Agri Business Foreword

AGRI Summer 2021 BUSINESS aN irish farmers journal report in association with KPMG

SURVIVE thr ve How the Irish agri-food sector has adapted to survive the dual threat of Brexit and pandemic uncertainty

IRISH farmersjournal.ie FARMERS JOURNAL

001 agribusiness.indd 1 06/05/2021 16:07:32 IRISH GLOBAL BEGINNINGS OPPORTUNITIES

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002Untitled-9 agribusiness.indd 1 2 07/05/202105/05/2021 10:52:1411:59:21 IRISH farmersjournal.ie FARMERS JOURNAL AGRI BUSINESS FOREWORD

hen last year’s Irish ew imagined that one year Farmers Journal/KPMG after the 2020 Irish Farmers Agribusiness report was Journal/KPMG Agribusiness launched, we had just report was published, we started adapting to do- would be still be in the grips ing business during a of the COVID-19 crisis. Hope- pandemic,W and Zoom calls and webinars fully,F as the vaccination programme were still a relative novelty. continues and certain lockdown restric- PHELIM The past year has been like no other TOM tions are relaxed, we can look forward to O’NEILL with disruption levels not experienced MCEVOY a return to some degree of normal life. Irish Farmers Journal since the end of World War II. Not only Partner and head of food So how has the agribusiness sector markets specialist have farmers and the agri-food industry and agribusiness, KPMG fared in the last year? had to function like the rest of society It has undoubtedly been a very dif- through a global pandemic, they also oFXOW\HDUIRUDJULEXVLQHVVGXHWRWKH had to deal with Brexit. pandemic and even those businesses In itself, it is a once-in-a-lifetime that have survived and prospered, have event even if Irish exporters to Britain KDGWRPDNHVLJQLoFDQWFKDQJHVWRWKHLU haven’t yet experienced the worst of it, strategy and operations. as border controls have not been intro- The industry has come through the duced. initial impacts on supply chains result- While farming, processing and ing from Brexit, but there may be further retailing have all functioned throughout changes ahead that impact on the ability the pandemic, sadly the restaurant and to seamlessly trade between the Repub- hospitality sector has been decimated. lic of Ireland and NI and between the UK In this year’s Irish Farmers Journal/ and Europe. KPMG Agribusiness report, we talk to Nearly every day, the media alerts people in all of these sectors, and we us to the impact of climate change. look at how companies are adapting to Sustainability (and the resultant impact Brexit. on business models), is very high on the While COVID-19 and Brexit have agenda of every management meeting of dominated the operational side of the agribusinesses at present. industry, a new strategy that will guide In this report, you will read articles the industry for the remainder of this from the leaders of new and established decade and beyond is currently out for businesses, describing how they navi- consultation. gated through the worst effects of the It is clear that from now on agricul- pandemic; how their businesses have ture will have to operate within excep- been affected by the disruption caused tionally stringent environmental and by Brexit; and how they are facing up emissions standards, and we explore to the probable imposition of tighter how Bord na Móna is reimagining its environmental regulations. business to adapt to the new reality. KPMG is delighted to partner with This will be the ninth annual busi- the Irish Farmers Journal for this, our ness report, again produced with the ninth annual Irish Farmers Journal/ support of our partners KPMG. It has KPMG Agribusiness report. This is the also had huge input from our former oUVWAgribusiness report that I have been colleague Lorcan Allen for which I am directly associated with, having taken extremely grateful. over from my colleague, David Meagher – no doubt well-known to many of you – who has recently retired from KPMG.

003 agribusiness.indd 3 06/05/2021 16:06:14 CONTENTS WINDS OF CUT 18 COVID CHANGING FACE OF 8 CHANGE C LLAPSE Kerry Group’s RETAIL Fiona Sweeney How sales fell on key by 91% for consumer family-owned Responding, recovering trends from food business, and rebuilding after the last year 14 Coolhull Farm 20 Brexit and the pandemic 24 B UNCE 26 FOoD F RESIGHT VALUEreturns BACK Bord Bia’s Maureen Gahan

Ibec chief economist Ger Brady Lidl CEO JP on long-term prospects for on how the rural economy could Scally on the bounce back as vaccines roll out return of value food service operators

REALITY 31 BITES 34 37 CHALLENGES FANE VALLEY CEO FACED BY IRISH DAWN OF A RESTAURANT Trevor Lockhart OWNERS on Making NEW WAY Brexit W RK TRADE IN A POST-BREXIT WORLD 42 chain track Solving the ammonia SHORT FOOD SUPPLY c nundrum CHAINS AND DIRECT-TO- 39 CONSUMER SELLING 48 Easyfix turns its COVID-19 ELIMINATION attention to the IN NEW ZEALAND A business evolution NATURALLY HOLLOW VICTORY IN 45 DRIVEN sustainability A posthumous interview with Denis HOW BORD NA MÓNA 52 THE WRONG GAME Lynn, founder of Finnebrogue SEES ITS FUTURE agenda

Editor: Phelim O’Neill | Contributors: Lorcan Allen, former Irish Farmers Journal agribusiness editor, Andy Doyle | Production: Garrett Allen, Regina Horan | Imaging: Philip Doyle, Jerome Dunne | Advertising: Mary Delaney, head of sales, Barbara Kilkenny, Deborah Stewart, Sandra Bothwell, Marie Riordan | Ad production: Barbara Kilkenny, Peter Mullen, Laura Tilson, Brian Morton | Circulation & marketing: Jamie Leonard, David O’Connor, Margaret O’Connor, Bríd Walsh, Caoimhe Doyle | Printer: Boylan Print Group, Drogheda, Co Louth | AgriBusiness 2021 is published by the Irish Farmers Journal, Irish Farm Centre, Bluebell, Dublin 12. Tel: 01-419 9500 4

004 agribusiness.indd 4 06/05/2021 16:00:59 For what’s next in sustainability. Together, we’ll help your business succeed in a low carbon world. Your Partner For What’s Next

7109_Sustainability_Advert_Farmers_Journal_A4_April_2021.indd7109 Sustainability Advert Farmers Journal A4 April 2021 indd 1 06/05/2021 14:46:02 005Untitled-1 agribusiness.indd 1 5 07/05/202106/05/2021 10:52:2916:33:37 AGRI BUSINESS INTRODUCTION crossroadsIRISH AGRICULTURE AT A While the impact of COVID-19 has been dramatic, it is Brexit that casts the longest shadow over Irish agriculture

s the Irish economy reopens Irish agriculture hasn’t yet felt the over the coming weeks and full impact because the UK hasn’t society emerges from the CO- implemented border controls nor has VID-19 bubble, we will begin it concluded major trade agreements to see where real damage has giving enhanced access for agricultural EHHQLQpLFWHGRQWKHHFRQ produce to the UK market from outside omy.A Dealing with a global pandemic the EU. required an immediate response that The principle has been established Justin no level of contingency planning could WKRXJKE\JLYLQJ&DQDGDDVSHFLoF McCarthy have fully prepared us for. 3,000t beef quota and Irish agriculture Editor and As we start the journey on the road faces the likelihood that this will be chief executive, back to normal, the phrase “new nor- repeated with Australia, New Zealand Irish Farmers Journal mal” is already a well-worn cliché. Once and South American countries in time. we get the basics of a proper haircut, All of this will devalue the UK market for we all look forward to getting out to Irish exports parallel to UK agricultural meet friends and business associates produce continuing to sell uninterrupt- face to face again after what seems like ed in the EU. a lifetime of online screen calls. We will appreciate the opportunity to have a CLIMATE CHANGE drink in a noisy bar and enjoy a trip to Tackling climate change remains an our favourite restaurants. ongoing issue and our familiarity with it Yet, we have to wonder will the new makes it no less important. normal reveal that many of these haven’t It is a global issue that is being ad- survived the shutdown that has extend- dressed at a national level and that has ed beyond a year? While this year’s re- particular consequences for Ireland port reveals the ingenuity of businesses whose main natural resources are grass adapting to survive the pandemic, it is and water. This makes us a particularly inevitable that there are those that won’t suitable area of the world for livestock make it. production but, in the absence of a glob- Farming and food processing quickly al approach to the issue, our agriculture adapted to keep food supplies going will be forced to constrain its production and it is a tribute to our farmers, factory capability. While COVID-19 workers and Department of Agriculture Irish farmers now need to focus on was a shock RIoFLDOVZKRDORQJZLWKVKRSDVVLVWDQWV securing the funding at EU level through all kept the shelves stocked even at the not just the CAP but the Just Transition and a major height of panic-buying. Fund to enable them to concentrate on disrupter, it Consumer behaviour adapted by delivering the maintenance of the rural is unlikely to returning to preparing food in the home, environment in the way that policymak- have the something that was an opportunity for ers wish. same long- retail and hastened online retail. 7KLVRQHVL]HoWVDOODSSURDFKWR While COVID-19 was a shock and a climate change may not be the best term impact major disrupter, it is unlikely to have the approach and Brexit will cast a long on Irish same long-term impact on Irish agricul- shadow over Irish agriculture. agriculture ture and the food industry as Brexit. Yet, the key lesson from the global and the food ,WLVVRPHWKLQJWKDWoQDOO\FDPHWR pandemic was the need to secure food industry as pass and in ordinary times would be the supply and we need to remember that as main event of the year. we take on the challenges ahead. Brexit 6

006 agribusiness.indd 6 06/05/2021 15:57:52 SIGNPOST -ul;uv=ouѲbl-|;1ࢼom

The Signpost Programme is a collaborative programme to lead climate action by Irish farmers and support the transition towards more sustainable farming systems

The main objectives of The Signpost Programme are to:

• Reduce greenhouse gas emissions • Reduce ammonia emissions • Reduce nutrient loss to the environment and contribute to improved water quality and biodiversity • Save farmers money and improve efﬁ ciency of production systems

Open the camera on your phone & scan the QR code to find out more!

For further details of the partners please refer to www.teagasc.ie/signpost

Signpost-Generic-A4ad.inddSignpost-Generic-A4ad indd 1 06/05/2021 15:59:09 007Untitled-2 agribusiness.indd 1 7 07/05/2021 10:53:1809:04:48 INTRODUCTIONINTRODUCTION winds of CHANGE

008-012 agribusiness.indd 8 07/05/2021 10:30:54 IRISH farmersjournal.ie FARMERS JOURNAL

COVID-19, Brexit and the agri-food strategy 2030 are each momentous occurrences and they combine to make this a unique time for Irish agriculture and food. Phelim O’Neill reports

hen it comes to reeling in the years, 2020-2021 will need a series of its own. Dealing with a global pandemic has brought unimaginable oQDQFLDODQGKXPDQFRVW\HWWKHIDUPHUVIDFWRULHVDQGVKRSZRUN HUVIRXQGDZD\WRNHHSIRRGVXSSOLHVpRZLQJDQGVFDUFLW\ZDVDYRLGHG 0DQ\LQWKHKRVSLWDOLW\VHFWRUKDYHKDGWKHLUEXVLQHVVHVUXLQHGZKLOH food retail prospered. ,QWKLVUHSRUWZHDQDO\VHERWKH[SHULHQFHVDQGPDUYHODWWKHLQJHQXLW\ RIWKHKRVSLWDOLW\VHFWRUWRGHYHORSWDNHDZD\DQGKRPHGHOLYHU\LQRUGHUWR limit the commercial damage from the pandemic. Another lesson from COVID-19 is that high-speed broadband is now as HVVHQWLDOLQUXUDO,UHODQGDVHOHFWULFLW\:KHUHLWH[LVWVSHRSOHZLWKGHVNMREV KDYHEHHQDEOHWRZRUNUHPRWHO\DQGFRQVXPHUVKDYHEHHQDEOHWRFRQWLQXH shopping, albeit in a different way.

