SuBmission to
AGRI VISION
2020 by TASTE Council
1,000 local, artisan, speciality food firms + €1.65 billion in their local output at consumer prices
= €4.1 billion in circulation in the local economy +7,500 more jobs by 2020.


Contents

1.0  Introduction Page 3

2.0  Required Action from Agri Vision 2020 Page 4

3.0  A Realistic Vision for Sustainable Job Creation Page 4

4.0  Rationale Page 5

5.0  A Potential Framework as a Basis for Strategy Page 6

6.0  Key Facts in Support of This proposal Page 7

7.0  Value for Money Page 15

Appendix 1 – Members of TASTE Council Page 17

Appendix 2 – Teagasc Report on the Artisan Food Sector Page 22

Appendix 3 – The Grocer - Article September 2009 Page 23

1.0 Introduction

This document is a submission from the Taste Council to Agrivision 2020. The central aim of this document is to communicate the TASTE Council’s request for 1 specific action in Agri Vision 2020 on behalf of farming, fishing and food primary and secondary producing entrepreneurs.

The TASTE Council is a voluntary representative group of the smaller food business sector made up largely of local, artisan and speciality food producers and formally established in October 2003. (For a list of the TASTE Council’s current membership please see Appendix 1).

The TASTE Council engages with the relevant government departments, government agencies, non government organisations and education establishments to promote the interests of the traditional, artisan and speciality food producing and farming sector and to assist in its strategic development to maximise its current and potential contribution to Ireland’s food and agri economy, society, culture and environment.

The TASTE Council formally represents the sector on the Food Safety Authority of Ireland’s (FSAI) Artisan Food Forum and the Agri Vision Artisan Food Sub Committee.

The TASTE Council made a detailed submission to the last 2015 Agrivision committee many of the recommendations included have been acted upon particularly in relation to the support and promotion of artisan and speciality and regional foods.

TASTE Council’s Objectives are:

§  To provide a national framework with access to international expertise and markets for the strategic development of the sector;

§  To form a cohesive group representative of the sector;

§  To draw on the expertise of the group (experience, skills, and knowledge) to address strategic issues facing this sector.

2.0 Required Action from Agri Vision 2020

The Taste Council requires one focussed action from Agri Vision 2020 and that is a commitment from government to prepare a cross departmental strategy for the sector covering enterprise, education and skills, tourism, food, fisheries and agriculture and environment.

The high level outcome of the strategy will be sustainable job creation through food, farming and fishing entrepreneurship.

3.0 A Realistic Vision for Sustainable Job Creation

By 2020 the existing base of 350 artisan/speciality food firms could double their output at consumer prices and increase their market share of the local market from 3% to 6% resulting in 1,000 new jobs created and (through a multiplier effect of local food expenditure see section 6.3) would circulate €2.1 billion into the local economy per annum,

During the next 10 years 650 new food entrepreneurs could establish businesses, resulting in 6,500 new jobs created and based on current local output levels this group could result in a further €2 billion into circulation in the local economy.

In combination this would result in 7,500 new jobs and an additional €4.1 billion in circulation in the Irish economy.

In order for this to occur the policy and intervention landscape would need to be adapted. In addition collaborative government body actions developed in partnership with the sector would need to be aligned and in place to deliver on these jobs.

For key facts in support of this proposal please refer to Section 6.0.

4.0 Rationale

This submission is made in the context of:

·  High levels of unemployment in Ireland,

·  10,000 people having been made redundant from the food processing sector since the beginning of 2009 largely due to a repositioning of food processing sector due to currency fluctuations and increased production costs,

·  A 16% fall (during 1998-2007) in employment in agriculture, forestry and fishing and the continued drift from fulltime farming.

And as part of the TASTE Council’s view of the food industry’s collective responsibility as a prime mover in economic recovery.

5.0 A Potential Framework as a Basis for Strategy

The strategy should work to appropriately support the sector’s potential in order to deliver on the growth targets as outline in section 3.0. This includes finding ways to mitigate or reduce barriers to growth or to convert these to enablers. It should also include developing ways to maximise enablers of growth.

6.0 Key Facts in Support of This Proposal

6.1 Speciality Food Business Population, Revenue, Employment and Growth to date

The total food firm population is Ireland is estimated at 800 firms.

The majority of these firms are SMEs.

The speciality food business population in Ireland (defined by Bord Bia as micro and small firms) with individual turnover levels of between €100,000 and €3.5 million per annum is 350 firms.

This group excludes the firms which started as micro or small and graduated to become bigger firms over the course of the last 15 years (e.g. Glenisk, Lily O’Briens, Clonakilty Black Pudding, Mr. Crumb).

These 350 firms grew from a population of 60 firms in 1996.

These 350 firms have a combined output at consumer prices (i.e. prices charged at retail or foodservice prices) of €475 million.

Approximately 10% of this output is destined for exports leaving €427.5 million as local sales in Ireland or 3% share of the local market for food grocery and foodservice (the latter worth €14.5 billion in 2008).

6.2 Benchmark – New Zealand

New Zealand is often regarded as a good benchmark in Agri-food for Ireland due to its similar population size, island status and temperate climate. Through inventiveness, cutting edge technology, research and astute branding and marketing, more than 2,000 speciality food and beverage companies (excluding wines) add value to a wide range of natural products resulting in niche products which stand out in the international marketplace.

The foods produced range from traditional pastries, honey, confectionery, speciality sauces, marinades, oils, luxury ice creams, cheeses, organic soups, energy drinks, organic juices and boutique beers.

New Zealand’s speciality food and beverage exports were estimated at NZ$8.75 billion in 2006, up from NZ$2.9 billion in the 16 years since 1990. Key export markets include USA, Australia, Europe, Japan and China.

