Posted on Wednesday 17 October 2012 by Ulster Business

Diageo

Michael Hailes, Baileys, Mallusk plant manager 

When Baileys was first launched in 1974, its first production run was for somewhere in the region of 100,000 bottles that year.

Today, the Baileys plant in Mallusk can turn out that many bottles in less than eight hours.

In fact, the plant has the capacity to blend, produce and pack up to 10 million cases of Baileys Original Irish Cream each year, the equivalent of 90 million bottles.

That level of production has been needed because the No.1 selling cream liqueur is being exported to an increasing number of countries, with demand continuing to rise.

"It has been the most successful spirit brand launched in the last 40 years and we want to keep growing that in the same way," says Michael Hailes, who has been Baileys Mallusk plant manager for the past six years.

"It deserves its place on the shelf among the top spirit brands. In terms of spirit exports in Ireland, Baileys accounts for 50% of everything. The scale is really huge," he added.

Two thirds of the global production of the liqueur is produced here in Northern Ireland, with the remainder produced in Dublin, where Baileys has another site which also manufactures a number of other Diageo products.

In the grand scheme of things, the island of Ireland is a small market for the drink. Over 95% of what is produced at the Mallusk site is exported to in excess of 130 markets across the world.

The US, GB and continental Europe remain the biggest markets for the product, but Diageo is starting to also see new markets open up. It sees Eastern Europe as a big potential market because of the emerging middle classes and in Russia has developed special promotions featuring highly decorated and beautifully designed bottles by recognised designers such as Stephen Webster and Philip Treacy. Interest in the brand is also growing in the Far East, Latin America and even Africa, where milk based drinks would not traditionally have been popular.

"Our Christmas rush now starts in July," says Hailes. "We start exporting to Australia and Asia by the end of the summer and then move closer to home. The nearer it gets to December we do the Far East, Middle East, Europe and then GB. It's full on at this point in time, which is fantastic for the company.

"There are exciting times ahead for the brand in 2013 with some design changes and marketing campaigns designed to widen the appeal of Baileys to both a new demographic, and to make people who already drink it, think about it differently."

Having opened up a whole new category in cream liqueurs which didn't exist previously, Baileys has recently launched a number of flavoured variants, the latest being Baileys Orange Truffle.

Diageo is keen to change the perception of Baileys as being just an after dinner drink popular during the winter months and to widen the frequency and opportunity for people to drink it.

"We're trying to encourage people to drink Baileys at other times of the year because it's not just for Christmas," says Hailes. "Baileys has the highest number of 'adorers' (people who love the brand) of any brand, we just want to encourage everyone to enjoy a Baileys whatever the occasion.

"It is a really great brand with so much potential. It is the number one liqueur brand in the world and even in the whole premium spirits category it is a top ten brand, in amongst the likes of Smirnoff vodka and Johnnie Walker whisky. It is competing now but the potential for developing new markets is fantastic."

ECONOMIC IMPACT

Despite its strong reputation in the industry, not a lot of people are aware that 65% of the total Baileys output comes from one factory in Northern Ireland.

Named as Diageo's 'Plant of the Year' and recipient of the Northern Ireland Quality award in 2010, Hailes says the Mallusk site has come a long way since it was founded ten years ago.

At that time there was nobody at the site with bottling experience. Now it is an efficient, high performing, lean organisation where the performance, attitude and pride its staff takes in their work are held up as examples of World Class to other plants in the drinks giant's global network.

"At the time the plant was built it jumped out at me how well laid out everything was. Ten years in the plant still looks like it is brand new. You could probably get the same technology squeezed into a smaller space these days, but it is just as highly automated and the benefits of that technology still shine through," says Hailes.

The plant is well equipped to react to what the market wants, whether that is supplying value added packaging for special promotions or different size packs for developing markets with lower throughput than its core regions.

As much as 60% of what is produced is now shipped directly to its final market destination, meaning the company has had to reduce warehouse times and really innovate in order to maintain high customer service and product quality.

Of course, a business on this scale also has a hugely positive economic impact on the region.

Diageo is a company that relies very heavily on local producers for Baileys. Over 80% of all ingredients and packaging are sourced on the island of Ireland – including bottles, cream, Irish whiskey and packaging.

"The infrastructure that we support is significant. Over 5% of all of Ireland's milk production goes into Baileys. That's huge, purely on raw materials," explains Hailes.

"We employ people from across Northern Ireland in various areas, engineering, security, facilities management. We have 45 permanent staff and a contractor base of 20 permanently on site. As a seasonal product we also flex up our work force from July to cope with the Christmas demand," he adds.

Northern Ireland has finally got around to recognising the importance of the food and drink sector to the future of the economy here.

In that context alone the Baileys story is certainly one that's worth dwelling on.

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