19 Sep Irish food sector ahead of the sustainability race
Tara McCarthy, CEO, Bord Bia, highlights Ireland’s food and beverage sector’s recent successes and its long-standing commitment to the environment and natural practices
What does Bord Bia provide for the Irish food and beverage industry?
We manage the promotion, trade, development and the marketing of food, drink and horticulture on behalf of the sector. Bord Bia is a relatively young organization, established in 1994 and grown through mergers with other similar organizations. Every element of food in Ireland is now represented within Bord Bia. Our industry has laid out a 10-year strategy until 2025 that is updated every five years. The strategy targets exports moving to $22 billion in value by 2025, not just for food but also for wider agriculture exports. This is a realistic target.
Bord Bia’s job is to enhance the reputation of food, drink and horticulture in developing markets for Irish suppliers, bringing the taste of Irish foods to as many tables worldwide as we possibly can. Our headquarters is in Dublin, and we have 15 overseas offices, in places such as New York, Tokyo, London, Singapore and Shanghai. Our overseas presence is important so that we understand our customers. The needs and the demands of customers are evolving consistently. We need to meet and exceed their expectations. Our goal is to have customers around the globe recognize that Irish food and drink is world class, high quality and distinctive.
How successful is Ireland’s food and beverage sector?
We have seen growth of more than 60% in food exports over the last decade. Notwithstanding an incredibly disruptive year, Ireland exported $15 billion worth of food and drink in 2020, down only 2% from 2019, a record-breaking year.The maintenance of value is a huge vote of confidence in the industry and underlines a decade long diversification strategy. We now export to 180 countries throughout the world. Around 40% of our total exports are dairy, which increased last year, as did our pig and sheep meat segments. In 2020 we saw a significant rise in value exports throughout the world, particularly towards Africa and the Middle East.
The most important attribute of the food and drink industry is trust. We have created an infrastructure that ensures it is independently accredited, validated and proven. We believe that the combination of trust with a natural product is the recipe for success.
What has Bord Bia done to promote the next generation of workers in the sector?
We have invested quite strongly in talent. Over a decade ago we created a program called Marketing Fellowship to fill a gap in the food and drink industry. We partnered with UCD Michael Smurfit Graduate Business School to create our first program. We offered potential students — all of whom were graduates with work experience — the opportunity to have a master’s in marketing combined with an opportunity to work with the Irish food industry on commercial projects. After a decade of work, we are adding four additional programs to support our sustainability agenda. We are creating a pipeline of talent that has market-focused experience in the industry through the 24 months they spend with us. We also created a separate program called Agri-Food Diversity & Inclusion Forum, which looks for necessary tools to promote diversity and a modern and welcoming industry. We want to provide career paths for people in all walks of life.
Our investments in this area are not only for the retention level at Bord Bia but the entire food industry. Around 80% of graduates who run through our programs — whether it is towards supply chain, sustainability or export marketing —stay with the food industry and create new success stories. We recently recruited 40 places out of 3,000 applications, which means one in every 15 graduates was applying to work in the food industry. This is a fantastic endorsement of the excitement associated with our sector.
What is Bord Bia doing to promote sustainability in its food and beverage value chain?
The world is facing many challenges. We argue that sustainability is the one element that should have all our focus.We are the only country in the world to operate a national sustainability program. Our Origin Green initiative is incredibly innovative. It’s a national-run program at a national scale that unites the government, private sector, and supply chain from farmers to food producers right through the food services and retail sectors. More than a decade ago we committed to creating an infrastructure that is independently reviewed, based on science and constantly looking to improve. We offer tangible proof in our green agenda. This allows us to set and achieve measurable sustainability targets while balancing the environment, economics and social elements included in the definition of sustainability.
We view traceability of food as a cardinal infrastructure. We visit over 50,000 farms in Ireland every 18 months. We undertake audits, check traceability and animal welfare. While we have had this form of traceability for many years, we are now looking at criteria such as greenhouse gas emissions, biodiversity, water usage, energy efficiency, soil management, socioeconomic factors and other necessary modern data sets. We have 600 auditors consistently on the road gathering data at farm and factory levels. They ensure the industry has proper support and management systems to navigate the steadily changing environment.
How significant is the U.S. market in Ireland’s food and beverage exports?
The U.S. is the second largest export market for Irish food and drink. Alcohol is a huge part of that, amounting to $652 million. We are very conscious of the challenges that COVID-19 has presented to the alcohol sector. There was also an imposition of U.S. tariffs on Irish cream liqueurs. From a dairy perspective, the U.S. grew 12% in value in 2019. We were hit with 25% tariffs on certain dairy goods, particularly our butter. However, we grew around 11% in 2020 in our dairy exports. When we look at the positioning of Irish dairy among U.S. consumers, they love the exceptional quality and taste that comes from our grass-fed credentials.
Family grass-based farming is the tradition in Ireland. We have done an awful lot of work to provide scientific grounding of our grass-fed strategy. Our scientific research partner, Teagasc, looks at the net calorie intake of our cattle at different life stages. We have been able to calculate that on a rolling average 95% percent of our cows’ diet is grass. This directly affects the taste and spreadability of our butter. Kerry Gold butter is the number one imported butter in the U.S. and the number two brand within the U.S. butter category. Additionally, our beef exports grew 70% from 2019 to 2020, reaching $40 million.
How has Brexit affected Ireland’s revenues from exports of food and beverages?
The U.K. is our number one export destination for food and drink. We transported $5.1 billion worth of goods to the U.K. in 2020, encompassing around 33% of our exports. Of this, almost half consisted of beef and dairy exports. The U.K. is our closest market and has a similar taste profile to our own. We import and export around the same amount of food and drink between us. We share a mutual dependency.
We have been preparing for Brexit since the vote in June 2016. We created data sets that would help us understand all applicable nuances. We created a Brexit parameter and then evolved that into a readiness radar to help us understand the risks and capability gaps that the industry needed to consider. We created several additions to our Brexit action plan to be specific on key actions that food and drinks manufacturers need to undertake in terms of customs, sanitary and phytosanitary controls, business continuity and market diversification. We saw that 90% of companies felt they were well prepared for Brexit.
However, there is a resetting of expectations on how we navigate our future engagement due to added permanent costs. It is still an unsettled trading environment with new regulations on the way. We are currently dedicating our time to fully understanding the implications of these regulations and training our industry to prepare for them.
Through our customer insight initiatives, we have found that British consumers are more open to Irish foods than to other European-sourced food. Data shows that 85% of U.K. consumers are open to choosing food and drink from Ireland. We have very similar high standards, farming practices and production systems. Irish businesses can thrive in this new environment.
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