statement of strategy 2012/2014 - bord bia · view of the entire industry with the goal of driving...

2012/2014

STATEMENTOF STRATEGY

Growing the success of Irish food & horticulture

The strong performance of the sector in 2010 and 2011, with food and drink exports growing by 25% over the two year period to reach an estimated €8.84 billion, reflects both the evolving, global food commodity environment, notwithstanding the impact of a severe economic downturn, and the capacity of the sector to capitalise on a sustained growth in demand.

The Bord Bia Strategic Plan 2012-2014 is based on an inclusive view of the entire industry with the goal of driving long-term sustainable growth. It has been developed to fully support the implementation of Pathways for Growth and Food Harvest 2020, a shared blueprint for everyone involved in the sector and of which ‘Pathways’ is an integral part.

01 Bord Bia Statement of Strategy 2012 - 2014

STaTemenT of STraTeGy2012 – 2014Preface

The key drivers of strategy are the growth targets set by food

Harvest 2020:

• Increasing the value of primary output by €1.5 billion.

• Increasing value added by €3 billion.

• Achieving an export target of €12 billion. This represents a 51% increase compared to the 2009-2011 average.

Realising the targets set by Food Harvest 2020, and meeting the challenges and opportunities posed by an ever more complex marketing environment, requires the setting of clear strategic priorities to inform an optimal resource allocation in the period ahead and corresponding measures to enable progress to be monitored. This is the purpose of the strategic plan.

The prospect of higher commodity price levels as world supply struggles to keep pace with the expanding demand for food represents a significant opportunity for Irish primary food exports such as meat and dairy. However, ongoing market and price volatility seems certain as supply shocks, weather events, competition from biofuels and market speculation seem set to influence medium term price developments. meanwhile, climate change and the need to reduce greenhouse gas emissions pose a major challenge as the world seeks to expand food production to meet the growing demand.

Michael CareyChairman

Aidan CotterChief executive

Bord Bia Statement of Strategy 2012 - 2014 02


mISSIon STaTemenT

Bord Bia’s mission is further articulated through the followingsix strategic objectives:

1. To actively contribute to the success and development of the Irish food,

drink and horticulture industry.

2. To positively influence attitudes towards, and knowledge of, Irish food,

drink and horticulture among consumer and trade buyers in the

marketplace.

3. To establish Bord Bia as the top-of-mind source for authoritative market

research and analysis, providing a link between market opportunities and

the Irish food, drink and horticulture industry.

4. To lead a collaborative approach to market development with the key

agencies involved in serving Irish food, drink and horticulture.

5. To actively respond to significant market issues that affect the industry.

6. To deliver value-for-money with expenditures.

To drive through market insight and, in partnershipwith industry, the commercial success of a world class Irish food, drink and horticulture industry.

Food and drink exports in 2011 are estimated to have reached a new all time high of almost €8.84 billion, representing an increase of close to €1 billion on 2010 levels. This follows growth of €700 million in 2010 leaving Ireland’s food exports in 2011 some 25% ahead of 2009.

All major categories have increased, led by dairy and meat. Strong global prices have been driving export growth, with the FAO food price index reaching a new high in 2011. However, increased volumes of dairy products, pigmeat, whiskey, cider, confectionery, sauces/soups and mushrooms also boosted revenues.

There has been some change in the market distribution of Irish food and drink exports in 2011. While the UK remains the principal export destination, its share has fallen from 44% to just 41% in 2011. The proportion of exports going to other European markets grew by two percentage points to 35% while International markets now account for one quarter of exports, driven in particular by stronger dairy exports.

THe markeTInG envIronmenT

Strong export performance


9,000

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

9,000

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Irish food and drink exports, 2000 to 2011 (€m)

These developments mark a positive position for the Irish food and drink industry as we set out to achieve the ambitious targets contained in Food Harvest 2020. The upward trajectory in world food prices is further evidence that the era of cheap food may have come to an end for the foreseeable future. However, a softening in commodity prices along with lower output in some sectors, will limit potential in 2012. Also, the conditions for market and price volatility remain, whether as a result of supply shocks arising from weather events, fluctuating stocks, exchange rates or market speculation.

Looking ahead, the anticipated growth in demand for food, particularly meat and dairy products and the likely supply capability of many parts of the world present opportunities for exporting countries such as Ireland, which if embraced successfully can go a long way towards helping the sector deliver its growth targets.

The growth in the global population, urbanisation and rising income levels are boosting demand for all key products. The fact that people are living longer, a key factor driving population growth, is underpinning the link between diet and health. With the global population reaching seven billion for the first time in 2011, eight billion by 2025 and more than nine billion by 2050, demand for food products partly driven by a switch in dietary habits is expected to increase by more than 70% over the next 40 years. And there are supply challenges, among them the increasing incidence of freak weather-related events, the use of land for fuel as well as food, water (70% of freshwater is used in agriculture), and declining productivity growth rates.The fact that it takes 5 - 8kgs of grain to produce 1kg of meat and the anticipated strength of feed prices provides the potential for significant competitive advantages to countries such as Ireland that have predominantly grass based systems of meat and dairy production. The removal of dairy quotas from 2015 offers the Irish industry considerable potential for expansion to meet growing global demand.


Future prospects positive Rising global demand

Food prices and food insecurity A changing policy environment


The past year has seen significant increases in global food prices with the FAO food price index hitting record levels in 2011, reigniting concerns about food insecurity as world supplies seemingly struggle to keep pace with the growth in demand.

While some easing in prices is expected to continue in the short term as supply responds to higher prices, the long term prospects remain strong with the latest FAO/OECD Agricultural Outlook suggesting that all commodity prices in nominal terms will average higher to 2020 with cereals rising by 20% on the 2001 to 2010 average, meat 20% to 30% higher and dairy products more than 20% ahead of the last decade.

