Once a lost cause, Northern Ireland’s image is changing, as both a tourist destination and a place to do business.
In the past year alone, hit TV series Game of Thrones and a new BBC adaptation of Nicholas Nickleby have been filmed in the province. Pop starlet Rhianna recently disrobed in a Northern Irish field for a pop video. Then there was the April opening of the £90m Titanic Visitors Centre in Belfast, expected to attract 400,000 visitors in its first year, and this year’s Irish Open, which lured 60,000 golf fans to the Antrim coast in June. And let’s not forget the impact of golf world number-one Rory McIlroy, the pride of the province.
The NI food and drink sector is also taking giant strides. Already the province’s largest industry, employing 92,000 people (29% of NI’s total manufacturing workforce), new figures out last week show the food and drink processing sector is now worth just shy of £4bn to NI, up 6.7% on the 2011 performance, which in turn was up 8.8% on the previous year, according to Northern Ireland’s Department of Agriculture & Rural Development (DARD).
Northern Ireland’s grocery success has been categorised in the past as a currency-based phenomenon, with the media reporting shoppers pouring into the province to take advantage of sterling’s weakness at the onset of the recession. But with the imbalance ironed out some time ago, it’s increasingly apparent that the continued growth is symptomatic of a wider flowering of the NI food and drink economy, as a new generation of entrepreneurs emerges to reap the benefits from the so-called ‘peace dividend’.
“All of this is about how we can do it rather than keep going back to the reasons why we can’t” Tony O’Neill, AFSB chairman
The government’s support is also helping. In fact, it’s set up the newly formed Agri-food Strategy Board (AFSB), aiming to increase the sector’s turnover by 40% to £5.2bn, and create 15,000 more jobs by 2020. The question is: how?
The board is expected to draw up an action plan within weeks. And for agriculture minister Michelle O’Neill, the future for NI food and drink will not surprisingly be export-led. “I’d expect the board to identify the challenges and opportunities for each sub-sector, and action needed by government and industry to secure a profitable and sustainable future for all elements of the supply chain,” she adds.
Tony O’Neill, AFSB chairman (and convenience foods and new business director at Moy Park), believes the government’s decision to award the sector Priority 1 status is recognition of the central role it will play in the province’s economic recovery in years to come. Now it’s down to the sector to prove it’s a horse worth backing.
“The government needs to back winners,” says O’Neill. “The food and drink sector is really the backbone of the economy. Call centres come and go but the food and drink industry touches every town and village and is here for the long-term. But there’s no room for excuses now. I’ve been calling for greater government support for so long we had better make it work now we are going to get it.”
“Call centres come and go but food & drink is here for the long term. It’s the economy’s backbone” Tony O’Neill, AFSB chairman
The industry is broadening its horizons to make sure it does. Currently about two-thirds of food and drink produced in the province is sold in supermarkets in the UK and Eire, but increasingly the industry is looking to farther flung markets for growth.
Last month a host of NI-based companies - including meat processors Elmgrove Foods and Moy Park and dairy players Dale Farm and Greenfields Ireland - flew to Shanghai for the exhibition Food Hotel China, which brings together foodservice buyers from across Asia.
Enterprise minister Arlene Foster says the trade mission, the first time an NI contingent has exhibited at the show, was a significant step with Asia likely to be a key market in coming years. “A number of our companies are already supplying products to customers in China, especially Hong Kong,” she adds.
“They include meat, seafood such as prawns and salmon, cheese, breakfast cereals and snacks. Northern Ireland is also a leading supplier of dairy products to China. Our companies are keen to do business in China and other international markets by providing high quality products that customers demand.”
Look no further than the business cards of any senior executive from Moy Park, which are written in both English and Cantonese, for proof of how seriously Northern Ireland’s biggest food processor is taking the opportunities presented by China. Moy Park is also one of the first companies to partner with the recently established Confucius Institute at the University of Ulster, through which it hopes to further its business in China.
The Institute was set up last September to help private companies and public sector organisations get to grips with the language and business culture of China to help them gain a competitive edge. The first course for businesses launched last month with a team from Moy Park among the first to be enrolled.
