Majority of businesses remain optimistic despite significant future challenges

Despite the unprecedented challenges facing the Irish food, drink and horticulture sector in 2020, the resilience and positive outlook of the sector is clear as 82 percent of Irish businesses are optimistic for the next three years, according to ‘Bord Bia’s Readiness Radar’ report.

The recently launched report is ‘an expert risk diagnostic tool, designed to analyse the key challenges and opportunities facing the Irish food, drink and horticulture sector’.

“The report analyses the high-level risks facing the industry in key areas such as; Covid-19, the trading environment with the UK, market diversification, talent management, and sustainability.

“It provides crucial insight into how Bord Bia can best support the sector to overcome these obstacles and target new potential opportunities. The results are based on a survey of 111 Irish businesses from across food, drink and horticulture, representing an estimated 60% of all Irish food and drink exports.

“While Brexit and Covid-19 in particular presented significant challenges to the sector, both short and long-term outlook has remained positive and 2020 exports witnessed only a marginal two per cent decline to €13 billion (Source: Bord Bia Export Performance and Prospects 2021 ). The industry’s robust response to Brexit and Covid-19 has reaped rewards, as having overcome the challenges of 2020, much of the sector feels now more prepared and confident for the period ahead.

“However the trading environment with the UK and the implications of Brexit remain an issue, as 45% of businesses surveyed have reported having seen the value of their exports decline since the referendum in 2016.

“A stark 90 percent of the Irish businesses exporting to Britain report an increase in the costs of doing so post-Brexit, and for 80 per cent of these margins have been reduced, which has led to necessary price increases for British customers, therefore impacting adversely on competitiveness.

“To help offset some of the impact of Brexit, the businesses surveyed remain focussed on the need to diversify into new export markets. The EU was identified as the most significant prospect in terms of market diversification, with bright expectations for Asian markets in particular from larger enterprises and those in the meat, dairy, and seafood sectors. Encouragingly, some 46 percent (or €871 million ) of total export growth since 2016 (€1.9 billion ) comes from the EU27, while international markets accounted for 43 per cent (or €817 million ),” Bord Bia stated.

“It is incredibly heartening to witness the positive outlook of the Irish food and drink sector highlighted by the Readiness Radar, as 82 per cent of businesses report being optimistic for the next three years despite significant trading conditions of 2020.

“The food and drink industry has bravely confronted Covid-19 and Brexit disruption, however the adverse effects of Brexit on margins and costs signal the significant challenges still facing the sector.

“This year’s Readiness Radar provides us with excellent up-to-date insight into the biggest risks facing the industry and will allow us to continue to tailor our supports for the sector to help maintain and grow food exports now and into the future.

“Sustainability remains crucial and is by far and away the most significant and the most widely accepted challenge facing the global food and drink industry. Eight in 10 companies consider sustainability spend to be an investment as opposed to a cost, while three in four have verified sustainability measures in place.

“Some 85 percent of those surveyed are active members of Bord Bia’s Origin Green programme. When looking at what is driving the sustainability agenda, social responsibility, customer demands and consumer expectations were called out as the top three forces of change. Packaging, responsible sourcing and waste are the current top sustainability priorities for companies, and the sector almost unanimously agrees (95 per cent ) that sustainability will become more important in the next three years.

“Finally, attracting, developing and retaining talent also emerges as a ‘top 5’ risk area in the report, as 73 percent of businesses consider it to be a risk to future development and growth, with 38 percent citing it as a critical or very significant risk.

The Readiness Radar report also analyses risks such as the impact of Covid-19, insight and consumer research, innovation and new product development and digital technology,” Bord Bia’s Chief Executive Tara McCarthy said.

The full report can be found on www.bordbia.ie/radar

 

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