The prospect of commodity prices at levels above their historic average represents a significant opportunity for Irish primary food exports such as meat and dairy.

Policy changes will continue to be important in defining the market environment for Irish food and drink, especially meat and dairy products. While the current WTO round of negotiations show little sign of progressing towards an agreement, the prospects for an EU/Mercusor bilateral agreement in relation to access for beef to the EU market at a preferential tariff rate remains a potential threat. Impact analysis suggests that any agreement could result in up to 200,000 tonnes additional imports of non-EU beef with a strong emphasis on steak cuts.

Similarly, the outcome of the current round of CAP reform will largely dictate our livestock production base to 2020. It is vital that any agreement helps sustain active farmers while also recognising the critical importance of beef and sheep breeding herds to Irish agriculture.

The growing scale of retail groups across Europe enhances their bargaining position with suppliers, making it difficult to secure higher prices and recover higher costs, while increasing pressure on suppliers in terms of marketing supports. In addition, new suppliers continue to emerge across product categories in most developed food markets. This is particularly evident in the prepared foods and meat sectors. A number of these suppliers benefit from lower input and manufacturing costs and greater economies of scale. This presents a further competitive threat to Irish exporters and highlights the need to focus on developing and promoting key points of differentiation in order to maintain and develop our market position.

Changes in consumer spending habits have led to major retailers and foodservice operators focusing strongly on reducing prices through increased levels of price promotions, smaller pack sizes etc. The fact that this situation has prevailed for three years in most European markets means that consumers have in some ways come to expect lower prices when they shop. When this is combined with the competitive focus of retailers and foodservice operators it presents a major challenge for the Irish food sector to achieve higher returns from the marketplace.

The expected developments in the global market for food and drink products represent a significant opportunity for exporters such as Ireland provided the industry can adapt and take a proactive approach to broadening our product offering while creating a point of differentiation that can enhance our market position. However, there are a number of significant

challenges facing the sector in relation to pressure on consumer prices and ever increasing levels of competition. To successfully position the Irish industry in an increasingly global marketplace requires a clear ability to utilise our natural advantages, an in depth market knowledge and a strong consumer led innovation capability to create a point of differentiation within the marketplace.


A competitive retail andfoodservice landscape

Perception of Ireland High quality & safety standards


Research undertaken by Bord Bia over recent years at both trade and consumer level has shown that Ireland scores very strongly when it comes to food safety, trustworthiness, quality ingredients, a natural environment and a heritage of food production through a family farm culture. These attributes offer considerable opportunities to enhance the reputation of food and drink from Ireland in the marketplace, a reputation that performs strongly from a functional perspective while providing cues for emotional hooks critical to building consumer loyalty.

While many European markets take the ability to produce high quality food to the highest safety standards for granted, for a number of emerging markets this remains a major issue. The reputation of Ireland in this area is extremely good and must continue to be underpinned as it represents a key strength when trying to build business in the developing markets of Asia and Africa in particular.

Growing populations in developing economies with increasing income levels and a resulting shift from a grain based to a livestock product based diet is forecast by the FAO to result in global demand for dairy products growing by 30% by 2020 with meat demand rising by up to 14%. With more limited scope for production increases among traditional exporters due to weather related issues and competition for land, the Irish grass based production model for meat and dairy production leaves the sector in a strong competitive position.

The security of food supplies over the medium to longer term is becoming increasingly important for leading global food retailers and manufacturers given the pressures on food production in many parts of the world due to issues around land and water availability. Any country that can credibly demonstrate its ability to produce food sustainably is in a position of strength in the marketplace. The Sustainability programme being developed by Bord Bia offers the potential to use our natural advantages to deliver competitive advantage in the marketplace for Irish exporters.


Grass-based productionmodel a key strength

...and underpins our sustainability credentials

Proximity to key markets Industry expertise


While emerging markets such as Asia and Africa represent strong growth opportunities over the longer term, it is worth remembering that a European Union market of 500 million relatively affluent consumers is on our doorstep. Figures from the IMF show EU27 Member States account for 5 of the top 10 global countries in terms of GDP per capita. This market offers considerable potential for Ireland, particularly as food output in a number of traditional European producers is struggling. Our proximity and full access to this market is a major strength for the sector.

The ability of producers and processors to consistently deliver high quality food products required by the marketplace while improving the efficiency of output is a considerable strength and must continue to be supported where appropriate. This technical understanding combined with the flexible mindset of producers leaves the sector in a strong position to adapt and adjust as market requirements evolve.

In Pathways for Growth, a number of underlying issues facing the Irish food and drink sector were identified, key among them being that of scale and fragmentation. In relative terms the Irish food and drink industry at both farm and processing level lacks scale. This is often matched with a high degree of fragmentation within sectors with only limited evidence of collaboration between operators to enhance their power in the marketplace. Given growing concentration among global customers and key competitors, it is increasingly difficult for Irish exporters to influence purchasing decisions.

Meanwhile, recent progress addressing licensing issues in aquaculture are to be welcomed and will be critical to enabling the sector meet growing demand and building exports.

Maximising returns from the marketplace will require a deepening and broadening of our export base, particularly for prepared foods and consumer dairy products, to a wider range of markets, channels and customers. This is only possible if the sector is competitive relative to other suppliers, which hasn’t been the case consistently over the last 5-10 years. Substantial progress has been made to reduce costs and boost efficiencies over recent years. In order to further improve competitiveness, it is important that the business and regulatory environment such as energy price setting, labour and other costs is reviewed regularly to ensure costs faced by the sector are in line with other countries.


Scale and fragmentation Competitive position

Level of consumer orientation Attracting talent to the sector


Similarly, it was pointed out in the Pathways report that a high proportion of Irish food exports are sold as primary products or as ingredients of finished products, with exporters having a limited interaction with the end consumer. Given the ever changing requirements of consumers, and notwithstanding the critical role of trade customer feedback, this lack of interaction puts the industry at a disadvantage in building a relationship with consumers and in delivering new products or solutions that meet their emerging needs. In order for the sector to compete in terms of innovation, increased levels of interaction with end customers and consumers is critical.