008-012 agribusiness.indd 9 07/05/2021 10:31:07 INTRODUCTION

The surge in parcel deliveries has been made changes caused by lockdown, made the physical more straightforward by the availability of Eircodes, presence of banks less important. which eliminate the need for the skill of giving and The business of farming has also been trans- understanding directions which were so much part formed by technology and, again, this was happening of the fabric of rural life. but was speeded up by lockdown. Of course, online shopping was already grow- Farmers have been required to engage with the ing but the pandemic fast-forwarded the process by Department of Agriculture online for calf registration several years. and scheme applications. The lockdown has intro- It is the same with the use of cash and traditional- duced the concept of online farm inspections but style banking. perhaps the biggest change of all has been the move As shopping migrated to online and card pay- to online buying and selling of cattle. ment rather than cash was encouraged for purchas- The local mart is primarily a place for farmers to es, the main banks increased the pace of removing convert their livestock to cash. However it is also a their physical presence through closing social outlet for many isolated people with limited branches. social opportunities. COVID-19 in itself didn’t Lockdown stopped marts operating in their tradi- cause these developments tional way but while the social opportunity was lost, but its presence, and lifestyle the business was able to move online. Online trading has been embraced by farmers and has a particular attraction for livestock farmers, many of whom are working part-time off farm during the day. There is a great convenience in being able to bid for cattle through an app on the phone from a kitchen table. It also reinforces the need for good broadband or 4G mobile phone signal. Such has There is a great convenience in been the success of online selling that many livestock being able to bid for cattle through an farmers want the facility to remain when traditional app on the phone from a kitchen table. mart sales resume. 10

008-012 agribusiness.indd 10 06/05/2021 15:57:04 IRISH farmersjournal.ie FARMERS JOURNAL Brexit & trade policies

BREXIT ferred until 1 October 2021 but the problems are Prior to the arrival of COVID-19 and the lockdown extensive. just before St Patrick’s Day last year, Brexit was the Big business can adapt to some extent but, even biggest issue facing Irish agriculture. then, the major supermarkets such as Asda and The fact that it existed alongside the pandemic Sainsbury’s which are serviced from distribution throughout 2020 made it no less an issue and the centres in Britain will fi nd it simply not viable to sup- arrival of a very basic deal that avoided tariff s and ply many products of plant and animal origin. quotas on Christmas Eve was greeted with relief that The problem, as revealed by the Trevor Lockhart it could have been worse. interview on pages 37 and 38, is that trade rules Ireland is the EU country most aff ected by Brexit aren’t designed for the normal trade of goods in an and the consequences of a no deal would have left internal market such as the UK nor do they refl ect Ireland with the largest tariff burden in the EU 27, the current state of technology to replace an historic despite having just 5% of EU 27 trade with the UK. paper-based system. This is because if it came to trading under WTO For the NI protocol to function as intended, there terms and tariff s, agriculture – particularly beef – is a need for a risk-based and proportionate set of has the largest tariff s. In fact, if Irish agriculture was controls which protect the EU single market but a country, then it would have had the second largest allow business to continue. There is no off -the-shelf tariff burden in the EU, just behind Germany. solution to this – a bespoke arrangement is required. While the deal avoided that, there remains the cost and inconvenience that non-tariff barriers will TRADE AGREEMENTS bring to Irish exports entering Britain. These haven’t The other major threat to Irish agriculture from been experienced yet because the UK government Brexit is UK trade policy outside the EU. It is in have deferred the introduction of full border con- the process of concluding trade agreements with trols until January 2022. Australia and New Zealand, both major exporters of However, it is evident from the problems export- beef and sheepmeat, plus dairy in the case of New ers from Britain to the EU are having with goods Zealand. of animal and plant origin that it adds cost and A UK deal will mean enhanced access for these to disrupts service to the point that for small consign- the UK market, creating additional competition for ments it makes doing business too costly to be Irish exports. viable. Also, it will not just be in the UK marketplace that this impact is felt for Irish exporters, it will have a NI PROTOCOL knock-on eff ect in EU 27 markets as well. Nowhere is this more evident than in the This is because the EU-UK Trade and Cooperation implementation of the protocol designed to allow agreement that allows tariff and quota-free trade Northern Ireland (NI) to continue trading in the EU both ways means that the UK can continue to export single market. This means that EU border controls its beef and sheepmeat to EU markets, while imports have to be applied at NI ports on goods entering to the UK satisfy the needs of domestic consumers. Online from Britain. Therefore, if UK producers are fi nding their shopping was Suddenly, on 1 January, a 1kg online purchase market oversupplied with imported product which growing before of a speciality cheese or meat required the same in the case of New Zealand sheepmeat this spring is COVID-19 but veterinary certifi cation and inspection process as a half the price of UK or Irish, then the EU market risks the pandemic 20t container. being oversupplied with UK sheepmeat, creating a fast-forwarded While it is commercially viable to do this for a downward pressure on price. the process by 20t container, it simply isn’t commercially viable or This, combined with the cost and disruption of several years. practical to do it for a 1kg consumer purchase. non-tariff barriers, means the full consequences of Full implementation of controls has been de- Brexit have yet to be felt by Irish agriculture.

A major threat to Irish agriculture from Brexit is UK trade policy outside the EU.

High- speed broadband is now as essential in rural Ireland as electricity 11

008-012 agribusiness.indd 11 06/05/2021 15:57:12 INTRODUCTION Agri-food strategy 2030

7KHoIWKDJULFXOWXUHVWUDWHJ\LV FXUUHQWO\RXWWRFRQVXOWDWLRQFORV LQJRQ-XQH7KLVVWUDWHJ\LVOHVV DERXWSURGXFWLYHDJULFXOWXUHDQG LVIRFXVHGSULPDULO\RQSURWHFWLRQ RIWKHHQYLURQPHQWDQGPHHWLQJ VWULQJHQW*+*HPLVVLRQVWDUJHWV 7KLVLVWKHIUDPHZRUNLQZKLFK ,ULVKDJULFXOWXUHZLOORSHUDWHIRU WKHUHPDLQGHURIWKLVGHFDGHDQG EH\RQG 7KHVWUDWHJ\GHoQHVZKDWLVUH TXLUHGE\ZD\RIHPLVVLRQVUHGXF WLRQV3XWEOXQWO\DUHGXFWLRQLQ There is no doubt that with the implementation of the targets set, Irish agriculture is likely to HPLVVLRQVRIKDVWREHPDGH be the most sustainable in the world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o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

The Common Agriculture Policy (CAP) notice is that 25% of their current direct ing at €260/ha. The current thinking is is the main vehicle for delivery of EU payment will have to be earned by deliv- that it is more likely to settle at 85% or funding to agriculture across the EU. It ery of environmental measures. €220/ha. was the fi rst common EU policy in 1962 The current average direct payment This is controversial because it cre- and its purpose was to ensure supplies to Irish farmers is approximately €9,000 ates winners and losers. Small, intensive of aff ordable food for EU citizens. and there is concern that many may farms with large payments carried This objective has long since been forsake 25% of their payment instead of forward from the time when CAP pay- achieved and in its latest format, expect- pursuing environmental projects. ments were production-based will lose ed to be signed off in the coming weeks, The other big controversial issue out to farmers with large areas of land it will pivot from production support to with Irish farmers is the movement of irrespective of its production capability. supporting environmental management payments from historic production- It is estimated that 60,000 Irish farm- and GHG reduction. National govern- based entitlements to an area- or land- ers would benefi t from increasing area- ments will present detailed plans to the based payment. During the present CAP, based payments, 55,000 would lose out, EU on how they will deliver this and the all entitlements reached 60% of the while 16,000 would remain the same. agri-food strategy 2030 will be at the national average, a rate of €150/ha. The CAP is likely to be approved in core of the Irish application. The European Parliament wants this the coming weeks and changes will take The big change that Irish farmers will to move to 100%, achieving full fl atten- eff ect from January 2023. 12

008-012 agribusiness.indd 12 06/05/2021 15:57:22 YEAR OF COVID-19

Businesses are reopening with the hope that the disruption of further lockdowns is consigned to history. COVID-19 is an experience that will never be forgotten and its impact on Irish business has varied from devastation in the hospitality sector to enhanced business in retail. While our health services battled the pandemic, our farmers, factory workers and shop assistants were also on the frontline to ensure that everyone had access to the essential supplies to live, and where possible, work from home.

013 agribusiness.indd 13 06/05/2021 15:55:34 CUTYEAR OF COVID-19

Fiona Sweeney, strategic marketing director at Kerry Group, outlines to Lorcan Allen the consumer trends she noticed in the last year

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014-016 agribusiness.indd 14 06/05/2021 15:54:43 IRISH farmersjournal.ie FARMERS JOURNAL

KEY POINTS

ÔConsumers want local produce but with international fl avours. ÔFood brands roared back to life during COVID-19. ÔExplosion of e-commerce is the standout feature of the past year.

CUT STEAK

eating these products more than once a week. While meant the days of the all-conquering consumer food WKHSODQWEDVHGSKHQRPHQRQLVDGLIoFXOWFRQFHSW brand looked to be numbered. for traditional livestock farmers, Sweeney believes However, Sweeney says a lot of staple food brands the consumer shift to these products is as much of a roared back into life during COVID-19. lifestyle choice as it is to do with sustainability. “People were cooking to escape during CO- Also, while it’s still a relatively new phenomenon, VID-19. It was just something to do for many the plant-based category is a broad church. Sweeney consumers. And it drove what we’re calling a ‘Back says there are two types of consumers interested in to Familiar’ trend among consumers. The surge in plant-based right now. scratch-cooking and baking has led to this re- 7KHoUVWVHWRIFRQVXPHUVDUHWKRVHORRNLQJIRU surgence in the centre of the supermarket,” says alternatives to traditional meat and dairy products. Sweeney. This group want alternative products to traditional “The need for comfort has got consumers reach- meat and dairy but which still offer the exact ing out for familiar and known food brands. They VDPHH[SHULHQFHLQWHUPVRIpDYRXUQXWUL are the kind of brands they may have remembered tion and texture. from their childhood. And that’s seen some really The second group of consumers be- familiar centre store food brands experi- hind the plant-based lifestyle are almost encing fantastic growth during COVID-19,” veggie champions, says Sweeney, who she adds. are more interested in new vegetarian While it’s been an unprecedented year, this dishes made with lentils and vegetables unusual trend offers food as opposed to seeking plant alterna- brands an opportunity to tives to meat or dairy. reclaim customers they may have lost over HEARTY recent years or to engage for the very There’s a lot of noise around oUVWWLPHZLWKQHZFXVWRPHUVWKH\ plant-based foods over recent may never have had. years but some other really interesting trends have emerged over the past year. The rise of Kerry Group’s strategic marketing discount supermarkets and director Fiona Sweeney. own-label food products 15

014-016 agribusiness.indd 15 07/05/2021 15:20:01 YEAR OF COVID-19 E-commerce The explosion of e-commerce within the food supply chain due to COVID-19 has probably been the standout trend of the past 12 months. It takes the form of online ordering, click and collect, or food delivery. The restrictions introduced across the world to stop the spread of the COVID-19 virus shuttered almost every restaurant and left many with no route to market. Faced with no alternative, many businesses turned to online ordering in a bid to maintain some form of revenue. What we have today is a food service sector that is utterly transformed from where it was 12 months ago, with many businesses and restaurants establishing a working online sales platform for the very fi rst time. Whether the model is takeaway, click-and-collect or delivery, the food service landscape that emerges post-COVID-19 is going to be very diff erent from where it was at the start of 2020, says Sweeney. The growth in digitisation across food businesses and restaurants presents new challenges for food producers. For instance, maintaining the crispiness or heat of food when it comes to delivery is a challenge the average restaurant will never have had to deal with before. The solutions to these problems are there but it can often require a menu change away from ingre- dients that don’t travel well. Again, it will be interesting to watch how many food service operators continue to maintain a presence in online sales, click-and-collect or delivery, once things start to return to normality. Given that most have now invested in the required digital in- Plant-based foods saw frastructure, you suspect that most restaurants and strong growth last year food businesses will continue to maintain an active as health-conscious e-commerce platform. Indeed, it’s more likely that consumers sought to this is the new standard consumers will demand reduce meat intake. from the food sector from now on.

