Food Wise 2025

Vision -  Executive Summary

Vision - Executive Summary

Executive summary

A vision for success

Ireland’s agri-food industry is on a journey, one that is connecting local communities across the island to vast and diverse food markets around the globe. Building on what has been a largely successful decade to date, Food Wise 2025 is setting out a vision of the industry continuing along this course of growth, recognising the importance of strategic foresight if emerging opportunities are to be fully realised in the decade ahead.

Agri-food is Ireland’s oldest and largest indigenous industry, deeply embedded in the landscape, history and personality of the country. It encompasses everything from primary agriculture to food and beverage production, from fisheries and fish processing to forestry and forestry outputs. Its strategic importance to the Irish economy, its roots in local communities and its strengthening global reach (the industry provides quality, safe and nutritious food to consumers in at least 175 countries around the world) make it a sector unlike any other. A renewed focus on export growth, combined with a longstanding commitment to excellence, have, in recent years, created a host of new opportunities for established industry players as well as emerging entrepreneurs. With the agri-food sector now recognised as one where ambition and investment are rewarded, Food Wise 2025 sets out the practical ways in which aspirations for growth can be made tangible and the sector supported as it strives for new levels of success in the decade ahead.

Our wealth and potential as an island begins in the earth beneath us and the sea around us. Agri-food is embedded in local communities across Ireland in ways that no other industry can match. It is the main economic driver in many rural areas and, in terms of direct and indirect employment and wealth creation, its impact across the country is unparalleled. Its standing as Ireland’s largest indigenous industry is more than a question of economic ownership. The agri-food sector uses more domestic inputs than any other sector of the economy and, as farmers, fishermen, forest owners and food businesses supply their goods and services, their actions add to the common good in often underappreciated ways. They are custodians of Ireland’s natural landscapes and its environmental riches, while their support for local community activities underwrite Ireland’s social and cultural wellbeing in countless ways.

Food and Beverages Exports 2014

 

This firm rooting in the local is, of course, only one side of the story. The sector’s focus on international export markets has been a longstanding one, but the more recent renewal in export growth has been unprecedented and has led to a dramatic shift in perceptions around the industry. Building on strong macro economic trends, Irish food and drink exports grew strongly in the years 2010 to 2014 and, against the context of domestic and global recession, the sector’s achievements were striking. Agri-food is now firmly positioned at the heart of Ireland’s journey to economic recovery. This dual aspect of the industry – its distinctive contribution to local economies and its growing international footprint – is underlined by the fact that net foreign earnings generated from agri-food exports are greater  than non agri-food sectors of the economy.

Against this positive backdrop, Food Wise 2025 has been conceived as providing both vision and strategy for the future development of the sector. It builds on a successful lineage in this regard. Five years ago, the Department of Agriculture, Food and the Marine (DAFM) launched Food Harvest 2020, which set out smarter and greener ways to deliver sustainable growth and recommended a suite of actions, on a sub-sectoral basis, to support the industry’s development.

Like Food Harvest 2020, Food Wise 2025 has been informed by a committee of industry stakeholders and can be viewed as a framing document and a statement of intent. It represents the shared voice of an industry striving to create a business and regulatory environment in which the extensive growth opportunities of the next 10 years can be fully capitalised on.

It is appropriate to recall that, at the time of the launch of Food Harvest 2020, Ireland’s agri-food sector had come through a particularly difficult period and the vision painted of an industry that could capitalise on growing global demand for high quality, safe and nutritious food seemed a distant one to some. Five year later, Food Wise 2025 reflects an industry with a far stronger sense of its own capacity and a clearer picture of where the opportunity ahead lies (it is ‘wise’ therefore both to its own strengths and to the demands and opportunities of the marketplace). Globally, that demand continues to grow, bringing with it an increasing requirement for more sophisticated food solutions, particularly among the emerging middle classes of Asia and Africa.

The learnings of the last few years, then, are not simply that the world wants more food but that the opportunity for Irish agri-food is in meeting this demand at the upper end of the market. Irish food and drink exporters will find their greatest opportunities where they provide offerings that target different life-stage requirements, fit into the lifestyle choices associated with convenience and well being, and provide products with clear nutritional and health benefits.

Food Wise 2025 sets out how Ireland and the Irish agri-food sector can grow by refining its focus around these objectives. It does so recognising, at all times, the importance of the industry committing to processes that are sustainable – economically, socially and environmentally.

Exports

The opportunity

Food Wise 2025 identifies significant growth opportunities across all sub-sectors of the Irish agri-food industry. Cumulatively, it projects export have the potential to grow to €19bn per annum in value by 2025, a figure that would represent an 85% increase from the current three-year average. This export growth will be driven chiefly by expansion in dairy, beef, seafood and consumer food and drinks exports. Within these sub-sectors the role of value-added products in delivering innovative food solutions to consumers will be pivotal, and will be equally significant whether Irish companies are active in existing mature markets such as the UK or emerging markets such as China. Such developments will result in projected growth in Gross Added Value for the sector of 70% up to 2025.

