Presenting
Pathways for Growth
Building Ireland’s largest indigenous industry
Review & Outlook
May 2011
Growing the success of
Irish food & horticulture
Contents
Pathways for Growth
Foreword by simon Coveney,
Minister for agriculture, Food and the Marine . . . 1
section 1
year 1 Progress report
2
Mary Shelman, Director of Agribusiness Program,
Harvard Business School
The Current state of the irish Food
and Drink industry: a View from the Top . . . . . . . 4
Progress towards Pathways
recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . 7
next steps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
section 2
Building ireland’s largest
indigenous industry
12
Foreword by aidan Cotter . . . . . . . . . . . . . . . . . . . 13
Pathways for success . . . . . . . . . . . . . . . . . . . . . . . 14
The five work streams:. . . . . . . . . . . . . . . . . . . . . . 15
‘Brand Ireland’ . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SUSTAINABILITY PLATFORM
Irish Beef – pathways to sustainability . . . . . . . 18
Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Co-opetition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Entrepreneurship . . . . . . . . . . . . . . . . . . . . . . . . . 27
Download the reports
Pathways for Growth is available at
www.bordbia.ie/industryinfo/publications/bbreports/Pages/PathwaysforGrowth.aspx
Food Harvest 2020 is available at
www.agriculture.gov.ie/agri-foodindustry/foodharvest2020/
1
Pathways for Growth
Foreword by Simon Coveney, Minister for Agriculture, Food and the Marine
As the Minister for Agriculture, Food and the Marine, I am determined
to make the Agri-food sector a central part of the Government’s plans
for economic recovery.
The vision of Ireland as a clean, green, high quality,
innovative producer of excellent food and drink must
be sold at home and abroad. I want to help realise this
vision, to sell Ireland as a producer and exporter that can
contribute to feeding the world’s growing population
with our high quality food. This industry is moving
towards the heart of Ireland’s economic recovery with
its ability to grow and export unrivalled by any other.
a further hundred
bespoke projects
will have been
undertaken on
behalf of Irish
food and drink
companies in a
twelve month
period.
It gives me great pleasure to introduce this latest update
to the Pathways for Growth report and, on behalf of
the Government, to note its significant contribution to
delivery of the vision for Irish agri-food set out in Food
Harvest 2020. In under a year the Pathways for Growth
report has evolved into a series of interconnected work
streams with rapid progress recorded in many areas. It is
impressive that more than 60 food and drink companies
have engaged in innovative co-opetition projects to date.
Furthermore upon completion of the second Bord Bia
Marketing Fellowship, in June 2011, a further hundred
bespoke projects will have been undertaken on behalf of
Irish food and drink companies in a twelve month period.
Our Food Harvest 2020 targets are ambitious but
achievable. Our exports have increased 11% from 2009
to €7.8bn, and this must grow further to €12bn by 2020.
The opportunity now exists for us to further develop
the strength and potential in this sector by taking this
hugely valuable natural resource of Ireland on to a new
level when populations are growing and food demand
is increasing. There is an air of excitement around food
and agribusiness. Young farmers see the opportunities
that now exist. Food producers are aware of consumer’s
needs and wants. Consumers are educating themselves
on what food they want to eat. Ireland is realising its
full potential in taking advantage of this current climate
to further build Ireland’s largest indigenous industry.
This update to Pathways for Growth provides a concise
summary of the progress to date and developments
anticipated in the coming year. Ultimately, however, it will
be in your own direct experience that its greatest value
will be seen to lie. I wish Bord Bia continued success in
this innovative programme and look forward to further
updates documenting its progress. A great journey has
been embarked upon, and the shared commitment to
sustainable expansion augurs well for the coming decade.
Simon Coveney
Minister for Agriculture, Food and the Marine
2
pathways for Growth Building Ireland’s largest indigenous industry
Section 1
year 1 progress report
Mary Shelman
Director of Agribusiness Program
harvard business school
Just over a year ago, David Bell and I were
engaged by Bord Bia to conduct a high-level
assessment of the Irish food and drink industry
with the objective of identifying new export
opportunities. Our results were presented in
“Pathways for Growth: Building Ireland’s largest
indigenous industry” and key elements were
incorporated into Food Harvest 2020. The purpose
of this paper is to report on progress towards
the Pathways recommendations, to summarize
lessons learned so far, and to set out next steps.
3
Pathways for Growth
Conclusions and Recommendations: A Summary
Overall we were optimistic about the prospects for the
Irish food and drink sector given its natural resources,
agricultural heritage, reputation as a reliable supplier, and
proximity to the large and wealthy European market.
However, we identified three fundamental challenges—
fragmentation, lack of consumer orientation, and low
confidence in the future—that must be addressed in
order for Ireland to increase its share of the growing
global market for high quality, natural, and safe food.
We laid out aspects of a solution, which included:
• Cooperation instead of competition
• Innovation leading to differentiation
• Brands built around customer feedback
• All under an umbrella strategy which
everyone could agree upon
In addition, we asserted that Ireland needed a unified
and ambitious vision to inspire change and re-invigorate
passion in the sector. We described one possible vision,
which we called “Come See Us”, that is based on Ireland
(companies, farmers and farmer groups, government,
agencies, universities…) adopting a strategy of developing
a world-class agricultural industry by 2016. To achieve
this, tough national standards would be defined to
allow Ireland to make the claim “we are natural and
we can prove it”, and farmers and firms would invest
to meet them. The Irish food and drink industry would
work as one to achieve export growth. The ultimate
expression of this vision would be the creation of an
umbrella brand for food and drink, which would be
launched once all of the groundwork was in place.
4
Pathways for Growth Building Ireland’s largest indigenous industry
The Current State of the Irish Food
and Drink Industry: A View from the Top
The Pathways project came about because of the extremely difficult
environment faced by the Irish food and drink industry at home and
abroad. On both fronts, much has changed from a year ago.