Post-COVID-19, it will be really interesting to than we know what to do with so many consum- watch the various strategic approaches taken by ers found themselves preparing really high-quality, different food brands as they try to retain these new showpiece cuts of meat as a way to kill some hours in found and return customers. We may have thought the day. the best days of many food brands were behind them Just like the food brands, Irish beef and sheep but COVID-19 has turned that assumption on its farmers need to ask themselves what they can do to head – at least for now. keep these consumers engaged with their produce. Aside from the boost for familiar food brands, The decline in popularity of roast cuts of meat and consumer nostalgia and comfort eating led to a the increase in demand for minced meat and burgers resurgence in traditional food dishes like the Sunday has certainly not helped farm gate prices over the last roast, which is a form of cooking that has been in decade. steady decline over recent decades due to time poor If Irish farmers, through Bord Bia, can develop a consumers. strategy to hang on to these consumers then it would But COVID-19 has left most of us with more time certainly improve the outlook for the coming decade.

Future crisis. Despite the unprecedented chal- turned other trends on their heads. It’s lenges, businesses throughout the food been a very diffi cult year for many but Overall, the global food industry has supply chain have adapted and many there are positives for the food industry not been immune from the impact of have even thrived. Supermarket shelves if they look for them. COVID-19. The pandemic has added cost have remained well stocked throughout And there will be opportunities as to food businesses, played havoc with the past year and many food businesses we emerge post-COVID. Having a strong supply chains and has caused incredible now have an e-commerce sales channel strategic understanding of the new con- disruption to the food service sector. they never imagined a year ago. sumer post-COVID-19 will be vital for However, the food sector has shown The pandemic has clearly accelerat- any food business to capitalise on these its usual resilience when dealing with a ed many consumer trends but it has also opportunities. 16

014-016 agribusiness.indd 16 06/05/2021 15:55:00 COVID-19

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017Untitled-7 agribusiness.indd 1 17 07/05/202130/04/2021 10:54:3517:55:23 YEAR OF COVID-19

COVID c llapse how sales fell BY Lorcan Allen speaks to Barry Murphy, managing director of 91% for one Irish Coolhull Farm, about the difficult food business year his family-owned food business has been through due to COVID-19

ver the last year, the two Almost overnight, the retail channel became the only KEY POINTS major events that directly show in town and food companies that depended affected the performance on the food service market were left stranded. Food ÔSales down of the Irish agri-food companies like Coolhull Farm. 50% in 2020. sectors were Brexit and Based in Co Wexford, Coolhull Farm is a family- ÔMoved into COVID-19. owned Irish food business that specialises in premi- retail and ex- However, while Brexit um desserts such as ice cream, cheesecake, mousses, ports to off set oQDOO\KDSSHQHGLQ'H pastries and cakes. loss of markets. cember last year, it is an However, the business was heavily reliant on the ÔFrozen event that has been in the food service channel as a route to market with over dairy produce melting pot for the best 90% of sales to hotels, restaurants, cafés and contract presents op- part of four years and Irish caterers. portunity. companies have had some time to prepare for its The mass shutdown of the food service sector consequences. across Europe was devastating for the business. In the case of COVID-19, the opposite was the “Our sales for April last year fell 91% as a result of case.O The impact of the COVID-19 virus was swift and WKHoUVW&29,'ORFNGRZQyVD\V%DUU\0XUSK\ brutal, effectively shutting down the global economy managing director of Coolhull. in a matter of days. Back in March and April 2020, “We had to make some very tough decisions early Barry Murphy, only the most essential services remained in opera- on. Our staff numbers had been heading towards 50 managing tion. people prior to COVID-19 but we had to let people director of And while the food industry did qualify as es- go temporarily as soon as the virus hit. The company Coolhull Farm. sential, the impact was not equal for all businesses. was basically down to just three people, and I was 18

018-019 agribusiness.indd 18 06/05/2021 15:53:43 IRISH farmersjournal.ie FARMERS JOURNAL

practically on my own trying to keep everything going in the factory,” he adds. SHOCK After the initial shock in March and April, Murphy says business remained very slow in May. This was because any food service operators that were trying to reopen by doing takeaway or click-and-collect still had supply stocks from pre-COVID-19 that they were very slow to get through. %\-XQH&RROKXOOZDVVWDUWLQJWRVHHWKHoUVW trickles of activity in the food service market but it was inconsistent. “We started moving some product again in June as some restrictions started to ease but it was very sporadic. We got back to making product maybe one or two days a week. Coolhull Then as the country began to reopen in the sum- Farm recently PHUZHJRWEDFNWRWKUHHGD\VDZHHNDQGoQDOO\ launched a EDFNWRoYHGD\VDZHHNDVVWD\FDWLRQVJRWLQWRIXOO range of ice swing,” says Murphy. cream cookie While the return of demand was certainly wel- sandwiches. come, Murphy says it presented its own challenges for the business. “Firstly, we had to ensure the correct safety pro- by the consumer,” says Murphy. tocols were in place for returning staff, particularly The company has also recently launched a range as there tends to be very little space in most food of ice cream cookie sandwiches, which are being businesses and the virus spreads easily in a cold or trialled in a number of retail stores and quick-serve chilled environment.” restaurants around the country. While the business The second challenge was to reopen the business LVVWLOOWDNLQJLWVoUVWPDMRUVWHSVLQWRUHWDLO0XUSK\ from a standing start and ramp up production to believes the frozen dairy category offers lots of op- meet a surge in demand. portunities. “Having seen our sales collapse in April and May, “If you look at the US, there’s certainly a lot more the summer staycations meant we were suddenly creativity and variety in the frozen dairy aisle than in under incredible pressure. We ended up cramming Ireland. We think we can rejuvenate the frozen dairy almost half of our turnover for the year into just three category in Ireland by bringing something different,” months,” says Murphy. he says. “I have to say the team really came together Alongside the push towards retail, Coolhull con- during that period. They went above and beyond to tinues to develop new product solutions for its food make sure we got through it,” he adds. service customers that remain open with takeaway, delivery or click-and-collect services. RESTRICTIONS The company has developed a new ice cream However, the return of restrictions in October meant sandwich range, which Murphy says is very easy for sales fell off a cliff once more for Coolhull. Murphy restaurant operators to include with meal deals and says the brief reopening in December was really im- promotions. portant for the business as it brought in some much Outside of Ireland, Coolhull has been steadily QHHGHGUHYHQXHEXWRYHUDOOWKHFRPSDQ\oQLVKHG building its export footprint over recent years. While 2020 with sales down almost 50% on normal levels. the UK is its main export market, Murphy says the The country has since spent almost all of the business was starting to develop in European mar- early months of 2021 stuck in Level 5 lockdown kets and had developed relationships with clients UHVWULFWLRQVZKLFKKDVEHHQYHU\GLIoFXOWIRUPDQ\ in the Netherlands, Germany and other European businesses. countries. “It’s been a pretty bleak number of It’s still early days but some of these customers months since Christmas but we think are starting to come alive again now that a phased one of our roads back will be via the end to restrictions is beginning to take place in most retail channel,” says Murphy. of Europe. :KHQ&29,'oUVWKLWODVW\HDU Coolhull reached out to supermarkets RESILIENCE in a bid to see was there any oppor- Standing back from the day to day, its clear Coolhull tunities there. It’s taken almost a year Farm has been through a gruelling year. Yet despite but the company has won a number all the incredible challenges, the business is still of listings with new products this year. standing and doing everything it can to adapt, pivot, “We developed a new product innovate and survive. which we call our Yummy Cakes Like so many other Irish food businesses, the sto- range and that’s got us ry of Coolhull over the past year really illustrates the listings with Tesco and fantastic resilience of the Irish food sector. There’s SuperValu. It’s going not likely to be another year like 2020 in terms of the really well but it’s still devastation it wrought on so many businesses. Yet for too early to tell the those that come through to the other side it could be acceptance level the making of them in the long run. 19

018-019 agribusiness.indd 19 06/05/2021 15:53:54 YEAR OF COVID-19 RETAILCHANGING FACE OF

Lorcan Allen speaks to Malachy O’Connor, a veteran of the grocery retail industry, to get his views on the impact that COVID-19 and Brexit have had on the supermarket sector

020-023 agribusiness.indd 20 06/05/2021 15:52:10 IRISH farmersjournal.ie FARMERS JOURNAL

fter years of wrangling, missed deadlines and theatrics in the House of Commons, Brexit oQDOO\KDSSHQHGODVW\HDUDV the UK formally exited the EU on 31 December 2020. The last- minute negotiations between Brussels and London ran right XSWR&KULVWPDV(YHEXWDGHDO was struck in the end.

020-023 agribusiness.indd 21 06/05/2021 15:52:24 YEAR OF COVID-19

KEY POINTS now where a lot of major companies are looking at ÔBrexit has Ireland and asking themselves can they afford to disrupted supply the Irish market. It’s a small country on the supermarket edge of Europe that has a population the same size supply chains. as Manchester so the cost of realigning supply chains ÔSurge in may not be worth it for some companies,” warns consultant in the grocery retail sector having worked demand for O’Connor. for over 20 years in key commercial roles with Tesco pet food as While it may just be a short-term shortage, Ireland and Aldi Ireland, the supply chain disruption pet ownership O’Connor says you can already see shortages of caused by Brexit came as no surprise. increased with certain product lines on Irish shelves for a variety of “I remember giving a presentation in January COVID-19. reasons including Brexit. Since the start of the year, 2019 at a conference for FMCG brand owners where I ÔFood price is he says food items such as berries, pulses and nuts warned that Brexit was going to mean serious turbu- too low, driven have been in short supply, while there has also been lence for supermarket supply chains. It was obvious not by con- less availability of pet food and bin bags. because so much of the food that ends up on Irish sumers but by supermarket shelves is coming from or travelling supermarkets through the UK,” says O’Connor. themselves. “If you think about it, these major food companies have large supply depots in the UK where they import all their food to service the UK and Ireland as a single geography. They then break down these consignments and start distributing product to their network of stores in the UK and Ireland. It was really HIoFLHQWEXWLWZDVVHWXSIRU seamless movement of product,” he adds. Now that Brexit has happened, that seamless movement of goods has come to an end for every company trying to move goods across the Irish Sea. “Food supply chains between the UK and Ireland were VRoQHO\WXQHGLWZDVLQFUHGLEOH There was never an empty container moving back and forth,” says O’Connor. “But now there’s going to have to be a realignment of supply chains. 7KHUHZLOOEHDVLJQLoFDQWLQFUHDVHLQ direct shipping to Ireland of EU goods from now on, which is going to add FRVWDQGEHOHVVHIoFLHQWyKHVD\V “You actually have a scenario Future