Gross Value Added

This projected growth will further cement the agri-food sector’s position as a strategically pivotal sector of the Irish economy. As the data alluded to earlier illustrates, economic growth within agri-food has a proportionally more positive impact on communities, both directly and indirectly, than other sectors. The substantial increase in exports and in value added outputs will, firstly, increase direct employment in the sector, with the potential for 23,000 additional jobs to be created up to 2025. The distribution of these jobs across the country will ensure a significant further spin off in terms of the creation of indirect employment.

Sustainability

Food Wise 2025 recognises that a significant increase in food production cannot be considered in isolation from its environmental impact, in particular regarding concerns associated with the depletion of natural resources and the potential impact on climate change. To address this, future food production systems must be as focused on managing and sustaining our natural resources as they are on increasing production. Making the right choices now will ensure that Ireland is well positioned to deliver sustainable growth far into the future.

Ireland comes to this challenge with a number of natural advantages, key among them being a temperate climate which favours a grass-based livestock production system that is more efficient and environmentally sustainable compared to alternative intensive feed systems.

In a fast changing, and unpredictable, world, such comparative advantages cannot be taken for granted. Food Wise 2025 puts particular emphasis on harnessing the broad experience, expertise and knowledge of the Irish agri-food sector and in ensuring this collective wisdom is used to deliver future growth in ways that emphasise the improvement, development and adoption of sustainable processes, using natural resources in a manner which protects them into the future . A guiding principle that Food Wise 2025 will seek to embed at all levels of the agri-food industry is that environmental protection and economic competiveness are equal and complementary: one will not be achieved at the expense of the other. Food Wise 2025 also recognises that the three pillars of sustainability - social, economic and environmental - are equally important and carry commensurate weight. As the sector continues to develop and grow, the view that development must be undertaken within a framework of sustainability must become further embedded in the industry.

Food Wise 2025 enthusiastically supports the development of technologies and processes that increase productivity, resulting in more efficient use of limited resources. This strategy must be based on the latest scientific evidence and must ensure that the aims of delivering public goods, economic growth and sustainable rural local communities work hand in hand.
In the development of the Food Wise 2025 strategic document, a Strategic Environmental Assessment and an Appropriate Assessment for Natura 2000 areas were conducted in parallel. This environmental analysis helped inform the Food Wise 2025 report.

Delivering growth

Food Wise 2025 identifies a number of areas that require strategic action if the industry is to capitalise on, deliver and maximise the growth opportunities in the years to 2025. In particular, it highlights the need for:

  • the attraction, retention, and development of talent right along the supply chain, supported by training that will foster the necessary technical and entrepreneurial skill sets;
  • a greater focus on market development that is consumer-insight driven, to ensure Irish products are targeted at the right markets, and the right segments within those markets. These consumer insights will help the sector understand where its opportunities lie in emerging market opportunities, allowing businesses to focus on exports that deliver the best returns;
  • productivity improvements that are driven by innovation and the adoption of the latest technologies; and
  • value addition to sustainably produced primary materials, which will support local employment growth, ensure the viability of local producers and protect the environment and natural resources.

 

Food Wise 2025 identifies a number of actions that will facilitate this growth and addresses these areas specifically under the headings of human capital, competitiveness, market development and innovation. These crosscutting actions are complemented by a number of additional sector specific recommendations to support the development and growth of specific sub-sectors of the industry up to 2025.

Human Capital

The agri-food sector will only achieve its full growth potential if it can address the skills needs within the industry. This will involve investment in people currently working in the sector, a commitment to knowledge transfer that brings technological and process advances to the industry, and recognition of the need to attract people with the relevant skills into roles within the industry. The agri-food industry offers a host of exciting and rewarding career opportunities but needs to do a better job in communicating its appeal. The pace of change, and the level of new opportunity with for agri-food is demonstrated by the fact that the industry can now be viewed as a platform and a partner in the development of other sectors of economy such as pharma, tourism, bio-economy, biotechnology, bio-energy, IT including big data and precision technologies. These interfaces were largely the stuff of aspiration only five years ago, but now an emerging dialogue between agri-food and other industries should see an exciting spill over of new opportunities. The potential to attract new expertise and talent into the industry and to develop new spin off businesses and even new sub-sectors is an opportunity that should be enthusiastically explored in the decade ahead.

At producer level, the improved profitability and viability of enterprises will remain a pressing concern in the decade ahead. This will be driven by the adoption of the latest production technologies and processes, and by improving the financial management capabilities of producers. Such developments will, however, require enhancements and investment, in terms of knowledge transfer and educational supports.

At processing level, the opportunity presented by potential growth of 85% in exports are self-evident and the industry must focus on attracting and rewarding highly motivated and skilled people to achieve these ambitions. The future success of the agri-food sector will require the application of the latest technologies, the best financial management expertise, the capacity to absorb new innovations, marketing and language capabilities, and operational skills in management, marketing production, technical support, R&D and engineering. The agri-food sector will compete with others for the people with these skillsets, and it will be clear that realising the ambitious growth projections for the sector are, to some extent, dependent on its success in this regard.

Innovation

Research, Development and Innovation (RDI) are key drivers of competiveness and central to maintaining competitiveness in the long term. A wide range of state agencies and research institutions deliver high-quality research related to agri-food production and forestry, however, Food Wise 2025 has identified some challenges faced by the sector in relation to RDI.

