Research and Development in the Irish Food Sector

Patrick Daly:                     Hello, this is Patrick Daly and welcome to Interlinks. Interlinks is a program about connections, international business, supply chains, and globalization and their effects on our life of work in our travel over recent times. Today on the show, we’ll be talking to Darren Harris, a consultant trainer and university lecturer based in Dublin. Darren has two interesting and complimentary roles currently. One is he is a research and development expert for the specialty food and technology sector, helping those with R&D tax grants and grant reports in his private consultancy role. Then he is also a lecturer in bakery and pastry arts at the School of Culinary Art and Food Technology at TU Dublin. Welcome Darren, and thank you very much for being here with us today.

Darren Harris:                  Thanks, Patrick. Hello to your listeners, and thanks for your time. It’s a pleasure to share some time with you here today.

Patrick Daly:                     You’re very welcome. Maybe as an overview, Darren, could you give us an idea of your career to date and how from that culinary and gastronomic background, you ended up in this position of being an R&D consultant to businesses here in Ireland?

Darren Harris:                  Yeah, thank you. I suppose when you hear my career path, you might be tempted to go “Just he’s a chef or a baker.” I’ve had quite a circular career path, Patrick. I was a lot more scientific and analytical than your average bakery and chef out there, and no disrespect to them, I have an absolute passion for food, but I always wanted to do a deep dive. I wanted to understand operationally how business worked and I suppose that led me into other disciplines beyond the bakeries and the small areas in the morning or the kitchens at small times in the evening. Basically, I found myself in a halfway house between those two different disciplines.

                                           An opportunity came up to do a master’s in culinary innovation and product development. At that point then, I realized that not only did I have a stronger insight into science, I was fundamentally driven by understanding how things work. That then brought me into large scale food manufacturing expertise. I’m a lot stronger on the operational side, speaking to complex teams, dealing with procurement teams. Also, I suppose what that also did was it brought me in the journey where I realized that there’s actually a technical skills gap around analysis and writing and technical report writing for the food industry. That’s a whistle-stop tour of part one. Part two is my culinary education for TU Dublin.

Patrick Daly:                     Okay. What does your current work entail then on both sides? As an R&D consultant on the one hand and as a university lecturer on the other, and how do the two compliment each other if they do?

Darren Harris:                  Yeah, absolutely. I’ll start with the university side, I suppose. University side is that you’re dealing with the new recruits that we say people that have a passion in the area around bakery, culinary arts, designing new products, making things taste good, et cetera. But you’re bringing those learners on that journey, Patrick. You’re trying to upskill people, theoretical and practical skills in a university environment, it’s a very safe environment I’m going to use that term. We challenge the students, but fundamentally you’re not going to lose your job if something goes wrong. The whole idea is to learn and be mentored on that journey. But where that overlaps with industry is that if you flip that out in the industry, you’re only as good as your last performance review. There’s often a concern about wanting to show that you made an error or you learned from something. That’s fundamental R&D.

                                           Now, I’m not espousing that we deliberately go out of our way to make errors, but if we can train people to make better errors and analyze them quicker, respond quicker, that actually allows us to improve our processes, our products, and our formulations and our profitability. What that in turn does then, if that’s captured right, allows people to draw down grant funding and R&D tax credit. They are linked, but they’re on a spectrum of experience and skills.

                                           In between that you’ve got life skills underway, as well. But again, fundamentally when you’re in industry, we can’t simulate an education. We cannot simulate a workplace environment no more than industry can simulate an educational environment. They’re complimentary, but they’re separate disciplines. Where I saw the gap was coming in, being able to speak to the people who are at the coalface, giving them the key information, the linguistic skills, the data, and how to get these reports done quicker, which then helps them to do their jobs better as well. But it’s critical to get them out of that environment and hold them into a learning space for a short period of time with the house.

Patrick Daly:                     The people you’re training in the courses in the university, are these people who are going to end up working in restaurants or hotels or more in the food industry, in food manufacturing or processing industries?

Darren Harris:                  Yeah, great question. You’ve always got people who are passionate and want to set up their restaurants, or their bakeries, or their bakery cafes. That cohort is always going to be there. You are seeing quite strong demand from food manufacturers who are looking for people who understand what good looks like at a recipe concept stage, and they will mentor those types of students on that journey. You’ve got that split, the creative types, the chefy artistic types, and you’ve got the science types as well. But what you often find is that there’s a schism because students who are learning in the university don’t necessarily always see themselves as manufacturing material. They don’t always want to work there.

