Irish Food and Drink 2009 Performance Dependent on UK Segment
43 per cent of Ireland’s total food and drink exports, which make up one tenth of total merchandise exports, are destined for the UK market and each 1 per cent decline in the value of sterling reduces the euro value of exports by €35 million a year.
27/02/09 "The performance of Irish food and drink exports in 2009, worth €8.2 billion, will to a large extent be determined by the exchange rate with sterling and the capacity of Irish suppliers to remain competitive" said Aidan Cotter, Chief Executive of Bord Bia speaking at the organisation's UK Retail and Currency Seminar in Dublin. Some 70 delegates from Irish food and drink companies heard how 43 per cent of Ireland’s total food and drink exports, which make up one tenth of total merchandise exports, are destined for the UK market and each 1 per cent decline in the value of sterling reduces the euro value of exports by €35 million a year.
"The depreciation of sterling combined with a higher Irish cost base and pressure on consumer spending are posing unprecedented but not insurmountable challenges for Irish companies. Bord Bia is committed to working with Irish food and drink companies to maximise their potential in the market by addressing the currency and competitiveness issues that exist and helping them manage their businesses through tough times", according to Aidan Cotter.
The Bord Bia seminar featured presentations on the economic outlook for the UK market including forecasts on currency fluctuations, how the downturn is shaping consumer behaviour, strategies of key UK retailers and offered practical advice on sales management in turbulent times.
Addressing the seminar Beatrice Blake, head of Bord Bia's London office said "The trading climate for Irish companies exporting to the UK has been extremely volatile for the past eighteen months. Recognising the seriousness of the challenge Bord Bia’s London office has re-engineered its programme and service offer to ensure that all resources are focused on the defence of Ireland’s share of the UK food and drink market. Key elements include equipping companies with high quality market data and insight and providing sales training support while reducing costs by developing more efficient routes to market."
Speakers at the event included Mark Thomson, Consumer Insight Director, TNS Worldpanel who focussed on how the current economic conditions continue to impact on consumer purchase decisions and what trends and opportunities are arising within the UK retail market.
According to Mr Thomson "Despite a decline in consumer confidence there are openings for food and drink companies to capitalise on changes in spending behaviour. As consumers search for value for money options and alternatives to eating out the focus has turned to waste reduction, cooking from scratch and entertaining at home. Replicating out of home treats will be a prime area of opportunity in 2009 for food and drink companies who can modify and adapt their products and marketing."
Other speakers included Jonathan Loynes, Chief European Economist, Capital Economics; Edward Garner, Research Director, TNS, and Finn Cottle, former Retail Buyer and Marketing & Strategy Director, Noble Foods who discussed strategies for Irish companies currently doing business with the UK retail market. "Suppliers need to mirror the retailer approach to cost obsessiveness, both showing rigorous cost control and knowing cost structures inside out. Above all, they need to be procuring brilliantly to keep ahead of the retailers' demands and showing that they are actively pursuing cost efficiency and savings" said Ms Cottle.
In 2008, Irish food & drink exports were valued at €8.16 billion. The UK was the main destination for exports, accounting for 43% of the total; 33% went to Continental EU markets with the remaining 24% going to non-EU markets. Bord Bia recently launched its Statement of Strategy 2009-2011 which aims to boost Irish food and drink exports to €10 billion in the next three years.
