt Irish Cider Vinegar Crisps
The best selling flavor?
Mature Irish cheese and onion
What has been your most valuable lesson in business?
Ultimately, business is about people, hire great people in key positions, who naturally embody your company culture and have the experience and desire to succeed.
What advice would you give to a food brand starting now?
Focus on the taste of the product. Today there are so many new food companies that focus on marketing. Marketing will get you a sale. If you want a repeat sale, your product has to deliver.