                                           There’s nearly a sense that it’s not sexy enough or it’s not glamorous enough. They can use that terminology and that’s an optics issue that needs to be addressed. It’s quite common in the UK as well, that we’re having difficulties with bringing in new millennials and new recruits into the business. But that’s also down to historical factors about maybe lack of investment, a lot of money being tied up and maybe not, no forward planning as well. That’s a communication gap as well, that a lot of industries, actually manufacturing have to overcome.

Patrick Daly:                     Maybe the students think that “If I wind up working in industry, maybe I’m not a talented chef or cook,” or whatnot. Do they think maybe it’s lower skills?

Darren Harris:                  Do you know what I think part of it is? Because I do actually get my students on site visits quite a bit, right? When they see the site, they’re always incredibly impressed by the technology, but it’s really hard to visualize a large scale state-of-the-art production plant in your mind’s eye unless you’re actually walking through and it’s real. A kitchen, we’ve all seen a kitchen with a chef having a tantrum or we’ve all seen, it’s been romanticized in the media. You don’t have that. Maybe we need a Gordon Ramsey type expo, say, for manufacturing and people can come in and fix your manufacturing problems and glamorize the industry a little bit. But that is a big issue. It’s a perception, optics issue. But when students realize that there are graduate programs out there that starts to get their interest a bit. It’s just that engagement piece I think is a bit of an issue, Patrick.

Patrick Daly:                     In your consultancy work, how would you say your clients are better off after having worked with you?

Darren Harris:                  Yeah, great question. Everybody’s stretched, right? Why should they go and engage yourself or risk it, right? First of all, you need to get out of your own skin when you’re actually looking at a project. I often say to clients “Change your facts, change your tax.” It’s actually about your information. I’ll give you a quick case study, actually, is probably a good way to do this if that’s all right. We had a client that was… I’m not going to name the client, but I’m going to give you a close enough to the actual figures here. They’re able to provide a quote to a customer for producing approximately a hundred units per hour, high-end units per hour, to a, now this is a complex products. They were producing a hundred units per hour in a large scale manufacturing environment.

                                           When it’s talking about units, I’m talking about palletization as opposed to individual products here. Producing a hundred units per hour, but they were actually able to run their manufacturing line 50% faster than the bomb. When they were talking to their client around the bill of materials and gave the quote over the manufacturing figured out a way to run the line 50% faster, which meant in about five and a half hours you would’ve produced what you normally might’ve been able to make an eight-hour shift, so far so good. You with me? Okay.

Patrick Daly:                     Yeah.

Darren Harris:                  Now, what this meant was was that because they’re running the line, faster problems occurred. They had downtime during that eight hour shift, but when the manager came in the following morning, they were still able to hit that 100 units per hour over eight hours as a general target. They had two and a half hours of downtime, but it could have been making products, but it wasn’t picked up on because they were still hitting that 100 products per hour over eight hours. What actually that meant was from a procurement point of view, from a packaging raw materials point of view, the guys in inventory in the stores couldn’t keep up because one day the production would run like a dream and the next day it’d be a disaster. They’d be using a lot more consumables on the products. This didn’t become visible to the manufacturer until I actually did a deep dive through the processes and went, “Hang on a second here. There’s serious discrepancy on what you’re actually using.”

                                           Nobody wanted to admit there was a problem, because everybody’s KPIs were associated with delivery of 800 units over a shift or minimizing waste. This is all hidden under the umbrella of R&D. That’s just a really quick analysis in relation to the extra set of eyes that I can bring. Now, more importantly, if you’re capturing the information right, you can draw down funding. My services pay for themselves. I often say to clients, “Clients, if you use my services, they’re for free. But if you don’t use me, there’s a cost because you won’t have resources to actually do technical writing in one of these businesses,” because there’s fear and a concern about what good R&D writing looks like and people, the human nature will be, “Look, I’m too constrained. I don’t think we actually qualify for this. I don’t want to have a technical audit from revenue. It’s an extra headache.”

                                           Fundamentally, the R&D or the NPD department, the better they are, the harder they’re working. The more proficient they are, the more likely they are to actually say, “We don’t actually qualify for R&D,” and that’s a constriction and that’s a systemic issue that I’ve seen in the food industry.

Patrick Daly:                     It sounds like from what you’re saying that the value is not just in the deliverable, which is some sort of a well-written application, but it’s actually in the know-how that you’re bringing to bear that has a much higher value than the deliverable. At the end of the day, the deliverable’s just a piece of paper. Would that be fair to say?