In recent years a major challenge for the sector has been the attraction of new and emerging talent. While this has begun to change as programmes such as the Marketing Fellowship help to attract and retain increasing numbers of suitably qualified graduates, it remains an issue.

There is also a need to foster a spirit of entrepreneurship as this will be critical if the sector is to successfully develop and deliver new products and capabilities that can set the Irish food and drink industry apart in what is an increasingly competitive marketplace.

Ireland’s exposure to currency movements is highlighted by the fact that around two thirds of our exports are to non-euro areas. Around 40% of our food and drink exports go to the UK while a quarter are shipped outside of the EU where trade is largely denominated in US dollar terms.

Volatility in exchange rates has seen the euro fluctuate considerably against both the US dollar and sterling. Over the last five years it has strengthened by almost 30 per cent against sterling and 12 per cent against the US dollar. The economic environment means that ongoing fluctuations are likely for some time, which makes it difficult to maintain returns from the market over the immediate term but also makes it extremely difficult for exporters to plan ahead.


Entrepreneurship Currency exposure


Pathways for Growth has helped to advance an optimistic new future for Irish food, drink and horticulture, marking a further progression in the close partnership between Bord Bia and industry, and fully integrated with Food Harvest 2020. Now the challenge is to implement the Pathways

vision, meet the Food Harvest 2020 targets, and continue to anticipate, change and adapt to an evolving marketing environment. Given the lack of scale within Ireland’s food industry, the need to collaborate and focus resources is essential.

Bord Bia, acting with industry as a catalyst for change, can play an even larger role to ensure that future success is achieved, first, by supporting food companies to become increasingly differentiated and consumer focused; second, by working hand-in-hand with all sectors, in established and emerging markets, to grow exports to €12 billion by 2020; and third, by facilitating the necessary transformation in mindset and behaviour. In delivering on each priority, Bord Bia will collaborate with both Departments and agencies of the State as appropriate.

The Bord Bia Strategic Plan 2012-2014 is based on an inclusive view of the entire industry with the goal of driving long-term sustainable growth. It has been developed to fully support the implementation of Pathways for Growth and Food

Harvest 2020 and includes the following priorities:

The strategic plan at the same time recognizes

the importance of delivering short-term wins to

ensure continued stakeholder support; learning

from best practices; and enabling positive

communication with customers at home and

abroad

STRATEGIC PRIORITIES

Building Ireland’s Reputation

Develop, implement, and promote a shared vision of Ireland as a world leader in safe and sustainable agriculture and food production consistent with a premium positioning in the marketplace

Enhancing CompetitivenessPromote industry’s market competitiveness by championing an integrated approach, leveraging existing strengths and exploiting synergies across sectors and firms; supporting innovation; and building capabilities where necessary

Building Exports

Strengthen and extend the ability of Irish food and drink companies, driven through market insight, to build profitable share in selected high-potential export markets

A Vibrant Home Market

Support and progress the strong position that the agri-food sector currently occupies within the broader Irish economy

Work to date on securing the PAS2050 accreditation on Green House Gas emissions for the beef and lamb farm audits has entailed extensive collaboration with Teagasc and this is continuing as extensions to both the scope of the schemes and other product categories are explored. Consultation with the Environmental Protection Agency has also taken place and will continue in the future.The Food Safety Authority of Ireland participate in Technical Advisory Committees for our Quality Assurance Schemes (as do representatives from the Department of Agriculture, Food and the Marine and Teagasc) and their input is highly valued.Bord Bia also engages with Fáilte Ireland (and Tourism Ireland) in the area of food tourism.The Department of Foreign Affairs & Trade and its network of overseas missions play an important role in the promotion of trade underscoring Ireland’s reputation abroad.

Pathways for Growth calls for the creation of an umbrella brand for Irish food and drink to enable differentiation and value growth in key markets. Building a brand reputation that encompasses multiple products, sectors, firms, and customers is a complex and lengthy process. While still in early stages of the journey, significant progress has been made. Moving forward, Bord Bia will continue current projects and/or initiate new work in the following areas:

Finalize the elements of “Food Brand Ireland”.

Bord Bia will continue with its branding work to define the core values of Building Ireland’s Reputation and to distil those values into a coherent, unified message encompassing all sectors and resonant with consumers and ‘B2B’ customers alike. The ‘brand’ must address consumer needs even if the trade customer is the immediate focus. The goal is a unique and compelling Irish story developed and delivered in conjunction with industry, state, and tourism.

Provide proof.

Another critical step towards Building Ireland’s Reputation is the identification of critical claims and the development of scientifically-based standards to support them. Bord Bia will continue to proactively develop and promote (i) the highest standards of food safety and traceability in all Irish agri-food products; (ii) best practice in sustainable production and animal welfare; and (iii) high and consistent product quality. In particular, Bord Bia’s quality programme will be broadened to include additional sustainability criteria. Where appropriate and with industry support quality and environmental assurance will also be extended to other sectors,including dairy.


Building Ireland’s Reputation: The development of an umbrella food brand with verifiable sustainability and quality credentials at its core.

STRATEGIC PRIORITY 1


Promote Brand Irelandat home and abroad.

In preparation for living up to the brand claims, agri-food companies as well as farmers must fully take to heart the need for sustainability and transparency in food production. While participation in the Bord Bia assurance programmes is voluntary, Bord Bia will work with all stakeholders to advocate for 100% adoption. Specifically, Bord Bia will encourage a “full-chain” approach and facilitate communication with farmers to bring them on board to the Building Ireland’s Reputation vision in order to build in sustainability and to help connect them with consumers. Another benefit of a full-chain approach is that it should lead to an improvement in product quality and consistency, further supporting, for example, the repositioning and differentiation strategy already underway for Irish meat.