In the longer term, O’Connor says it will it’s actually really diffi cult to have food The COVID-19 pandemic has meant be interesting to watch how supermarkets price infl ation because of the competition,” consumers were never more reliant on react to the sustainability agenda. There’s says O’Connor. their local supermarket in order to eat. already a lot going on in terms of plastic Against the backdrop of growing Before the virus hit, almost 50c in every packaging and food waste, but he says the consumer awareness about sustainability euro spent on food in Ireland was done in a price of food has fallen to a level that’s too and the carbon footprint of food, it will be restaurant or food service outlet, meaning low. fascinating to watch how the supermarkets Irish consumers were eating out more than “The fall in the price of food over the compete with one and other over the com- ever. last decade was not driven by consumers. ing decade. So what does this mean for the future Instead, it was driven by the supermarkets Added to that, the increased costs of of the sector? O’Connor says it will be in- themselves. Originally, this was by the big realigning supply chains might mean a teresting to watch how society reacts after retailers trying to stem loss of sales to the return to food price infl ation in Ireland over the vaccine rollout. discounters but sustained by them all in the coming years. He says supermarkets will continue the battle to win market share. Or will the intense rivalry for market to do well after COVID-19 but says there’s “Unfortunately I think it has skewed share between the big fi ve retailers in Ire- defi nitely a real sense of cooking fatigue consumer understanding of the cost of land mean food prices are set to stay rock among consumers right now. food, especially for local produce. And now bottom? Time will tell. 22

020-023 agribusiness.indd 22 06/05/2021 15:52:40 IRISH farmersjournal.ie FARMERS JOURNAL

COVID-19 trends

On the pet food shortages, O’Connor says 3% to just 5.4% of the entire market last year. this is mostly down to COVID-19 with pet So it’s growing but we’re still way behind ownership, particularly dogs, exploding in the UK in terms on online grocery where the last year. The sharp increase in household about 15% of grocery shopping is now done pets has seen a surge in demand for pet online,” he says. food, which the industry has struggled to Prior to COVID-19, O’Connor says Tesco Online keep pace with. Ireland and SuperValu were the only two su- grocery But what other trends has O’Connor no- permarkets in Ireland taking online grocery ticed in the supermarket aisles over the last shopping seriously. However, the pandemic shopping year related to COVID-19? forced the other major players to try to catch doubled “There was price inflation of 3% last year up. last year in as consumers were buying more brands last Lidl had been working with Buymie since year. It was also noticeable that a lot of food 2018, giving it a head start on Dunnes Stores, Ireland companies cut the number of products they which is now also working with Buymie, and sell to focus on their core lines. This collabo- Aldi, which has partnered with Deliveroo. ration between retailers and suppliers was However, O’Connor remains to be convinced essential to meet the surge in demand. about online grocery and how big a feature “Alongside this, you could also see food it will be of the Irish grocery market after companies bringing out bigger packs for COVID-19. their products because consumers were buy- “I carried out some research recently ing larger volumes,” he says. which tells me that in-store shopping is still The other really interesting trend in the what most Irish consumers prefer. So I’m not supermarket sector over the last year, says sure how seriously the Irish supermarkets O’Connor, was the growth in online. are taking online shopping. Unlike in the UK, Malachy “Online grocery shopping effectively Ireland has a low-density population outside O’Connor, doubled last year in Ireland, although it’s still the cities, which is hard to service with retail quite small overall as it went from less than online,” he adds. consultant.

020-023 agribusiness.indd 23 07/05/2021 14:11:23 YEAR OF COVID-19 B UNCE BACK

Ger Brady, chief economist with Ibec, explores how the Irish economy has performed so far and how the rural economy could bounce back as vaccines roll out

OVID-19 meant that the past year was the most challenging year in living memory for IRISH BUSINESS MODEL households, for business and the country more After the last recession, we saw how the Irish busi- generally. While some sectors, such as Tech and ness model, based on openness to the rest of the BioPharma saw continued export success during ZRUOGKHOSHGXVUHFRYHUIURPDFULVLVTXLFNO\$WD the lockdown, it was a different story for many of our basic level, the model works like this: step one is that members in the “experience economy” which pre- Irish-based companies export goods and services, dominate rural employment. Hospitality, non-essen- and foreign consumers pay Irish companies for those tial retail, other direct consumer-facing business, exports. and those in the supply chains have had only a Step two is that those companies then use that few weeks of normal trading since last March. money to pay their staff, suppliers and the taxman LQ,UHODQG7KHoQDOVWHSLVWKDWWKRVHVWDIIVXSSOL- HOSPITALITY HIT HARDEST ers and the Government spend that money in local 7KLVLVUHpHFWHGLQWRWDOLQGXVWU\WXUQRYHULQWKH economies all over the country creating jobs in our accommodation and food sector being down over consumer-facing sectors. 60% in the period from April to December 2020, How do we know this model still works? There is compared with 2019. Within this, some sub-sectors no doubt that we face some increasingly challeng- are down between 80% and 90% in turnover and will ing economic circumstances. As we speak, there are FRQWLQXHWREHWKURXJKRXWWKHoUVWTXDUWHURI close to half a million people unemployed and the In non-essential retail companies, turnover is impact of COVID-19 on associated health restrictions GRZQE\EHWZHHQRQHTXDUWHUDQGRQHWKLUGRYHU was evidenced by the 9% fall in consumer spending the same period. As a result, the future of many pubs, in 2020. However, despite all of this, and the testing shops, restaurants, hotels and other crucial business- international conditions, Irish exports grew by 6.2% es in both rural and urban areas remains in jeopardy. last year. Step one is still working. People abroad are We all know the problems, but what about the buying what we are selling. good news? Holding on to optimism as we live through this isn’t easy but, as we get further into 2021 EXPORTS ARE CONTINUING there are reasons for rural communities generally to Those growing exports meant that in many sectors be optimistic about the future after COVID-19. This incomes continued to grow all through last year. It is because, despite COVID-19, the Irish business DOVRGURYH*RYHUQPHQWFRQoGHQFHLQRXUDELOLW\WR model is still working. afford to spend huge amounts of money supporting the incomes of people in the worst-hit sectors. 24

024-025 agribusiness.indd 24 07/05/2021 10:35:12 IRISH farmersjournal.ie FARMERS JOURNAL

As a result, data from the Revenue Commission- Reopening the rural economy ers suggests private sector incomes in Ireland were pDWLQGHVSLWHWKHHFRQRPLFEDFNGURS6WHS WZRLVVWLOOZRUNLQJqHYHQLIWKHVRXUFHRIPRQH\IRU Households will stop saving so much and money SHRSOHLQVRPHVHFWRUVLVYHU\GLIIHUHQWWRQRUPDO earned from our open trading business model will WLPHV start to flow again bringing local economies back to %XWSXEOLFKHDOWKUHVWULFWLRQVPHDQWKDWVWHS life. That is before we get to the question of where the WKUHHLVIRUWKHPRPHQWLQDVWDWHRIVWDVLV+RXVH- €15bn already saved goes to. KROGLQFRPHVKDYHEHHQVXSSRUWHGUREXVWO\EXW Based on our previous experience of SSIAs in the people have had fewer opportunities to spend due to 2000s, a fair amount will be saved. Some will be spent ORFNGRZQV$VDUHVXOWUHFHQWGDWDIURPWKH&HQWUDO on things we had long put off like the house, garden %DQNVKRZVWKDWKRXVHKROGVDYLQJVKDYHVN\URFNHWHG or car. E\RYHUçEQLQ Finally, a portion will be spent making up for lost time – meeting friends and family, breaks away, go- WHAT DOES THIS ALL MEAN FOR RURAL IRELAND’S RECOVERY? ing out and generally enjoying life. Rural towns and 7KHIRRGDQGGULQNLQGXVWU\ZKLFKLVFUXFLDOWRVWHS villages need to start thinking about ways to capture RQHDQGWZRIRUUXUDOFRPPXQLWLHVKDVKHOGXSEHW- some of that activity over the coming years. WHUWKDQPRVW To achieve this optimistic outcome – continued /DVW\HDUQRGRXEWSURYLGHGFKDOOHQJHVIRUVRPH and enhanced support from Government for the DUHDVRIWKHIRRGLQGXVWU\GXHWRWKHFORVXUHRIUHV- worst-impacted sectors will be needed through much WDXUDQWVFDIHVDQGRIoFHV%XWRYHUDOOGDWDIURPWKH of 2021. The Brexit Adjustment Fund will also need to :RUOG7UDGH2UJDQLVDWLRQVKRZVWKDWJOREDOWUDGHLQ be used judiciously to boost our long-term ability to IRRGDQGGULQNIHOORQO\PDUJLQDOO\GXULQJWKHZRUVW sell abroad. RI&29,'FRPSDUHGZLWKIDOOVRIZHOORYHU Finally, vaccine rollout will need to run smoothly IRUWUDGHJHQHUDOO\4XLWHVLPSO\WKHLQGXVWU\LVD and give us a chance at relaxing some restrictions over QHFHVVLW\3HRSOHQHHGWRHDWDQGGULQN the summer. For rural Ireland, there is now real hope :KLOHWKHIRRGVHUYLFHPDUNHWKDGVWUXJJOHGUH- for the second half of 2021 that as vaccine rollout takes WDLOVDOHVJUHZVLJQLoFDQWO\DVSHRSOHSXUFKDVHGWKHLU place, and the robust export performance of our key IRRGDQGGULQNIRUKRPHFRQVXPSWLRQ sectors continues. This will help release record house- 'XULQJWKHUHFRYHU\IURPRXUODVWUHFHVVLRQZH hold savings, bring down unemployment, and give the saw how important this resilience in the Irish food economic recovery a much needed shot in the arm. DQGGULQNLQGXVWU\ZDVWRUXUDODUHDV It won’t solve every problem rural Ireland faces but it %HWZHHQDQGWKHVHFWRUJUHZLWV would be a good start. H[SRUWVE\çEQRUDOPRVWD\HDU7KLVZDVPRUH than twice the growth rate of the sector’s exports EHWZHHQDQG,WZDVVL[WLPHVWKHJURZWK UDWHDFKLHYHGVLQFHMRLQLQJWKH(8LQ WKH8.PDUNHWDQG,ULVKIRRGSURGXFWVDFFRXQWHGIRU Given the sector spends almost two-thirds of VHYHQRIWKHPRVW%UH[LWH[SRVHGIRRGDQGGULQN LWVWXUQRYHULQWKH,ULVKHFRQRP\qWKURXJKZDJHV SURGXFWFDWHJRULHVLQWKH(8 KEY POINTS WD[HVSXUFKDVHVIURPSULPDU\SURGXFHUVDQGORFDO While competitiveness challenges remain for the VHUYLFHVqWKHPDMRULW\RIWKHVHJURZLQJH[SRUWVDOHV SURGXFHUVZKRDUHVRNH\WRJHWWLQJWKHSURGXFWRII Ô COVID-19 pRZHGGLUHFWO\WR PRVWO\UXUDO KRXVHKROGVDQG WKHLVODQGWKHUHLVVFRSHWRKHOSWKHPZLWKNH\SROLF\ created win- VXSSOLHUV VXSSRUWVWKURXJKWKH%UH[LW$GMXVWPHQW)XQG ners as well as 7RSXWWKLVLQFRQWH[WWKHIRRGDQGGULQNVHFWRU losers in the VSHQWRYHUçEQLQSD\UROODQGSXUFKDVHVLQWKH €1BN FUND economy. ,ULVKHFRQRP\RYHUWKHSDVWGHFDGH7KLVDPRXQWV ,EHFKDVVHWRXWWKHNH\DUHDVZKHUHLWEHOLHYHVWKH Ô While WRRIWKHWRWDOGRPHVWLFVSHQGLQJRIDOOPDQX- çEQRI(8IXQGLQJFDQEHGHSOR\HGWREHVWVXS- society closed, IDFWXUHUVqLQGLJHQRXVRUPXOWLQDWLRQDOqRUç SRUW,ULVKEXVLQHVV7KLVFDQEHGRQHLPPHGLDWHO\ exports kept IRUHYHU\PDQZRPDQDQGFKLOGLQWKHFRXQWU\7KLV WKURXJKVWDELOLVDWLRQVXSSRUWV moving. in turn, gets spent in local economies and gave rural :DJHVXEVLGLHVWD[ZDUHKRXVLQJDQGGLUHFW Ô Irish food ,UHODQGDSODWIRUPIRUUHFRYHU\ LQYHVWPHQWIXQGVDUHDOUHDG\LQSODFHIRU&29,' and drink DQGQHHGWREHH[WHQGHGWR%UH[LWLPSDFWHGoUPV accounts for POST COVID-19 BOUNCE )LUPVZLOODOVRUHTXLUHORQJWHUPVXSSRUWVWR 45% of the 7KHUHDUHUHDVRQVWREHOLHYHWKDWZLWKKHOSWKH EXLOGQHZPDUNHWVVXFKDVH[SRUWFUHGLWLQVXUDQFH total domestic VHFWRUFDQUHSHDWWKHWULFNDIWHU&29,')LUVWO\ GLUHFWJUDQWVIRUSURGXFWLYLW\OLQNHGLQYHVWPHQW spending of all ZHZLOOVHHUHQHZHGGHPDQGJOREDOO\LQWKHFRPLQJ PDUNHWLQJDQGWUDGHSURPRWLRQDQGDQH[SDQVLRQRI manufacturers \HDUV H[LVWLQJORDQVFKHPHV$OORIWKLVZRXOGKHOSWRPDLQ- including mul- 6HFRQGO\WKHUHFHQWVXVSHQVLRQRIWUDGH WDLQDQGJURZWKHPHDQVE\ZKLFKZHJHWIRRGDQG tinationals. WDULIIVRQVRPHNH\GDLU\DQGGULQNSURGXFWV GULQNRIIWKHLVODQGDQGEULQJWKHFDVKLQIXVLRQZKLFK E\WKH%LGHQDGPLQLVWUDWLRQJLYHVKRSHIRU ZLOOKHOSUXUDO,UHODQGUHFRYHUIURP&29,' a more productive trading relationship )LQDOO\ZKHUHLVWKHUXUDOHFRQRP\ZKHQLWFRPHV ZLWKWKH86VRRQ WRVWHSWKUHHqJHWWLQJPRQH\VSHQWLQWKHORFDO )LQDOO\GHVSLWHWKHVHULRXVLVVXHVFUH- HFRQRPLHVDFURVVWKHFRXQWU\"2XWVLGHRIWKHIRRG Ger Brady, DWHGE\WKHQHZUHDOLWLHVRIRXUUHODWLRQ- DQGGULQNVHFWRUDQHIoFLHQWYDFFLQHUROORXWPLJKW chief ship with the UK, the worst-case scenario VHHVRPHVHPEODQFHRIUHFRYHU\LQWKHVHFRQGKDOI economist, RIWDULIIVLVQRZRIIWKHWDEOH RI,WZRQ WEHOLNHEHIRUHEXWWKHUHLVSRWHQWLDO Ibec. We had good reason to fear a far IRUOLIHWREHFRPHPRUHQRUPDO$VDUHVXOWRIYDFFLQH worse Brexit outcome up until rollout, people will have more opportunities to spend 'HFHPEHU2YHURI,ULVK time in local towns and villages, shopping, eating, IRRGDQGGULQNH[SRUWVJRWR GULQNLQJDQGJHQHUDOO\HQMR\LQJOLIHDJDLQ 25