Globally, the world is in a slow climb out of a deep
and prolonged recession. In most Western countries
unemployment levels are still high, credit remains tight,
and consumers have not yet regained the income or
the confidence to return to pre-recession spending
levels. However, growing food demand from emerging
economies, increased use of corn-based ethanol in the
USA, and unusual weather conditions have caused the
price of many agricultural commodities to climb to record
levels. The good news is that farming returns are up,
sending the important signal to increase supply. The notso-good news is that manufacturers’ margins are being
squeezed as powerful retailers (as well as concerned
governments) are reluctant to raise food prices. China,
in particular, is struggling to rein in food inflation (food
prices in January 2011 were up 10.3% over the previous
year, with fruit up 35%, vegetables up 2%, and grains up
15%) while also dealing with ongoing food safety issues.
Brazil is also experiencing strong domestic growth that,
when coupled with a strong Real, higher feed costs, and a
shortage of trained labor in processing plants, has pushed
up the cost of Brazilian beef and poultry on international
markets (Brazilian steer prices were 95% of the EU-15
average price at the end of 2010 compared to 60% at
the beginning of the year; in April 2011, it cost as much
to produce a chicken in Brazil as it did in the USA).
growing food
demand from
emerging
economies,
increased use of
corn-based ethanol
in the USA, and
unusual weather
conditions have
caused the price of
many agricultural
commodities
to climb to
record levels.
Domestically, the economic situation is well known.
The Irish market is still difficult as many consumers
continue to closely watch their spending and buy on
price/value. Yet the agri-food sector appears to be a
bright spot in the Irish economy. To gain a perspective
on the sector’s prospects, I interviewed 15 industry
leaders including many of the same CEOs that we spoke
with last year. Following the same method as used
before, respondents were asked to put themselves in
the position of CEO of Ireland Food and Drink Plc.
It is clear from these conversations that Ireland has
a lot more going for it than it did a year ago. Four
major themes emerged from these discussions:
5
Industry Optimism
CEOs now see Ireland as a place to invest rather than
divest; several say they would consider substantial
investments in Ireland (rather than investing elsewhere),
especially those that lead to improved efficiency and/or
increased value-added. Irish goods have become more
competitive as wage and energy costs have come down,
and further improvements are likely. In addition, CEOs
now have a larger pool of talented young people to draw
from (due to diminished prospects in other high-paying
sectors), including 50 graduates of Bord Bia’s Marketing
Fellowship Programmes. Some young people are also
returning to the farm, bringing with them a business
approach, improved orientation to technology, and goals of
expansion. Over time, this is likely to lead to consolidation
and improvements in efficiency and raw material quality.
Government Support
The adoption of Food Harvest 2020 is universally viewed
as a pivotal step in the right direction and a sign of
the new government’s commitment to make food and
agriculture a national priority (although there are many
issues that still must be addressed for industry targets to
be met). The new Minister’s enthusiasm and energy has
generated the hope that he will be a strong and vocal
champion, promote a market-based approach which
puts consumers first, and implement a “we must run
government like a business” style. Business leaders realize
that the days of extensive government support are over
and understand that the emphasis must be on prioritization
and alignment, as well as removing roadblocks.
6
Pathways for Growth Building Ireland’s largest indigenous industry
Capital is Available
Although Irish banks are strained, CEOs of larger food and drink firms have access
to capital to support viable strategies (one CEO noted his surprise at how easy it
was to raise capital, often at cheaper prices than existing debt). However, small and
medium-sized enterprises—especially those focusing on the domestic market—are
still challenged. Given the strong prospects for the sector, investment funds and banks
in other parts of the world are expanding their food and agribusiness portfolios.
Top international agri-food firms are also consolidating and enlarging their global
footprints, as evidenced by Friesland’s merger with Campina, Kraft’s acquisition of
Cadbury, and the marriage of Perdigão and Sadia (two already large Brazilian meat
companies) to form the world’s 10th largest food company (now called Brasil Foods
or BRF). Irish food and drink firms may need to look beyond the Irish market for the
capital they require. And just as Italy is grappling with the likely acquisition of Parmalat
by France’s Lactalis, Ireland may see new flags flying in front of “Irish” factories.
Export or Perish
It is now widely accepted that growth—and perhaps even survival—must come from
increased exports. This clarity is of strategic value to the industry. Difficult choices
about resource allocation (e.g., whether to invest in brand building in Ireland or
abroad) become easier, as do hiring decisions (a global perspective and language
skills are a must). Export-driven growth also reinforces the need for companies to
cooperate or even to consolidate, since most Irish firms are too small to tackle largescale international market development. In addition, we have often observed that
firms operating from small home bases are more customer oriented (think of Nestlé);
however, Ireland’s highly competitive domestic market will make it difficult for companies
to use local sales as a foundation for exports or as a test market for new products.
7
Progress towards Pathways
Recommendations
Pathways for Growth recommended a new strategic direction
for the Irish agri-food sector, a historic transformation that must
be supported by written plans and targets as well as industry
enablers—small investments that have a big impact.
In addition (and perhaps even more difficult), Pathways
called for a change in mindset and behaviour. Short of a
complete collapse and fresh start, there is no one “big
bang” that can immediately deliver this type of change;
instead, it comes about through a deliberate process of
small steps and experiments (some will be wins while others
are failures), growing momentum, ultimately reaching a
tipping point. Keeping this process going requires lots of
energy, constant management, and long-term commitment.
This is more than a one-year or even a three-year project.
If Ireland is going to be truly significant in the global
marketplace, it is about changing the game for the future.
If Ireland is
going to be truly
significant in the
global marketplace,
it is about changing
the game for
the future.