More broadly, the overall reputation of Ireland as a sustainable and caring producer of high-quality agri-food products will be shaped and reinforced by myriad factors including for example the experience of international visitors. This includes what restaurants serve (e.g., provenance, food quality, and type of dishes) and how the menu is written, what visitors see when they visit supermarkets in cities and villages, what Irish people know about their own agricultural heritage. Bord Bia will work with and through others to build and improve Ireland’s food culture and to progress food tourism opportunities for local or international visitors.

Once the principles, language and elements of Building Ireland’s Reputation are clear (but before it is fully executed), Bord Bia, consistent with available resources, will seek to develop and implement a multi-faceted, multi-year communications plan to build awareness and recognition of the sustainability and quality credentials that underpin our reputation with customers in selected markets. This could include collaborative initiatives with others including the tourism sector.

BUILDInG IreLanD’S OUTPUTS IMPACTSrePUTaTIon

Providing proof number of accredited Qa schemes Percentage of relevant number of Qa scheme members at farm level farmers in each scheme number of farm audits number of sustainability dimensions in each Qa scheme Percentage of national number of companies applying to “charter” output covered by each number verified under “charter” scheme Trade fairs number of fairs number of customers attending trade fairs number of unique exhibitors Awareness and Coverage in trade media awareness and understanding understanding amongst target audience

This priority will benefit from collaboration with Enterprise Ireland and Teagasc on entrepreneurship in particular, as in the Food Works programme, but also on co-opetition and innovation where appropriate. Bord Bia also collaborates with BIM on seafood development issues.


Enhancing Competitiveness: Enabling Ireland to become the most efficient, most highly innovative food, drink and horticulture country in the world


Pathways for Growth envisioned that in twenty years time Ireland could become the most efficient, most highly innovative food, drink and horticulture country in the world. The key steps to achieving this vision include cooperation instead of competition, innovation leading to differentiation, brands built around consumer feedback, all under a coordinated strategy—developed and promoted by forward-looking industry leaders—that results in a better outcome for all.

To support the implementation of Pathways for Growth, over the last year Bord Bia has created a multi-disciplinary development programme that seeks, in partnership with industry, to be a catalyst for change. New models of partnership, along with investment in market insight and human capital development, are being supported and encouraged. The goal is to stimulate more strategic thinking, consumer insights that drive innovation, and cooperation at all levels (industry-wide, across-chain, and within firms). Over the next three years Bord Bia will continue to develop and refine dedicated work streams for consumer insight and innovation, cooperation/co-opetition, and education while adding a new emphasis on leadership. However, it is important to note that these are fundamental concepts which are embedded throughout each of the Strategic Priorities.

Innovation leadingto differentiation.Develop the industry’s capacity to produce innovative products (both B2B and branded) that anticipate consumer demand and deliver new growth streams. Bord Bia’s ‘consumer insight based approach will complement innovation that is ‘science-based’ (particularly that which focuses on delivering good nutritional solutions) in that both provide different stimuli for innovative products. Indeed, ‘science’ may be needed to capitalise on some of the consumer insights unearthed in the Bord Bia approach and consumer insights might be needed to validate the perceived utility amongst consumers of scientific developments.

A strategy of co-opetition.Facilitate companies working together to achieve scale and differentiation. This requires the creation of a culture where Irish companies work as partners, not as competitors, to increase their ability to win business both at home and overseas. It also calls for leveraging existing strengths and exploiting synergies between firms and across sectors.

Investment in education.Enhance leadership and management capability through a range of training and learning programmes supported by third-level institutions and/or international best practice, while proactively attracting the best people to the industry.

Encouraging entrepreneurship.

Promote the creation of a stream of new companies and products, working in collaboration with Enterprise Ireland and Teagasc, providing “signposts” and mentoring to young businesses with growth potential, and encouraging new entrepreneurs to consider scalable food market opportunities.

Developing leadership.Provide opportunities for strategic reflection and engagement amongst food and drink companies and their leaders, through for example the organization of semi-annual gatherings (a mix of formal programmes and informal discussions) to encourage information sharing and “future back” thinking.

On-line sales to consumers.Bord Bia will support and encourage the use of web-based sales channels which can be particularly appropriate for artisan producers. This was one of the topics at this year’s Small Business Open Day – Delivering Insights for Success 2012 - and has been the subject of a fuller report recently published on our Vantage website (www.bordbiavantage.ie).




OUTPUTS IMPACTS

In market education Candidates in each cohort by scheme (fellows; food number of candidates marketing Graduates; ‘alumni’) in each cohort retained in industry number of assignments completed Co-opetition number of projects proposed number of projects established number of companies briefed annualised additional sales

Entrepreneurship number of entrepreneurs met number selected for food Works number of briefings number of new startups Consumer insight number of discrete projects number of new SkU listings number of companies involved number of brand refreshes Marketing grants for number and value of approvals Sales increase after one yearsmaller business average approval time number of full-Time equivalents in supported companies

enHanCInGComPeTITIveneSS

This priority will benefit from

collaboration with Enterprise Ireland

and Teagasc on entrepreneurship in

particular but also on co-opetition and

innovation where appropriate. Bord Bia

also collaborates with BIM on seafood

development issues.


Building exports: A long-term plan for market development and diversification.


Progress on this priority will be greatly assisted by collaboration with

the Department, Agriculture, Food and

the Marine (they are often critical to issues of market access) and with

the Department of Foreign Affairs

& Trade.

Historically, the majority of Irish food exports were destined for the UK. The need to diversify to reduce risk and find new opportunities for growth is well established. Over recent years Bord Bia has assisted Irish firms to develop new business in nearby European markets; however, faster-growing markets in Asia, Africa, and the Middle East are geographically far away with new layers of complexity. Given that (most) Irish firms are small and Bord Bia itself has a limited budget, the need to focus resources to achieve scale and “move the needle” is imperative.