“Being able to speak more than one language is critical in today’s global business market,” explains Dr David Barr, head of the School of Modern Languages at the University of Ulster. “Each year, 60% of UK trade takes place with non-English speaking countries and crucially, business deals can be won or lost on the ability to communicate in a range of languages. In the current economic climate, the need for businesses to communicate in other languages is more important than ever.”
China is not the only market of interest for Northern Ireland’s food and drink producers. In a recent report on the opportunities and challenges the province’s producers face, Deloitte identified Brazil, Russia and India as other key areas of opportunity as their economies mature to become net food importers.
Changing diets in these regions also present particular opportunities for red meat, poultry and dairy producers, concluded Deloitte. This is set to play to the strengths of some of Northern Ireland’s biggest players and it is estimated that this shift in demand could pave the way for a further £600m of exports from the province a year.
Kantar Worldpanel: Northern Ireland
The NI food and drink industry has grown 3% in each of the past two years, in contrast to the Republic, which has remained flat following significant decline in 2009.
The major supermarkets claimed an 85% share of the NI grocery market in 2012, compared with 84% to previous year.
The average NI consumer made 242 grocery trips in 2012 down from 270 in 2011.
Brands represent 50% of grocery spend in Northern Ireland compared with 45% in the rest of the UK.
Fruit & veg, meat, fish, poultry and dairy account for 41% of Northern Irish food and drink spend.
A number of commentators have also suggested there’s been a lack of focus on attracting the right kind of talent to the sector.
A report published by the Northern Ireland Food and Drink Association [NIFDA] in March identified what it calls “important skills gaps that need to be tackled”. Areas of concern include marketing and senior management skills as well as a lack of knowledge around animal nutritional and genetic traits.
SHS Group managing director Michael Howard believes the lack of business skills is endemic in Northern Ireland - “the number of public sector jobs has been far too high,” he says. But as one of the few companies to own ambient brands of real scale (including WKD, Bottlegreen and Merrydown), he also believes the mix of businesses in the province is unhelpful. “The majority of jobs are in fresh and chilled. That’s a problem. I know there’s more value added than there used to be, but there aren’t enough branded businesses, and they’re invariably too small.”
Tony O’Neill insists progress is being made to address the skills gap, but concedes that a key challenge is convincing would-be newcomers of the appeal of a sector that has suffered from a less than glamorous image over the years. “We need to make people aware of the whole range of jobs available in the industry,” he says.
“At Moy Park, we have a wide range of roles: food technologists, commodity analysts, buyers, sales and marketing people not to mention all the other skills that go with a company of our size, such as accountants.”
There’s another key area where skills are needed: R&D. “If the industry is to increase its competitiveness, it needs to raise the level of investment in R&D at every step of the supply chain,” concludes the NIFDA report’s author and leading economist Philip McDonagh.
More progressive players are reaping the rewards. Moy Park’s introduction of the Jamie Oliver branded poultry range, which is already gaining ground in the UK and Eire, is an obvious example.
“Our companies are keen to do business in China and other markets by providing high quality ” Arlene Foster, NI enterprise minister
But a number of smaller players are also growing impressively in the UK, and further afield, through the development of highly innovative, value-added products.
For example Fermanagh-based Kettyle Irish Foods is now selling bacon that has been dry-cured using seaweed in supermarkets across Holland and Germany, while Irwin’s Bakery’s range of traditional regional breads is widely available throughout mainland Britain.
Another entrepreneur is Martin Hamilton, founder of Mash Direct. His company sells value-added quality convenience vegetable products. Starting with mashed potatoes, Mash Direct has grown sales to in excess of £10m in just eight years.
Operating initially from a small 2,200 sq ft facility, Mash Direct has expanded to a factory 10 times the size, with plans approved to build an even bigger plant in the next two years. But it’s the development of new products and expanding his range that Hamilton sees as pivotal to his success. That, and a gruelling schedule of exhibitions around the world to make sure the company’s innovations are seen by would-be buyers.
