Brexit may be causing indigestion to the Irish food sector right now but market diversification can make it more palatable.
“Demand for food globally is growing at an enormous pace,” says Lance O’Brien, head of management services at Teagasc, the agriculture and food development authority. “Population growth is expected to tip 9.7 billion by 2050.”
From a logistics perspective, that growing population will be easier to sell and distribute to too. “Some 70per cent of us will be living in urban areas, up from 50per cent now. It is estimated that 50per cent more food will be needed by 2050, and this has to be produced from the same amount of land, or less, than is currently used, because we can’t keep expanding land for farming, cutting down rain forests to clear land, for example.”
Instead, we will see an intensification of farming, with technology providing the key, he says. “In the past when we had big jumps in food production, it was due to improvements in technology and fertilisers. Now we are seeing productivity gains in the cereals sector, for example, slackening off. We have reached the end of those gains. On top of that, we are facing into huge challenges such as climate change, which is a serious problem, as well as deterioration of soil and water, another huge issue. As a result of all this, sustainable intensification is the buzzword right now.”
Other factors are at play too. Europe’s population is ageing, and eating less as a result. Consumption of proteins falls as people age, he points out, which is not good news for a country reliant on beef and dairy exports. On the other hand, demand for proteins is growing in developing markets such as Africa and Asia, particularly China, where Ireland is already familiar to consumers as the producer of much of its baby milk formula.
The Middle East offers growth potential too and is a market food and drinks exports agency Bord Bia is focusing on in the wake of Brexit. As well as ongoing promotion of the agency’s national sustainability programme, Origin Green, it organised a trade mission to the United Arab Emirates in February and hosted a record number of companies on its Ireland stand at Gulfood, a five-day tradeshow that attracted around 90,000 food buyers from 156 countries.
There is good potential for Irish sales in the region, not least because food security is a key concern in a part of the world that imports 90per cent of its food. Ireland, which, by contrast, exports 85per cent of its agri-food output and has a strong focus on quality, traceability and sustainability, all of which make it an attractive supply partner.
Bord Bia reckons post-sanctions Iran, Turkey and Saudi Arabia offer particular growth potential. These have the three biggest populations in the region at 80 million, 80 million and 30 million respectively.
Irish food companies already have a significant presence in the UAE and further growth is predicted. The value of Irish food and drink exports there in the first 10 months of 2016 was up 13per cent on the same period the previous year, and valued at €47.1 million.
Consumer trends in developed markets echo those at home, with consumers keen to source healthier option style foods, such as gluten free and organic. Not only is this “free from” sector showing growth but such “added value” products offer producers better margins, making them more resilient to external factors such as currency fluctuations and increased tariffs. That’s an advantage to which the high volume, low margin mushroom industry, which suffered closures in the immediate aftermath of the Brexit vote, can attest.
