Under the most recent strategy for the Irish food sector, Food Wise 2025, the headline figure for the industry is a forecast 85% increase in the value of food exports to reach €19bn by 2025.

And when we think about how to achieve these targets, the discussion usually revolves around finding new markets for Irish food and drink exports to drive the growth. However, in doing this, it could be very easy to overlook some of the adjacent core markets that have served the Irish food industry so well for so long. Maintaining our presence in these established markets is just as critical as finding new ones for Irish food.

It is for this reason that Bord Bia and 20 Irish food companies are currently in Cologne, Germany, attending Anuga, one of the world’s largest food trade fairs. The event, which runs over five days until Wednesday 14 October, is expected to welcome up to 160,000 international trade visitors from 187 countries.

Important market

Germany is the fourth-largest export market for Irish food and drink in terms of value. In 2014, food and drink exports to Germany were valued at €565m, with provisional data from the Central Statistics Office indicating a 2% year-on-year increase in value for 2015 to date. It is a market that cannot be taken for granted by the industry.

Despite being a highly consolidated, competitive and mature market, Irish food and drink exports to Germany have enjoyed considerable growth in recent years. Dairy, beef and prepared foods account for more than three quarters of exports.

Valued at €230m for 2014, dairy exports are the best-performing category. Germany is a critical market for Kerrygold, where it is the number one-branded butter in both volume and value terms with a 17% market share.

Irish beef exports to Germany have also been performing strongly in recent years. In 2010, Ireland exported 9,600t of beef to Germany valued at €45m. In the intervening years, exports have grown in value close to €120m with 21,000t exported last year.

Consolidated retail sector

Like any mature market, the retail sector in Germany is highly consolidated, with the largest supermarkets accounting for almost 70% of the market share. As you would expect in Germany, the discounters and private label are very powerful.

Around 45% of the retail market share in Germany is held by discount retailers, such as Aldi or Lidl. Compare that to the Irish market where, although the discounters have gained significantly over recent years, they only hold a combined market share of less than 18%.

From an Irish perspective, the hypermarket chain REAL (part of the Metro Group) is the largest customer of Irish food exports, particularly for Irish beef. Last year, the retailer purchased close to 6,000t of Irish beef from suppliers including ABP, Dawn Meats, Kepak, Liffey Meats, Dunbia and Kildare Chilling. The retailer has even included Irish beef in its television adverts.

In terms of size, the average REAL store in Germany carries 80,000 items in stock – almost double the 40,000 stock-keeping units in the average Tesco store in Ireland.