024-025 agribusiness.indd 25 07/05/2021 10:35:26 YEAR OF COVID-19 value returns

Lorcan Allen speaks to JP Scally, chief executive of Lidl Ireland and Northern Ireland, about the unprecedented challenges presented to the grocery retail sector by COVID-19

n 12 March 2020, Leo Varadkar gave his now fa- oUVWORFNGRZQDVZRUULHGFRQVXPHUVXQGHUVWDQG- mous speech to the Irish public from Washington ably, sought to stock up on essentials. While things DC during his St Patrick’s Day visit to the US. It have since settled down, supermarkets and the gro- was 11am Irish time when Varadkar descended cery retail channel have played an essential role over the steps of Blair House beside the White House the last year to keep the entire country fed. to inform the Irish public the country was head- As it turned out, March 2020 ended up being a HGLQWRLWVoUVWORFNGRZQLQDELGWRFRQWDLQWKH bigger month for grocery sales than Christmas, with rampant spread of the COVID-19 virus. almost €1.1bn spent on groceries and other essen- ,W VQRZRYHUD\HDUVLQFH&29,'oUVW tials. barged its way into our daily lives and that his- “The initial panic-buying phase put huge pressure toric speech from the then Taoiseach seems like on supply chains around the world. We saw what had a lifetime ago for many. However, for JP Scally, chief happened in China and Italy so we had been gradual- executive of Lidl Ireland and Northern Ireland, the ly building stocks throughout the month of February. memory of that day is still clearly etched in his mind. And we had just opened our new 54,000sq ft distribu- “I remember Leo Varadkar started his speech at tion centre in Kildare, which helped. Thankfully, we 11am that morning and by 11.30am things were al- were able to quickly scale up to demand due to our ready kicking off. Within minutes, our stores became robust and agile supply chain, including the large overrun with panicked customers stockpiling food, network of local Irish suppliers we work with,” says toilet paper and other staples they could get their Scally. hands on,” says Scally. k)RUWKHoUVWPRQWKZHZHUHZRUNLQJZLWK “I remember it was a really tough time for all our our suppliers trying to secure supply day after day. store teams. It was pure panic-buying and it lasted Imports of certain products became a challenge. for the rest of that week,” he adds. For example, it was very hard to get pasta because Italy was really hard hit by COVID-19 and a lot of the EMPTY SHELVES IDFLOLWLHVZHUHFORVHG7KHQpRXUEHFDPHUHDOO\VKRUW The sight of empty supermarket shelves all over Ire- when the home-baking craze took off and eggs be- ODQGEHFDPHDGHoQLQJLPDJHLQWKHHDUO\GD\VRIWKH FDPHGLIoFXOWWRVRXUFHGXHWRDQRXWEUHDNRIDYLDQ 26

026-028 agribusiness.indd 26 07/05/2021 10:37:50 IRISH farmersjournal.ie FARMERS JOURNAL

Sustainability

Aside from consumer food trends, Scally says the big focus in the grocery sector is now fi rmly on sustainability. Earlier this year, Lidl announced that it was phasing out the circulation of almost 6.3m plastic “Bags for Life” and will instead off er customers the option to buy a heavier-duty shopping bag made from 100% recycled material. The retailer plans to increase the number of elec- tric charging points at its network of stories and has recently announced a new partnership in Northern Ireland where eight of its delivery trucks will be pow- ered by renewable bio-methane (biogas) produced from food waste. “The one thing I see is that consumers are more and more interested in sustainability. A lot of consumers have a new-found appreciation for nature because of COVID-19 and they want the economic recovery from the pandemic to be a green recovery’,” says Scally.

SURGXFWVWRUHSODFHWKHEDULVWDFRIIHHIURPZRUNRU WKHFLW\ 2WKHUIRRGSURGXFWVOLNHSRWDWRHVJUDY\VWRFNV DQGDQ\SURGXFWOLQHVOLQNHGWREDNLQJVXFKDV GULHGIUXLWRUEDNLQJVRGDGLGUHDOO\ZHOOODVW\HDUDV FRQVXPHUVZHUHIRUFHGWRFRRNDWKRPHPRUHWKDQ HYHUEHIRUH k,WKLQNDORWRI,ULVKFRQVXPHUVUHDOO\UHFRQQHFW HGZLWKIRRGODVW\HDUEHFDXVHWKH\KDGWLPHWRFRRN DJDLQ7KHUHLVGHoQLWHO\PRUHDSSUHFLDWLRQIRUJRRG IRRGDQGPDQ\SHRSOHKDYHOHDUQHGWKDWKRPHFRRN LQJLVQRWVRGLIoFXOW,QVD\LQJWKDWWKHUHLVGHoQLWHO\ DORWRIFRRNLQJIDWLJXHRXWWKHUHULJKWQRZyVD\V 6FDOO\ ,QWHUHVWLQJO\ZKLOHWUDGLWLRQDOPHDWDQGIUHVK SURGXFHVDOHVVDZDELJERXQFHODVW\HDU6FDOO\VD\V LQpXHQ]DyKHVD\V JP Scally, CEO WKHUHZDVDQRWDEOHLQFUHDVHLQVDOHVRI/LGO VUDQJHRI $VLGHIURPIRRG6FDOO\VD\VFOHDQLQJPDWHULDOV of Lidl Ireland kUHGXFHGPHDWySURGXFWVZKLFKDUHDQHZUDQJHRI EHFDPHYHU\VFDUFHEHFDXVHWKHUHZDVDWR and Northern KDOITXLQRDKDOIEHHISURGXFWVWKDW/LGOKDVGHYHO LQFUHDVHLQVDOHVYROXPHLQWKDWFDWHJRU\DV Ireland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ÔMarch 2020 :LWKDIXOO\HDUQRZSDVVHGVLQFH&29,'oUVW *LYHQKLVSRVLWLRQDV&(2RI,UHODQG VIRXUWKODUJ was a bigger WXUQHGRXUOLYHVXSVLGHGRZQZKDWFRQVXPHUIRRG HVWUHWDLOHU6FDOO\KDVKDGDELUG VH\HYLHZRIWKH month for gro- WUHQGVGRHV6FDOO\IHHOPD\FRQWLQXHDIWHUVRFLHW\ FRQVXPHUIRRGWUHQGVWKDWKDYHHPHUJHGLQWKHSDVW cery sales than EHJLQVWRUHRSHQDQGUHWXUQWRQRUPDO" \HDU6RZKDWZHUH,ULVKFRQVXPHUVEX\LQJODVW\HDU" December. k,DFWXDOO\WKLQNWKHFRQVXPHUWUHQGWKDWHPHUJHV k:HGHoQLWHO\VDZ,ULVKFRQVXPHUVWUHDWLQJWKHP ÔSales of IURP&29,'LVJRLQJWREHWKHUHWXUQRIYDOXH VHOYHVDORWPRUHODVW\HDU:HVDZELJLQFUHDVHVLQ cleaning prod- VKRSSLQJ,VDLGFRQVXPHUVZHUHWUHDWLQJWKHPVHOYHV VDOHVRIWKLQJVOLNHIUHVKSURGXFHDQGSUHPLXPEHHI ucts soared DORWPRUHLQWKHODVW\HDUEXWZHFRXOGVHHWKLVWUHQG 2XUVDOHVRISUHPLXP$QJXVVWHDNVZHUHXS at the start of ZDVFKDQJLQJQHDUWKHHQGRIWKH\HDUyVD\V6FDOO\ ODVW\HDU$QGRIFRXUVHDOFRKROVDOHVGLGYHU\ZHOO lockdown. k6LQFHWKHHQGRIDQGULJKWWKURXJKIURPWKH EHFDXVHSHRSOHZHUHVWXFNDWKRPHyVD\V6FDOO\ ÔConsumers VWDUWRIWKLV\HDULW VFOHDUWKDWSHRSOHDUHQRZVWDUWLQJ 5HFRJQLVLQJWKDWFRQVXPHUVZHUHLQGXOJLQJPRUH will return to WRZDWFKWKHSHQQLHV7KH\DUHIRFXVLQJRQYDOXH GXULQJORFNGRZQ/LGOLQWURGXFHGQHZUDQJHVRISUH value shop- IRUPRQH\QRZLQWKHLUVKRSSLQJEHFDXVHWKHUHDUH PLXPIUHVKGHVVHUWVDQGH[SDQGHGLWVFRIIHHEHDQV ping. UHDOIHDUVRIDUHFHVVLRQRXWWKHUH3HRSOHDUHZRUULHG UDQJHZLWKFRQVXPHUVORRNLQJIRUSUHPLXPFRIIHH DERXWZKDWZLOOKDSSHQWRWKHLUMREVDQGEXVLQHVVHV 27