In close partnership with industry, Bord Bia will create and implement a long-term plan for market development and diversification. This plan will provide an internal roadmap for resource allocation and allow Bord Bia to proactively support brand, category, and product development in countries Ireland has not traditionally targeted.

Target markets.Bord Bia will continue to identify and reassess target markets based on an evaluation of short and long-term opportunities (by country and sector), matched with current and future capabilities of the Irish industry, anticipation of future global competitive situation, and feasibility of success. The objective is to identify areas where Ireland’s brand attributes, product set, and current customer base can be mutually reinforcing and lead to profitable and sustainable market share for Irish firms.


In-market activities. In high priority markets Bord Bia will play a leadership role in supporting companies to open up strategic relationships with retailers, distributors and regulators; act as an ambassador for the Irish food industry and Irish products; facilitate the sharing of information and in-market resources across firms; and utilize efficient ways, including participation at key trade fairs, to help Irish companies engage in business activities and successfully expand their export reach. Programmes such as Marketplace and the Bord Bia Marketing Fellowship (which includes in-market research projects done on behalf of industry partners) will be refined and expanded. In addition, new country-specific programmes will be created to support a unified approach to market development. Where necessary, Bord Bia will continue to advocate for market access.

Expand the role of markets. To ensure that market learnings are fully utilized, Bord Bia will create a regular, timely, and efficient customer/consumer feedback loop between its international offices and firms. The objective is to provide superior market knowledge, including insights into local consumer behaviour and trends as well as the competitive environment.

A pipeline of skilled firms and exportable products. As the Irish market has become increasingly competitive, it is now widely accepted that growth—and perhaps even survival—must come from increased exports. Yet many Irish firms lack the resources, capabilities, and/or interest to be successful across a diverse set of countries, customers, and consumers. Bord Bia, working closely with Enterprise Ireland, will emphasize capability development to ensure that Ireland builds a pipeline of skilled export-oriented firms and differentiated products.

Specific actions include the monitoring of best practices, identifying gaps and supporting capability development to ensure that firms are able to participate successfully in diverse international markets. It also involves the development of an assessment process to screen company export readiness and avoid the negativity associated with a failure to follow through on meetings and queries, thus maintaining the reputation of Building Ireland’s Reputation. This will also require building the industry’s skills to differentiate its products within the market through branding and consumer insight, and benchmarking Irish products against local offerings.

The promotion of entrepreneurship to help create a stream of new companies and products, highlighted under the second strategic priority above will also serve to underpin the delivery of export growth.



BUILDInG eXPorTS OUTPUTS IMPACTS

Beef

Dairy Exports

Seafood Exports

Lamb

Livestock Exports

Marketplace programme

Overseas Offices

Amenity Exports Emerging markets

number of retail and foodservice accounts promotingQa beef

number of research reports published identifying opportunitiesnumber of dairy companies involved in foresight4food

number of market study visits to markets other than france, Germany, Spain or Uk

number of inward buyer visits from customers in markets other than france, Germany, Spain or Uk

number of brands developed in markets other than Uk and francenumber of retailers in france featuring Agneau Prestoin-store demonstrationsnumber of CIBC events which feature lamb

number of DvDs directly distributed by Bord Bia offices

number of buyer/supplier meetingsnumber of countries covered

number of buyer presentations

number of nurseries involved in mentoring programme

number of inward delegations from such markets (buyers, journalists and regulatory)number of companies participating in missions to such markets

Price relative to eU averagenumber of new customers

exports to non-eU markets

number of new listings in markets other than france, Germany, Spain or Ukexports to markets other than france, Germany, Spain or Uk

Price for Irish lamb, relative to eU average

exports to markets other than Uk and france

number of head exported

number of opportunities to quotenumber of new SkU listingsnumber of companies reporting increased businessannualised increased business by sector and market

annualised incremental sales

export values

export values to emerging markets

Collaboration with Enterprise Ireland on foodservice and retail development programmes will continue in advancing this strategic priority.


Although future growth will come primarily through exports, Irish food, drink and horticulture firms can benefit significantly from a vibrant and dynamic domestic market. Home is where firms develop capabilities, test new ideas, build experience with brands and consumers, and gain the skills and confidence to export. At a broader level, the home market serves as a showcase for the industry—an opportunity to attract capital, entrepreneurs, and talent. It is a place to educate and engage all members of the food supply chain—from farmers to consumers—as partners in the industry’s future.

Strategic sectoral importanceIndeed for some sectors, the home market is the dominant market, particularly in the case of branded foods, horticulture and organics. Other sectors, such as pigmeat, poultry and lamb, while having a high export orientation, face relatively intense competition on a home market that offers significant strategic value in terms of total market returns. Helping small firms and sectors to compete effectively at home then becomes a major priority as well as a critical enabler to competing overseas.

The promotion of quality-assured products, based on consumer insight and using the platform of the Bord Bia Quality Mark, and consumer communications such as the Best in Season and Garden Time campaigns, will remain a priority on the home market while events such as Bloom will continue to be developed to stimulate interest and to strengthen consumer connections.

Towards a vibrant and dynamichome market.


A platform for brandingand innovation.

The home market, in contrast to export, enables Irish companies to embrace brands as their preferred route to market, building relationships and loyalty with their consumers, and closing the feedback loop that helps drive innovation. Bord Bia’s Brand Forum and demand for its range of consumer insight and innovation services have to a significant degree therefore been informed by the needs and the dynamics of the home market, while accommodating and nurturing the ambition and confidence of firms seeking to take the branded route to export markets. The continued development of these services will therefore remain critical.

A springboard for growthBord Bia has a long established relationship with the small business, speciality and artisan sector, whose principal focus is on the home market, yet with significant potential to provide the new exporting firms of the future. The Vantage programme and marketing finance programme for small businesses are fundamental to advancing the capabilities of these businesses.