New Zealand is often first to market with new niche concepts such as avocado oil for example. The country is also receiving international recognition for its olive oils.

Pioneering research work results in new high value products such as for example Manuka honey as a medicinal product effective against highly resistant bacteria.

There are only 80 farmers’ markets in New Zealand and all require that 80% of product is local.

6.3 Local Food Revenue Multiplier Effect

A study by the New Economics Foundation in London found that every £10 spent at a local food business is worth £25 for the local area, compared with just £14 when the same amount is spent in a supermarket. That is, a pound (or euro) spent locally generates more than twice as much income for the local economy. The farmer buys a drink at the local pub; the pub owner gets a car fixed at the local mechanic; the mechanic brings a shirt to the local tailor; the tailor buys some bread at the local bakery; the baker buys wheat for bread and fruit for muffins from the local farmer. When these businesses are not owned locally, money leaves the community through every transaction.

This means that the €472.5 million consumer sales value of output sold locally in Ireland from over 350 small, local and speciality Irish food businesses, results in €1.01 billion in total revenue back into local business communities throughout Ireland.

An increased share of the national food grocery and foodservice markets (estimated at €14.5billion in 2008) would serve their growth potential well. Provided these companies increase their share of the local market for food and drink from 3% to 6% their local turnover would rise to €855 million per annum which through the multiplier effect would circulate €2.1 billion in the local economy.

6.4  Local Food Jobs

The 350 small food businesses who are client firms of Bord Bia employ approximately 3,000 people.

We estimate that these firms by doubling their revenue and market share over ten years have the potential to increase their employment levels by one third, thereby creating 1,000 new job opportunities.

Smaller food companies are generally more labour intensive than large manufacturing food firms. Large firms need to apply technology to become less labour intensive and to compete on scale. From 1998 to 2007 industrial employment fell by 4% in Ireland. During the same period employment in agriculture, forestry and fishing fell by 16%. During this period however, small food firms expanded their employment level from 600 people to 3,000 people, largely through start up and growth.

We believe that a minimum of 650 new food/farming/fishing entrepreneurs could grow the sector to 1000 firms by 2020. This target number is conservative when you consider the number of speciality food firms in New Zealand (see section 6.2). It is noted that, on March 30th 2010, the Food Safety Authority of Ireland (FSAI) reported a 50% increase in enquiries regarding the starting up or establishment of new food firms in 2009 compared to 2008.

These 650 new small businesses can grow to the equivalent size of the 350 firms active in the area to date resulting in an additional 6,500 jobs created as these firms grow to an average employment level of 10 people each.

Innovation, research, astute and cost effective branding, marketing and distribution for national and international export sales will be critical to their success as is the case in the New Zealand model.

Direct routes to market will need to be facilitated further to support this level of start up. An important growth channel for all players going forward will be online direct sales and sales through online resellers as the online channel is likely to become a broader, all-encompassing destination for all things speciality.

These additional 650 firms would grow the consumer price output of the small food business sector locally by an additional €611million. Applying the multiplier effect to this output leads to a potential turnover in circulation in the local economy of €1.5 billion.

6.5  Food Tourism

Food Tourism is defined as a visiting tourist’s experience of food or food activity. No longer considered a niche, food tourism covers all “touchpoints” or points at which a visiting tourist samples and experiences the food from a place.

Food Tourism in Ireland is valued at €2.3 billion at consumer prices in 2008. This means that visitors spend on food and beverage accounts for €2.3 billion in Ireland. This figure is largely included in the foodservice market valued at €5.5 billion in 2008.

Local Food from an artisan/speciality food producer, farmer or fisherman translates into a story and experience for visiting tourists which is unique to Ireland as a place.

This offers Fáilte and Tourism Ireland a critical advantage in the place marketing of Ireland as a tourist destination in a highly competitive area.

In 2009 Tourism Ireland reported to Bord Bia that local food activity had risen exponentially up their target visiting tourist’s agenda now ranking third or fourth place in order of priority. For a visiting British tourist local food activity as a priority has risen to the second most important priority after “seeing the sights”.

The potential for mutual gain for the food and tourism sector through a collaborative approach to food tourism is substantial, and has much to add to the sustainable performance of food and tourism sectors.

6.6  Sustainable Food Systems

The price of food disguises externalised costs of environmental impact and the impact on the health of the nation. Local food has the potential to create a highly sustainable food system and to protect our food security in the face of climate change and volatility in energy input prices and commodity prices.

Supporting local providers supports responsible land development anda collaborative effort to building more locally based and self-reliant food economies. Self reliant food economies are those in which sustainable food production, processing, distribution, and consumption is integrated to enhance the economic, environmental and social position of communities.

This is central to the development of Ireland the Sustainable Food Island (as a source of food) and to Ireland as a sustainable food destination (for tourists). Buying local food also keeps us in touch with the seasons. By eating with the seasons, we are eating foods when they are at their most natural, peak in taste, most abundant and therefore least expensive and most nutritious.

Organic production adds to the sustainability of food systems and particularly in the context of local. The current targets to increase organic agriculture will assist in this process and is welcomed by the TASTE Council.

6.7  The Market for Local Food and Speciality Food

Demand for local food is rising in Ireland (source Bord Bia Persicope).

However, importantly, very recent consumer research by Bord Bia (February 2010) on local food in Ireland illustrates a substantial headway for local food as defined by food from local people and small scale producers. The shift reflects a move back to basics in the local food arena as consumers support local food for local community benefit.

The research proves that local food in Ireland is now a category in its own right reaching 93% consumer awareness and the ‘definition’ has shifted from a geographically focused one to a more producer and small scale product-centric one.

In 2007 41% of consumers thought of Local Food as ‘produced within the Republic of Ireland’- today just 10% of consumers define the category in those terms.