The influence that Pathways for Growth has had so
far has been impressive. This is clearly more than just
another report gathering dust on a shelf. Specific
recommendations are included in Food Harvest 2020,
people have adopted the Pathways language (some
can cite chapter and verse), and numerous projects are
underway that are in line with the Pathways vision. Yet
when you are on the first leg of a lengthy journey it’s
common to feel that you are not making progress (just
as parents often don’t realize that their child has grown
taller). To appreciate the development in the Irish food
and drinks sector requires a fine-grained overview of
everyone’s actions. Overall I am confident that progress is
being made and offer the following evidence in support:
“Permission” to Cooperate
The word co-opetition has become part of the
everyday language. One CEO commented that
hearing it from Harvard “made it respectable”.
The fundamental concept of co-opetition seems to
have gotten through. People understand that it is
about Irish companies working together rather than
being engaged in a race to the bottom. However,
it is a difficult concept to put into practice.
A number of co-opetition projects have been initiated,
including several pilots supported by Bord Bia. For example,
several non-dairy food ingredient companies are presenting
each others’ products to existing customers—already
leading to new sales. The CEO of a leading consumer-foods
company has offered to share information on his top 10
customers with other (non-competitive) food companies;
hopefully more will follow his example. Six root vegetable
8
Pathways for Growth Building Ireland’s largest indigenous industry
growers have agreed to (anonymously) share cost information in order to identify possible
savings from coordinated purchasing. Other co-opetition projects include a fish cooperative
and a seafood processor working to fill unused capacity and sell higher-value products,
and a leading Irish dairy exporter launching a farmhouse cheese under an existing brand.
Co-opetition in beef is a challenge due to overcapacity and historic industry culture and
practice; however, there have been some steps forward. For example, AIBP and Kepak
introduced a joint program for farmers designed to keep calves on Irish farms rather
than being shipped live to other countries. Several processors are involved in a project to
supply Irish beef to Germany, a market that has a taste for grass-fed beef. With Argentine
beef no longer available, Ireland could step into this gap. Although the industry so far
has not able to agree to a common higher quality standard, discussions continue.
Several important lessons have been learned. To succeed, co-opetition projects need the
commitment of top management and constant shepherding. When they are delegated,
the reasons to work through the difficult issues get lost and no one has the authority
or incentive to remove roadblocks. Sometimes partners must deal with rejection; for
example, a joint presentation of a group of products might lead to acceptance of only
one or two. It helps if different outcomes are considered in advance and a strategy
worked out beforehand (a trained facilitator/mediator can help). Finally, joint marketing
projects are more difficult than those directed at cost savings; these might work better for
launches in new markets where expertise can be pooled and resources can be shared.
The fact that people are coming together to discuss co-opetition possibilities
is itself an important sign. It means that people are looking at the world
through a different lens—from the viewpoint of an industry participant
or as a member of a supply chain. Conversations lead to opportunities
and, over the long term, continued conversations lead to trust.
Progress towards an Irish Food Brand
Almost everyone I spoke with this year agreed that a “Brand Ireland” would help Irish
firms trying to win new export business, either on a B2B or B2C basis. Positive support
came from dairy (“We need it to help sell the flood of milk coming in 2015”), beef (“It
would force everyone to operate at the highest standards”), even consumer foods (“When
presenting to a buyer I always sell Ireland first. Then I sell my products”). While last year
many CEOs expressed skepticism that it could be done or asked “what’s in it for me?”,
this year they asked “how fast can we have it?” and “why didn’t we begin sooner?”
Over the past year Bord Bia has worked with consumers and retail buyers in six countries
to define what the dimensions of “Brand Ireland” should be. Substantial progress has been
made, although there is still work to be done to clarify, refine, and test. It is a matter of
crystallizing and distilling the essence of Ireland’s green and natural DNA in a way that is
enduring and resonant across multiple audiences—a difficult challenge for a brand. The
goal is to match the simplicity of “100% Pure New Zealand” (a tourism brand) in food.
9
Another critical step towards “Brand Ireland” is the
identification of critical claims and the development of
standards supporting them. Here, progress is also evident.
In March 2011 Bord Bia completed the initial stages of
a project to measure the carbon footprint of Irish beef
production. Importantly, the measurement methodology
has been accepted by the Carbon Trust. This program
has now been extended to track the environmental
performance of all 32,000 members of the Beef Quality
Assurance Scheme (BQAS). Recognizing that carbon is
only one element of sustainability, additional measures are
being developed for areas such as water and biodiversity.
While the initial focus has been on beef, Bord Bia plans to
extend this work into other sectors including dairy, other
meats, grain, and horticulture. This program of activity
will help ensure that Ireland can credibly demonstrate
its sustainability credentials in the marketplace.
While this is clearly progress, the essence of the “Come
See Us” vision is that standards are broadly adopted by
farmers and by industry. It won’t work to have one farmer
or processor living up to the “Come See Us” promise while
his or her neighbour is on a different course. Currently
participation in the Assurance Programs is voluntary. The
goal should be nothing short of 100% adoption.
While it is attractive to think that “sustainably produced” products will
command a price premium, it is not clear that sustainability is a feature
that consumers will pay extra for. However, this does not mean that it
is not important. Sustainable production (if it can be documented) is
a differentiator, a way to raise the bar for competitors, and perhaps
ultimately a way to lower costs. Sustainable production may be
particularly resonant for beef, especially for companies like McDonald’s
who need to show that beef consumption should not be condemned for
its environmental impact. McDonald’s will not advertise its beef based
on its sustainability. Yet they must have it to protect their brand.
10
Pathways for Growth Building Ireland’s largest indigenous industry
Harvard Business Review recently devoted an entire issue to failure
(April 2011). In an entrepreneurial culture, failure is a badge of honor.
