In the official statistics, the Agri-Food sector is categorised under three headings:
The Agri-Food sector is a very significant component of the Irish economy. It makes a strong national contribution to economic activity and employment, but its regional and rural contribution is vital. Along with tourism, the sector makes a very strong contribution to rural economic activity and employment. Its success is essential for the success of rural Ireland.
The Department of Agriculture, Food & the Marine (DAFM) estimates that in 2019, the broad sector employed over 164,400 people or 7.1 per cent of total employment. Some 137,500 farms produce over €8 billion in output; over 770,000 hectares of forest; and over 2,000 fishing vessels and aquaculture sites produce fish with a value of €770 million. The sector represents 6.7 per cent of modified Gross National Income (GNI*).
In the third quarter of 2020, the CSO’s Quarterly Labour Force Survey shows that 91,800 people were engaged in Crop and Animal production; 51,200 people were engaged in Manufacture of Food Products; and 6,700 were involved in the Manufacture of Beverages. This equates to 149,700 people engaged in the Food and Beverage sector, which is equivalent to 6.5 per cent of total employment in the economy.
The food industry makes a very strong contribution national and local economic sustainability. It supports economic activity and employment in local economies all over the country, and it plays an essential role in sustaining local economies. Through its various elements, it also makes a strong contribution to the national finances.
The Agri-Food sector is heavily export-driven, and is a key component of Ireland’s indigenous export economy. There are two main sources of data on the export contribution of the sector – Bord Bia and the Central Statistics Office.
BORD BIA EXPORT PERFORMANCE
The annual Bord Bia Export Performance and Prospects report estimates that Irish food and drink exports declined by 2 per cent in 2020, and were valued at €13 billion.
The Dairy sector accounted for 39.7 per cent of total exports, and Meat and Livestock accounted for 26 per cent, with Beef accounting for 15.9 per cent of the overall total.
In very challenging circumstances, the performance of the food and drink sector was very strong in 2020. COVID-19 restrictions had a dramatic impact on the food service sector; shipping costs increased; global economic growth weakened considerably; sterling was relatively weak; and Brexit created significant uncertainty.
Table 1: Irish Food and Drink Exports (Bord Bia)
|CATEGORY||2019 (€)||2020 (€)||% ANNUAL CHANGE|
|Meat & Livestock||3,309,787,944||3,379,698,911||+2.0%|
|– Beef (inc. offals)||2,123,166,413||2,071,003,434||-2.0%|
|– Other Meat||13,612,441||12,033,398||-12.0%|
|– Live Animals||183,470,421||201,538,410||=10.0%|
|Prepared Consumer Foods||2,592,179,363||2,493,120,272||-4.0%|
Source: Bord Bia, Performance and Prospects 2020/21, 13th January 2021.
CSO TRADE DATA FOR FOOD AND BEVERAGES
Trade data from the CSO show that exports of Food, Live Animals, Beverages and Tobacco totalled €13.4 billion in 2019, equivalent to 8.8 per cent of total merchandise exports.
In the first 11 months of 2020, exports of Food, Live Animals, Beverages and Tobacco totalled €11.8 billion, equivalent to 7.9 per cent of total merchandise exports. In the first 11 months, exports of Food and Live Animals declined by 2.9 per cent, and exports of Beverages and Tobacco declined by 14.6 per cent (this category is exclusively made up of Beverages, as there are no Tobacco exports).
Table 2: Irish Agri-Food Exports (CSO)
|CATEGORY||2019 (€m)||2020 (JAN-NOV) (€m)|
|Food & Live Animals||€11,724||€10,461|
|Beverages & Tobacco||€1,673||€1,321|
|% of Total Merchandise Exports||8.8%||7.9%|
Source: CSO, Goods Exports & Imports
Table 3 shows the breakdown of Agri-Food exports by destination in the first 11 months of 2020. The United Kingdom accounted for 36.1 per cent of total Agri-Food exports.
Table 3: Agri-Food Exports by Destination (Jan – Nov 2020)
|REGION||2020 (JAN-NOV) (€m)||% OF TOTAL|
|Rest of World||€2,042||17.3%|
Source: CSO, Goods Exports & Imports
Trade data from the CSO show that imports of Food, Live Animals, Beverages and Tobacco totalled €8.8 billion in 2019, equivalent to 9.9 per cent of total merchandise imports.
