Bord Bia today launched its Export Performance and Prospects Report which reflects a 4% increase in exports for 2014 to reach a record high of almost €10.5bn.
Aidan Cotter, Chief Executive, Bord Bia outlined the background to the fifth consecutive year of export growth for the food and drink industry. He said that, in 2014, exports grew by 4%, representing an expansion of 45% or €3.2 billion since 2009. The strongest performing sectors were dairy product and ingredients which exceeded the €3 billion mark (+3%), prepared foods (€1.8 billion, +8%) and seafood (€540 million, +8%).
Mr. Cotter highlighted the significant shift in the destinations for Irish exports in 2014 with international markets showing renewed growth, reflected in a 15% increase in trade to stand at €3 billion or 29% of total food and drink exports.
"The industry's drive to broaden export reach to destinations outside of the EU is paying dividends with growth in emerging and international markets now driving export figures, offsetting the limited growth in our established premium EU markets" he said.
This shift in market destination was marked by increases in the value of exports to Asia to reach €850 million (+45%) as well as significant increases to North America (€740 million, +18%), the Middle East (€330 million, +11%) and Africa (€610 million, +9%). Within this, China recorded a further increase of almost 40% to reach approximately €520 million. China is now Ireland's second largest export market for dairy, compared to 13th in 2008.
While it remains Ireland's most significant export market, the share of exports destined for the UK eased slightly though the value showed little change at €4.2 billion or 40% of export share. Stronger export values for beverages, prepared foods, mushrooms and poultry helped offset lower beef and dairy values.
The value of exports to other EU destinations grew by 2% to reach €3.3 billion equating to 31% of total exports reflecting largely static consumer price inflation across the Eurozone.
Ireland`s exports benefited from the effects of a weak euro against sterling and the US Dollar, however a strengthening euro against the Russian Rouble combined with trade suspensions had a significant negative impact on Irish exports to that region with exports falling by an estimated 30% to €170 million.
Welcoming the positive results the Minister for Agriculture, Food and the Marine Simon Coveney TD said that "since 2009 food and beverage exports have increased by 45% compared to Irish merchandise exports which are 5% higher. Our strategy for exports is clear and our pursuit of the targets set out in Food Harvest 2020 is relentless. The speed and determination the industry displayed in shifting focus to new and emerging markets in response to static price inflation in EU markets, and the severe restrictions in the Russian market, has been remarkable".
Prospects for 2015
Aidan Cotter outlined the factors that point to 2015 being a more challenging year to maintain recent growth. While the abolition of milk quotas in April 2015 is expected to lead to an increase in milk output of more than 10% for the year, the current weakness of global dairy markets is negatively impacting on price levels and recent forecasts from Rabobank suggest this trend will persist well into 2015.
Cattle supplies are expected to ease by more than 120,000 - 150,000 head in 2015, which will lead to export volumes falling by around 8%. However, some recovery in cattle prices is anticipated. Much will depend on demand developments in more established markets with consumer sentiment to remain a critical driver.
The prepared foods and beverages sectors both face competitive market environments, although both have shown a strong ability to diversify over recent years. Further strong growth potential exists for whiskey in particular, while a number of key prepared food categories such as confectionary, ready meals and bakery are expected to record further growth.
The export outlook for the seafood sector will depend on product supply. However, value added salmon exports from Ireland are showing strong increases and this trend is expected to continue in 2015.
Industry Survey
The results of the annual Bord Bia industry survey, completed in December 2014, shows good optimism among food and drink manufacturers across all categories. In total, almost 95% of the 350 respondents reported similar or higher export sales over the previous 12 months. The industry is also optimistic for the year ahead with more than half (52%) expecting their export sales to increase, while a further 42% expect them to be maintained.
Concluding today's briefing Bord Bia Chairman Michael Carey commented "we will continue to support the industry in its broadening of export reach and access to new markets to ensure that exporters can maximize their potential and hedge against market volatilities. The industry optimism emerging from our recent survey reinforces our efforts and I am confident that the recent market access to the United States and the potential access for beef to China are reasons to look to 2015 with confidence."
Key Bord Bia Initiatives for 2015
In 2015, Bord Bia will continue to promote Ireland's sustainable food and drink industry through its Origin Green Programme and its participation in some eighteen trade exhibitions which will attract in excess of 800,000 business executives in Europe, Russia, the Middle East and Asia. 'Feeding the Planet, Energy for Life' is the theme for the upcoming World Expo, which will be hosted in Milan, Italy for six months starting on May 1st. World Expo is a global showcase which is expected to attract in excess of 20 million visitors. Ireland will exhibit alongside 143 other countries and Bord Bia's Origin Green programme will be the key theme of the Irish stand.
In March, Bord Bia will host its largest ever Marketplace International event in the Convention Centre Dublin. Some 450 buyers, including 300 from overseas, are expected to participate in one-to-one meetings with in excess of 160 Irish food and drink companies. In addition, over 100 of the international visiting buyers will participate in sector specific three-day itineraries visiting farms and factories nationwide.