Equally, Bord Bia engages in a range of activities designed to stimulate awareness and interest in food at a range of levels, from the healthy eating programme, Food Dudes, to participating in Agri-Aware programmes, in schools, supporting local food initiatives, food tourism, and through working with the Taste Council.

Bord Bia will also work actively to raise public awareness of the industry’s significant contributions and to enhance the position of Irish food, drink and horticulture on the Irish market. Through the process of creating Building Ireland’s Reputation, Bord Bia will help the industry develop a common language, speak with a unified voice, and deliver a positive message about the exciting opportunities available to the agri-food sector.


Home markeT OUTPUTS IMPACTS

QA productpromotion

Bloom

Horticulturalpromotions

Fish promotions

Optimising market

number of national campaignsPercentage of population coveredfrequency of coverage

number of exhibitors by plant producers, food producers and other (e.g. equipment etc.)

number of national campaigns

number of national campaigns

number of workshopsnumber of companies attendingnumber of mentoring days

Share of facings for Qa productsConsumer affinity to Qa mark

number of visitors;Satisfaction of exhibitorsawareness in general populationamenity horticulture output

% growth in horticultural output Proportion of population reporting consumption of five or more portions per day

Percentage of homes purchasing haddock, hake and whiting

number of plans producednew customers acquiredannualised incremental sales by participants



SeCTor PerSPeCTIveS

Beef

Global beef supplies have come under pressure just as demand has been increasing across Asia, the Middle East and South America, leading to the growing convergence of European and world beef prices while opening up the prospect of future possibilities in new markets. Meanwhile across Europe consumers have been under financial pressure and in some markets consumption of beef has been weakening. With consumer spending constrained and producer prices increasing, margins have tightened. The Food Harvest 2020 report targeted a 20% growth in output value and this target was subsequently doubled to 40% by the Beef Activation Group. Bord Bia will contribute to the achievement of this target primarily through the following initiatives:

As part of the Building Ireland’s Reputation priority Bord Bia will promote Ireland’s sustainability credentials. The Beef and Lamb Quality Assurance Scheme (BLQAS) is the world’s first such scheme to incorporate an objective measurement of the carbon footprint, with similar measures around water and biodiversity to be added. Bord Bia will seek to build competitive advantage with the sector’s existing and targeted customer base by capitalising on the growing awareness of sustainability issues among consumers.

Meanwhile, Irish beef products have adopted premium positions in a wide array of markets, from niche premium online sellers to Michelin star chefs and multiple retailers. Bord Bia will continue to

prioritise support to those ranges returning the highest prices along the supply chain. Bord Bia will also focus premium image building activities in Flagship Regions via chefs and media. The Chefs’ Irish Beef Club has served to enhance the reputation of Irish beef among key influencers in markets such as France, Belgium and Holland. This initiative will be extended to three other markets, and will focus on driving home the premium message through PR, events, cross promotions with retailers and through Ireland’s planned involvement with the Bocuse D’Or contest in Lyon in 2012. As part of the Enhancing Competitiveness priority, Bord Bia will work with exporters to advance collaboration via co-opetition projects where there is common ground, such as in developing propositions with existing, jointly served customers, with a view to growing volume and value.

As part of the Building Exports initiative, Bord Bia will continue to emphasise and work with industry in implementing a strategy of continued market diversification and premiumisation, for example in seeking to position Irish Beef at the premium end of the German market. Opportunities will also be promoted where feasible in emerging markets, especially those not currently serviced by any Irish exporters. Meanwhile, together with the Departments of Agriculture, Food and the Marine, and Foreign Affairs and Trade Bord Bia will work to maximise market access, taking advantage of the growing convergence in international beef prices.



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Lamb

Retention rates within Irish flocks are reflecting a renewed confidence in the sector, while within Europe, production is expected to continue to fall at least in the short term. Higher costs have impacted on consumer demand with price promotions becoming ever-more pivotal to the retail trade. Competition for shelf space between lamb and cheaper proteins will likely continue to leave the lamb category compromised.

As part of the Building Ireland’s Reputation initiative and with the objective of increasing the profile of Irish lamb in key export markets, there will be a wider inclusion of Irish lamb initiatives in the Chefs’ Irish Beef Club programmes particularly in markets such as France, Belgium and Holland.

As part of the Building Exports initiative, Bord Bia activities will focus on Agneau Presto. On the back of strong brand awareness built over the past four years, the focus of the joint campaign involving the Irish, British and French industries will shift from PR and online, to in-store where a comprehensive programme will support a full roll-out of convenience cuts to consumers through major retailers.

Regional wholesalers and foodservice providers in overseas markets provide in some cases a more favourable trading environment than do retail multiples. Bord Bia will prioritise projects in higher value markets that would identify and profile new customers for business development with Irish lamb exporters.

In a bid to extend the Irish lamb season, resources will be allocated to develop the route to market for value-added milk lamb in the French, Belgian and German premium foodservice markets using trade marketing support to differentiate product on seasonality, provenance, and taste.

As part of developing a Vibrant Home Market the main initiatives will focus on promoting quality assured lamb during the peak season, targeting the 35-55 year old higher income shoppers with children. There will be a seasonal approach to messaging, focusing on premium cuts in June/July and moving to secondary cuts during the August / September period.

With the sharp increase in international commodity prices, the significant curtailment in the availability of credit and the continuing difficulties from a relatively weak domestic market, the past year has been a very difficult one for the Irish pig industry. While premiums for Quality Assured pigmeat products have been difficult to achieve on the domestic market, increased returns on the export front, in particular from international markets have seen average year-to-date prices improve.