In the first 11 months of 2020, imports of Food, Live Animals, Beverages and Tobacco totalled €8.1 billion, equivalent to 10.6 per cent of total merchandise imports. In the first 11 months, imports of Food and Live Animals declined by 0.4 per cent, and imports of Beverages and Tobacco increased by 6.8 per cent.
Table 4: Irish Agri-Food Imports
|CATEGORY||2019 (€m)||2020 (JAN-NOV) (€m)|
|Food & Live Animals||€7,877||€7,138|
|Beverages & Tobacco||€965||€977|
|% TOTAL Merchandise Imports||9.9%||10.6%|
Source: CSO, Goods Exports & Imports
In the first 11 months of 2020, 47 per cent of Agri-Food imports originated from the UK.
Table 5: Agri-Food Imports by Destination (Jan – Nov 2020)
|REGION||2020 (JAN-NOV) (€m)||% OF TOTAL|
|Rest of World||€1,129||14.0%|
Source: CSO, Goods Exports & Imports
Since Ireland joined the EC in 1973, exports of Food, Live Animals, Beverages and Tobacco have growth strongly and have made a significant contribution to Ireland’s export and overall economic performance.
Figure 1: Exports of Food, Live Animals, Beverages and Tobacco
Source: CSO, PxStat
Figure 2 shows the trend in consumer expenditure on food (excluding eating out) since 1995. Over that period the annual spend on food has increased by almost 92%.
Figure 2: Consumer Expenditure on Food (ex. Eating Out – Current Prices)
Source: CSO, National Income & Expenditure
While the absolute level of consumer expenditure on food has increased significantly over the period, the consumer spend on food has declined from 14.1 per cent of total consumer expenditure on goods and services in 1995 to just 7.1 per cent in 2019.
Figure 3: Consumer Expenditure on Food (ex. Eating Out) as % of Total Consumer Expenditure on goods and services.
Source: CSO, National Income & Expenditure
One of the most significant features of the Irish grocery market is the price compression across a broad range of foodstuffs. Between 2010 and 2020, the average retail price of food declined by 9.2 per cent. This compares to an increase of 6.3 per cent in overall consumer prices. Table 6 gives a breakdown of a wide range of food categories, and with just a few exceptions, the grocery food market is characterised by consistent downward pressure on prices.
The price compression in the retail food sector is a result of intense competition within the grocery sector, and import penetration. This intense price competition is a response to a long-established consumer desire for cheaper food, and very strong competition between the retail multiples.
The retail price trends in the food sector have significant implications for the food supply chain, ranging from the primary producer, to the manufacturer, to the retailer. There is a constant struggle between the requirement to produce high quality food and the price compression that characterises the sector. Consumers need to realise and be educated on the fact that there is a trade off between cheap food and quality.
Table 6: Consumer Price trends 2010 to 2020
|ITEM||% 2010-2020||ITEM||% 2010-2020|
|Average CPI||+6.3%||Cheese & Curd||-17.4%|
|Beef & Veal||+0.3%||Potatoes||-9.7%|
|Lamb & Goat||-8.5%||Sauces & Condiments||-7.2%|
|Fresh Whole Milk||-0.8%||Beer||-1.6%|
Source: CSO, CPI Detailed Sub-Indices
Policy makers now recognise the contribution that the sector makes to the economy, and that it will make an even more important contribution to the national economy in the future. Ambitious long-term targets have been set for the sector in Food Wise 2025.
Food Wise 2025 is a 10-year strategy for the Agri-food sector that was launched in 2015. The growth strategy for the sector is based on three guiding principles. Namely, Irish food and drink exporters will find their greatest opportunities where they provide offerings that target different life-stage requirements; fit into the lifestyle choices associated with convenience and well-being; and provide products with clear nutritional and health benefits.
The key targets in the strategy include:
To deliver this growth, it is recognised that a number of key areas will need to be focused on. These include:
Food Wise 2025 makes a number of recommendations under the headings of human capital, competitiveness, market development and innovation.
The strategy for the food sector is quite explicit in its recognition that the agri-food sector will only achieve its full growth potential if it can address the skills needs within the industry. This will involve investment in people currently working in the sector, a commitment to knowledge transfer that brings technological and process advances to the industry, and recognition of the need to attract people with the relevant skills into roles within the industry.
