Bord Bía highlights opportunities for growth
Bord Bía's recent Small Business Open Day revealed Ireland's best performing category in terms of growth is ‘pickles, table sauces and condiments' (+10.3%), followed by fresh fish (+9.7%)
Print19 February 2013
Over 170 small food and drink producers gathered in Dublin last month to attend Bord Bía’s third annual Small Business Open Day. The event, themed ‘Resilience and Progress in 2013′, provided information on the range of programmes and facilities available to assist companies in striving for further growth and business development. Celebrity chef and co-host of RTE’s Masterchef, Dylan McGrath, attended the event to share his insights into reinventing a business in a challenging environment.
Key speakers included Evelyn Moynihan, head of own brand, Musgrave Retailer Partners Ireland, who addressed SuperValu’s commitment to Irish and local suppliers and afforded insight into how small businesses can begin to work with SuperValu, while Kantar Worldpanel commercial director, David Berry and consumer insight director, Cathy Cross, presented on the Irish and UK retail landscape and category trends.
Insight into GB and ROI markets
Berry compared the ROI and GB grocery markets. Whereas Ireland has a market size of €9 billion and grocery spend per household of €5,400, the GB market totals £100 billion in terms of size and the average grocery spend per household is lower, accounting for £3,800. Price inflation is comparable between the two markets, at +5% in Ireland and +4.5% in GB. However whereas GB has achieved market growth of +3%, the Irish market has remained static with no growth.
Unfortunately for Irish retailers, despite increasing inflation, shoppers are continuing to restrict their spend. They are doing this in a number of ways, by buying less (-1%), through changing their store choice and shopping at the discounters (-1%) and by trading down (-3%).
Subsequently private label has been a major success story of the past three years, growing by 44% in 2010, 46% in 2011 and 47% in 2012.
In contrast to Ireland, the GB market is now once again trailing inflation and every category within grocery is showing sales growth. The fresh food categories have added the most in terms of absolute sales growth. Fruit and veg and salads are up by £542 million, a significant leap up from the next highest performer of chilled convenience, which achieved growth of £287. Fresh food is therefore a major GB growth area which could provide opportunities for Irish suppliers.
Berry also examined how individual retailers in Ireland are performing and found that Dunnes Stores returned to growth for the Christmas period. A key factor in this turnaround was its targeted use of its Value Club scheme.
Categories demonstrating growth
Cathy Cross delivered a presentation entitled ‘Growth Opportunities in the Irish market in 2013′. She reported that although the Irish grocery market is flat overall, there are key frozen and ambient areas seeing growth as well as fresh produce. In fact, 13 Irish grocery categories are currently demonstrating growth. The best performing of these are ‘pickles, table sauces and condiments’ (+10.3%), fresh fish (+9.7%), alcohol and ‘fruit and veg and salads’ (both up +7.3%) The worst performing category was take home confectionery which declined by -9.3%. (Source: Kantar Worldpanel, 12 w/e 25 November 2012)
Stock cubes have also witnessed accelerated growth over the past two years, rising by 9% in 2011 and +11% in 2012. The category has seen no change in price and has attracted few new shoppers but consumers are buying into the category more often, and this delivered 80% of its growth in 2012, with new formats fuelling sales.
Coffee was reported to be a second category going from strength to strength, growing by +5% in 2011 and +8% in 2012. The premiumisation of standard instant coffee through new ranges such as Kenco Millicano and Nescafé Azera has created growth, with consumers buying coffee more often and becoming more willing to pay a higher price. Another interesting statistic revealed by Cross was that eight out of the 13 categories showing growth, have more than 13% of spend coming from NPD. She added that the target markets showing the strongest growth are 25-44 year olds and two person households.
For more information on the supports Bord Bia can offer to small businesses through its Vantage programme, visit www.bordbiavantage.ie.
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