In all of the analysis on Brexit, before and after the vote, Ireland’s agri-food sector has continually been highlighted as the most exposed sector, particularly if the trading relationship between the UK and EU reverted to WTO rules in the event of a hard Brexit.

The UK accounted for €4.5bn, or 35%, of all Irish food and drink exports in 2017. Some sectors are more exposed than others, with over half of all Irish beef, pork, cheese and mushroom exports destined for the UK market.

Because of its proximity, similar culture for food and drink, and shared language, the UK has long been the most attractive and straightforward export market for Irish food exporters.

For David Brett, general manager with Tipperary-based pork processor Oakpark Foods, the UK was always a comfortable high-value market.

“We dipped our toe into exporting for the first time in 2008 when we did some promotional listings with Lidl UK. It started out small-scale but a decade on and we now have a full listing with all of Lidl’s stores in the UK. We also have nationwide contracts with Aldi UK, Morrisons and Iceland,” says Brett.

Since the Brexit vote, however, there has been a significant push for Ireland’s food exporters to diversify more of their business into new markets and away from a heavy reliance on the UK.

For Oakpark, which will generate a turnover of €35m this year, exports now represent 40% of the total business, with the majority of export sales going to the UK. As a result of the Brexit vote, the company now finds itself where it was with the UK market 10 years ago and is dipping its toe into new export markets in Europe.

“Through our connections with Lidl, we’re developing new sales markets in Europe,” says Brett.

“We’re at the stage with Lidl in Europe where we were with Lidl UK 10 years ago. Every second week we have an order going out to Europe to test what works in different markets. It may take a couple of years, but if we can get a full listing in one or two markets out of this, it would be fantastic.”

Challenges

However, breaking into new markets is not straightforward. According to Brett, the biggest challenge the business now faces is trying to adapt Oakpark’s product range to the tastes of European consumers.

“The rasher is a staple of the British and Irish diet. But they’re not frying up rashers in Paris,” he says. “We’re going to spend circa €750,000 over the next three years on R&D and new product development to adapt our products to the EU consumer.”

Oakpark has its own R&D team in-house that works with Enterprise Ireland on designing new products, new packaging and advanced production processes to extend shelf life. Pork products such as streaky bacon and lardons are the types of product that Oakpark is starting to manufacture on a larger scale to win over more European customers.

The company has recently acquired and retrofitted a second processing facility in Clonmel, which is now up and running producing product with the EU market in mind.

Core business

Despite the focus on new markets, the UK will continue to be a core market for Oakpark. With the country only 60% self-sufficient in pork and relying on imports for 80% of its sliced bacon, the UK will always have an import requirement for pork.

“We’re still growing our sales in the UK market and we’re in that market for the long haul.

“We’ve spent a lot of money developing our market share in the UK and we’re committed to the market despite what Brexit may throw at us,” says Brett.

The devaluation of sterling since the Brexit vote means the UK is not as profitable a market as it once was but Brett says the company has adapted to that challenge by continuing to focus on being ultra-efficient.

With Ireland still accounting for 60% of the business, Brett says the aim over the coming years will be to invest and grow the Oakpark brand name.

Producing own-label product for retailers remains the core of Oakpark’s business model but the Oakpark brand is now one of the top five most recognised consumer bacon brands in Ireland.

“The Oakpark brand has gone from a local brand to a regional one and is now a national brand with listings nationwide in all retailers,” says Brett.

“We’re investing in the brand and intend to grow it. It’s going to take a helluva lot of hard work but I would have aspirations of it becoming the No 1 bacon brand in Ireland some day.”

Silver lining

There’s no doubt Brexit carries with it a significant negative impact for Ireland’s agri-food industry. However, if there was any silver lining it is that many Irish food companies, heretofore heavily reliant on the UK market, are now being forced outside their comfort zone to look for new business in Europe.

“If Brexit hadn’t happened, I doubt I would have been in Europe this week meeting new retail customers in the Netherlands and Belgium. It’s going to be tough, but we need to be able to look beyond the UK market,” explains Brett.

Doing business in Europe for food exporters presents many non-trade tariff barriers such as language, cultural differences and food tastes. However, there are many examples of Irish food companies that show it can be done and there is an appetite out there for Irish food in Europe’s high-value markets.