Research, Development and innovation are recognised as key drivers of competitiveness. However, it is recognised that there are challenges in translating research into commercial products and in ensuring that at both the producer and consumer level there is sufficient capacity to absorb new research into innovation.
The overriding theme is that in order to achieve the ambitious targets contained in Food Wise 2025 there is a need for ongoing improvements at both the producer and processing levels. Specifically, at the producer level it is recognised that future profitability and viability will be driven by productivity improvements through the ‘adoption and application of cutting-edge sustainable processes and technologies.’
A guiding principle in Food Wise 2025 is that environmental protection and economic competitiveness are equal and complementary, and that one will not be achieved without the other. The three pillars of sustainability – social, economic and environmental – are viewed as being of equal importance and should carry commensurate weight.
In order to achieve the ambitious targets contained in Food Wise 2025, it is important that the sector and policymakers are aware of the challenges facing the sector and to identify the strategies needed to address those challenges.
The Agri-food sector was instrumental in pulling the Irish economy out of deep recession after the 2008-2011 period and its real significance to the economy was generally recognised after a decade of being a victim rather than a beneficiary of the ‘Celtic Tiger’ economy. The sector inherited all of the high costs that evolved during the Celtic Tiger period, but enjoyed few of the benefits. It inherited all of the rising input costs, but faced intense price compression at the consumer level.
The economy now finds itself in another difficult situation as result of COVID-19. Some sectors have been particularly damaged by the global pandemic and the associated restrictions. Tourism, non-essential retail, the broad hospitality sector, and certain personal services have been particularly affected. It will be necessary to rebuild all of those sectors as quickly and as effectively as possible.
The impact of COVID-19 on the Agri-Food sector has been significant. Demand from the food service sector has been dramatically undermined, but eating at home has become very important. The sector will eventually revert to normal, and then it will have to play a significant role in rebuilding the overall economy, and particularly rural economic activity and employment.
The issues facing the sector include:
Love Irish Food (LIF) was formed in 2009 with the aim of helping consumers make informed choices about buying Irish manufactured food and drinks. The aim is to promote the consumption of Irish food and drink, and create a realisation that every time a consumer makes a conscious decision to purchase an Irish manufactured food or drink product, this is supporting vital local employment, local businesses, and local sustainability all over Ireland.
While many Irish agri-food companies have a strong export focus, the domestic market is also very important, particularly for smaller companies who lack scale. Smaller companies can build scale in the domestic market, and eventually achieve an export capability, Love Irish Food must play a key role in driving home these messages, but ultimately it is the purchasing decisions of consumers that will matter most.
In the first 11 months of 2020, Ireland imported over €8 billion worth of food and drink products. Of these imports, the UK accounted for 47 per cent of the total. In the context of Brexit, some of these products from the UK are becoming more difficult to source and more expensive. There has to be potential for import substitution – in other words producing locally, what we previously imported. The decisions taken by Irish consumers can play a key role in this regard. The role of Love Irish Food is to help inform consumers about the impact of such decisions on local communities and local economies. This message has resonated with many people during the COVID-19 crisis, and the objective now is to ensure that post-COVID, consumers will not forget the importance of supporting local producers. By doing so, they are having beneficial impact on the local economy and the environment.
For more information contact [email protected]+
Bland food leads to boredom and boredom leads to take-out! That’s the mantra of Cali Cali Foods, which was established in the summer of 2018. Fast forward to the summer of 2021, and Cali Cali’s range of products have made their mark on several FMCG categories. Maev Martin talks to founders TOM GANNON and NIALL McGRATH about the next step on their mission to make healthy eating tasty, while positively impacting on society and the environment
During a holiday in California, fit food entrepreneurs Niall and Tom met up with LA resident, fellow Dubliner and celebrity chef Donal Skehan. Over Korean BBQ tacos, the trio hatched a plan to take the melting pot of Californian street food flavours and the latest Californian healthy eating trends to Europe with a new brand called ‘Cali Cali’. “Flavour, quality and healthy benefits were of the utmost importance from the beginning,” says Tom. “Equally importantly, we wanted to develop a brand that gave consumers a beacon of (orange!) light in the confusing category of
healthy food and snacking. We wanted to bring the two worlds of healthy living and eating together with the flavours of foods of the world. “This mindset led us to embark on a number of adventures that took us from northern San Francisco to the tip of Baja California in Mexico as we sought out the authentic new and old flavours of California. Whether it was small batch beef jerky in Monterrey or family recipes of hot sauce in the street markets of Cabo, it was on these trips that we decided to launch not just one style or category of product, but a range of products across several categories, while staying true to our healthy eating and living mission.”