The best firms know how to understand failure, learn from it, and
recover from it. Several authors wrote about the need to actively build
a learning culture. This includes proactively seeking opportunities to
experiment, as well as having a process for the systematic analysis of
failures (successes should be examined with the same scrutiny).
Changing Language and Tone
It is clear from my conversations that more dialogue is taking place. People are
coming together to seriously discuss tough industry problems. These are different
types of conversations than in the past and they are happening across many different
groups—between competitors (to discuss possible areas of co-opetition); large
companies and small (one CEO noted that big companies should be duty bound to
help small businesses); farmers and manufacturers. Industry leaders report that the
later discussions are more forward looking than before and that the tone is not as
contentious. However, while there is strong buy-in amongst farmers to the prospect of
growth in dairy, the acceptance of the need for other adjustments is more difficult.
Resource Allocation and Commitment
Bord Bia has reorganized significant resources and activities to support the Pathways for
Growth recommendations. Their market-based education program has been expanded to
include industry members. New projects have been developed on co-opetition, innovation,
branding, and entrepreneurship. Where appropriate, new products and services have been
introduced including the Food Entrepreneurs Network, procurement supports, and logistic
model analysis as well as a co-creation and crowd sourcing program to mention a few.
There are many other examples of commitment to change in the agrifood sector. Enterprise Ireland has introduced a new executive development
program for senior managers in the food and drink industry. A task force is
studying how to streamline government research programs to increase their
efficiency and commercial orientation. Industry Activation Groups are nailing
down concrete steps for the implementation of Food Harvest 2020.
In Summary
In summary, change is underway in the Irish agri-food sector. Ireland is in a
much better position than a year ago. A unified vision is emerging of the
country as a leading producer of high quality, green, and safe food and steps
are in progress to get there. However, there is still a long way to go before
Ireland has a world-class agricultural industry. Many hard decisions must be
made and there will be some tough times ahead—particularly if the milk supply
increases before new customers are found or the European market is opened
to Brazilian beef. It will be important to focus on the successes if momentum
is to continue, while examining the failures to inform the next steps.
11
Next Steps
More strategic thinking
I was recently asked if the Irish agri-food
sector could cope with the need for good
strategic thinking “after having been in a
frozen state for 25 years”. The answer is yes,
but CEOs and other industry leaders must
change their approach. Sam Su, the CEO
of Yum Brands1 China, was instructive in
this matter when he spoke to me about the
need for “future back” thinking. Su, who
in 20 years has built the largest restaurant
company by far in mainland China with
over 4,000 restaurants in 700 cities, says
that incremental thinking is not enough
if you want to be great. Instead, leaders
must develop a vision of where they want
their business/industry to end up and then
create the plan to get there. Su decided early
on that KFCs should be in every Chinese
city—not just in the largest ones where his
competitors were concentrating. He built a
country-wide logistics system even though
this was expensive when there were only
a few restaurants in the interior of the
country. Today, Yum’s distribution network
is a tremendous competitive advantage.
Role of farmers in the vision
You can’t have a world-class agri-food sector
without world-class farmers. Importantly,
sustainability can’t be built into a product
after it comes off the farm. In the New
Zealand kiwifruit industry, Zespri (the
industry’s export marketing company)
devotes substantial time and effort to
educate growers about international markets
and the value that can be created from
a superior quality product (for kiwi, this
means a fruit that is grown to the highest
environmental standards and consistently
sweeter than other kiwifruit on the market).
Growers understand that their neighbor
isn’t their competitor—it’s the grower in
Chile—and that everyone wins if they share
information on best practices. Getting
farmers to see themselves as partners in
the supply chain requires communication
and transparency. Carol Ward, Director of
Grower Services for Zespri, also reminds us
that “farmers do what you pay, not what
you say”. Zespri’s strategy is paying off.
While New Zealand holds 30% share of the
globally traded kiwifruit market by volume,
it captures 70% of the market by value.
Joined-up thinking
Genuinely hard resource decisions are
being made in all government programs
right now; agriculture and food should
be winning these battles. The prospects
for growth are exciting and all available
resources should be harnessed to support
an increase in exports (just as everything
was previously aligned in support of FDI).
In support, the industry must continue to
“sell” the importance of the sector and
what it can contribute to Ireland’s economic
recovery in terms of jobs, tax revenues, and
wealth—all the way down to the local level.
Complete the Virtuous Circle
The recommendations from Pathways
for Growth still hold. The Irish food and
drink sector needs cooperation instead
of competition, innovation leading to
differentiation, and brands built around
customer feedback. These elements work
together to create a virtuous circle. (The New
Zealand kiwifruit industry has perfected this
model.) Innovation leads to differentiated
products, which can be distinguished by a
brand. Cooperation means that premiums
can be sustained, which can be invested
back into R&D and marketing—and
also in higher payments to producers.
Can we use this time of unprecedented
crisis in Ireland to build a new business
model for the Irish agri-food sector?
Mary Shelman
Director of Agribusiness Program
Harvard Business School
1Yum is the parent company of several restaurant brands, including Kentucky Fried Chicken (KFC) and Pizza Hut. It is the
largest restaurant company in the world in terms of number of units and one of only five companies in the world with
two top 100 brands (Business Week 2009).
12
pathways for Growth Building Ireland’s largest indigenous industry
Section 2
building Ireland’s largest
indigenous industry
Bord Bia’s Progress Update 2
May 2010 – May 2011
13
Pathways to progress
It is now 12 months since professors David E Bell and
Mary Shelman of Harvard Business School introduced
Pathways for Growth to the Irish food industry at Bord
Bia’s Farmleigh Leadership Summit. Much has changed in
this time. The buoyant export figures for 2010 confirmed
the industry to be once again on a journey of recovery
and growth, following the difficulties of previous years.
