Bord Bia’s annual report and accounts suggests that the reduction in Irish exports in 2020 was only 2% as evidence of sustained demand for Irish produce in emerging markets in Africa and the Middle East.

Since 2016, the value of exports of food and drink have increased 16%.

It is also worth noting the value of food and drink exports to the UK has increased to €4.3bn over that five-year period.

The destination of Irish produce is now almost equally split three ways, a third to the UK, a third to the EU and a third to countries outside the EU. In 2016, the split wasn’t that different; 37% to the UK, 32% to the EU and 31% to international markets.

The agri-food sector has recorded phenomenal growth since 2010, but does 2020 mark a significant change, given the potential impact CAP changes and climate regulations might have on Irish farmers in coming years?

Will farmers be allowed produce more or will they get more for what they are producing?

While the aspiration from our Minister for Agriculture Charlie McConalogue is to continue to grow the value to over €19bn, can it happen? Will farmers be allowed produce more or will they get more for what they are producing? Speaking to the Irish Farmers Journal last week, the minister is intent on increasing the value rather than the volume of milk produced in Ireland

Bord Bia accounts

Bord Bia, Ireland’s marketing and promotional body for Irish food abroad, took in almost €74m in 2020, mostly from Department of Agriculture funding (Figure 1).

The other significant chunk of income comes from a levy on cattle, sheep and pigs and, in 2020, this came to €5.9m.

Income and expenditure

Total expenditure in 2020 amounted to €72.5m with the majority spent on marketing and promoting Irish food, pay costs and running the Quality Assurance schemes in the different sectors.

If we look back five years, Department funding has increased substantially as the value of exports has grown.

Total income to Bord Bia is up almost €15m, mostly from higher grant aid. However, costs are also up significantly and the spend on promotional activity has increased by over €14m over the same five-year period.

Wages

Over €8m extra compared to 2016 was spent on marketing in 2020, while just shy of €5m extra was spent on wages.

The main driver of the wage increase is the fact there are 50 extra staff members in 2020 compared to 2016 with 162 on the books for 2020 compared to 112 in 2016.

The accounts show in 2016 there were six staff members earning over €100,000 with 12 earning over €100,000 in 2020. The chief executive salary is €166,000. This week, Bord Bia responded to queries on its new location at Pembroke Road highlighting the annual cost of its new office is €1.5m per year.

Q&A

JK: The 2020 export value shows a slight fall in overall value, but it’s small relative to the impact of COVID-19 on markets. However, some companies did better on the back of a retail bounce - why not Bord Bia?

Padraig Brennan: Yes, the pandemic had an effect with closures of food service for much of the year and changes in consumer behaviour, which saw the largest disruption to normal market operation, globally, since the end of World War II.

Increases were recorded in the value of Irish dairy and overall meat and livestock helped by strong increases in the value of pigmeat and sheepmeat exports.

A strong retail performance in these sectors helped to offset the loss of food service for much of the year and boost overall export values.

Sectors most valued affected by the pandemic included drinks, prepared consumer foods and seafood, which were most severely impacted by the loss of the food service sector and channels such as travel retail, in the case of drinks.

Still on target to reach €19bn by 2025?

Under Food Vision 2030, the target is an increase in agri-food exports from €14bn last year (that includes non-edible agri-sector goods of €1.3bn), to €21bn by 2030. There is opportunity to differentiate ourselves, not to compete on price alone, but rather to anticipate new sources of added value to consumers. This will require the ongoing delivery of strong proof points around areas such as sustainability that can help us to clearly differentiate ourselves from competitors.

This will require us to scale our messaging around what Food Brand Ireland stands for and being able to back this up with strong proof at all times, while also demonstrating the capability of the sector to deliver innovative solutions to meet the needs of customers. Successfully delivering on this can help to secure further value growth over the period ahead.

Where do you see organics in light of what is coming from the EU – 25% of all land under organic? Is the market for premium value there?

The size of the market for organic food is showing strong growth. Retail sales of organic food products in Ireland stood at €220m for the year ended October 2021. This represents a growth of 19% since 2009 and equates to around 2% of the total grocery market.

The organic share of total grocery retail turnover is now approaching 7% with the modern retail channel driving growth over recent years.

Research carried out by Bord Bia suggests that a good proportion of consumers are willing to pay a premium of up to 10% for organic products.

We need to co-ordinate existing supply to minimise leakage into the conventional sector, which currently stands as high as 70% for sectors such as lamb while also growing the scale and managing the seasonality of supply.

Do you have an update on where PGI is at?

We are continuing to work with the Department of Agriculture, Food and the Marine to progress it for Irish Grass Fed beef. Over recent months, we have responded to some clarifications sought by the European Commission and are hopeful that we have provided sufficient detail to allow the application to proceed to the next stage, which will give other countries an opportunity to provide views on the application.

Grass fed dairy – have all processors undertaken the audit now or where is it at and what are the next steps?

Over the course of 2021, we have worked strongly with dairy processors in relation to the grass-fed standard. At this point, 20 processing facilities have been audited and certified against the standard. We are now working with each processor as they develop their rollout plans for utilising the standard for primary dairy products with selected customers.

Bord Bia is informing customers about the grass-fed standard as part of our marketing campaign in key European markets, the United States and Asia.

  • Other specific questions asked on the accounts, relocation, relevance and levy funding will be covered in the coming weeks.