Darren Harris:                  The deliverable is a monetary gain, so there’s a monetary gain there. There’s actually, there’s a recruitment benefit as well because if you’re actually training people to do better R&D, you’re going to have production line operators. You’re going to have people who are shadowing the R&D lead, and you’re going to be actually training them on the job as well and upskilling them. As a consequence of drawing down grants and R&D tax credits, you’re actually train your workforce to better react as well and respond to issues that they can see on the production line, and also be more aware of opportunities in the marketplace. You quite often find that staff are a bit more enthused about their work, as well. They’re quite a bit more engaged. They say, “Oh, I saw this when I was around [inaudible 00:12:17] and I heard this is a thing. Is this a trend?”

                                           You get this virtuous circle of ideas coming back into the business rather than people just going in doing their rate or the 12 hours in manufacturing and going home. The other thing about it is as well is that you quite often find that there’s a better tenacity with the staff, as well. When they actually have problems, they know how to resolve the themselves, where they were always having to reach into the senior management team as well who are already constrained themselves. There’s a big play here. It’s not just the financial piece. It’s actually upskilling the workforce and actually retaining talent in the business, as well. That’s quite often not picked up on until it actually happens and you get quite positive feedback from people once we start implementing these processes.

Patrick Daly:                     Yeah, upskilling and staff retention are huge issues these days. We know with the way the labor market is and challenges that companies are facing, and it’s probably even in the longer run, probably more important than the grants and so on. But what is R&D in general terms and what constitutes R&D from the point of view of tax breaks and grants in the Irish system, and who provides those grants and tax breaks?

Darren Harris:                  Okay, yeah, great question. There’s a really, really good and strong, I’m just using very vanilla language here, just to engage with the people as many as possible. There’s a very strong ecosystem of grants and R&D tax credits available in this country, be it through the IDA or Enterprise Ireland or your local enterprise offices, as well. Now, to be mindful about this, the Irish Revenue also have R&D tax credits. You have grants and you have R&D tax credits. The definition of what R&D actually comes from is from an OECD. Now, we’re not going to bore you, but it’s essentially the resolution of a scientific or technological uncertainty. What does that mean? First of all, you need to have a competent, professional, somebody who knows how to do the job, with some qualification and/or experience has been working there. It could be like a line manager or a department manager. They have to be located in the country or at least be working on site quite a bit.

                                           What does a scientific or technological uncertainty mean? Using an example here for the food industry, it’s data. It’s specifications around the product. It’s your settings on the machinery, it’s your photographic records, it’s your email summary reports on how a production shift went, how you fix things. What drives R&D.? This is probably a bigger and more relevant question for your listeners here. It’s going to be procurement, it’s going to be cost saving analysis, it’s going to be contingency supply, it’s going to be reformulation, it’s going to be issues such as government legislation coming down the pipe going, “Can you reduce the sugar in this? Can you change the sodium in this? Or can you make this more sustainable? Can you make this in a matter that might have a different heating element, therefore that could affect the carbon outputs associated with this?” There’s a big play here. It’s not the product per se, it’s the process, the raw materials and the thinking around the product. There’s a big Venn diagram-

Patrick Daly:                     Even the supply chain and the logistics, maybe.

Darren Harris:                  Absolutely, absolutely. It’s a big Venn diagram about this, and I suppose I really appreciate the opportunity to share this because maybe with supply chain, you guys are focused on outside a macro, there’s people who know how to get things done on R&D, they probably know what’s coming up from a trends or constriction perspective or skills perspective, because they’re on the front lines of delivering, right? They’re at the bottom end of the food chain in a sense, but they also are talking to other movers and shakers in product development, and they can probably feed up information that might be very valuable to procurement, supply chain, and logistics about what’s going to happen in the next 12 to 18 months. It’s good to talk. It’s that BT slogan, but it’s really important to get as much data as you can.

                                           Sometimes that qualitative data can provide a lot of insights as to regards what’s applicable from an R&D grant perspective and also what potentially can go in from a tax perspective, as well. Overall, you could probably write off between 60 and 80% of your costs associated with the carrying on of R&D, raw materials, energy, staff, lab analysis, technical reports, consultants. You could be looking at mass balance weights if you think you’re losing some weights there, as well. Once it’s conducted in a rigorous manner and you set out your project task properly, then you could be looking at R&D. It’s a fantastic opportunity for companies on the margin.