As part of developing a Vibrant Home Market, Bord Bia will continue the primary emphasis on promotion of increased usage of Quality Assured pigmeat products in Ireland at both retail and foodservice level.As part of the Building Exports initiative, Bord Bia will work with the Departments of Agriculture, Food and the Marine and Foreign Affairs and Trade, and with industry operators in accessing a wider range of international markets, and also in identifying business opportunities for Irish processors in those markets.

The poultry industry has been severely affected by the surge in animal feed prices over the past year. On the home market, consumption levels have been performing relatively well as consumers look for value for money offers. However significant issues remain from competitively priced imports in all sectors within the poultry industry. Exports from the industry concentrate on offal and cuts which are not traditionally consumed in large quantities on the home market, opportunities do exist in certain markets for specific types of products.

As part of the Building Exports initiative, Bord Bia will work closely with Irish processors in markets where demand for these products can be identified and exploited, in particular in attempting to gain market access to mainland China.

As part of developing a Vibrant Home Market, Bord Bia activities for 2012 to 2014 will (subject to receipt of Industry funding) seek to deliver higher returns by processors through increasing consumer awareness, understanding, and propensity to purchase Quality Assured chicken, with a particular emphasis on whole bird promotion.

Pork & bacon Poultry


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Dairy

Over the period 2012 to 2014 the dairy industry will be preparing for the unprecedented expansion in production which is anticipated to follow the lifting of quotas in 2015. Bord Bia’s strategic focus on developing Building Ireland’s Reputation, Enhancing

Competitiveness and Building Exports will be particularly relevant in this context.

The Irish dairy sector has a positive story to tell consumers who increasingly demand safe, nutritious dairy products produced in an environmentally friendly manner. Our extensive farming methods (grass-fed cows), dedicated, quality driven, family farms, high standards of animal welfare and measurably lower levels of carbon emissions represent powerful selling points for the dairy industry. As part of the Building Ireland’s Reputation

initiative Bord Bia will work in partnership with the dairy sector to develop a communications strategy to help convey the positive attributes of Irish dairy production to industrial users and key consumer groups as appropriate.

The Irish dairy industry exports to some 120 countries which range from high value consumer markets to developing economies alike, and where consumer needs and product requirements can vary significantly. The industry’s wide market reach, combined with a still relatively narrow portfolio of products, represents an important platform on which to broaden its product range while accommodating the targeted expansion. To Enhance Competitiveness

Bord Bia will offer a menu of consumer research services to support and encourage innovation and product development within the industry. This will complement the continued focus on detailed market studies on where and how the industry might compete, enabling it to make key strategic choices through market knowledge.

Targeted support programmes will be developed to build the capability of the dairy industry in key markets. For example the Chinese formula market is a high value, high growth target market where Bord Bia can support industry’s efforts at Building

Exports through a programme of information and promotion, as well as by developing a targeted programme to raise awareness of Ireland among key trade and consumer groups.

The approach for the seafood sector for the next three years is to focus on Building Exports in new export markets where the penetration of Irish seafood is currently low. This strategy will allow key processors within the sector to exploit the growing potential and demand for seafood in these markets, with the focus particularly on the high end of the market where a premium positioning can be secured for quality (and often organic) Irish seafood.

Target markets will include China, Japan, Dubai, Austria and Switzerland. Opportunities in these markets will be exploited through a range of initiatives including a Bord Bia presence at Trade Fairs, the coordination of market study visits, a targeted programme of inward buyer visits, a strong seafood presence at Marketplace 2012 and the support of the Bord Bia Fellowship Programme with Fellows currently working on seafood assignments in many of these target markets. In addition, our seafood strategy will seek to consolidate the position of Irish seafood in the five existing core markets where Irish exporters currently have a strong presence and which account for 62% of exports. Our programme of activities in these markets (France, Spain, Italy, Germany, UK) will focus on Trade & PR initiatives, Market Research and in-store promotions. Given the potential for displacement, Bord Bia will concentrate on identifying opportunities for co-opetition in servicing these markets.

Bord Bia’s seafood strategy will also seek to develop a Vibrant Home Market for Irish seafood through an intensive promotional campaign aimed at encouraging Irish consumers to eat more seafood, and specifically more Irish landed white fish which will provide a direct benefit to the catching sector in Ireland and encourage more domestic sales. This will be achieved through our campaign themed ‘Fish, Surprisingly Simple’, which seeks to reposition fresh Irish fish as a simple meal option for everyday meals, increasing consumers knowledge of how to cook and prepare fish.

Seafood


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Prepared foods Alcoholic beverages

Prepared Foods is a diverse and dynamic category consisting of chilled & frozen prepared foods, bakery, non alcoholic beverages, confectionery, snacks and grocery products. The sector operates in a highly challenging and competitive marketing environment. It has become increasingly more export oriented, especially in frozen foods and confectionery, as reflected in current Bord Bia programmes, including targeting opportunities for private label in some European markets.

While the UK has been the dominant market for the sector, Building Exports will be an important strategic priority as there is now an increasing focus and diversification towards the eurozone with some clients looking further afield at the Middle East. In some sectors, such as chilled foods, bakery, soft drinks and grocery, the focus is on ensuring a Vibrant

Home Market through customised brand services and gaining market information and insights. This is reflected in plans to carry out specific product category research on the home market and in working with these clients on building their brand.

The strategic approach for the Prepared Foods sector will focus in particular on the following areas:

• Investmentinkeyresearchacrossthesector to build new market and consumer insights and to identify where key opportunities may exist.

• Co-ordinatedandtargetedmarketstudyvisits to improve our customer understanding as well as idea generation around product innovation.

• Keyresearchinitiativesfocusingonrelevantcustomers, so as to better understand their specific requirements and how best to do business with them.

