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Risk Readiness Radar Findings

91% of Agri-Food companies rank Covid-19 as highest priority risk

Date: 02/07/2020

 

Covid-19 has been ranked as the highest priority risk facing the agri-food sector, according to ‘Bord Bia’s Risk Readiness Radar’, the most robust and accurate risk assessment of the Irish food and drink sector ever undertaken. 

Launched by Bord Bia today (July 2nd 2020)), the report comprehensively captures the high level risks facing the industry across six key areas: Covid-19, Brexit, challenges to market diversification, sustainability pressures, consumer insights & innovation, and talent management. This in-depth industry analysis captures the level of risk exposures facing the industry, and in turn converts insights into interventions via Bord Bia’s supports and programmes to help industry mitigate defined risks. 

A total of 128 Irish food, drink and horticulture companies, representing 51% of total exports, took part in the survey, which was conducted over a four week period in March and April this year. 

Some 91% of respondents scored the trade implications of Covid-19 as either a high or a very high priority. Export market diversification was ranked the second biggest focus area for the industry as a whole, with 71% of respondents actively seeking to expand into new markets in response to Brexit. 

Speaking ahead of the launch, Shane Hamill, Strategic Projects Manager at Bord Bia said: 

The Irish food, drink and horticulture industry has had to withstand many shocks over the years. While a disruptive event is always an immense challenge for any business, dealing with the consequences inevitably helps businesses to build resilience and be better prepared for the next event. As a result of Brexit preparations, valuable skills in risk management have been learned by the agri-food sector and there is evidence that the industry has been better able to manage the impact of Covid-19 because of the actions it had taken over the past three years.”

The Readiness Radar builds on the previous work of the Brexit Barometer, which has been assessing industry preparedness for the UK’s departure from the EU since 2017. As with the Barometer, this allows for an informed response from Bord Bia at strategic and granular levels to industry needs. The invaluable insight provided by the Readiness Radar survey will influence Bord Bia’s supports and programmes as we work with industry to navigate the period ahead.”

While expansion into new export markets would help Irish exporters diversify their Brexit risk, there are however many challenges facing manufacturers as they aim to unlock the growth that market diversification can deliver. Some 60% of respondents cited networks and contacts, while 56% noted market knowledge as key impediments to progress in this area. 

The results of the Readiness Radarwould suggest that a higher level of turnover provides very little advantage when it comes to having effective networks and contacts in the markets. This is an issue for all companies, big and small alike.

Bord Bia’s Chief Executive Tara McCarthy added “Given our island location on the edge of Europe, Irish manufacturers with a growth focus are export dependent. The estimated value of food, drink and horticulture exports from Ireland for 2019 was €13 billion, capping a decade of extraordinary growth where the value of Irish food and drink exports increased by 67%. This has been achieved through sustained, incremental increases in value and volume across Ireland’s food and drink categories, and across its key export markets.”

The current scenario posed by Covid-19 and Brexit has created a greater sense of urgency for overcoming any obstacles presented by market diversification. Our whole organisation is reimagining how it can best respond and help position our clients for growth post Covid. Our focus has shifted to providing reassurance to our global customers and consumers, with renewed urgency and vigour, that Irish food and drink is high quality and safety standard, distinctive and committed to sustainable production. Looking at the longer term future, we will provide our clients with world-class consumer insight, tailored supports and customer facing opportunities through ournetwork of overseas offices. In these unprecedented and chaotic times, we are entirely focused on delivering the very best for our clients and in my opinion, the role of Bord Bia has never been more important.”

Summary of Report Findings 

Impact of Covid-19 

Covid-19 continues to dominate concerns among Irish companies and fears that it will prompt a recession are voiced as a key concern by 75% of respondents. When asked to rank the top concerns for businesses as a result of Covid-19, recession was ranked to have the highest significance, with over 70% of respondents ranking it either significant or very significant. Meanwhile, companies with a turnover below €1 million are more concerned about rising unemployment levels which in turn will impact consumer spending.

Other Covid-related concerns such as staffing issues, significant decrease in foodservice demand, disruption to supply chains, staffing levels or maintaining production were also ranked as being of high significance, with over 50% of respondents ranking these risks as being of high or very high significance. 

Brexit Preparedness Continues 

Amidst the disruption of Covid-19, indications show that Irish food and drink manufacturers are continuing to focus on Brexit by proactively identifying and, where possible, mitigating Brexit related risks. Over 91% of respondents said they had made progress in relation to their Brexit preparedness over the past 12 months. 

Against a backdrop of ever-uncertain political negotiations between the UK and the EU, the UK remains a significant market for Irish food and drink manufacturers. Speaking today, Shane Hamill said “Despite the uncertainty surrounding Brexit, 41% of respondents reported an increase in their sales to the UK over the past 12 months, with a further 39% reporting stable revenues. Looking ahead, just over half of respondents (55%) stated that they were planning to grow sales in the UK, and the remaining manufacturers (45%) stated their plan was to maintain sales in the UK.”

 

To view the full report, click here.