Value ‘dominant issue for food and drink consumers’

Value remains the dominant issue for Irish food and drink consumers, according to an industry survey unveiled at Bord Bia’s fourth annual Food Service Seminar.

Irish food and drink industry leaders have been adapting to meet this consumer focus, the seminar heard. Industry respondents saw a strong opportunity in consumers’ sustained willingness to purchase, albeit with lower cost and value for money in mind, in the vast majority of purchases.

Bord Bia analyst Maureen Gahan notes: “Despite a period of sharp decline, food service in Ireland offers major opportunities for suppliers offering innovative products and solutions.

“In certain channels such as ‘on the go’, casual dining and quick service restaurants, there are clear green shoots emerging as consumers trade down to lower-cost eating out options. These channels will drive market revival.”

However, industry responses also made it clear that consumers, while seeking value for money, also want to eat quality food. Several of the speakers noted these seemingly contradictory consumer demands have been repeated in economic downturns, dating all the way back to post-war periods.

Food businesses were given a number of suggested responses by James Burke, director of Dublin-based food and retail consultants James Burke & Associates.

In terms of price-based solutions, Mr Burke suggested that Irish food and drink producers become “lean champions”, revisiting all of their cost structures.

He also suggested smarter and/or cheaper packaging, producing goods with a longer shelf life, adopting world-class supply chain systems, increasing automation and ensuring maximum efficiency in procurement.

In terms of non-price solutions, Mr Burke suggested companies consider more structured innovation, improved account management, improved customer and consumer knowledge, and a selection of solution-based approaches to global food service expertise and greater communications to the consumer on the taste, quality and provenance of their produce.

Nonetheless, Mr Burke also reminded food business owners that, faced with a choice between two polar opposites, “you cannot be both”.

Bord Bia chief executive Aidan Cotter also noted that Irish food and drink producers need to be aware of the growing focus of global consumers and retailers on sustainability.

With most Irish food output being focused on export rather than domestic markets, he noted that 3bn consumers will join the global middle classes over the next 20 years. He cited Bord Bia’s own ‘Origin Green’ branding plans, and promises to consumers from the likes of Sainsbury’s and Unilver to source 100% of their agricultural and other raw materials from certifiably sustainable sources by 2020.

To date, some 32,000 Irish farms have signed up to certified beef schemes, representing 75% of total Irish beef output. Lamb is at 8,500 certified farms, or 45% of total output. Pigs are at 360 farms, and 95% of output, with poultry and eggs on similar ratios.

Some 18,000 Irish dairy farms are signed up to certified schemes, or 100% of output. Horticulture is at around 50% certified. The goal is for every sector to sign up, with the notion of giving the country a clear, green, export-focused marketing advantage.

Mr Cotter also cited World Wildlife Federation (WWF) criticisms of some food and drink producers who, noting the green swing in global consumer awareness, have sought to claim ‘green’ origins for their produce.

Addressing an open letter to Brazil’s president, the WWF wrote: “Dear Mrs President Dilma Rousseff, your credibility is like the forest, once it’s gone, it’s gone.”

That WWF letter was accompanied by pictures of felled trees in the Brazilian Amazon. The letter aligned the tree felling to Brazil’s land use for its export-focused beef sector.

WWF wrote: “As the second largest producer of beef and the top global exporter since 2004, beef cattle represent the leading driver of deforestation in the Brazilian Amazon.

“According to the National Wildlife Foundation, the country is also the world’s third largest emitter of greenhouse gases, nearly half of which are directly tied to deforestation. These factors make the monitoring of the supply chain critical.”