The new Government has brought with it a fresh
mandate to tackle the issues confronting the domestic
economy and also made clear its commitment to the
vision set out in the Department of Agriculture, Food and
Marine’s Food Harvest 2020, published in July 2010.
The conviction that innovation and sustainability are the
twin engines driving our industry forward has moved
from laudable aspiration to a tangible driver of progress.
The buoyant export
figures for 2010
confirmed the
industry to be once
again on a journey
of recovery and
growth, following
the difficulties of
previous years.
The positive response from industry to the Pathways
for Growth report, which was evident at last year’s
summit, has remained resolute in the intervening year
and underpins the widely-shared conviction that ‘smart,
green growth’ is the only way forward for our sector.
While acknowledging the present difficulties in our
domestic economy, there is common consensus that the
food and drink industry is on the right track to capitalise
on its enormous potential in the decade ahead.
Within Bord Bia, the five-year Pathways for Growth
programme is now well underway and I am delighted
to have significant progress to report in all five areas
of the programme: branding; education;
co-opetition; innovation; and entrepreneurship.
Change is never easy, even when the opportunities
presented are compelling, but a journey of
transformation is taking place. Bord Bia is playing its
part in supporting the industry with the resources it
needs for this journey. We welcome your feedback
on all aspects of our programme delivery and look
forward to working with you as they progress.
Aidan Cotter
Chief Executive
Bord Bia
14
Pathways for Growth Building Ireland’s largest indigenous industry
Pathways for success
What Pathways for Growth said:
‘Ireland has an enviable agricultural situation that almost
every other country would kill for… But there are underlying
issues… no different, and no worse, than in many other
countries, but that doesn’t mean to say they can’t be fixed.’
Since the publication of Pathways for Growth in May 2010,
Irish food and drink companies have enjoyed a sustained
recovery in exports, following extremely challenging
years in 2008 and 2009. Exports of food and drink grew
by 11% in 2010 to reach €7.9bn, with the prospects
for continued growth in 2011 remaining positive.
Capitalising on the industry’s longer-term prospects
for growth, however, requires recognition that
structural weaknesses within the industry are
inhibiting development and instigating a positive
approach to resolving them. Pathways for Growth
identified a number of key concerns, including:
• Producer fragmentation;
• Lack of consumer orientation;
• A failure to attract outside entrepreneurs,
investors and business graduates; and,
• General lack of confidence within the sector.
Bord Bia’s multi-disciplinary five-year development
programme, seeks in partnership with the industry to be a
catalyst for change as it addresses these challenges. New
models of partnership, along with investment in innovation,
leadership and business development, are being supported
and encouraged, facilitating the industry to convincingly
overcome longstanding developmental ‘bottlenecks’.
Collectively, the implementation of the Pathways for
Growth and Food Harvest 2020 reports provide
a shared platform for action as Ireland turns its
immense natural advantages into a sustainable
high-value food and drink export industry.
15
The five work streams:
1. ‘Brand Ireland’
The development of an umbrella food brand with verified sustainability
at its core.
Early wins:
A major research project on ‘Brand Ireland’ involving consumers and industry in six
countries and an intercultural debate online concluded in April 2011, provides a basis
for moving forward.
2. Education
Enhancing leadership and management capability across the industry
through learning programmes supported by third-level institutions.
Early wins:
Contracts worth between €2.4m and €2.6m have been won as a direct result of the first
Bord Bia Marketing Fellowship programme, with more to follow.
3. Co-opetition
Creating a culture where Irish companies work as partners, not
competitors, to increase their ability to win business overseas.
Early wins:
Agreement by an Irish prepared foods company to key account mentor potential Irish
suppliers will enable them to meet the specifications of multi-national companies.
4. Innovation
Developing the industry capacity to produce innovative products that
anticipate consumer demand and deliver new growth streams.
Early wins:
A consumer collaboration project linking NPD to social media could enable Irish companies
to dramatically reduce the cost of consumer research.
5. Entrepreneurship
Attracting non-food entrepreneurs and investors into the industry
and encouraging senior executives to take entrepreneurial positions
within it.
Early wins:
The launch of the Food Entrepreneurs Network, in November 2010, has created a new
networking opportunity for Ireland’s leading food entrepreneurs.
16
Pathways for Growth Building Ireland’s largest indigenous industry
The five workstreams:
‘Brand Ireland’
The Vision:
An umbrella brand that confirms the world-class environmental
sustainability credentials of Irish food and drink.
What Pathways for Growth recommended:
‘Perform a branding study to find out what aspects of Irish agriculture
are the most appealing, or would be the most appealing to customers
and consumers.’
Where we are
In April 2011, Bord Bia concluded a major research project
on perceptions of Irish food and drink, involving consumers
and business audiences in six countries: the UK, USA,
France, Germany, Sweden and Netherlands. The research
involved focus groups consumers and one-to-one interviews
with buyers, retailers, foodservice professionals and media,
as well as an online platform for intercultural debate.
In addition, Bord Bia is engaging with other stakeholders
to ensure joined-up thinking on developing Ireland’s
image abroad. Dialogue with the tourism authorities,
in particular, has been progressing to ensure the ‘Come
see us’ message (a priority in Pathways for Growth)
links the openness and transparency of Irish food
production to opportunities in food tourism. Proposals
under active consideration include a new food quarter
for Dublin, under the aegis of Dublin City Council.
Bord Bia has also carried out a risk assessment of
Ireland’s environmental performance, in partnership
with the EPA, to establish the broader playing
field for proving our green credentials.
17
What we are learning
• There is a strong and positive response to Ireland as a
source of natural and untainted food, as well as Ireland’s
family farming heritage.
