Innovation key to food growth

The recently published Enterprise Strategy report "Ahead of the curve'' looked at where the Irish economy is going or, more importantly, where it should be going. One of the main bodies responsible for implementing that strategy is Enterprise Ireland (EI). Pat O'Keeffe spoke to their Food director, Mike Feeney

Mike Feeney explains the background to the enterprise strategy report. "The economic model pursued in Ireland will have to change. In the past, we could attract foreign investment (and jobs) based on a plentiful supply of relatively low cost labour. When that was combined with our low company tax and grant aid, it was an attractive offering. Now that we are a relatively "rich'' country, that model will have to change,'' he said.

The mission of Enterprise Ireland (EI) is to "accelerate Ireland's national and regional development by working with Irish companies to develop and compete so that they can grow in world markets''. In food, they work with the main sectors, as well as with companies individually.

At a sector level they seek to develop a strategy for the entire industry in collaboration with Bord Bia and Teagasc. For example, EI undertook a major project to examine the competitiveness of the pig processing sector in Ireland. This examined how the Irish industry compared with foreign industries and also allowed Irish companies to benchmark their performance. Enterprise Ireland is also involved with companies individually in a number of ways. In small companies, there is a strong demand for advice on improving management structures. A Mentoring programme also provides companies with access to an experienced business professional who has "been down the same road before.''

Enterprise Ireland also provides funding to start-up companies. In most cases, EI will take an equity stake as part of the funding arrangement. They will also provide a range of non-financial support in the form of advice and guidance on strategy.

Research and development

Research and development and the whole concept of innovation was the main emphasis in the Enterprise Strategy report. Enterprise Ireland is already increasing its commitment to this area, with substantial funding available to assist companies. For example, a number of food companies have availed of RTI funding - the Research and Technology Initiative.

"Recently I see an increasing awareness in food companies on the need for innovation. There has been a significant uptake in research and development demand. That was not the case as late as two years ago,'' Mike Feeney said.

As part of the government's increased focus on building a science based economy, Science Foundation Ireland is pouring huge sums of money into institutional research. Mike Feeney is particularly keen to ensure this knowledge is quickly commercialised.

"Institutional research has to be commercialised to return money to the State. We think it is very important that large food companies have Centres of Excellence in Ireland.'' The concern of course is that Ireland's increasingly multi-national food companies could undertake their research abroad.

"I think it is important that we continue to internationalise but keep a reasonable amount of investment in Ireland, particularly in knowledge,''

Glanbia will shortly open one such centre in Kilkenny, while Mike Feeney said that discussions are well advanced with other companies.

Enterprise Ireland is also involved in ensuring that the Irish based operations of multi-nationals compete for expansion investment. One example in the food sector is Abbotts, whose massive expansion at their Cootehill plant will shortly be officially opened.

Increasing expansion

Chilled foods is an area where Mike Feeney would like to see greater expansion by Irish food companies, as this is expanding rapidly in the supermarkets at the expense of frozen foods. At present the majority of our consumer food exports are in the frozen category. Meanwhile, the introduction of decoupled subsidies will make for a "changed world'' for Ireland's beef processors. Mike Feeney also comments that Ireland's beef processors must contend with the fact that Ireland is no longer a low cost economy. Enterprise Ireland remains committed to the belief that increasing scale is one area where we can improve our competitiveness, noting that significant over-capacity remains in the sector.

In the dairy industry, Mike Feeney is passionate about the potential for functional foods. Last year EI took a group of 12 Irish companies to Japan, where the industry is very well advanced. In recent weeks a number of Japanese visitors were in Ireland. Mike Feeney believes that there are major opportunities to develop alliances in the sector, perhaps initially through the research institutes.

In November, Enterprise Ireland will host a major World Food technology and Innovation Forum, with a Japanese expert on functional foods among the key speakers.