Food industry must consolidate and exploit aquaculture potential

The Irish food industry must consolidate, get out of the “commodity trap” and exploit its potential for aquaculture.

That was the message from Prof David Bell and Mary Shelman of Harvard School of Business who have been working with Bord Bia and Irish food companies since 2010.

They were addressing more than 120 figures from the food and drink industry who attended a Bord Bia seminar at the Smurfit School of Business in Dublin yesterday.

Prof Bell said the Irish drinks industry was “in fabulous shape” as it had scale and branding, “and you have this emerging craft distillery movement which I think is also excellent”.

Ireland was known globally for its drinks industry “but for food, not so much, and I think the goal should be to have a food industry that matches the drink industry in terms of global reach, in terms of brands...”

Prof Bell said Ireland still had to create its own food culture. “What I’m told is that the Irish aren’t particularly demanding about food.”

He said the industry should also tap into young people’s passion for food and their fascination for the food industry. Ireland should set up “thinking houses” where foodies, scientists, entrepreneurs and consumers could share ideas about food and innovation.

Commodities

Prof Bell said Ireland was still stuck in the trap of selling commodities instead of added-value product. “Commodities are known for low margins and high volatility, which is obviously not what you want.”

Ireland was a high-cost environment in which to do business so “the answer has to be to provide high-margin products...you have to add extra value, you have to do branding, you have to innovate. It’s a no-brainer.”

One of our best natural resources was the coastline, and aquaculture was one of the biggest trends in the food business “so that should be one of the things that you are pushing”.

The growth of farmed fish consumption had “rocketed” and now accounted for at least 50 per cent of all fish consumed.

Prof Bell said the dairy industry was a high point in Ireland’s food story but it had to consolidate if it was to grow. He pointed to companies like Danone which had sales that surpassed the entire Irish dairy industry. “You’re competing against giants.”

Stronger position

Ms Shelman said most of 20 senior Irish food industry executives she recently interviewed felt they were in a much stronger position now than they were four years ago.

“Nothing like a good crisis to force companies to take a hard look at what they are doing and to make some tough decisions,” she said. They were more cost competitive, had more professional management and had higher ambitions.

Earlier, Bord Bia chief executive Aidan Cotter said plans to have every farm and food business in the country signed up to the agency's sustainability programme Origin Green by 2016, was well on track. "A total of 356 food and drink manufacturers, accounting for 85 per cent of our exports, have signed up to Origin Green."

He said more than 43,500 beef farms were full members of Origin Green.