With that in mind, Cali Cali immediately launched into two completely different categories – snacks and condiments/sauces. “This was a deliberate move as we didn’t want to get pigeonholed into one product category,” says Niall. “We followed this up with four new products in three new categories. In May 2020, we launched Cali Cali Pop-A-Grains, Cali Cali Superbars, Cali Cali Supersnacks and Cali Cali Seasonings. All these products are delivering flavours that we are extremely proud of. In fact, we are so proud of them that we are entering these four products for the Great Taste Awards. They have fantastic, better-for-you credentials, and their launch has been executed in a manner that is relevant to todays’ discerning consumers.” Real food The concept of providing great tasting Californiastyle street food flavours combined with California-style healthy benefits, while using real food ingredients, is the common theme running through Cali Cali’s pop-a-grains, sauces, protein bars, crisps, seasonings and snacks. “For example, our new Cali Cali Superbars are great tasting, with flavours such as Chocolate and Himalayan Sea-salt, but they are also high in Vitamin D, high in protein, gluten-free, and
vegan-friendly,” says Niall. “And they have been created without sugar alcohols, which you find in most protein bars. Finally, we use real Belgian chocolate, which is sweetened with chicory root.” The term ‘real food’ crops up quite a bit on the Cali Cali website, so how do Tom and Niall define ‘real food’? “We spent a lot of time working in the US over the past few years and we looked at several trends in the market and one of the most significant wholesale food distributors, KeHE, as well as Whole Foods Market, were very particular that they would not sell products that contained sugar alcohols such as maltitol and erythritol,” says Niall. “These are sugar alcohols that are used by most protein bars to sweeten their chocolate. The market had moved on and manufacturers in the US had stopped selling these products. They were looking for products that tasted great but were using ‘real foods’ as they put it, hence the emphasis on ‘real foods’ on our website and in all of our product information.” No hidden nasties Consumers are also looking for products that display their ingredients in a clear and easy to understand format. “They want to read the rear of the pack and be able to understand the ingredients without having a science degree,” says Niall. “What we are looking to do with Cali Cali is to get ahead of this trend and bring this to European buyers and consumers, so you find that with all our product offerings, the shopper simply reads the information on the packs and they won’t find any nasty stuff. For example, in our Supersnacks, they will simply find chickpeas and fava beans.” Another term that features regularly on both the Cali Cali website, and in conversation with Tom and Niall, is ‘bad stuff’. “We don’t use bad stuff in any of our product ranges, and by that we mean artificial flavours, preservatives, or MSG,” says Niall. “However, we still manage to deliver outstanding taste profiles in our allnatural seasonings.” Their range of wet sauces is a perfect example of a product that is manufactured from purely wholesome, natural ingredients. Fellow Love Irish Food member company, Follain in Cork manufactures the five sauces in their wet range and is also manufacturing Cali Cali’s new Gold Collection of premium ketchups, which uses premium ingredients such as real Kimchi. The Gold Collection will be launching in the market this month. Cali Cali’s ‘better-for-you’ credentials are further highlighted via partnerships with other reputable manufacturers and retailers. They teamed up with Manor Farm, yet another Love Irish Food Company, to create a chicken Meet the MakersFresh wing meal kit complete with Cali Cali sauces, and featuring blue cheese, celery sticks and recipes, which they sold through Fresh the Good Food Market. Cali Cali is also working with Kerrigan’s Butchers on a summer BBQ meal kit that was launched over the June Bank Holiday weekend and will be available for delivery nationwide. Start-up challenges Niall and Tom founded the Cali Cali with chef Donal Skehan, and they are keen to stress the importance of his input to the success of the business. “Donal was instrumental in the development of the authentic street food flavours of the sauces and crisp ranges,” says Tom. “He was living in LA at the time, so having him on the ground was a great advantage because he had his finger on the pulse and was up to speed with all of the latest trends and flavours.” According to Tom, one of the most important aspects of launching a new brand is being clear about the brand identity. “Being clear from the outset about our brand identity and what it stood for really helped us to keep on track and reduce wheelspin,” he says. “We were convinced that there was a gap in the market for an umbrella brand that consumers could always trust to give them great tasting and healthy food, as well as snack products that were healthy but done in a cool and relevant way. We went so far as to create a ‘brand world,’ which was based in an LA street food market, and we tested every decision, from product to packaging, against the question ‘would this work in an LA street food market?’ That became the benchmark for any decisions that we made regarding the development of our product ranges.” Cali Cali’s sauces are currently their bestselling ranges. “They are neck and neck on the sales front at the moment, but we expect that our sales mix will change following the launch of our new ranges over the past few months,” says Tom. Packing and distribution Cali Cali has opted for co-packing (contract packaging) over own production for its product lines. “This approach affords us the flexibility to scale up and down, as well as to switch into better performing ranges,” says Niall. “It also allows us to offer more ranges without the constraint of needing to own the lines. In addition, machinery and factories are expensive in terms of upfront costs. We are looking to increase the product range that we produce here in Ireland, and we anticipate further production in Ireland for the range in 2021.” He also points out that contract packers can be an important support when it comes to product development. “We like to develop our recipes in-house and to bring the products to the contract packers, as this keeps our ideas fresh and innovative, hopefully at the cutting edge,” says Niall. “But we also like to work with the teams in the contract manufacturing companies to optimise the recipes, so their expertise is vital in the production process.” One of the biggest challenges facing any start-up business is getting its distribution strategy right because that is what creates sales for the brand. Both Niall and Tom have exceptional business backgrounds in distribution. Having worked in Richmond Marketing for 20 years as marketing director (Niall) and head of sales (Tom) they were responsible for the launch of major FMCG success stories such as Red Bull, Hendricks Gin, Peroni and Vit-Hit. And, of course, they were the duo that co-founded the Fulfil brand. “We understand how getting this right is key,” says Niall. “You can have the best plans and the best brand, but if you have no sales flowing, the wheels will come off the wagon very quickly. For that reason, we initially partnered with leading FMCG sales, marketing and distribution company Tennant and Ruttle to get this right. They gave us the platform to grow and pushed us on to the point where we were able to take our products to international markets, and that is what we are now doing with Boyne Valley.” Future vision In October 2020, Cali Cali announced that it had entered a strategic partnership with the Boyne Valley Group. “Boyne Valley have taken a majority stake in our operation, but the Cali Cali business is a separate entity and will continue to be led and managed by both myself and Niall,” says Tom. “However, our strategic partnership with Boyne Valley Group allows us to leverage the fantastic resources of Boyne Valley in Ireland and in export markets. Over the next five years, we would like to see the brand on sale in a mixture of approximately four strategic and 10 trading markets and, as a result, delivering significant turnover. Our vision for Cali Cali is to be the go-to brand for tasty, healthy, easy, and ethical eating/snacking, delivering the flavours of the world to a growing customer base in Ireland and in international markets.”
How did Cali Cali first engage with Love Irish Food? We came across Love Irish Food at Bloom many years ago. When we were setting up Cali Cali Foods, we engaged with them early on to bring them on the journey of what we were trying to achieve and how we were trying to keep as much of the manufacturing on the island of Ireland. CEO Kieran Rumley and marketing manager Aidan Long were very supportive from day one. How important has Love Irish Food been to the development of your business? The organisation has played a key role in the development of the Cali Cali brand. We took a stand in the Love Irish Food tent at Bloom in May 2019. It turned into a massive sampling and consumer feedback session, with tens of thousands of consumers getting the opportunity to sample our products. The feedback we got from consumers and buyers who attended led us to adapt some of our flavours and packaging. That meant that, when we launched in Q4 of 2019, we had a more tailored offering for consumers and buyers. Would you recommend membership of Love Irish Food to local producers? Absolutely – not only have they helped in the initial engagement piece around Bloom, but also in terms of developing our profile with advertising and promotional activity. Love Irish Food membership also gives you access to like-minded businesses that you can network with.+