Exports expansion

Bord Bia chairman Michael Carey, Minister Simon Coveney and Bord Bia chief executive Aidan Cotter

With Bord Bia statistics showing food and drink exports increased by 3% to a reach record high of €10.8 billion, the coming year certainly looks set to be a prosperous one for the sector. Not only has Bord Bia announced intentions to open international offices in Singapore and Warsaw this year, but the food board has likewise revealed plans for a new insight centre

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22 January 2016 | 0

While ‘recovery’ was a key motif, albeit one that was cautiously uttered, throughout 2015, one sector where recovery has not been necessary over the past six years, is in the country’s burgeoning food and drinks exports. When Bord Bia presented its review of food and drink exports for 2015, the agency was able to proudly report an estimated increase of 3% for the year, to exceed €10.8 billion for the first time. In fact, the food and drink sector impressively recorded its sixth consecutive year of export growth in 2015 as increased output in key sectors, favourable exchange rate developments and better returns for beef, seafood and beverages, helped to offset a considerable weakening in global dairy prices.

Presenting ‘Bord Bia’s Export Performance and Prospects Report 2015/2016’, chief executive Aidan Cotter commented: “Irish food exporters registered record growth, increasing exports by some €355 million in a period when global food commodity prices declined by approximately 19%, the Russian market was effectively closed to EU food exports, and consumer sentiment remained sluggish across the Eurozone. This year will present further opportunities for growth in most sectors notwithstanding challenges from continued global dairy price pressures through the early months of 2016.”

Category champions

The strongest categories in terms of export growth were beverages (+10%), beef (+6%), and seafood (+4%). The sustained growth in exports of Irish whiskey, up by an estimated 18%, was the most significant driver in the beverages category. Meanwhile the growth in dairy exports, up 4%, occurred in the face of an exceptionally adverse trading environment and reflects the strong growth in the volume of specialist nutrition powders, which increased by 25% overall and by 40% to China alone.

Minister for Agriculture, Food and the Marine Simon Coveney complimented the industry for achieving a record sixth consecutive year of export growth. “The food and drink industry has been a driving force in our economic recovery since 2009, delivering cumulative export growth of 51%,” he said. “Irish producers and companies have yet again demonstrated in 2015 their ambition, innovativeness and ability to meet buyer and consumer needs in highly competitive and complex trading environments.”  

Market distribution developments

There have also been some significant developments in the market distribution of Ireland’s food exports last year. The US consolidated its position as our second largest market after the UK, with exports growing by 40% to an estimated €755 million, on top of higher exports of dairy and beverages. Exports to China grew by 16%, maintaining its position as our fifth most important market and our second largest for dairy and pork. Exports to the Middle East meanwhile grew by 12%, but exports to Russia and to the African region were weaker.

Bord Bia has also published its new Statement of Strategy, 2016 – 2018, ‘Making a World of Difference’. This sets out the key forces driving change in the marketplace and the strategic pillars that will guide the agency’s activities in the period ahead. It likewise includes a renewed focus on routes to market and the importance of building its international market presence.

New overseas offices

Minister for Agriculture, Food and the Marine Simon Coveney said: “Irish producers and companies have yet again demonstrated in 2015 their ambition, innovativeness and ability to meet buyer and consumer needs.”

Minister for Agriculture, Food and the Marine Simon Coveney said: “Irish producers and companies have yet again demonstrated in 2015 their ambition, innovativeness and ability to meet buyer and consumer needs.”

 “My Department along with Bord Bia and industry will continue to seek out new markets and new products to guard against the inevitable challenges facing a small open economy exporting 80% of the food we produce,” added Minister Coveney. “For this reason I am delighted that Bord Bia is to open new overseas offices in Singapore and Warsaw to offer support and insight to exporters targeting South East Asia and Eastern Europe.”

The chairman of Bord Bia, Michael Carey likewise spoke about the importance of innovation, consumer insight and the need to add value. “I’m delighted to note that the newly defined prepared consumer foods category, which includes a range of value added foods and beverage products, rose by 7%, Carey said. “When the added value components from all other sectors are included, this redefined category was worth €2.5 billion in 2015.”

In further good news, Bord Bia has also announced the establishment of a new insight centre which will become operational in the early months of 2016. ‘The Thinking House’ will be located at the organisation’s Dublin offices and is designed to help companies successfully underpin new marketing and brand initiatives by ensuring the consumer is at the heart of everything they do.

Continued government support needed
As one would expect, the figures were warmly welcomed by industry groups. Food and Drink Industry Ireland (FDII) which is part of Ibec, said the new export figures highlight the strength of Ireland’s food and drink industry.

FDII director Paul Kelly was keen to point out however that further growth would require continued government support. “We are calling for measures that will sustain export growth and also help regain market share in the food industry’s largest market – the domestic market,” Kelly said. “The industry can continue on a growth trajectory but this will require continued government support. Improved access to finance and tax measures to boost indigenous enterprise will facilitate further growth in the industry.”

Call to publish grocery regulations

“Ireland is the largest market for Irish food and the starting point for every new food business,” he added. FDII is calling for the Minister for Enterprise to publish the long-delayed grocery regulations to ensure a fair trading environment. The UK, which is our largest export market, introduced similar provisions six years ago.”

Kelly also highlighted the fact that a cost competitive manufacturing base is “fundamental to continuing Ireland’s export success and redressing the growing level of food imports in the domestic market”.

Strongest growth in drinks sector

Meanwhile Alcohol Beverage Federation of Ireland (ABFI), the representative group for drinks manufacturers and suppliers in Ireland, said Bord Bia’s data showed the important role that the domestic drinks industry plays in delivering export growth. Indeed, the sector was the strongest performer in export growth in 2015, with a 10% increase in exports year-on-year. Key reasons for the strong export performance as highlighted in the Bord Bia report include strong emerging market demand; favourable exchange rates; growth in whiskey demand; and strong demand from the US, Africa and Asia.

Ross MacMathuna, ABFI director said: “Irish whiskey exports have recorded a fourfold increase over the last decade to make it the fastest growing global spirits category and it is set to invest a further €1.1bn in Ireland by 2025,” MacMathuna added. “There are 26 new or proposed distilleries across the country, with annual exports of over €300 million, up 220% since 2003. Exports are set to double by 2020 and double again by 2030. The sector currently exports to 77 markets and aspires to grow global market share by 300% by 2030, from 4% to 12%. Employment is also set to grow by 30% by 2025, from 5,000 to 6,500.”

Role of brewing sector

MacMathuna said the brewing sector will also have a huge role to play, with beer production remaining the most important sector within the drinks industry in terms of indigenous manufacturing. “The brewing sector has continued to invest over the past few years, with exports up 7% between 2012 and 2013,” he said.

All-in-all, the country’s exports growth in food and drink, continues to show the high regard other nations hold for Ireland’s agricultural reputation as the ‘food island’. This is something we all – whether producers, distributors or retailers – can take justifiable pride in.


 

 Breakdown of Ireland’s food and drink exports 2015

2014

€m

2015

€m

2014/2015

% +/-

Dairy products & ingredients 3,105 3,240 +4
Beef* 2,280 2,410 +6
Prepared Foods 1,810 1,800 -1
Beverages 1,150 1,260 +10
Pigmeat 580 570 -2
Seafood 540 560 +4
Edible Horticulture & Cereals 230 240 +4
Poultry 310 320 +3
Sheepmeat 220 230 +5
Live Animals 245 195 -20
TOTAL FOOD & DRINKS 10,470 10,825 +3

*Beef includes offals & export refunds

 

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