These centre on gaps that exists (i) between translating research into commercial products and (ii) on the capacity within the sector, both at producer and company levels (in particular SMEs), to absorb new research and innovation. In addressing these challenges, Food Wise 2025 argues that an increased focus on consumer demands and insights must be central to future investment in research and innovation. This greater focus should improve the rate of translation of research into commercial outputs on markets. In this context, Food Wise 2025 recommends that the development of a Centre for Consumer Insight be pursued by relevant sectoral stakeholders. Such a centre would identify key consumer trends and insights in specific markets and inform the industry on further product innovation and product development research. The goal would be to develop solutions that would be easier to commercialise and would focus on value-added solutions driven by market demand.

Market development

To fulfil the diverse demands of global markets, the Irish agri-food sector must better understand the specific needs and requirements of consumers in specific markets. With this in mind, it is essential that market and product development be driven by a focus on consumer insights and consumer needs. If the sector is to maximise the growth opportunity presented by increasing global demand for food, industry players must understand these demands and their particular permutations in the markets they are entering. Only when production decisions are driven by high-level consumer insight will the sector be able to confidently say that marketing and sales resources are being applied in the most productive manner.

Food Wise 2025 recognises that part of the process of engaging with new markets is promoting Ireland as a source of food to audiences who may not have a clear understanding of the country and its unique culture, environment and people. Developing Ireland’s reputation and building better recognition of the country in these markets will be crucial to opening doors for Irish companies, particularly those entering these markets for the first time. Irish food and drink products sometimes represent the first direct experience of Ireland among consumers in emerging markets, meaning they also represent a significant opportunity to promote Ireland itself. There are clear overlaps between promoting Irish food and drink and identifying the country as a tourist destination and these potential synergies should be further exploited. Food Wise 2025 recommends that relevant Government agencies collaborate more closely to develop the image and reputation of Ireland in emerging markets. Harnessing this positive reputation of Ireland in this way represents an astute and cost effective way to maximise the benefit of marketing spend for the entire Irish economy.

Competitiveness

As a small, open economy and one that is particularly reliant on exports to drive growth and job creation, Ireland requires a continued focus on competitiveness in its global marketplaces. The impressive export growth achieved by the agri-food sector over the last five years, and its potential for continued expansion, have required, and will continue to demand, concerted efforts to improve competitiveness and productivity.

Food Wise 2025 stresses the need for ongoing improvements at producer and processing levels. At producer level, it should be clear that future profitability and viability will be driven by productivity improvements through the adoption and application of cutting-edge sustainable processes and technologies. Therefore investment in the development of new technologies that create more sustainable production systems must be a cornerstone of achieving future growth at primary production level. In addition, the requirement for economies of scale at producer level will need to be addressed. This will require measures to support land mobility and consolidation in agriculture, as well as access to additional raw material in the seafood sector.

At processing level, the industry must continue to manage its cost base and adopt new processes that will drive efficiencies and maintain competitiveness on the domestic and international markets. While significant opportunities will emerge in new markets as a result of growing affluence, these markets will continue to be competitive in terms of value and price, meaning Irish agri-food companies will have to compete on these terms. Investment in innovation and human capital will be key drivers of competitiveness in the sector and will enable businesses to adapt to market conditions and adopt best practice in delivering food solutions in global markets.

Conclusion

Food Wise 2025 sets a course for Ireland’s agri-food industry that is ambitious, informed and achievable. In transitioning from the goals of Food Harvest 2020 to Food Wise 2025, there is a clear recognition that our learnings as an industry over the last number of years have been significant.

This is a sector that is wiser in terms of its own resourcefulness and capability, and much clearer in its understanding of the scale of the opportunity around it. This is also an industry that is more competitive and more confident in its outlook than at any other time in its past.

The projections set out by Food Wise 2025 will build on the achievements of the last few years, but for the agri-food industry to truly realise its potential, it will need to move beyond a course of growth that is steady and incremental. New resources and new thinking will be needed as businesses enter larger and more dynamic trading environments. As the industry embraces new levels of growth, it will also be required to show an absolute commitment to the principles of sustainability, recognising that gains in productivity must not be at the expense of the environment.

The Food Wise 2025 Committee looks forward to a decade of growth for the industry, recognising that, while there will be challenges, the commitment and resolve of the industry’s stakeholders to achieve these projections are not in doubt and Department of Agriculture, Food and the Marine will lead a dynamic implementation process to deliver on the ambition of Food Wise 2025.

The vision of thriving primary producers and agri-food businesses at the heart of vibrant communities across the country is one everyone in the industry can share.


On the basis of available data, the Committee believes that the following growth projections are
achievable by 2025:

  • Increasing the value of agri-food exports by 85% to €19 billion.

  • Increasing the value added in the agri-food, fisheries and wood products sector by 70% to in excess of €13 billion.

  • Increasing the value of Primary Production by 65% to almost €10 billion.

  • The creation of an additional 23,000 direct jobs in the agri-food sector all along the supply chain from primary production to high value added product development.