Patrick Daly:                     I assume as well, a lot of these companies and the Enterprise Ireland are involved is because they want these companies to be exporting. What challenges do Irish SMEs in the food sector face and actually doing credible or indeed that’s going to be successful here and abroad?

Darren Harris:                  Okay, so we’ve got an issue, right? Ireland’s known globally for its food credentials. We are the green island, we’re the food island, okay? We’re known for the quality of a raw produce. Brexit, I hate to bring up the B word, but Brexit’s been a massive issue, especially around fresh produce, making sure it gets to where you want it to get to in a certain amount of time. There’s additional customs checks in there now, as well. That’s one problem. From a processed food perspective that has a extended shelf life, be it map, be it frozen, be it canned, whatever it is, we have a constriction in Ireland in that we don’t have enough unless you want to go on the private label or you want to go on the businesses of somebody else. We don’t really have enough manufacturing centers for the food industry bearing the output that we do in this country.

                                           The food and beverage industry is about 30 billion a year annually. Our exports going from where we think it’s about $8 billion, so it’s not an insubstantial chunk of change. What we have is now we have a lot of incubator spaces, but we don’t have enough of that median size producers where you’re just about to start scaling up properly and going over to Europe and rolling stuff out. Historically, we were looking at the UK, but now we have a problem. We can’t do that anymore because Europe are walloping them now with legislation, as well. It’s payback on that. We’re looking a little bit at France, but that’s a whole other opportunity there. Then again, if you do R&D in this country, you can claim back your R&D tax credits in a different country, but the records need to be up to scratch.

                                           Maybe there’s some differences in how the French might take some records for versus what you’re doing from Ireland. I suppose that’s where I’ve seen the gap here as well. It’s about helping companies know what needs to be captured so they can absolutely catch their bonafide is already the expenditure. This is meant to assist Irish companies involved in risky activities. That’s new, the unknown or trying something you haven’t tried before. Your competitors might be doing it, it could be a me too product, but you just might not have the information on how to do it. That’s your inherent risk involved in the process. Once you start doing a deep dive in this, it really starts jumping out at you. If you haven’t gone straight to production, then there’s a reason for that.

Patrick Daly:                     Ireland on the aggregate figures is an export powerhouse, but when you break that down, the vast majority of our exports are driven by a relatively small number of multinational corporations and some large Irish companies, the likes of in the food sector say, or [inaudible 00:20:10] in Gambia and these people. But there’s lots and lots of small and medium-sized Irish companies, and I think they were perhaps complacent that when you talked about export, it was always the UK, similar culture, similar taste and all that kind of thing. Now, I think we’ve been poor at this diversifying into countries like Spain, and Italy, and France, and Germany and so on, because there’s a different type of understanding, different tastes, different nuances, different packaging and so on. Has that become a particular challenge since Brexit?

Darren Harris:                  It would. Because there’s a constriction. There’s only so much local expertise you have, and then suddenly the whole market has changed. I suppose in the companies that you’ve mentioned, the larger the big boys and girls, they would have those resources available to them. It wouldn’t be their first rodeo, but there’s a good ecosystem of supports here via [inaudible 00:21:12]. Also, I suppose there are some people I know have to operate in a few different jurisdictions, I suppose where we… Sorry, I say where the food industry has been trying to target quite a bit is actually the Middle East high value products. There’s a bit of a move for Irish cheese, would you believe, in dairy over there, because it’s very much a premium product. Again, yeah, there’s market sensibilities and nuances over there. I’m just going to be, matter of fact, you’re not going to put… This is meant to be all encompassing, but there’s sensitivities and cultural sensitivities around family or activism and stuff like that.

                                           Quite often your advertising and your branding has to be cognizant not only of operating in the EU where maybe a pride logo, for example, is very well accepted, but also you might need to be thinking about how that might be taken in Middle East as well. I’ve heard some stuff about blowback as well, about maybe companies espousing too much for one persona in EU and then different persona over there. It just has to be congruent with what you’re doing and part your bigger long-term strategy. Again, it’s just meant to be a friendly observation as opposed to any kind of veiled criticism. It’s not that at all. I want the Irish companies to succeed, but if you’re going to play in the global stage, you need to be thinking about the ramifications about cultural sensitivities and what works, because people do travel around a bit, as well.

Patrick Daly:                     I might just change tack slightly away from the business per se, and maybe just explore a few things with you as Darren Harris. What would you say is the most important life lesson that you’ve learned that stood to you throughout your career?

