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• RTE News: 75% of Irish food SMEs expect revenue growth in the year ahead – Love Irish Food and PwC research

  April 27, 2021 Profiles and Interview
  

  By Gill Stedman

  Updated / Tuesday, 27 Apr 2021 06:00

  Most small and medium sized businesses in the food sector expect their revenues to increase in the year ahead, according to new research by Love Irish Food and PwC.

  The 2021 Irish SME Food Barometer found that 75% of companies in the sector are optimistic about their growth prospects.

  The findings suggest that there is a wider sense of optimism in the sector, with 65% of companies confident the economy will improve over the next 12 months.

  Despite challenges related to Covid-19 and Brexit, that figure is up from just 16% in late 2019.

  However, the research shows that 22% of companies believe economic growth will decline in the year ahead.

  Owen McFeely, Director, PwC Retail and Consumer Practice, said the research reveals “cautious optimism” for business prospects for Irish food SMEs.

  “These organisations have seen major disruption in their businesses for more than a year and, with plans for investment, they are now looking forward to turning a corner,” he said.

  According to the survey, the impact of Covid-19 is the greatest threat for the food and beverage sector.

  However, Kieran Rumley, Executive Director of Love Irish Food, said that volatile commodity prices now pose a new and significant threat to companies

  “It is unlikely that SMEs will be able to shoulder the burden of these additional costs for long and may eventually be forced to pass these on as consumer price increases.

  “Love Irish Food is working to increase the support offered to companies throughout 2021, with greater retailer support in the interface with the retail grocery sector, as part of its mission to advance the future of Irish food and drink brands,” he said.

   

  The research also indicates that there will be a significant uplift in the levels of capital investment made by food and beverage companies, following a significant stall during the pandemic.

  69% of respondents stated that they will not delay investment over the coming 12 months, compared to 62% who said they did delay such investment in the last 12 months.

  Meanwhile, 20% of respondents confirmed that they are planning to launch new products or services to drive business growth in 2021, while a total of 11% will enter new markets.

  Respondents also indicated that environmental sustainability remains high on their agenda, with 60% of those surveyed stating that the importance of having an environmental sustainability strategy in place has increased this year.

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• RTE NEWS: 88% of Irish SME food companies expect revenue growth in 2020

  December 03, 2019 Profiles and Interview
  

  A new survey shows that 88% of Irish food companies expect revenue growth in the year ahead, with 34% of these companies expecting revenue growth of over 10%.

  The SME Irish Food Barometer was carried out by PwC and Love Irish Food.

  It also reveals that while companies are optimistic about the growth prospects for their own businesses, they are less certain about the future performance of the economy.

  Almost all respondents – 96% – confirmed that they are planning some form of capital investment next year in order to develop their business, with 10% saying this investment would be in excess of €3m.

  But just 16% of SME food firms believe that economic growth in Ireland will improve in the year ahead, 50% say it will remain unchanged and 34% say it will decline.

  As a small open economy, this is not surprising given external uncertainties, PwC said.

  Today’s barometer also shows that just 6% of Irish food companies expect to achieve price increases in current trading conditions.

  PwC said this suggests that margin improvements will be derived from advances in technology and operational efficiencies.

  The barometer shows that key challenges curtailing growth prospects include availability of labour (43%), trade wars and tariffs (37%), operational costs such as energy, insurance and rates (28%), volatile commodity prices (21%) and embracing the sustainability agenda (17%).

  84% of companies confirmed that they have an environmental sustainability plan in place to make improvements in 2020.  Key areas for this investment are energy consumption, reducing plastics and water usage.

  On Brexit, just 31% of companies surveyed said they had delayed investment in the organisation due to the UK’s planned departure from the European Union.

  Any delayed investment was mainly in areas such as production capacity, operational resources innovation and marketing.

  Grace McCullen, Senior Manager at PwC Ireland Retail & Consumer Practice, said the survey highlights optimism about the future growth potential for Irish food companies.

  “They are also keen to seek operational efficiencies through innovation and technologies to improve margins, cost competitiveness and satisfied consumers,” Ms McCullen said.

  “With the domestic market being the priority for growth prospects, expanding  into new markets and new products should not be ignored. The UK will exit the EU at some point and that will give rise to new opportunities for manufacturing food products in Ireland that may have been supplied from the UK,” she added.

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