Irish market success at centre of food chief’s plan

BORD Bia’s new chief executive, Aidan Cotter exudes an air of Zen-like calm.

However, he knows he has a big task on his hands.

Irish food producers are facing into a stiff commercial breeze with the opening up of protected markets, the emergence of new low cost competition, and the ever growing power of the big retail grocery conglomerates.

Now, with decoupling, production could fall back if returns from the marketplace are not sufficient."

In such an environment how best can producers respond?

"In order to even keep production at current levels, Ireland has to move up the value chain."

There is no point, it seems, even trying to match people like the Brazilians when it comes to scale.

How then are food manufacturers responding to the growing power of the retailer customers?

"There is a natural tendency for manufacturers to consolidate. Look at the huge dairy combination of Arla Foods and Campina, which have just come together following a merger. In Denmark, 90% of what is a massive pigmeat industry is now controlled by a single company, Danish Crown."

So is this process happening fast enough in Ireland?

"At the end of the day, the market will decide. There are plenty of successful Irish food and drinks companies." Sadly, the Bord Bia CEO cannot go into detail, here, for fear of being accused of favouritism. We must stick to generalities.

"The successful companies are those that identify the opportunities as they emerge, they are the people who can spot the trends early and build on this."

Think Kerry, think IAWS. Bord Bia's role is to try and boost enterprises at an early stage in their development. "We have a role in priming the pump."

Recently, a group of 28 speciality food businesses, each with an annual turnover of €2.5m, has received backing. Their strategy is to go after market segments.

Bord Bia has long placed faith in the prepared foods sector which grew at a health pace up until 2003.

"This is the sector most likely to experience problems brought on by food price deflation."

Assuming that this trend is likely to continue, the only way to get round it is through product innovation which means an increased commitment to R&D.

Aidan Cotter has been there before. As a young researcher with the National Board for Science & Technology, back in 1979, he prepared a Report on the role of science and technology in food processing. His conclusion and this will sound familiar was that Irish industry was not investing to a sufficient degree in science and technology.

"At the time, the co-ops were farmer owned. They did not have the financial structures to enable them to invest in R & D. Since then, there has been huge progress. The Irish food industry has expanded its export output as a share of the European total."

But once again, it is time to push out those oars.

"There is an increasing recognition of the impact of science and technology," he says, pointing to the success of various new products from pizzas to chilled microwaveable beef dishes.

Looking at consumer trends, he believes that "convenience remains the biggest driver of change."

At the same time and a touch confusingly "health and wellbeing are now part of the consumer agenda." Customers, as usual, wanting to have it all but then, the customer is always right.

While the Bord Bia boss accepts that the impact of the Atkins diet a major boon to beef exports has begun to recede, he believes that there will be a long term 'Atkins effect' in the sense that consumers now recognise the important role that good proteins can play in weight reduction.

One important trend is the increasing convergence of two mighty industries, food and pharmaceuticals.

"There is a new language in food. You have new words such as ' Phfod', 'nutraceuticals' and the ultimate, 'nutrigenomics' scientists are saying that if you can identify a person's DNA, you can develop a diet that is unique to that person's DNA."

"The extent to which it will translate into benefits down the line we will have to wait and see."

This world of personalised nutrition may still be a gleam in a scientist's eye, but extraordinary developments in technology can occur within a relatively small number of years.

Aidan Cotter accepts that there are already signs, overseas, of this historic convergence between food and pharmaceuticals. "Irish companies are not unaware of these developments."

The Bord Bia boss adopts a pretty cautious stance on the matter of GM (genetically modified foods.)

"To an extent, it is a cultural issue. In the US, consumers do not seem to have an issue with the use of hormones in beef, or with genetically engineered soya product, for example. In Europe, consumers are very sceptical. I can understand the European viewpoint. If these foods do not provide clear benefits, why should we adopt them? Consumers are right to be sceptical until it can be shown that they bring proven health benefits."

The Irish grocery market has been changing rapidly, in recent years.

There is now much pressure on Irish suppliers, even on the home front. The takeover of Superquinn by an Irish consortium of investors is a new twist in this tale.

"The Irish market is extremely important to producers. It is expanding rapidly. The population has risen by 14% in the past ten years and the Central Statistics Office are projecting similar growth in the period up to 2016. The Irish market is a true microcosm of the international (grocery) market. It now provides a platform for those who are prepared to start exporting. Ten years ago, you could not have said so."