• Consumers do not consider Ireland as having a distinct
cuisine, but respond to the idea of Ireland as a source of
natural and quality food and ingredients.
Bord Bia has also
carried out a brand
risk assessment
of Ireland’s
environmental
performance, in
partnership with
the EPA, to establish
the broader
playing field for
proving our green
credentials.
• There is remarkable consistency in perceptions of Ireland
across markets and among both consumers and trade
audiences. In effect, everyone is a consumer.
• ‘Brand Ireland’ needs to tailor and simplify its message.
Recognising the language around sustainability can
leave consumers cold, it will be important that the
‘brand Ireland’ concept engages emotionally with the
hard facts in place to back these claims up.
• The power of storytelling – storylines around Irish
farming make sustainability more accessible than facts
and figures. However, the messaging must reflect
the sophistication of both consumers and Irish food
producers.
Next steps
From May 2011, the research is being shared with
industry through workshops and roundtables, with a
view to building a common consensus on the goals
and progression of ‘Brand Ireland’. Early feedback
indicates strong recognition of the need for national
reputational branding if Ireland is to upscale its production
outputs in key demand areas in the decade ahead.
Bord Bia will continue to work with other
development agencies to progress food tourism
opportunities as part of the overall repositioning of
Ireland as an international tourist destination.
18
Pathways for Growth Building Ireland’s largest indigenous industry
‘Brand Ireland’ – Sustainability Platform
Irish Beef –
pathways to sustainability
The Vision:
Establish a leadership position for Irish beef through a carbon
footprint calculation model that confirms the natural advantages
of grass-based production.
What Pathways for Growth recommended:
‘Perform an audit of all of Irish agriculture against objective standards
related to sustainability.’
Where we are
Bord Bia has worked with Teagasc and the Carbon Trust
in the UK to develop accreditation for a carbon footprint
calculation model for beef farming in Ireland. The
initiative followed research that showed buyers wanted
more proof of Ireland’s sustainability performance.
The goal is
to establish a
leadership position
for Irish beef in
this evolving area.
The carbon footprint measurement operates alongside
Bord Bia’s beef quality assurance scheme (BQAS),
making BQAS the first scheme of its type in the
world to incorporate an objective assessment of
sustainability. The goal is to establish a leadership
position for Irish beef in this evolving area.
The accreditation will also help deliver solid feedback
to producers on how they can further improve
their environmental performance. It has been
well documented that greater efficiencies at farm
level not only significantly reduce carbon outputs
but also improve economic performance.
In 2010, Bord Bia conducted detailed pilot audits on more
than 200 beef farms participating in BQAS. Farms were
selected to be representative of the entire beef sector and
the surveys set out to accurately measure the greenhouse
gas emissions associated with beef production, as well
as to identify ways of achieving further efficiencies.
19
What we are learning
• Defining a brand as an established reputation with a
customer, Pathways for Growth identified the brand
promise for Ireland as that ‘we are green and we can
prove it’. This sustainability initiative will be critical to
underpinning this brand promise.
• The importance of sustainability in the future
positioning of the Irish agri-food sector has been
highlighted by the ‘Brand Ireland’ research. The growing
importance of the issue is reflected in the evolving plans
and strategies of some leading global players in the
marketplace.
• Unilever and McDonalds are among major players
to have recently announced significant initiatives on
sustainability. Corporate investment in this area is,
increasingly, seen as part of long-term corporate social
responsibility and brand integrity.
Next steps
From May 2011, the environmental performance of
all 32,000 farms participating in BQAS will be tracked
on an ongoing basis, with a sustainability survey
carried out on each farm at the time of audit.
In order to maintain this certification, Bord Bia needs
to be able to demonstrate that a strong producer
feedback programme is in place that will lead to an
improved environmental performance within two
years of the original measurements taking place.
Over the coming months, Bord Bia also plans to capture
the performance of Irish beef production in terms of
biodiversity and water. Ireland has a potentially positive
story to tell in both areas. There is currently an international
framework for water footprint measurement and Bord Bia is
investigating credible measures of biodiversity performance.
It is also intended to extend this work into other
sectors to help demonstrate the environmental
credentials of all major Irish food and drink products.
As the programme is rolled out, Bord Bia will, in
conjunction with suppliers, present the initiative to all key
customers to brief them on how farmers and processors
in Ireland are taking an innovative, leadership position in
the demonstration of our green and natural credentials.
Defining a brand
as an established
reputation with
a customer,
Pathways for
Growth identified
the brand promise
for Ireland as that
‘we are green and
we can prove it’.
20
pathways for Growth Building Ireland’s largest indigenous industry
the five workstreams:
Education
the Vision:
Attract, develop and retain a new generation of executive talent
through a multi-tier education programme built around real experience
in the food and drink industry.
what Pathways for Growth recommended:
‘expand the bord bia Marketing Fellowship programme to include
more companies and more students. develop a comprehensive
training and management development programme.’
where we are
The Bord Bia Marketing Fellowship enters its third year
in 2011. Graduates with industry experience complete
commercial assignments for exporting companies as
part of their MSc in Marketing Practice. The second
programme, which concludes in July 2011, involves
12 markets, 25 fellows, 80 companies and 100
assignments. The Food Industry Strategic Growth
(Alumni) programme commenced in December 2010 and
provides a framework to accelerate career development
and enhance long-term executive opportunities.
21
pathway successes
contrActs worth
between €2.4M And
€2.6M hAve been won
As A dIrect result oF
the FIrst FellowshIp
proGrAMMe, wIth
A sIMIlAr AMount
to be brouGht
‘over the lIne’.
Contracts worth between €2.4m and €2.6m have been
won as a direct result of the first fellowship programme,
with a similar amount to be brought ‘over the line’. The
second programme, although not completed, has delivered
additional sales so far in Spain, France, China, Netherlands,
Italy, Saudi Arabia, Germany, Sweden, UK and the US.