026-028 agribusiness.indd 27 07/05/2021 10:38:05 YEAR OF COVID-19

after the Government’s COVID-19 supports end,” The supermarket giant already operates 209 stores in Lidl’s he adds. If this is the case, Scally is likely seeing a Ireland and currently employs about 6,000 people. 54,000sq foot trend that has so far been invisible in unemployment Scally says employees of supermarkets and distribution oJXUHVDQGRWKHUHFRQRPLFGDWD0DQ\HFRQRPLVWV grocery retailers literally found themselves working centre in Co have warned that the Government wage subsidy at the frontline of the COVID-19 pandemic last year, Kildare. scheme and other supports are keeping many Irish helping to keep critical food supply chains open all businesses on life-support and that a recession is over the world. likely for the Irish economy once those supports And while there have been many challenges since oQLVK ODVW0DUFK6FDOO\VD\VLWKDVEHHQUHDOO\KHDUWZDUP For Lidl, consumer demand for value in their ing to see the number of cards and letters sent in to weekly shop will certainly be a major opportunity to the staff at Lidl by Irish consumers as a thank you for continue to grow its Irish business. From a standing the role they’ve played over the last year. start, the German retailer has eked out a 12% share of In recognition of the role they’ve played through- the €10bn grocery market in Ireland. out the pandemic, Scally says Lidl Ireland has paid Over the next year, Lidl says it aims to create 1,200 out three bonus payments to all its staff in the past new jobs and plans to open an additional six stores. year, with the latest bonus payment totalling €2m.

Future never saved as much cash as they have ness, particularly when the Government in the last year and most will be eager supports for COVID-19 inevitably come to spend some of these savings as soon to an end. Although there is now some light at as they can, be it on a holiday abroad, Yet judging by what JP Scally and the end of the tunnel with the vaccine weekend trip away, a night out or dinner Lidl are seeing in terms of consumer rollout, it’s still very diffi cult to predict in their favourite restaurant. shopping habits since Christmas, it how the Irish, and indeed global, On the other hand, many consum- looks likely that many Irish consumers economy will emerge post-COVID-19. ers are clearly worried about their job are already tightening their belts in On the one hand, consumers have security or the future of their own busi- anticipation of a diffi cult period ahead. 28

026-028 agribusiness.indd 28 07/05/2021 10:38:19 IRISH farmersjournal.ie FARMERS FO D JOURNAL F RESIGHT

Lorcan Allen speaks to Maureen Gahan, Bord Bia’s food service specialist, about the impact of COVID-19 on the industry and the long-term prospects for food service operators

W VQRZRYHUD\HDUVLQFH&29,'oUVWHQ down through the food supply chain and caused a tered our daily lives. While many businesses short-term drop in Irish meat and dairy prices at the have adapted to the “new normal” of living with farm gate. the virus in order to continue operations in some capacity, many small, family-run businesses in DEMAND SHOCK the food service industry have had their doors After the initial demand shock last March and April, closed for the majority of the past 12 months. the market settled down as the industry began to No other sector of the economy has been adapt to the public health restrictions as best as they dealt such a swift and decisive blow as the food could. service sector, as Government health restrictions Some food service operators have tried to keep meant the mass shutdown of pubs, restaurants, open by offering takeaway, delivery, or click-and- cafés and hotels all over Europe. collect options for consumers. Even still, turnover for In total, Europe’s food service market is val- these businesses is way down on normal levels and ued at an enormous €600bn and has been growing most have been forced to cut staff numbers. rapidly over the past decade as consumers continue In November last year, Bord Bia published a to eat more and more food out of home. On the detailed new insights report on the state of the Irish island of Ireland (Republic of Ireland and NI), the food service sector after a devastating year for all total food service market was valued at €8.5bn be- operators. fore COVID-19 hit, while the UK food service sector The report showed that food service sales in had grown to become a €100bn market. Ireland had collapsed by 48% in 2020 to just over Up to last year, Ireland’s food service market had €3.3bn, while in Northern Ireland the food service recorded eight consecutive years of topline growth sector had shrunk by 46% to just under and had become a crucial route to market for many €1.2bn. food businesses. The sector was particularly impor- The numbers were stark but not tant for Irish beef exports into the UK and account- unexpected given the extent of the HGIRUDVLJQLoFDQWYROXPHRI,ULVKFKHHVHWRR lockdown restrictions in March, As such, the sudden collapse in demand from April and May last year and again in the food service market last year reverberated right October and November. 29

029-030 agribusiness.indd 29 07/05/2021 10:40:04 YEAR OF COVID-19

Also included in the report from Bord Bia was a forecast for the sector’s recovery post COVID-19, which spelled out a number of best- and worst-case scenarios for food service operators. In a best-case scenario, Bord Bia forecasts that food service sales would recover 41% in 2021, which Maureen would mean a €1.9bn jump in sales on 2020 levels. Gahan, In this scenario, however, the food service market food service would still be down 14%, or almost €2.2bn, on specialist, where it was pre-COVID in 2019. Bord Bia. However, this best-case scenario was based on the assumption that public health restrictions would be eased in early 2021 as Government vaccines programmes ramped up. KEY POINTS restrictions later this year, how many hotels and food As we now know, the rollout of vaccines in Eu- service operators will actually reopen? Some opera- rope has been dogged by supply issues and severe ÔNo other tors have already said they are going to hold off until public health restrictions have been in place in most sector of the 2022 to fully reopen because there will be no proper European countries since the beginning of 2021. economy has tourist season again this year,” she says. taken as big “Even if the vaccine rollout is completed and the WORST-CASE SCENARIO a hit from the economy reopens in the second half of the year, food In its forecast for a worst-case scenario for the food pandemic as service operators are still going to be living within service sector, Bord Bia estimated that sales would food service. public health guidelines for a long time to come. So recover by just 16% in 2021, which would mean ÔVery impor- the food service sector could see a burst of consumer almost €720m in extra sales. However, this would tant sector for spending in quarter four this year but they will still be leave the overall food service market in Ireland Irish food and at reduced capacity because business will still have down 22%, or €3.3bn in sales, on where it was pre- drink exports. to limit numbers and have sanitising protocols in COVID-19. ÔPublic place,” says Gahan. These worst-case projections for the food service health guide- “We will be going back out to the industry for a industry were based upon a slow rollout of the CO- lines will aff ect series of research interviews this month and publish- VID-19 vaccine, continued public health restrictions the sector for ing a mid-year White Paper in June. This will allow us for most of the year and the continued absence of a prolonged to review our initial predictions for the food service international tourism in Ireland. period after VHFWRUDQGFRQoUPXSGDWHGIRUHFDVWJURZWKoJXUHV According to Maureen Gahan, Bord Bia’s food reopening. for the market in 2021,” she added. service specialist, the outlook for the food service ÔThe While the vaccine rollout should help the food industry in Ireland has actually regressed to a worse longer-term service industry reopen on a more permanent basis state than the worst-case scenario forecast by Bord impact on Irish later this year, Gahan thinks it could be 2025 and be- Bia’s in November. hospitality yond before we see a full recovery in the food service “I would say the outlook for food service in Ire- and recovery industry to pre-COVID-19 levels of business. land in 2021 is now actually worse than the worst- in conference “The food service industry is extremely resilient. case scenario we outlined last year. We did not business will ,WFDPHWKURXJKDYHU\GLIoFXOWSHULRGDIWHUWKH envisage this level of public health restrictions in be slow. oQDQFLDOFUDVKLQ+RZHYHU,GRQ WWKLQNZH UH 2021 when we were doing the analysis,” says Gahan. going to see a full recovery in the sector for three to “When the Government does start to pull back oYH\HDUVyVKHVD\V

meaning many companies will accommodation. However, the be weighing up the benefi ts of CATERING short-term future of tourism is large offi ces and canteens for While restaurants and cafés quite challenged. staff over the coming years. are the most visible operators, Even with a successful global At the same time, it’s dif- there are many other areas of vaccine programme, it will be fi cult to see the number of the food service industry where many years before tourism conferences and public meet- business owners are facing a numbers fully recover. This leaves ings returning to pre-COVID-19 very uncertain future, including many hoteliers and food service levels again, which would also contract catering and hotels. operators in regions of Ireland be a major blow to the catering Tourist numbers into Ireland that are tourist-dependent with industry. over the last decade an uncertain outlook for the years So while the vaccine rollout have swelled to ahead. 11M may mean an end to the stop- more than 11m An even bigger question mark start restrictions that really people every is now hanging over the future hurt the food service industry year, who viability of many contract catering tourists, last year, the longer-term spend an businesses in this country. on average, impact of COVID-19 could estimated €5.8bn The COVID-19 pandemic has ac- visit Ireland mean much more fundamental on food, drink and celerated a shift to home-working, each year. changes to the market. 30

029-030 agribusiness.indd 30 07/05/2021 10:40:16 IRISH farmersjournal.ie FARMERS JOURNAL

BITESreality

Michael Archer speaks to two Irish restaurant owners about the major challenges of 2020 and how it forced them to move their businesses online

he pandemic has hit every business 7RFRPEDWWKHVHFKDOOHQJHVPDQ\,ULVKUHV hard. In particular, restaurants across WDXUDQWVKDYHDGDSWHGE\XVLQJFOLFNDQGFROOHFW the country have struggled hugely to VHUYLFHVDQGWDNHDZD\VDOHV VWD\DpRDWZLWKPDQ\EHLQJIRUFHGLQWR In comparison to a normal adapting their business model entirely. year, restaurant sales are still /RFNGRZQVDQG&29,'SXEOLFKHDOWK GRZQVLJQLoFDQWO\+RZHYHU UHVWULFWLRQVKDYHGLVUXSWHGEXVLQHVVHVIRU many Irish restaurants have held on to a degree WKHSDVW\HDUZLWKPRVWUHVWDXUDQWVIRUFHGWR RIRSWLPLVPDQGDUHJUDWHIXOWKDWWKH\ZHUHDEOH FORVHIRUDODUJHSDUWRIWKHSDVW\HDU WRVXUYLYHVRIDU 31

031-032 agribusiness.indd 31 06/05/2021 15:45:21 YEAR OF COVID-19 Case studies

KEY POINTS The Leaping Ô Restaurant sector among hardest hit by Salmon COVID-19. The Leaping Salmon is a gastro pub Ô Click-and- located in the heart of Blackrock village collect or tele- in Co Cork. The business is renowned for phone orders its pizzas and the lively atmosphere in the has preserved pub. Owner Ernest Horgan says he was some business forced into operating a click-and-collect for restaurants. service when the second lockdown hit last Ô No point October. reopening Once the second wave of restrictions until they can was implemented by the Government, stay open. The Leaping Salmon started up a phone-in Ô COVID-19 service for collecting food. Horgan says one of the biggest challenges at the From left: Ernest Horgan, owner, has added op- beginning was catering for the pub’s main customer base, a demographic and colleagues Eoghan Connolly erating costs that largely struggles with technology. and Patrick Deasy. for businesses. After an initial trial, he says the business pretty much abandoned its click- and-collect website service in place of customers simply phoning in orders. Overall, The Leaping Salmon’s sales were still down 70% last year as a result of the loss of normal business from COVID-19. Despite the significant loss of revenue, Horgan said the business was lucky in many ways as it was the only establishment in the area offering this form of service and it managed to wade through the darker months of the pandemic and stay open. Looking ahead to the second half of 2021, Horgan says he does not want to see pubs and restaurants reopen until they can stay open fully as the stop-start system over the last year has been both mentally and financially draining. The Leaping Salmon in Co Cork.

