Despite the unprecedented challenges facing the Irish food, drink and horticulture sector in 2020, 82% of Irish businesses are optimistic for the next three years, according to Bord Bia’s Readiness Radar’ report.
Launched today, Bord Bia’s Readiness Radar is an expert risk diagnostic tool, designed to analyse the key challenges and opportunities facing the Irish food, drink and horticulture sector, the group explained.
The report analyses the high-level risks facing the industry in key areas such as; COVID-19, the trading environment with the UK, market diversification, talent management, and sustainability.
According to Bord Bia the results are based on a survey of 111 Irish businesses from across food, drink and horticulture, representing an estimated 60% of the all Irish food and drink exports.
Bord Bia noted the trading environment with the UK and the implications of Brexit remain an issue, as 45% of businesses surveyed have reported to have seen the value of their exports decline since the referendum in 2016.
A stark 90% of the Irish businesses exporting to Britain report an increase in the costs of doing so post-Brexit, and for 80% of these margins have been reduced which has led to necessary price increases for British customers therefore impacting adversely on competitiveness, it added.
To help offset some of the impact of Brexit, the businesses surveyed remain focussed on the need to diversify into new export markets.
Commenting on the report the Minister of State at the Department of Agriculture Food and the Marine, Martin Heydon, said, “The Irish food and drink sector has faced many significant challenges in 2020, and these continue in 2021."
"The sector has remained resilient, and the industry’s confidence is reflected in the desire to diversify and expand to new markets, signalling global ambitions for growth," Minister Heydon said."This ambition for market diversification is crucial to mitigate the impacts of Brexit, and to take full advantage of the opportunities in the rest of the EU and in international markets such as Asia."
The EU was identified as the most significant prospect in terms of market diversification, with bright expectations for Asian markets in particular from larger enterprises and those in the meat, dairy, and seafood sectors, the research showed.
Encouragingly, some 46% (or €871 million) of total export growth since 2016 (€1.9 billion) comes from the EU27, while international markets accounted for 43% (or €817 million).
"The food and drink industry has bravely confronted COVID-19 and Brexit disruption, however the adverse effects of Brexit on margins and costs signal the significant challenges still facing the sector," said Tara McCarthy, chief executive, Bord Bia.
"This year’s Readiness Radar provides us with excellent up to date insight into the biggest risks facing the industry and will allow us to continue to tailor our supports for the sector to help maintain and grow food exports now and into the future,” she added.