How the PCF sector dealt with another turbulent year

Aoife Glennon, PCF Executive

PCF exports for 2021 were valued at €2.5 billion, a 2.7% increase on 2020’s value. This performance is due to sustained strong sales across retail, most notably for the meal solutions category but also bread and value added pigment. Restrictions in the Foodservice channel due to the pandemic continue to cause significant declines in processed cheese, value added beef and sweet bakery.

The PCF category of food and drink exports contains a breadth of products ready for consumer consumption, and success heavily tracks consumer lifestyle trends. This category is very dependent on the UK market with 68% of all exports destined for that market. This proportion has increased substantially from 62% in 2016.

The largest single element of this category is value-added meats. These products are destined for quick service restaurants (QSR) and retail ready environments and were significantly negatively affected by pandemic closures in 2020. In 2021 as foodservice, particularly QSR, returned, they sustained exports at a value of €677 million.

Elements of the PCF category dependent on the retail channel had a positive year. The Meal Solutions subcategory – which includes pizzas, ready meals and soups – increased the value of exports by 5% to be worth €517 million, a 10% increase on 2019’s record value.

Non-alcoholic beverage exporters balanced between the return of foodservice demand and continued robust retail demand during the year. Exports in this category were worth an estimated €110 million in 2021, a 27% increase on 2020’s value and an increase on 2019’s value.

PCF exports will remain dependent on the UK to the greatest extent. There remains opportunity for growth in that market, but the scope of Irish exporters to take advantage of that growth will depend to some degree on the implementation of the TCA and the relationship between the UK and the EU.

Value-added meats and the meal solutions categories will continue to deliver the largest blocks of export value in this wide and complicated category. The opportunity for diversification rests most significantly in the EU and within the meal solutions category. The logistical challenges of chilled export to those markets should not be dismissed however.

Opportunities for Irish manufacturers across confectionary, bakery and snaking will continue to track consumer lifestyle trends. Exporters within the sector report being optimistic for the possibility of growth within the UK but also within other export markets.

In addition to the channel disruption the sector had to deal with significant inflation in relation to input and operating costs while exporters to the UK had to manage the impact of Brexit and its associated costs and complexity.