Kinara In Dublin, Eastern dine-in restaurant chain Kinara members at each of its three restaurants. has had to completely adapt its business model Aside from staff, Collender says the busi- since the pandemic hit. One of the most ness was hit with a lot of instant costs which popular eastern cuisine restaurants in dented the cashflow in the early weeks of Dublin, the Kinara group operates three the pandemic. For instance, he recalls pay- restaurants in the capital and has been in ing over €2,000 for face masks during the business for the past 30 years. early weeks of the first lockdown which Although COVID-19 has brought a would cost less than €200 today. myriad of new challenges, owner Sean While business levels were still down Collender took a pragmatic approach and significantly on a normal year, Collender wasted no time in changing Kinara’s busi- says Kinara’s takeaway service did relatively ness model to a click-and-collect takeaway well given the circumstances. After an initial service. surge in demand, he says the novelty aspect of Collender says his restaurant business has getting restaurant standard food for takeaway seen plenty of bumps over the years but “absolute- wore off with consumers after the first few months ly nothing compares to what has happened this and sales began to drop. past year”. He was forced to react swiftly and, once Kinara continues to operate a click-and-collect the first lockdown hit, he set up a click-and-collect service from Thursday to Sunday, with Friday and system on the Kinara website. Saturday their busiest nights. Despite the enor- Unfortunately, while the business continued to mous challenges of the last year, Collender is hope- operate, Kinara was forced to cut its staff numbers ful for the future and looks forward to reopening from 93 to just 30 people within a 24-hour period his restaurants for full dine-in service later this as the business reduced its numbers to just 10 staff year.

031-032 agribusiness.indd 32 06/05/2021 15:45:32 YEAR OF brexit

Brexit finally came into being on 1 January this year. Checks and veterinary certification are now a necessary part of doing business between the EU and UK. So far, Republic of Ireland exporters have been shielded as the UK is not introducing border controls until 1 October. The EU is implementing full controls and, consequently, food and plant-based imports from Britain have fallen dramatically. Northern Ireland has particular problems as part of the UK that can also participate in the EU single market.

033 agribusiness.indd 33 06/05/2021 15:44:11 YEAR OF BREXIT

DAWN OF A NEW WAY Michael Haverty, partner, The Andersons Centre, explains how the trade and cooperation agreement between the EU and UK prevented the worst-case scenario, but difficulties remain

he EU-UK Trade and Cooperation Agreement to other EU member states. Non-EU exports are also (TCA) avoided the cliff-edge of a no-deal Brexit, VKRZQDVDUHRYHUDOO8.VHOIVXIoFLHQF\HVWLPDWHV but it has reimposed friction on trade between Unsurprisingly, exports to the EU are dominant the UK and the EU, as well as between Britain across all commodities. They are most prevalent in and the island of Ireland. This has major impli- sheepmeat, where just over one-third of UK output is cations for both the UK and Irish agri-food sectors. exported; 95% of which is to the EU. This article examines some of the key challenges Exports to the EU are also important in other which have arisen from a British agri-food perspec- commodities, particularly for pork and poultry where tive and explores ways in which these issues could carcase balancing plays a key role. be addressed to achieve a “steadier state” in the 7KH8.SURGXFHVDVLJQLoFDQWVXUSOXVRIEDUOH\ long-term EU-UK relationship. and 88% of exports are to the EU. Wheat exports Table 1 gives an overview of the UK’s production are down on historic levels (normally two million and exports for a selection of agricultural commodi- tonnes per annum) and the EU is again the dominant ties. Exports to Ireland have been split from exports destination. 34

034-036 agribusiness.indd 34 06/05/2021 15:43:08 IRISH farmersjournal.ie FARMERS JOURNAL

TRADE AND COOPERATION AGREEMENT (TCA) IMPLICATIONS The announcement of the TCA came as a relief to most British farmers as it meant that tariff-free and quota-free trade could continue for eligible products. The notable exception is seed potatoes; particularly important in Scotland, due to the EU’s ban on imports from third countries (including Britain). This highlights that tariff-free trade is not barrier-free trade and the TCA brings a whole plethora of regulatory hurdles that must be overcome. Within the EU, Britain could trade with other PHPEHUVWDWHVZLWKPLQLPDOGLIoFXOW\$OWKRXJKWKH TCA does not impose tariffs and quotas for products eligible for free-trade, non-tariff measures (NTM) – barriers, particularly customs, sanitary and phytos- anitary (SPS) regulations and rules of origin require- PHQWVDUHQRZVLJQLoFDQW 7KHHQGLQJRIIUHHPRYHPHQWZLOODOVRLQpXHQFH UK farming’s competitiveness, particularly as the new Seasonal Agricultural Workers’ Scheme (SAWS) only offers 30,000 places but the seasonal labour re- quirement for UK agriculture is estimated at 80,000. Dispute settlement may also pose problems given WKHQDWXUHRIWKHOHYHOSOD\LQJoHOGUXOHVDVDQXQ dercutting of environmental standards, for example, could bring about retaliatory tariffs in agricultural trade. Non-tariff measures (NTM) costs are the most problematic. In previous studies, Andersons has LGHQWLoHGWRDGGLWLRQDOFDWHJRULHVRI170FRVWV which are now applicable on UK exports to the EU. These NTM cost estimates are summarised below, both on a probabilistic basis (average over 100 loads) and on a checked-load basis, the so-called “unlucky load” that is subject to the full range of regulatory checks and delays. )RUXQOXFN\ORDGV170FRVWVFDQVXUSDVVIRU UHGPHDWDQGGDLU\7KH\FDQEHDVKLJKDVIRU SRXOWU\PHDWDQGXSWRIRUFRPSRVLWHPHDWV and highly perishable fruit and vegetable products. Here, value deterioration brought about by delays due to physical checks and sampling account for the majority of costs. On a probabilistic basis, although costs decline VXEVWDQWLDOO\JLYHQWKHWKLQSURoWPDUJLQVLQPDQ\ DJULIRRGFDWHJRULHVWKHLUHIIHFWLVVWLOOKLJKO\LQpX ential and will create pressure on prices at both the farm and consumer levels. Arguably, the impact on SMEs is even more pronounced as they ship fewer loads and will have less scope to absorb the pro- hibitive costs of an unlucky load. British exporters only had one week (over Christmas) to prepare

Table 1: Overview of UK agricultural output and trade for selected commodities (2019)

Commodity Beef Sheepmeat Pigmeat Poultry Cheese* Butter* Wheat Barley meat Output (£m) 2,758 1,257 1,318 2,653 1,312 628 2,442 1,073 Production (Kt) 917 318 922 1,901 462 188 16,225 8,048 Produced and consumed domestically (Kt) 750 211 764 1,537 272 127 15,114 6,257 Total exports (Kt) 167 107 276 364 190 61 1,111 1,791 Of which: To Ireland (%) 16% 6% 19% 14% 6% 19% 14% 7% To other EU (%) 68% 89% 39% 56% 76% 64% 73% 81% To non-EU (%) 16% 5% 43% 30% 18% 17% 14% 12% Self-suffi ciency (%) 86% 109% 66% 91% 61% 92% 99% 127% Sources: Defra, AHDB, HMRC and CSO, analysed by Andersons. Notes: *Output based on wholesale cheese and butter prices. 35

034-036 agribusiness.indd 35 06/05/2021 15:43:23 YEAR OF BREXIT

for the TCA’s introduction as border controls became KEY POINTS changed trading relationship. effective across the EU from 1 January. Many were Mixed-product and groupage loads will become simply unprepared for the barrage of red-tape ÔDespite the less common. Instead, export shipments of single which has ensued. deal, many is- product loads (eg boneless beef) will be dispatched Some exporters have reported delays of a day or sues remain for to a single EU destination, where any additional pro- more and while this is settling down to a degree, sev- trade between cessing that is required will then be undertaken. eral agri-food traders have experienced NTM costs UK and EU Traders will need to carry increased contingency more akin to unlucky loads than the anticipated because of stocks to negate the effect of regulatory checks and average. non-tariff bar- ensure that all products shipped meet key rules of Unsurprisingly, this has had an impact on trade riers. origin requirements (eg =85% of shipments by weight DVLOOXVWUDWHGE\WKHODWHVW8. V2IoFHIRU1DWLRQDO ÔA veterinary qualify for preferential trade with the EU). Therefore, Statistics (ONS) data, released on 12 March. It shows agreement it is likely that agri-food trade between the UK and that exports of food and live animals to the EU are would reduce the EU will decrease somewhat. down by nearly 64% in January vis-à-vis December or even elimi- Given the geographic proximities involved, trade 2020. However, these statistics need to be treated as nate checks volumes at a commodity level (eg carcase beef, lamb) the sharp recovery in February suggests. depending ZLOOVWLOOEHVLJQLoFDQWDQGFORVHWRKLVWRULFOHYHOV $VLJQLoFDQWDPRXQWRIVWRFNSLOLQJWRRNSODFHLQ on the type However, there may be less scope for value add- December as traders prepared for the ending of the agreed. ing, with more processing being undertaken at the transition period. Many British traders deliberately ÔResetting destination. chose not to send shipments to the EU in early 2020 UK-EU relation- Undoubtedly, a UK-EU veterinary agreement run- as they waited to see how the Border Control systems ship is essential QLQJDORQJVLGHWKH7&$ZRXOGVLJQLoFDQWO\UHGXFH would cope. to resolv- border friction both on UK-EU trade and Britain-NI Furthermore, seasonal trade in agri-food tends to ing issues, trade. But it will not remove friction completely. To dip during January to March. Therefore, it is likely to particularly the allay the issues which have emerged in Northern EH$SULOEHIRUHDGHoQLWLYHDQVZHUHPHUJHVDVWRKRZ protocol cover- Ireland, a further de-dramatisation of border controls much UK agri-food exports to the EU have changed ing trade be- will be required. as a result of the TCA. tween Britain One way of approaching this is for products and Northern where Britain continues to align with the EU on ADDRESSING CHALLENGES Ireland. standards and where shipments are undertaken by Despite claims that the challenges experienced since “authorised” (trusted) traders, deemed to present a January are mainly due to “teething problems”, it is minimal risk to the Single Market, undertaking regu- clear that many of the new regulatory requirements latory checks away from the Border Control Posts DUHSHUPDQHQWo[WXUHV (BCPs) could be considered. Customs declarations are now a fact of life $GGUHVVLQJ1,3URWRFROLVVXHVUHTXLUHVpH[LELOLW\ for UK-EU trade, as are rules of origin. Although integrity and maturity on all sides. Recently, these improvements can be made in these areas, their qualities have been in short-supply. Both sides must EHQHoWVZLOOEHPDUJLQDO7KHDUHDZLWKJUHDWHVW do better. potential to alleviate friction on UK-EU (and Britain History has taught us that it is futile to continually to NI) trade is SPS regulation. re-run old feuds. A re-setting of the UK-EU relation- Notwithstanding any new veterinary agreement, ship, akin to the New Decade, New Approach Deal to agri-food supply-chains will still need to adjust to the restore the Northern Irish Executive, is badly needed.