Company support for the programmes is high.
In all, 80% of companies involved in the first
programme said they would participate again and
would recommend it to a friend or a colleague.
Seventeen of the 25 market fellows in the first
programme have been retained in the food industry
and are participants in the Alumni programme.
next steps
The third Marketing Fellowship programme commences
in June 2011, with 30 fellows, among them a small
number of executives currently employed within SMEs.
The sales capability module of the programme is being
strengthened, in line with company feedback.
A new Food Export Graduate Programme forms
the third-tier of the Education pillar of Pathways for
Growth. This 18-month placement programme for
15 graduates commences in August 2011. Developed
in conjunction with IBEC, it builds on key learnings
from the Marketing Fellowship and Bord Bia’s
previously successful Export Orientation Programme
to ensure maximum gains for all participants.
22
Pathways for Growth Building Ireland’s largest indigenous industry
The five workstreams:
Co-opetition
The Vision:
Strategic engagement between food and drink companies, either within
a single value chain or cross-sectorally, to secure new markets, larger
contracts or reduce procurement costs.
What Pathways for Growth recommended:
‘For each value chain, ask how it would be run more effectively if owned
by one company. What improvements could be made in communication,
logistics, product development?’
Where we are
What we are learning
Bord Bia is working with some 60 Irish
food and drink companies to facilitate a
range of co-opetition projects across all
sectors and all stages of the value chain.
Projects currently underway are addressing
opportunities in procurement, product
development, logistics, marketing and sales.
• Trust between participants is central to
initial engagement between companies.
Good faith and absolute transparency
are required from the start.
An openness to different models of
engagement has been a feature of
co-opetition to date – companies
are working together in one-to-one
partnerships and through multi-party
approaches. A number of significant
projects are now close to completion,
with many more actively progressing.
Growing use of the term ‘co-opetition’
among Irish businesses reflects
widespread acceptance of a concept
largely unknown 12 months ago.
• Support at upper management level
is essential to bringing projects to
completion.
• It is essential to show clear and
immediate benefits for all parties
from the start. As knowledge of and
confidence in co-opetition grows, more
strategic projects may develop.
• Sales-based co-opetition tends to work
best in markets where expertise can be
pooled or shared or where company
resources complement each other,
i.e., pairing the distribution/marketing
presence of one with the product range
of another.
• There is growing interest in looking cross
sectorally for partnership agreements,
rather than grouping companies
together by sector.
• Many companies ask ‘what’s in this
for me? Why should I take this risk?’
Specific, proven service offerings from
Bord Bia will help move the question
from ‘why?’ to ‘how?’
23
Next steps
Building on its own learnings, Bord Bia will develop a range of bespoke co-opetition
services in areas such as procurement, logistics, mentoring and marketing.
A mentoring facility, where companies share learnings and insights on key clients to
non-competitor peers is currently being piloted.
Co-opetition projects are also being undertaken as part of the Marketing Fellowship
programme, signalling the concept is gaining recognition as a business growth strategy.
Procurement/
Cost reduction
Raw Material
Production
Bakery
AIBP / Kepak Dairy Fish Filleting
Beef Initiative*
– Green Isle /
Castletownbere
Field Vegetable
Growers (Pilot)
Added
Value
Non Dairy
Ingredients
Prepared Foods
Project (Pilot)
Logistics
Consolidating
under a brand
French Logistics
Project
Mushrooms, ROI
Fish consolidation,
Hungary*
AtlanFish Sweden*
Farmhouse Cheese
& Dairy Company,
USA
Inputs, overheads & other costs
Raw Material
Production
Primary
Processing
Secondary
Processing
Domestic
Market
Distribution
Export
Markets
New Products
Non Dairy
Ingredients
New Markets /
New Customers
Non Dairy
Ingredients
Leveraging
Existing
Customers
Non Dairy
Ingredients
Key Account
Mentoring Dawn
Farm Foods
Irish Beef to Italy*
Marketing & Sales
Shared Sales
• Fish, Joint Sales*
• Fish, Fellowship*
• Farmhouse Cheese, US website
• Irish Cheese Direct
Shared Trade Fair Stands
• Bakery
• Farmhouse Cheese, Anuga
* Company Initiated Project
Pathways for Growth Building Ireland’s largest indigenous industry
24
Pathway successes
1.
Key account mentoring
Bord Bia has facilitated a mentoring
arrangement between Dawn Farm
Foods and a number of non-competitor
companies, whereby it will share its
knowledge and experience, enabling
them to meet the specifications
of its multi-national client list.
Discussions are ongoing between
Castletownbere Co-op and Green Isle
Foods with a view to combining the
fresh fish catch of the former with
the processing capacity of the latter.
Targeted potential customers included
retailers in Spain and France.
5.
2.Non-dairy ingredients
– partnership
A number of bilateral projects have
been agreed, which will see non-dairy
ingredient companies pairing together for
client product trials. An on-line directory
profiling 25 key ingredient suppliers is
also under development, providing links
back to each company’s website.
3.
Dairy
Bord Bia has facilitated a co-opetition
project between Irish farmhouse cheese
makers and a major dairy exporter
culminating in a Q4 2011 launch for one
cheese maker. Supporting this, a consumerfacing website, currently involving Irish
cheese makers and specifically targeting
the US, is also under development.
4.
Seafood
Several seafood co-opetition projects
have been initiated by companies,
primarily focusing on logistics and
consolidation of deliveries.
Atlanfish is acting as a consolidator
for a range of non-competing seafood
products in the Swedish market. Under its
brand, products from other Irish seafood
companies, such as prawns, mussels and
smoked salmon, are now being offered.
