Protecting the reputation of an industry worth €9bn in exports
Upholding the safety of Irish food is critical in light of the ‘horse burger’ controversy
The level of transactions in the Irish food and beverage sector last year shows a vibrancy and international dimension that many other sectors of the economy should be jealous of.
According to our new report*, the value of mergers and acquisitions in the Irish food and beverage (F&B) sector rose 32 per cent to €726 million in 2012, driven by a sharp rise in deal flow between Ireland and the US.
The fly in the ointment has been that the new year has started with the damaging “horsegate” controversy, posing a threat to the reputation of Irish produce, which has its foundation in high standards of regulation and food safety, and our natural green environment.
At this time it is vital that the industry holds its nerve, and collaborates to create a resilient supply chain that can minimise costs while ensuring Irish produce maintains its international standing.
Irish food companies must continue to invest in ensuring a robust and safe supply chain in order to protect the reputation of an industry that contributed €9 billion in exports last year.
At Grant Thornton, we believe the definition of sustainability goes beyond the “greenness” of food production to include the equally important need to share the financial reward for effort and risk across all participants in the sector.
Achieving sustainability will involve fundamental changes in productivity, smart innovation, pricing transparency, co-operation and alignment across the food supply chain.
We need to ensure that the interest from US in investing in high quality Irish companies with authentic products and strong brands continues into the future.
US acquisitions of Irish businesses last year included Hain Celestial’s €10 million purchase of Cully & Sully, the Cork-based producer of high-end ready meals. Whiskey giant Beam Inc also completed its purchase of Cooley Distillery in January 2012, and followed up in December with the acquisition of 2 Gingers Whiskey.
Equally, Irish firms were major investors in the US in 2012, with five deals completed, compared with just one in 2011. C&C’s €235 million acquisition of the Vermont Hard Cider company was the biggest outbound US transaction last year, with Glanbia’s €49 million purchase of nutrition drink group Aseptic solutions the second largest.
Companies such as Glanbia and Kerry Group have had tremendous success due to strong business and cultural synergies and both managements’ understanding of the opportunities and the scale that the US sports nutrition and food ingredients market has to offer.