Over the next three years, the focus of the alcohol beverage sector will be to contribute to Building

Exports in overseas markets. Exports from the sector have performed well in the past five years and activities and programmes for the period 2012-14 will include trade shows and buyer introductions in important markets like USA, Germany and the UK. Emerging export markets will also be researched to identify possible opportunities with market study visits and buyer introductions organised for the sector. In the past, such activities have proved particularly effective for many Irish companies leading to new business opportunities. In terms of developing a Vibrant Home Market, the ever increasing number of craft brewing companies and the growing consumer interest in these unique products will be supported through research on the sector to help the industry position itself for future development.

Bord Bia’s work with the artisan sector 2012-14 will link with the two key strategic themes of A Vibrant

Home Market and Building Exports.

On the home market, services for artisan producers will be delivered under the Vantage pillars of Point, Plus and Promote. The Point and Plus pillars will deliver day to day learning, information and networking opportunities for artisan producers with the objective of developing their core business skills efficiently and proactively. The Vantage Promote pillar has as its focus the development of the artisan sector through the building of relationships and market opportunities with consumers, trade, media and opinion formers, all of which will be further developed for increased home market success in the 2012-14 periods.

In the same timescale, work with individual companies and groups of artisan suppliers will be delivered under the Building Exports theme. Core markets for development will be the UK, Europe and the USA. Business development opportunities will be created via supplier participation on export focused Retail and Foodservice programmes, at bespoke events such as Marketplace International and via international trade fair participation. Enhancing the international reputation of Ireland as a source of highest quality food and drink and unique product stories will be an important focus in the target markets and will be delivered via in-market

PR campaigns and promotions and inward trade and media visits to Ireland’s leading artisan producers.

The role of alternative channels of distribution is particularly relevant to this sector and Bord Bia will continue to work with companies building on previous initiatives in areas such as farmers’ markets and on-line presences.

Bord Bia will also progress with the Department of Agriculture, Food and the Marine the awareness and uptake of EU schemes such as Protected Designation of Origin (PDO), Protected Geographical Indication (PGI) and Traditional Speciality Guaranteed (TSG).

Artisan


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Alcoholic beverages

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Horticulture

Horticulture includes both edible and amenity crops. Eighty per cent of the total value of horticulture output is from edible crops with the balance coming from amenity horticulture. The home market is the most important market for horticulture products and services. The main exports are made up of mushrooms to the UK and a more modest level of exports from the amenity sector to EU markets. The key focus is to increase the consumption and the domestic market share of locally sourced products and services, grow exports and improve competitiveness.

The clearly recognised health benefits attributed to fresh, local produce provides an important USP and promotional message. There is an opportunity to highlight and promote local seasonal produce as a guarantee of supply for the future without the environmental costs often associated with produce from elsewhere, as food security and sustainable production grow in importance. As part of the food brand initiative Building Ireland’s Reputation will provide the framework to communicate and reinforce this message. Participation by horticulture businesses in the quality programme will be maximised and additional sustainability criteria will be added. Building Ireland’s Reputation will underpin and enhance the promotion of mushrooms in the UK market.

Innovation in products, services and systems will help secure new and grow existing markets and contribute to improving the competitiveness of businesses. Adding value through the further preparation of fresh produce or the introduction of a new product

or plant variety will create new market opportunities. As part of the Enhancing Competitiveness priority Bord Bia will support these activities through market insight and financial support. Entrepreneurship will be encouraged and facilitated. The scale of horticulture businesses in Ireland tends to be smaller than in other countries and as a result the need for businesses to co operate has never been more critical. Recent co-opetition initiatives within the sector in the areas of joint promotion and procurement are evidence of what can be achieved and these will be built upon and expanded.

As part of the Building Exports initiative exporting companies will be assisted to expand existing markets and develop new markets where commercial opportunities exist. This will include promotional and marketing activities to assist companies maintain and grow the already significant market share secured by the Irish mushroom industry in the UK. Opportunities also exist to grow amenity exports within the EU as well as plant technology to markets outside the EU.

The home market is the key market for the horticulture sector. As part of developing a Vibrant

Home Market key activities will focus on increasing the purchase of and maximising the domestic market share for locally grown fresh produce and plants. This will be supported through a comprehensive communication programme, including the Bord Bia Quality Mark, the Best in Season fresh produce promotional campaign, the Garden Time campaign and educational schools programmes such as the Incredible Edibles.


The ever growing importance of health and wellness, and societal concerns around obesity, highlight the critical contribution of nutrition and diet. The Food Dudes programme, with its intervention at primary school level, will continue to play a central role in addressing the importance of healthy eating during a child’s formative years.

Individual businesses will be assisted through the market assistance and Vantage programmes to improve their business performance and assist them with specific marketing activities. Bloom will continue to be a major platform to display, highlight and promote to consumers and trade buyers the extensive range of top quality local food, plants and horticulture services which are available.

The strategy for horticulture takes cognisance of and supports the outcome of the Food Harvest 2020 Horticulture Action Group and in particular those actions relevant to Bord Bia including the areas of promotion and researching new market opportunities.


Corporate governance

Bord Bia was established under the Bord Bia Act 1994 and operates in accordance with the provisions of the Bord Bia Acts 1994 & 2004 and under the aegis of the Minister for Agriculture, Food and the Marine.

The Board has adopted the Code of Practice for the Governance of State Bodies and the provisions of the Code are being implemented. For the purposes of applying the Code of Practice for the Governance of State Bodies, Bord Bia is regarded as a non-commercial State Body. The Board is committed to maintaining the highest standards of Corporate Governance, has a formal schedule of matters specifically reserved to it for decision, provides strategic guidance, monitors the activities and effectiveness of management and monitors compliance on an ongoing basis with relevant legislation, regulations and guidelines.


Growing the success of Irish food & horticulture

HEAD OFFICEClanwilliam CourtLower mount StreetDublin 2, IrelandT + 353 1 668 5155F + 353 1 668 7521www.bordbia.ieE [email protected]

statement of strategy 2012/2014 - bord bia · view of the entire industry with the goal of driving...

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