Surge Of Optimism For Food And Agribusiness

08 Sep 2021 | 09.41 am

Surge Of Optimism For Food And Agribusiness

Rising costs and climate change are challenges

08 Sep 2021 | 09.41 am

There’s a climate of optimism in the food and agribusiness sector, according to a survey from ifac, with optimism levels rising from 55% last year to 77% in 2021.

The professional services firm’s Food and AgriBusiness Report 2021 says that levels have been boosted by the “robust vaccine rollout and plans to remove outstanding Covid restrictions”.

But while 77% of respondents are optimistic, 71% reported an increase in costs this year, from transport and energy to raw materials and packaging; an issue that could contribute to food price inflation in the coming months.

With the Brexit transition period over, the real impact is apparent, with 64% of businesses negatively affected by Brexit and half mentioning transport disruption as a major impact. Covid-19 has also made its mark: 55% of SMEs say the change in consumer habits is the biggest long-term effect of the global pandemic.

Climate change is a major challenge for the industry, and 37% of SMEs are putting it high on their agendas while 87% are already taking mitigation actions. Sustainable packaging continues to be the top trend impacting Irish food businesses, as well as managing waste and by-products.

The survey showed virtuall all the respondents planning to maintain or grow employee numbers over the next year, but there are fears that food production may follow the construction, hospitality, retail and care sectors in terms of labour shortages for low-paid jobs, with two-thirds or more finding it difficult to recruit the right people.

Also, ‘lack of interest in roles’ has become a key factor in recruitment difficulties for 2021, overtaking ‘skills not available’ in 2020.

‘Time Of Opportunity’

Chief executive John Donoghue (pictured) said: “Our report shows that despite massive Covid disruption, the Brexit challenge and climate change, Ireland’s food and agribusiness sector remains resilient, and optimistic about the future. With markets more connected than ever and investment in the sector hitting an estimated €22.3 billion in 2020, this is a time of opportunity.

“That opportunity comes with responsibility. ESG has arrived for the SME sector. Consumers are hungry for information, they want to see business leaders driving positive climate action, social impact and good governance. Anyone hoping to build a successful business will need to have ESG on their agenda.”

Ifac head of food and agribusiness David Leydon added: “While it is encouraging that optimism levels have bounced back strongly, trends to watch out for are rising costs, recruitment challenges, negative impacts from Brexit, and lower than ideal R&D investment.

“A real missed opportunity is around the strategic planning process – it’s concerning that nearly 80% of SMEs do not have a current strategic plan in place to guide their business.

“The climate and biodiversity crisis is here and people are starting to make purchasing decisions based on sustainability and social responsibility. Now is the time for Irish businesses’ operations and sustainability credentials to act as one. This is the first time that our report has a dedicated environmental, social and governance (ESG) section. ESG is now essential for any businesses’ long-term survival and for its ability to attract talent and finance.”

The full report is available here, with a useful infographic of key takeaways here.

 

IFAC infographic

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