Clear evidence consumers are increasingly buying Irish during pandemic.
Forty-four of the top 100 selling grocery brands in Ireland are Irish produced; this cohort has grown by 18% to a total of €1.07bn in combined sales.
Wednesday, 10 March 2021, Dublin – There is clear evidence that consumers are increasingly buying Irish throughout the global health pandemic brought about by Covid-19, delegates at a key food and drinks industry symposium hosted by Love Irish Food today (Wednesday) will hear.
The Love Irish Food seminar, which will be streamed live online this morning, includes keynote addresses from An Tánaiste, Leo Varadkar, and leading industry experts on the future of Irish produced food and drinks brands.
According to research from Kantar Worldpanel, to be presented on during the Love Irish Food conference, 44 of the top 100 selling grocery brands in Ireland during 2020 were Irish produced. Over the past year during the pandemic, this cohort of 44 brands has grown by 18% to a total of €1.07bn in combined sales. These Irish brands currently capture 48% of the money spent among the 100 top-selling grocery brands in Ireland.
The Kantar research will be presented on at the Love Irish Food symposium by David Berry, Managing Director, Ireland at Kantar Worldpanel. Other industry experts speaking at the event include Joe Manning, Commercial Director at Tesco Ireland and leading Economist Jim Power.
Commenting, Kieran Rumley, Executive Director at Love Irish Food, said: “The contribution of Irish manufactured food and drink brands to the local and national economies in Ireland is both vital and immense. Love Irish Food aims to educate Irish consumers so that they recognise Irish brands. Buying more Irish made products helps Irish businesses survive and protects Irish jobs, which is critical in the current climate in the context of the global health pandemic and will be crucial in driving economic recovery.”
THE ROLE OF LOVE IRISH FOOD IN DRIVING ECONOMIC RECOVERY
Love Irish Food 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.+
88% of Irish SME food companies expect revenue growth in 2020 – Love Irish Food/PwC Irish Food Barometer new research
PwC and Love Irish Food research reveals optimism among Irish SME food companies despite sectoral challenges
Irish SME food companies are optimistic about the growth prospects for their own businesses, but are less certain about the future performance of the economy. With the vast majority focusing on the home market for growth, expansion into export markets is an area for potential development.
Business growth is set to continue into 2020, but softening expected in the Irish economy.
Very few Irish food companies (6%) expect to achieve price increases in current trading conditions indicating that margin improvements will be derived from advances in technology and operational efficiencies.
Sustainability is high on the agenda.
These are some of the key findings from the 2019 SME Irish Food Barometer, new research carried out by PwC and Love Irish Food launched today taking the pulse on business confidence, growth opportunities and challenges facing Irish SME food companies.
Optimistic about business growth
Showing they are confident about the factors within their control, over eight out of ten (88%) Irish food companies expect revenue growth in the year ahead, of which a third (34%) expect this revenue growth to be in excess of 10%.
Most of this growth is expected to be organic (rather than from external factors such as a merger or acquisition), with the key drivers being new product development and growth of exports in addition to operational efficiencies.
This optimism is reflected when it comes to projected capital expenditure. Almost all respondents (96%) confirmed that they are planning some form of capital investment in 2020 in order to develop their business. One in ten (10%) said that this would be in excess of €3 million.
However, just 16% are of the view 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 and a softening in European and global growth.
Just 6% of respondents are expecting a price increase to drive revenue in the year ahead – an ongoing challenge for many Irish companies who are grappling with tight margins and cost competitiveness.
The growth of volume at the expense of value has placed huge pressure on the food manufacturing sector. With a price sensitive consumer, retailers’ opportunities to grow margins must now lie in the innovative use of emerging technologies to better understand shopping habits and to create brand loyalty.
Highlighting the need for development into new markets, the survey confirms that Irish SMEs value the domestic market (the Republic of Ireland) as the greatest source of growth (78%) in the year ahead. 24% said that the US was their most important growth market in the year ahead; 12% said this was the EU and just 11% said it was the UK.
Investment stalled, but not stopped, by Brexit
Suggesting growth is very much on the agenda in the face of change, just 31% reported that they had delayed investment in the organisation due to Brexit. Any delayed investment was principally in areas such as production capacity, operational resources innovation and marketing.
At the same time, the majority (63%) of respondent companies are currently exporting some product to the UK including one in five stating that these exports represent more than 20% of their total revenue. In light of Brexit, time will tell if exports to the UK continue at their current levels. Brexit presents an opportunity for certain Irish food manfacturers who may benefit through import substitution. Irish SME food companies may look to grow business by offering alternatives to product ranges that are currently imported from the UK.
Speaking at the survey launch, Grace McCullen, Senior Manager, 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.”
“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.”
Skills, potential trade tariffs and operational costs holding back growth
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%).
Sustainability is on the agenda
84% 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.
Irish consumers want to buy Irish
Three-quarters (77%) of survey respondents are of the view that the Love Irish Food endorsement is of recognisable value to consumers and retailers largely because it clearly identifies that the product is Irish and sets the brand apart from imported products.
Key reasons for buying Irish, cited by the participating food companies, are quality, supporting local suppliers, sustainability, food traceability and positive impact on the economy.
Kieran Rumley, Executive Director, Love Irish Food, the not-for-profit organisation established to help safeguard the future of Irish Food & Drink brands, said: “The survey highlights evidence of optimism amongst Irish SMEs around growth into 2020, notwithstanding a difficult trading environment. There are considerable challenges in areas such as availability of skills across the board from operational, to technical to management – which in turn highlights the need for a greater take-up of available apprenticeships in the industry.”
“The survey also suggests that Irish food companies are taking the sustainability challenge seriously with many planning to invest in initiatives to improve the environment. This together with the strong regional dispersion of the food industry base contributes greatly to overall sustainability.”
“It’s also encouraging to see that the majority of survey respondents are now looking to invest in their companies in the coming year. For certain food sectors, this represents a significant growth opportunity, specifically for those import substitution sectors. However, behind these positive signals there remains the worrying inability of Irish food producers to recover adequate costs, forcing them to continue to operate on even tighter margins.”