Irish food SMEs are optimistic about their growth prospects, according to new research by Love Irish Food and PwC, which found that 75% of companies operating in the sector are anticipating their revenues to increase in the year ahead.
The 2021 Irish SME Food Barometer reveals that this optimism is echoed by a favourable outlook for the Irish economy with 65% of companies confident the economy will improve over the next 12 months, despite challenges related to COVID-19 and Brexit, up from just 16% in late 2019.
However, some caution is in the air as these positive economic growth forecasts are tempered by 22% of companies who believe economic growth will decline in the year ahead.
Speaking at the survey launch, Owen McFeely, director, PwC Retail & Consumer Practice, said, “With the prospects of the re-opening for our economy over the coming months, 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 added.
'Difficult Trading Environment'
Commenting, Kieran Rumley, executive director, Love Irish Food, said, “Notwithstanding a difficult trading environment, it is encouraging to see evidence of optimism amongst food sector SMEs regarding the potential for their own company’s performance in the sector, reflecting factors they feel a greater degree of control over. As anticipated, Covid-19 related issues remain the greatest concern for companies operating in the food and drinks industry."
“However, volatile commodity prices now clearly pose a new and significant threat to companies, especially in the context of COVID-19 related costs imposed on such businesses more recently," he said.
Rumley noted that 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 concluded.