Food, Agri-Businesses Facing Number Of Challenges On Top Of Brexit
While Brexit continues to be top of the agenda, owner-managers of food and agribusinesses across Ireland are facing serious challenges from a variety of other avenues.
This is according to the Ifac, an umbrella group for Irish farmers, food producers and other agriculture-focused businesses, which released its Food and AgriBusiness 2019 report yesterday.
“From Brexit to climate change, trade deals and changing consumer behaviour, Irish food and agribusiness owners have much to contend with. Outside of dairying, many customers of agribusinesses who trade predominantly in Ireland are under pressure,” David Leydon, Head of Food and Agri-Business, said.
“These owners are under increasing pressure on multiple fronts, from Brexit and climate change to trade deals and emerging market forces.”
“It is, therefore, unsurprising that these findings would reveal a time of turbulence and uncertainty for most across the sector and confirm that these businesses are feeling less optimistic about the short-term future,” he concluded.
While the report highlighted a 20% decrease in optimism from this time last year, a 100% increase in Brexit concern, 59% of companies are still optimistic about the future.
The report found that businesses in the industry are paying more attention to their social responsibilities, with 74% of businesses taking action on climate change, focusing on waste management and sustainable packaging.
It reflects a growing number of consumer trends that are giving food producers something to think about; plastic reduction, veganism, and food provenance, to name a few.
One growing trend that many in the industry have somewhat disregarded is online, with 66% of companies saying that they have no plans to sell online.
In addition to this, 48% of companies said that they do not invest in Research and Development, with, on average, only 3% of turnover being invested in R&D.
However, the report added that this percentage varies across the scale of the business, as only 43% of Microbusinesses invest in R&D in comparison to 79% of Medium-sized ones.
Ifac also highlighted that succession planning is a big concern among companies, with only one in five reporting a clear succession plan.
It is more common for Medium-sized companies (30%) to have a clear plan in place versus Small (20%) and Micro (14%) businesses.
'Do or Die'
The Tánaiste and Minister for Foreign Affairs and Trade, Simon Coveney, who delivered the keynote at the launch event, repeated past pleas to businesses to up their preparations.
“Ifac has been using its financial expertise and sectoral experience to drive growth throughout the food and agribusiness sector and its report today is further evidence that our SMEs remain exposed to the challenges ahead,” Coveney explained.
“All of these businesses play an increasingly important role in Ireland’s local and national economy.”
“They need to act and take on the professional advice that’s needed, from Ifac and others, so that they can sustain the jobs and wealth they have created and respond to the challenges of the sector and Brexit.”
© 2019 Checkout – your source for the latest Irish retail news. Article by Aidan O’Sullivan. Click sign-up to subscribe to Checkout.