Sustainable exports

Bord Bia Chief Executive Aidan Cotter speaks to Owen McQuade about Ireland’s agri-food export performance and progress on the Origin Green sustainability programme, which is the first of its kind in the world.

The sustainability challenge facing the food production sector is huge, with global food production forecast to grow by 70 per cent over the next four decades, and greenhouse gas emissions set to reduce by a similar amount. Bord Bia Chief Executive Aidan Cotter points out that Ireland has clear advantages as a country of choice for producing food and drink sustainably. A temperate climate combined with its annual rainfall means Ireland’s grass production exceeds the European average by more than one third. EU Commission research ranked Ireland among the top five performing member states in terms of its carbon footprint for the livestock sector.

World first
A key part of the Harvest 2020 strategy was the Origin Green programme developed by Bord Bia and was launched in 2012. The sustainability programme underpins the strategy’s ambitious growth and sets out clear targets in key areas such as raw material sourcing, emissions, energy, waste, biodiversity and CSR activities.

There are now over 469 Irish food and drink companies registered with Origin Green and 109 of these companies account for over 80 per cent of exports. No other country has undertaken such a comprehensive programme to improve the sustainability of its food and drink sector.

“It’s a world first. We are hugely encouraged by the feedback we are getting internationally, from organisations such as the World Bank and the World Wildlife Fund, who would like to see it replicated in other countries around the world including Eastern Europe, Africa and South America and from the large global food industry players. We have Origin Green ambassadors in organisations such as Danone, Nestle, Unilever, Walmart and Coca-Cola – the feedback from all these organisations has been hugely encouraging,” states Cotter.

“The global food sector has been impressed by the commitments by Irish farmers and food industry towards sustainability. It is indeed a world first. We have undertaken 90,000 carbon assessments on farms and that is many times a multiple of what is happening in any other country in the world,” says Cotter.

Origin Green is the theme of the Irish pavilion at this year’s Milan Expo which runs from 1 May to 31 October. 140 countries have pavilions all addressing the overall theme of ‘Feeding the Planet, Energy for Life’. This global showcase is expected to attract over 20 million visitors. “When you walk around the Expo Milano, the Origin Green story is very unique and Ireland is telling a very compelling story on what it is doing on the ground – measuring, managing and improving.”

Exports
How will 2015 turn out? We have had the support of a very weak Euro. 70 per cent of our food and drink exports go to non-euro destinations, 40 per cent is to the UK in sterling and 30 per cent is international which is predominantly in US dollars. “So there a very significant benefit from the weak euro.”

“If you look at our main, and expanding sector, dairy, we have seen the end of quotas and a significant increase in volume, with double digit growth. The volume is going up as had been the ambition of the sector. On the other hand it has come at a time when global production has also increased which has resulted in dairy prices coming under huge pressure with significant falls in global dairy prices this year.”

There has been “huge” investment in the sector and companies have been investing for the long-term. The underlying global demand for dairy products has been growing at 2.5 per cent per year and it is driven by population and middleclass growth particularly in Asia, with a shift towards a more protein-based diet.

“But the previous two good years for the diary sector has driven global production capacity which impacted on prices. It is very much a case of rising production and falling prices globally which will mean 2015 will be challenging for Irish dairy exports,” observes Cotter.

Similar to the situation in dairy this year, 2014 saw rising beef production and downward pressure on prices. However, this year it has been the opposite. There has been a reduction in cattle processed but there has been a significant increase in price. “The question this year will be, will the average increase in prices offset the fall in output?”

The overall picture for Irish food and drink exports has been particularly bright with five years of export growth. In 2014 exports grew by 4 per cent to a record high of €10.2 billion. In addition to the dairy and meat and livestock sectors prepared foods, beverages and seafood all showed good growth as shown in the table below.

2015 exports
Looking forward to the remainder of this year and beyond, Aidan Cotter stresses that there are some challenges ahead. “Any growth coming this year will be hard won because of the challenges, particularly in the dairy sector,” observes Cotter. Recent forecasts by Rabobank suggest that diary prices will remain weak. Although the number of cattle supplies has increased this year this is expected to be offset by rising prices. The prepared foods and beverages sectors both face competitive market environments, although both have shown a strong ability to diversify. Overall, the food and drink sector show good optimism. The Bord Bia industry survey in December 2014 reflected this with almost 95 per cent of the 350 respondents reporting similar of higher export sales over the previous 12 months. The industry is also optimistic about 2015 with more than half (52 per cent) expecting export sales to increase and a further 43 per cent expect them to be maintained.

Bord Bia
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