Innovatin Enterprise Network logo

Exports cooking up a storm to meet rising European demand

Monday, February 11, 2013

By Liam Nolan

A recent showcase event in Poland saw Irish food and drink products take centre stage. But Irish companies are not resting on their laurels, writes Liam Nolan

At the tail end of January, a very snowy Warsaw played host to a ‘Flavours of Ireland’ dinner in the Sheraton Hotel.

The event, organised by the Irish Chamber of Commerce in Poland, the Ireland Poland Business Association, the Polish Embassy in Dublin, and the Irish Embassy in Warsaw, aimed to further establish the presence of Irish companies in this market of 38m people, by introducing Irish sellers to potential Polish buyers.

“Working from behind a desk in Ireland, you just can’t get close enough to overseas buyers,” said Tony Mackey, managing director of Irish Food and Beverage Exports Ltd, who had made the journey to Warsaw in the hope of meeting Polish supermarket buyers.

Irish Food and Beverage Exports Ltd now represents 25 producers from across Ireland, exporting products such as Bewley’s coffee and Flahavan’s cereal, as well as niche artisan foods to supermarkets in Belgium, Romania, and a select number of ex-pat delicatessens in the United Arab Emirates.

“We’re exporting pallet loads at the moment, but it’s frequent pallet loads to Belgium,” said Mackey, who established the firm in 2009 with two former senior executives with the Irish Dairy Board, Noel O’Meara and John McQueirns.

Among the household names on display in Warsaw were John McCambridge brown bread, Dunns Irish salmon, Dairygold butter, along with ABP beef, and Jameson and Kilbeggan whiskeys.

Poland is a relatively small market for the Irish sector, averaging €65m in export sales annually, but recent figures suggest foreign markets are developing a larger appetite for Irish food and drink products.

Irish Ambassador to Poland Eugene Hutchinson said: “Our food and beverages are now readily available in most of the larger (Polish) outlets. Even our local deli close to the embassy stocks Irish chocolates — for its Polish customers, not just us. We want to build on this through showcase events like the Flavours of Ireland event.”

Tullamore Dew whiskey is currently the number one selling whiskey in the Czech Republic, and although small in quantity, beverage exports to Latvia — mostly beer and spirits — grew 48% in 2012.

However, it’s not all about Europe. In dairy alone, about 40% of exports are bound for destinations outside the UK and Europe, according to Bord Bia. The most significant growth has occurred in Asia, where exports have increased by 75% since 2010.

Aidan Cotter, Bord Bia chief executive, said growth in Asia is mostly due to “a shift in the region’s dietary habits to a more protein-based diet of meat and dairy.”

In Europe, Germany remains the largest importer of Irish food and drink produce, spending €416.7m last year, of which €71.3m was on beef — a 21% increase on 2011 beef sales figures.

Indeed, Kerrygold is now Germany’s number one selling butter, selling 40,000 tonnes of butter in 2012. According to the Irish Dairy Board, 13m German households buy Kerrygold, representing a 15% share of the overall butter market.

Liam McHale, manager of Bord Bia’s Dusseldorf office, says firms seeking to enter German and eastern European markets “need to be focused on the long term”, and success stories such as Kerrygold “were not built up overnight”.

It is not just the big name brands that are doing well. An increasing number of artisan producers are etching out a place on overseas supermarket shelves.

Wicklow-based Organic Herb Company (OHCo), whose organically produced herb oils and spices were present at Warsaw’s ‘Flavours of Ireland’ event, already supplies eight organic retailers across Belgium, as well as higher-end gift markets in Dubai, and Selfridges’ flagship store in London.

“Ireland has a very limited niche market,” says OHCo co-owner Paul Pritchard, adding that, “about 40% of our sales would be for the export market”.

Pritchard and business partner Michael Martin are hoping to export to South Korea and Japan this year. Their optimism is well founded. According to a Bord Bia survey, 77% of Irish food and drink exporters reported increased sales in 2012, while 75% expect export sales to increase again in 2013.

Given the growth recorded across all segments of the sector, can Irish food exports continue to grow?

Yes, says Aidan Cotter, who believes Irish food export prices remain competitive in comparison to other eurozone countries.

“Global commodity food prices are relatively stable at the moment which would favour Irish food products,” he added.