Food processors invest in research
This has emerged in the initial findings of an Enterprise Ireland research project involving over 100 companies mainly in the food sector.
Enterprise Ireland director Michael Feeney told the Agricultural Science Association annual conference in Kilkenny he was greatly encouraged by the findings. “I detect a mood of confidence in the industry. More and more companies are demonstrating the ability to develop new and innovative markets and to find their niche in the international marketplace,” he said.
Mr Feeney said companies are investing in research and development and innovation to move up the value chain. They are linking into the largely untapped scientific research resources in the third level sector in order to build their own innovation capabilities.
The message is clear: the industry itself is saying that innovation, new market-led products and moving up the value chain is where the future lies.
“The need and the direction are recognised. The issue is that the strategies are not necessarily in place to make it happen,” he said.
Mr Feeney said innovating and moving up the value chain must underpin any strategy for achieving real growth.
“We are coming from a historical situation where the Irish agricultural industry operated in what can only be described as a false calm,” he said. “Protectionism, commodity purchasing and a regime of EU subsidies created a singularly unreal market environment. But all that is changing.
“Subsidies are being stripped away, market barriers are breaking down and prices for agricultural output are harmonising across the world.”
Mr Feeney said the individual characteristics of the marketplace have also gone through a sea change with increased concentration and the internationalisation of the multiples.
Food safety, animal welfare and environmental concerns, changing lifestyles, sophisticated and demanding customers are other important factors.
“It is a much more challenging environment in which to do business, and it will expose industry un-competitiveness. Neither producers nor processors can afford to stay locked in the past, clinging to outmoded ways of doing business,” he said. “As prices for commodity products harmonise across world markets, margins will contract. To put it bluntly, if food producers are not able to get more for what they produce, they will go out of business.”