Darren Harris:                  There’s been loads, I suppose just believing yourself and just keep on going. At one stage I was a chef and I was just like, “Okay, what am I doing this for? I like it, but I need change.” I wanted to get into radio broadcasting and I fancied that, but if you just keep on whittling away at stuff, you’ll get there and it’s to just enjoy the ride. I’ve done a lot of personal development and I got mentored by a guy called Bob Proctor you may or may not have heard from. He’s quite big in the States, Proctor Gallagher Institute.

                                           That was all just about keeping your thoughts focused, being aligned and being congruent in what you want to do and trying to think about what an elegant life is and to really try and get that. It’s all about consequences. We can get bombarded with stuff every day. For me, it’s just follow through, know that you can do it. If you believe you can, you’re already halfway there. I suppose if anybody who’s listening, that’s something I do actually try and say to my students as well, just to try and see themselves in a different light and keep on chipping away, there’s so much negativity out there, Patrick. It’s scary.

Patrick Daly:                     Yeah, what you said reminds me a little bit a mentor of mine said something like this to me. You’ve probably heard it out there as well, that 50% of success is actually turning up. As you say, you have to keep chipping away at what you’re doing and the opportunities will come for you. Another little question, so last two or three years that we’ve been through this whole Covid experience, how has that changed or refined or reinforced any of your own personal views or beliefs about work, about life and about business?

Darren Harris:                  Well, I properly got going actually and launched my food business during the start of Covid. I was just getting on with it. Again, I suppose you have this idea of creative destruction that something’s going to break and a new opportunity bubbles up. For me, it’s just be authentic, stay on target, stay on message. Try not to become subject to the wind’s change too much, because follow the trend is your friend, but not a fad. I think there’s always going to be statistics telling you that “This is going to be the next big thing,” but if you look at the data, the more information you have, the better. I suppose you’re asking me about Covid and everything else. There was a lot of stuff we didn’t know at the time, but the fundamentals were the food industry was the fourth emergency service. That’s one thing we learned.

                                           If you told me my status as a food employee was going to be equivalent to like an ambassador, you’re getting waved through guarded checkpoints and all this stuff. I would’ve laughed at you a few years ago, but it was true. Everybody realized how important the food industry was. It’s an evergreen industry. We ain’t going to go out of business. We need to bump up production by 50% in the next 30 to 50 years. That’s a scary stat. We need to focus on this because, and I’m not selling fair here, but if this isn’t properly managed, there could be food shortages. We need to get clever. We need to get motivated and we need to invest. I suppose that’s the other thing about the R&D thing. There’s a pro bono for here. Apart from having fun, to having fun with my passions, saving companies money, it’s actually a bit of a mission.

                                           We know how important food is, we know how it brings people together, and we know how authentic it is. You can’t force somebody to eat something they don’t want to eat. There’s a certain honesty about it. If you don’t like it, you go off and buy something else, I’m not forcing it on you. I just think that it’s made people appreciate what they have a lot more over the last few years. That’s probably the only a good thing. We sped up and we slowed down. It’s a weird thing over the last few years. It’s hard-

Patrick Daly:                     You’ve been there, you’ve been successful, and I’m sure you’ll continue to be successful. But as you know, success is not a straight line. Everybody faces setbacks in their career or in their life. How do you approach setbacks? What do you do? What do you think? What do you say to yourself to get yourself back on track when you’ve had a setback?

Darren Harris:                  It is only temporary. It’s a blip. This too will pass. It’s the only thing that really works, because you can get into the doldrums and start being hard on yourself. “I should have seen this, should have, would have, could have.” It’s just a case of dust yourself off, look at it, see if you can get the learning off. I know this sounds a bit trite, but it’s just so true. Nobody’s going to tap you on the shoulder and say, “It’s going to be okay.” Maybe your wife or your partner or whoever it is, but you’ve just got to try and take a learning out of that and do read the books on, I’ve been reading books on CEOs and the attributes of CEOs, and there’s so much content out there to help focus your thinking on stuff.

                                           But you need to be plugging into this all the time for yourself and don’t let other people tell you what to think. For me, I suppose critically, it’s just if I have a knock, I’m going to pick up something on somebody who was successful. I’m going to read that. You can only think one thing at a time. You can’t think left and right at the same time. You can’t think up or down. If I hit a wall, I’m going to read something positive and it’s going to get me off it. That’s the most simple and eloquent answer, and sorry about the roundabout style, but it’s the truth that it helps me.

Patrick Daly:                     Well, many thanks Darren for being here with us today. It’s been an absolutely pleasure to chat with you. Thanks again. Until next time, keep well and stay safe.