One of the main concerns of companies in the food and agribusiness sector is broadband, according to the Food and AgriBusiness Report 2018, designed by the ifac.
The research report, carried out by Amárach Research, surveyed up to 200 companies in the food and agribusiness sector and found that only 28% of SMEs have “perfectly sufficient” broadband for their business.
69% are not e-commerce enabled while only 7% are doing a significant level of online trading.
“With the ubiquity of mobile communication and the rise of e-commerce, Irish food and agribusinesses must stay alert to the opportunities online can offer,” the report suggested, however, it found that 58% of businesses have no plans to sell online. Those that do, 83% of which find Facebook to be the most effective platform.
“Food businesses are more likely to have better broadband available for their businesses, and are more likely to trade online and social media is of greater importance in their marketing efforts,” Leydon said.
“The findings are clear. Costs are rising, high-quality labour is in short supply and while Brexit looms large on the horizon, many businesses are focussed on the problems they can solve through sound management and diligent effort,” said ifac CEO John Donoghue.
“Succession remains a significant challenge for owner-managers in the sector. Fewer than one in five food and agribusinesses have a clear succession plan in place.”
83% of Irish food and agribusiness SMEs do not have a clear succession plan in place mainly due to the lack of thought, business viability, and no interest from the next generation.
David Leydon, Head of Food and AgriBusiness, said that Food companies are more open to selling their business in the next five years than agribusinesses, mainly due to the fact that a greater percentage of agribusinesses are family run.
86% of medium-sized businesses experiencing cost increases averaging 5%, however, despite this, there is generally a positive outlook for the future of both food and agribusinesses, ‘in line with a positive outlook for the overall economy’.
49% of the companies surveyed are not worried about Brexit with only 21% very worried. Among this group, the most worrying aspect about Brexit is the potential rising tariff costs.
Leydon said that this is because the majority of their sales, 84%, come from within the Republic, and that there is a “lack of knowledge” about what will actually happen after March 2019. 38% of companies surveyed have no interest in selling outside of the Republic of Ireland.
While Food and Agribusiness companies are not overly concerned about Brexit, Irish consumer sentiment slipped in August as worries about Brexit grew, erasing a July bounce put down to unusually warm weather and the start of the summer holidays.
© 2018 Checkout – your source for the latest Irish retail news. Article by Aidan O’Sullivan. Click subscribe to sign up for the Checkout print edition.