“We work extremely hard to keep our standards up,” says Hamilton. “But if you aren’t coming up with new ideas on an annual basis you’re dead in the water.”
Such innovation helped Mash Direct to win one of The Grocer’s coveted New Product Awards in 2010. And it’s by no means the only prize winner from these parts. Hannan Meats - the Moira-based supplier of quality meat and other speciality food products to hotels, restaurants and foodservice companies throughout Ireland and in London - is a prolific award winner, scooping 20 gongs in the recent 2012/13 Great Taste Awards. Its Italian style Moyallon Guanciale was also crowned the Supreme Champion - the second year in a row that a Northern Irish producer won this award, after McCartney’s Butchers won in 2011/12 with its twist on traditional corned beef. Hannan Meats founder Peter Hannan is now firmly focussed on using this success as a springboard to expansion and exports into the rest of the UK.
“If you aren’t coming up with new ideas on an annual basis then you are dead in the water” Martin Hamilton, founder, Mash Direct
Brand Northern Ireland
The overseas growth of players like Irwin’s and Mash Direct - following in the footsteps trodden by early pioneers such as SHS - is helping to transform the make-up of the industry in Northern Ireland, says Michelle Shirlow, CEO of Food NI, an organisation set up by a consortium of food sector representatives to enhance the reputation of food and drink from Northern Ireland.
Five years ago, the industry was polarised between the very big and the very small, with few medium-sized businesses with the clout to develop new markets overseas. That’s no longer the case, she claims.
“It is great to see that everyone in the industry does seem to be on the same page. But the key thing we are starting to see is just a real confidence surging through the sector.”
Food NI has been looking at the potential for an all-encompassing brand to badge food and drink from Northern Ireland. During the 1980s, a Red Tractor-style banner, Produce of Northern Ireland, was developed but it did not last long - and not just because of the slightly unfortunate PONI acronym. Some producers don’t want to badge their products at all, while others would prefer to focus on their Irish rather than Northern Irish heritage - though this also risks muddying the waters and detracting from the Irish food agency Bord Bia’s attempts to develop an umbrella brand for Irish Food - something the NI industry recognises the need to work alongside.
As such, Food NI has been focusing on a more holistic promotional campaign for its produce, incorporating PR and advertising. The campaign has been widely praised for its humorous use of what has previously been seen as NI’s Achilles heel - the weather and, in particular, the rain. ‘The Good Food - it’s in our nature’ campaign uses slogans such as ‘Lashed by our rain, bashed by our winds - our food, so good.’
“Everyone seems to be on the same page. There’s a real confidence surging through the sector” Michelle Shirlow, CEO Food NI
With its new Priority 1 status, it’s clear the government is listening and likely to respond positively to the proposals in the forthcoming AFSB report, say NI producers.
And there are some obvious areas where it will call for government help. In addition to investment in training and education to help plug the skills gap, there are some key issues around helping to reduce input costs for producers and suppliers.
Commodity prices might be beyond government control but simply extending the gas network to the west of Northern Ireland, could create big energy cost savings for farmers and suppliers, says O’Neill.
Then there’s the reams of red tape the industry has to deal with. While not a uniquely Northern Irish problem, bureaucracy governing issues such as waste reduction, corporation tax and business rates are all commonly cited bugbears for NI producers. “It’s about regulation and making sure it works,” says O’Neill. “All of this is about how we can do it rather than keep going back to the reasons why we can’t.”
SHS’s Howard believes the targets set by AFSB will be tough. “It’s all about jobs. And it’s perfectly logical to focus on food and drink. But you would expect a government to have highly ambitious plans. If you don’t set the bar high, you won’t even get half way.” And Mash Direct’s Hamilton is confident, primarily because of the people driving the whole project forward. “Simply through my own experience of the hard work and energy of the people involved,” he says, “I’ve no doubt they can do it.”
Giant strides for Northern Ireland's food and drink industry
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How Northern Ireland's food and drink industry is tackling 40% sales growth target