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  • Author: Jonathan English, Strategic Projects, Bord Bia - The Irish Food Board

    Bord Bia’s Readiness Radar: Irish Food & Drink manufacturers have a strong export growth mind set

     

    In March 2019, Bord Bia launched the Readiness Radar which assessed the challenges facing 128 manufacturers across Covid-19, Brexit, Challenges to Market Diversification, Sustainability Pressures, Consumer Insights and Innovation, and Talent Management.

    Irish manufacturers with a growth focus are export dependent and in 2019 the estimated value of food, drink and horticulture exports from Ireland was €13BN, capping a decade of extraordinary growth where the value of Irish food and drink exports increased 67%. This has been achieved through sustained, incremental increases in value and volume across Ireland’s food and drink categories, and across its key markets. With this growth mind set, it is important to look at the findings from the Readiness Radar under Market Diversification which provide both opportunities and challenges that Bord Bia can assist its clients with.

    Findings

    71% of respondents are actively seeking to expand into new markets in response to Brexit. The majority of Primary Meats and Alcohol Beverages respondents are looking to expand, where Horticultural companies, often limited by shelf life, are focussing on their existing markets. Outside of Brexit considerations, a higher proportion of respondents are seeking to expand into new markets. 52% of respondents have a marketing strategy specifically developed for non-UK export markets. If manufacturers with turnover below €1M are excluded from the sample, the number of respondents that have a non-UK marketing strategy increases to 60%.

    Over 50% of respondents stated that networks, market knowledge and supply chain knowledge are the biggest challenge to market diversification. 54% of all respondents rated currency volatility as a high or very high influence on their businesses, with only 31% rating their preparedness as well prepared or very well prepared. Over 50% of all sector respondents rate commodity pricing as being the most concern.

    Over 90% consider the pandemic to be a high influence or very high influence. Following this, 72% of respondents believe a market crash recession would be of high or very high influence to their business.

    Growth & Confidence

    What is positive to take away from the findings is that there is still a strong growth mind set amongst big and small manufacturers looking at export markets and the majority are looking beyond the UK with their formal marketing strategies for non-UK markets. Given the challenges highlighted above this is really important to see this growth mind set continue in the coming months.

    Confidence around preparedness for the pandemic is generally higher than with other global factors, reflecting the considerable time and resources that have been invested by companies, although almost a quarter of respondents still consider themselves to be not well prepared. The level of preparedness very much depends on the size of the respondent company, with only 22% of small companies (under €1M) feeling prepared or very prepared, but 82% of companies turning over €100M+ were of the same mind set. This increased confidence in preparedness is likely a combination of the larger manufacturers setting up Brexit teams as part of their planning over the last three years and embedded formal risk management plans that has allowed them to prepare to the best of their abilities for a pandemic that changed the landscape of the industry overnight.

    Next Steps

    Despite the positive growth mind set and confidence among larger manufacturers on dealing with the impact of Covid-19, there are still challenges to market diversification, including developing networks and contacts, market knowledge and logistics challenges. Covid-19 has brought these into even greater focus, and the challenges posed by Brexit have created a greater sense of urgency for overcoming global market obstacles.

    Bord Bia is positioned to address export challenges, such as networks, market and supply chain knowledge with its network of 15 overseas offices that can help deliver on lead generation, market insight and expertise and we can advise on supply chain optimisation. Bord Bia also have a Logistics Service Providers Database and a Supply Chain Logistics Report to assist manufacturers on identifying operations partners, efficient distribution channels and possible strategies for reducing supply chain costs.

    Smaller companies are experiencing the most challenges as a result of Covid-19 and Bord Bia have recently set up a Small Business Mentoring programme to assist small businesses with their challenges. There is also the Market Prioritisation Reports to identify new markets likely to present growth opportunities in the next 5-10 years which are important sources for continuing export growth over the challenging months ahead.

    For more Market Diversification supports, please see the following link and download the Industry Findings Report here.