The Irish food industry has boomed in the past few years but more growth needs to come from branded food manufacturers, says food specialist consultancy Bullseye Food Marketing.
According to Bord Bia, the Irish Food Board, the value of Ireland’s food and drink exports exceeded €9bn for the first time last year, and the Irish food industry grew by €2bn in the three years from 2010 to 2012. However, despite some well-known Irish brands, like Bailey’s, Kerrygold and Guinness, only 40% of Ireland’s food and drink exports are branded products.
Bullseye Food Marketing’s CEO Conor Hyde told FoodNavigator that the Irish food sector is too reliant on unbranded food commodities, like meat, dairy and seafood, which accounted for the majority of Irish food exports last year. In comparison, more than 60% of the UK’s food and drink exports are higher-margin branded products.
“We are delighted to see the growth, don’t get me wrong,” Hyde said. “…But we would love to see that percentage going from 40% to 60% branded products.”
He said that commodity-based food exports are dependent on market prices and can only be differentiated by quality and price, meaning that branded foods – those that encourage brand loyalty – may hold greater long-term potential to boost the Irish economy.
“We need to produce added-value pre-packaged products that produce a brand loyalty in the market,” he said. “Traditionally we haven’t really focused on developing branded products as a country. That’s changing rapidly.
“…What Ireland needs to be doing is to deliver high margins to the producer as well as to the retailer. Anyone can produce a commodity product.”
Big potential for small brands
The wider European market tends to be the central focus for smaller food makers looking to launch products on an international stage, Hyde said, mainly due to simpler logistics in exporting to Europe than further afield. However this brings challenges, as each European country has its own preferences in terms of flavours and formats. What might work in France, for example, might not work in Germany.
“We would like to see small brands making a presence internationally .The first step is to do your market entry research and target one market at a time, identifying unique selling points in target markets.
“…If you look in the States the strongest branded growth is coming from the smallest artisan producers. There’s no reason why smaller producers in Ireland can’t do the same thing.”