Beef
AIBP and Kepak recently launched a joint
initiative called the AgriProfit Dairy Calf
to Beef Programme. Along with the two
Irish processing groups, the venture is
being supported by OSI Food Solutions
and McKey Food Services, which are
the major food providers to McDonalds
restaurants in UK and Continental
Europe, the largest outlet for Irish beef.
6.
Bakery
A cost-reduction project exploring the
benefits and enhanced efficiencies of
collaborative purchasing is currently
in development involving companies
in the Irish bakery sector.
7.Industry Support
The list of companies supportive of
co-opetition is ever increasing including
AIBP, Atlanfish, Castletownbere
Co-op, CKI, Cooleeney Farm, Cooley,
Dawn Farm Foods, Errigal, First Ireland
Spirits, Glanbia, Green Isle, Irish Dairy
Board, J & L Grubb, Kepak, Monaghan
Mushrooms to mention but a few.
25
The five workstreams:
Innovation
The Vision:
Encourage and resource an ambitious programme of innovation
within the industry, helping companies develop the resources and the
consumer understanding they need.
What Pathways for Growth recommended:
‘Ireland must encourage a climate of risk taking and experimentation
in product development.’
Where we are
Bord Bia’s insight and innovation programme
foresight4food plays a major role in delivering consumerfocused NPD. In the first half of 2011, foresight4food
has worked with 30 companies and further initiatives
are being undertaken to support client innovation.
Companies with less that €3.5m turnover can now
engage bespoke consumer research at a nominal cost,
ensuring entrepreneur-driven NDP is informed by an
understanding of what the end-user wants and needs.
Also launched this year, a co-creation and crowdsourcing
programme allows client companies to tap into and
collaborate with consumers via online technology
to improve innovation, research and branding. The
opportunity to bring customers into the process as cocreators of value may present the most exciting long-term
driver of change and innovation seen for some time. This
‘win win’ innovation approach speeds up and reduces
the cost of consumer research, while simultaneously
building brand awareness among consumers.
26
Pathways for Growth Building Ireland’s largest indigenous industry
What we are learning
Irish companies are increasingly open to consumer
involvement in innovation processes. However,
engagement is largely at a bespoke individual
level, rather than sectorally driven.
In the first
half of 2011,
foresight4food
has worked with
30 companies
and further
initiatives are
being undertaken
to support client
innovation.
Next steps
The consumer collaboration project has already
received positive feedback from pilot companies
and offers a positive solution to one of the biggest
barriers to innovation – cost. In making consumer
research more accessible and quicker, it lays the path
for a new stream of NPD among Irish companies.
Food innovation competition
Highbank Organic Syrup, made by Kilkennybased Highbank Orchards, was the winner of the
first Food Innovation Award in December 2010,
sponsored by Bord Bia in association with the
South-East County and City Enterprise Boards.
One of five finalists, Highbank Orchards had
launched their organic apple syrup only two months
earlier. The prize entails a bespoke marketing and
commercialisation programme, worth €25,000, to
ensure the long-term success of the product.
Case studies of successful NPD by Irish food
and drink companies, supported by Bord Bia,
can be viewed on the Bord Bia website.
27
The five workstreams:
Entrepreneurship
The Vision:
Create a business culture that is open and attractive to entrepreneurs
and investors, where mentoring is a feature of business development,
and bureaucracy is streamlined and minimised.
What Pathways for Growth recommended:
‘Set up and standardise ‘innovation greenhouses’ for innovation in
food.’
Where we are
In November 2010, Bord Bia hosted the inaugural
meeting of the Food Entrepreneurs Network (FEN),
with some 40 invited guests attending the event. Built
around the pillars of mentoring, inspiring, learning and
networking, it is intended to appeal to different levels of
entrepreneurs from pre start-ups, to current SME owner/
managers to serial entrepreneurs and investors. The first
meeting featured presentations by Bank of Ireland on
the current investment landscape and food entrepreneur
Pat Rigney on his experiences in the industry, as well
as providing an informal networking opportunity.
FEN’s next event will focus specifically on pre startups, with a national ‘open call’ to participants,
offering them the chance to engage directly with
experienced entrepreneurs and investors.
FEN is envisaged as evolving into an event of choice
not only for food entrepreneurs but also for venture
capitalists and angel investors, giving them direct access to
entrepreneurs and exposure to where the opportunities lie.
28
Pathways for Growth Building Ireland’s largest indigenous industry
What we are learning
• Entrepreneurs are a distinct audience with a unique
skills set and high expectations in terms of how they use
their time. FEN needs to deliver a distinctive proposition
and real opportunities if it is to gain traction.
• Participants at the first FEN event identified what
they see as the main elements necessary to make the
network viable:
– Providing access to finance and investment
facilitators.
– Peer learning and mentoring supports.
– Supporting flexibility and access to information on
State funding.
– Outreach to Irish education – inculcating the
message of entrepreneurship.
• Mentoring will be an important service provision within
FEN, both peer-to-peer and through investors. Bord
Bia is currently determining the level of formal support
needed to optimise the process.
Next steps
FEN will target pre start-up food entrepreneurs
through a national ‘open call’.
A dedicated food entrepreneur information section
on www.bordbiavantage.ie will create opportunities
for online dialogue, support and problem solving.
An inspiration expedition targeted specifically
at food entrepreneurs will be developed.
Underlining its support for FEN, Bord Bia will take a
leadership position in bringing about a more joined-up
approach among agencies to support entrepreneurs
from the earliest stages of development.
Growing the success of
Irish food & horticulture
For more information, contact:
Bord Bia, Clanwilliam Court, Lower Mount Street, Dublin 2
Tel: (01) 668 5155 Fax: (01) 668 7521 Web: www.bordbia.ie