joint veterinary committee. While Switzer- Given the UK government’s stance, Veterinary land can engage with the EU when legisla- it will not countenance a Swiss-style tion is being drafted, it does not have any agreement as it would breach its “sover- voting rights on its adoption. Several UK eignty” red-line. The UK is rumoured to be farming bodies have expressed their pref- pursuing an NZ-style veterinary agree- agreement erence for a Swiss-style agreement. ment. However, the EU has concerns, given 2. NZ-style: this agreement recognises Britain’s proximity to, and volume of trade There are three potential veterinary NZ and EU standards as being equivalent with, Europe and its openness to regula- agreement templates that the EU but does not require further align- tory divergence. and the UK could follow: ment. NZ meat products entering Accordingly, a UK-specifi c type of vet- 1. Swiss-style: this is based into the EU are only subject to 1% erinary agreement is likely to emerge. This on a Common Veterinary Area physical checks and not the default could start off with default physical check between Switzerland and the EU. of 15% or 30%. rates akin to, but not quite as favourable as, Eff ectively, Switzer- 3. Canada-style: New Zealand’s, with scope to revert back land follows the under CETA, equiva- to default check levels, if the UK diverges EU’s regulatory lence was granted to in key areas (eg accepts hormone-treated controls for trade in Canada when export- beef) – eff ectively an extension of the level animals and animal ing animal products playing fi eld concept in the UK-EU TCA. products and Swiss such as beef and legislation needs poultry meat into the to move in lockstep EU, but subject to physi- with EU regulations. In return, cal check rates of 10% . While better eligible produce can move freely than the default levels of checks, a Michael Haverty is a partner at UK agricultural and farm between Switzerland and the EU. Canada-style deal would only have business consultancy The Andersons Centre Implementation is managed by a a limited impact on border friction. www.theandersonscentre.co.uk. 36

034-036 agribusiness.indd 36 06/05/2021 15:43:36 IRISH farmersjournal.ie FARMERS JOURNAL

This beef served at the State banquet on the occasion of the royal visit to Ireland was sourced from Slaney Foods in Wexford and salt moss dry-aged by Kettyle Irish Foods (part of Fane Valley) in Fermanagh before fi nal preparation and delivery to Dublin for the banquet. Making Brexit W RK Phelim O’Neill spoke to Fane Valley group chief executive Trevor Lockhart prior to the announcement that the joint venture with ABP was ending with the ABP acquisition of the Fane Valley interest in Slaney, Linden, Irish Country Meats and Kettyle Irish Foods

he Fane Valley Co-op which began in It has speciality meat processing businesses south Armagh at the beginning of the in Silver Hill Duck, Hilton edible offal processors, last century is now a large supplier of Duncrue fat processors, Kettyle Irish Foods, and products to farmers and a major proces- Whites, which has been manufacturing porridge sor of beef, sheepmeat and a manufac- oats since the middle of the 19th century. turer of speciality foods. The farmer-facing side of the business com- TWhile it is centred in Northern Ireland (NI) with prises feed mills in Newry, Co Down, Omagh, Co headquarters in Moira, Co Armagh, it has a major Tyrone, and Ballindrait, Co Donegal. Between them presence south of the border through the joint they produce 450,000t of animal feed annually, venture with ABP in Slaney and Irish Country Meats making Fane Valley the second largest miller on the (ICM). island of Ireland. Through ICM, Fane Valley has sheepmeat They also have 17 stores across NI processing capability in Belgium with A. Lonhienne supplying farm requisites with a com- and it also has abattoirs in the north of England prehensive website providing online access to these which supply carcases for processing in its Linden stores and a delivery service. Foods factory in Dungannon, Co Tyrone, all in The group employs 3,000 people, split evenly partnership with ABP. between the UK and Republic of Ireland/Belgium. 37

037-038 agribusiness.indd 37 06/05/2021 15:41:57 YEAR OF BREXIT

BORDERS HURT BUSINESS He accepts that the EU does not want to Given the nature of the business, it was little FUHDWHDSRVLWLRQZKHUHE\PHPEHUVFDQOHDYH VXUSULVHWKDW/RFNKDUW VoUVWFRPPHQWRQ DQGUHWDLQWKHEHQHoWVZLWKRXWWKHGRZQ Brexit was that borders of any type don’t sides, but the uniqueness of NI requires work, either on the island of Ireland or on proportionate controls, which enables trade between Britain and the island of trade to function without unnecessary Ireland. barriers. 5HZLQGLQJWRODVWDXWXPQDQGWKHGDLO\ If the EU and UK can get to a workable debate of will there or won’t there be a deal, DUUDQJHPHQWWKHQ/RFNKDUWLVRSWLPLVWLF KHZDVGHOLJKWHGWRZHOFRPHWKHGHDOWKDWGLG DERXWWKHLQGXVWU\DQG)DQH9DOOH\&RRS V HYHQWXDOO\DUULYHEHFDXVHGHVSLWHLWVVKRUWFRP position in it. ings, the alternative would have been worse. %DUULHUVDUHDQLPSHGLPHQWWRWUDGHDQG 7KH)DQH9DOOH\EXVLQHVVGHSHQGVRQVHDPOHVV HYHU\WKLQJWKDWFDQEHGRQHWRDYRLGWKHPKDVWR trade on the island of Ireland, and both ways with be done is his view. Britain, to function. 7KHPRVWKLJKSURoOHH[DPSOHRIWKLVZDVSURE Trevor PROBLEM WITH UNCERTAINTY ably providing beef for the State banquet during the Lockhart, Fane :KLOHWKHEXVLQHVVLVQRZDGDSWLQJWR%UH[LW/RFN royal visit to Ireland in 2011. Valley CEO. hart regrets the fact that there have been years of %HHIIURPD&R:H[IRUGIDUPZDVSURFHVVHGLQ OLPERZKLOHZHZDLWHGWRVHHZKDWLIDQ\GHDOZRXOG 6ODQH\EHIRUHFRPLQJQRUWKWR&R)HUPDQDJKIRU HPHUJHEHWZHHQWKH(8DQG8.SRVW%UH[LW WKHVDOWPRVVGU\DJLQJSURFHVVDQGoQDOFXWWLQJ KEY POINTS Business hates uncertainty and that is what Brexit and preparation in Kettyle Irish Foods, also part of FDXVHGVLQFHWKHUHIHUHQGXP,QSUDFWLFDOWHUPVWKLV WKH)DQH9DOOH\&RRS,QZKDWZDVDKXJHO\V\P ÔFane Valley KDVPHDQWFRPSDQLHVGHIHUULQJLQYHVWPHQWGHFL bolic and historic visit exclusively to the Republic of is a farmer- sions on large capital expenditure. This absence of ,UHODQGWKLVEURXJKWD1RUWKHUQ,UHODQGHOHPHQWWR owned co-op LQYHVWPHQWPHDQWWKDWFRPSDQ\GHYHORSPHQWKDV the occasion. that operates EHHQGHOD\HGDQGZKLOHWKHUHLVQRZDOHYHORIFHU across Ireland WDLQW\WKDWZLOOHQDEOHLQYHVWPHQWWRSURFHHGWKHORVW SILVER HILL DUCK and Britain. years are never fully recovered. 7KHH[DPSOHWKDW/RFNKDUWJDYHZKLFKEHVWGHP ÔIt has a joint k7KH%UH[LWRXWFRPHLVQ WSHUIHFWLWZDVQHYHU RQVWUDWHVWKHFRPSOH[LWLHVRIRSHUDWLQJHLWKHUVLGH venture in JRLQJWREHEXWDWOHDVWLWKDVEURXJKWVRPHFODULW\ of the Irish border, is Silver Hill Duck, whose factory meat process- DQGFHUWDLQW\y VLWVDORQJVLGHWKH1URDGRXWVLGH(P\YDOHLQ&R ing with ABP Monaghan. through Slaney GOVERNMENT SUPPORT 7KHSURFHVVEHJLQVZLWKHJJVIURP$XJKQDFOR\LQ Foods, ICM and Given that Fane Valley operates either side of the &R7\URQHJRLQJWRDKDWFKHU\LQ&R0RQDJKDQDQG Linden Foods. Irish border, Lockhart has an insight into how IURPWKHUHWKH\RXQJGXFNVDUHSODFHGZLWKJURZHU ÔIt wants JRYHUQPHQWLQWHUDFWVZLWKLQGXVWU\+HLVFRPSOL IDUPVPRUHRUOHVVHTXDOO\HLWKHUVLGHRIWKHERUGHU pragmatic and PHQWDU\RIWKH,ULVK*RYHUQPHQW VVWUDWHJLFSODQIRU 7KHVHIDUPVXVHPHDOVXSSOLHGIURP)DQH9DO proportionate DJULFXOWXUHDQGWKHLQGXVWU\LQYHVWPHQWSURJUDPPH OH\ VPLOOLQ2PDJK&R7\URQHDQGDOOGXFNVJRWR controls for announced at the end of 2020. (P\YDOHIRUSURFHVVLQJ trade between $VLPLODUSURJUDPPHLQ1RUWKHUQ,UHODQGDZDLWV 2QZDUGVDOHRIWKHGXFNLVWKHQVSOLWDOPRVW Britain and NI the updating of its last strategy for agriculture in 2012 HTXDOO\EHWZHHQ%ULWDLQDQG,UHODQGZLWKH[ that are risk- DQGXQWLOWKLVLVFRPSOHWHDQLQYHVWPHQWSODQIRU ported to the EU and beyond. based. industry is delayed. :KLOH/RFNKDUWXVHVWKLVDVWKHH[DPSOHWKDWEHVW )DQH9DOOH\PD\EHDIDUPHURZQHGFRRSZHOO LOOXVWUDWHVWKHFRPSOH[LWLHVRIFURVVERUGHUVXSSO\ into its second century of trading but it is its ability FKDLQVDPDMRUFRQFHUQLVWKHIXQFWLRQLQJRIWKHSUR WRHPEUDFHFKDQJHDQGDGDSWWRWKHFXUUHQWPDUNHW WRFROWKDWVHWVWKHUXOHVIRUPRYHPHQWIURP%ULWDLQWR DQGWUDGLQJFRQGLWLRQVWKDWDUHWKHEDVLVIRULWVVXV the island of Ireland. tained success. Like all of the large processors in NI, Linden ,QWKHEHJLQQLQJLWZDVDERXWFROOHFWLQJDQGSUR )RRGVWKHUHGPHDWSURFHVVLQJGLYLVLRQRIWKH)DQH FHVVLQJPLONORFDOO\DQGVHOOLQJWKHSURGXFHZLWKLQ 9DOOH\$%3SDUWQHUVKLSEULQJVFDUFDVHEHHIDQG WUDYHOOLQJUDQJHRIVPDOOORFDOFUHDPHULHV VKHHSLQIURP%ULWDLQIRUGHERQLQJDQGIXUWKHUSUR )DQH9DOOH\ZLWKGUHZIURPPLONSURFHVVLQJ cessing at their Dungannon factory. DQXPEHURI\HDUVDJRDQGIRFXVHGRQEXLOGLQJ The oats processing side of the business has also LWVEXVLQHVVDURXQGPHDWSURFHVVLQJDQGPLOOLQJ EHHQGLVUXSWHGZKLOHWKHFRQVXPHUDQGUHWDLOGLI DORQJVLGHDWKULYLQJIDUPUHTXLVLWHEXVLQHVVDFURVV oFXOWLHVKDYHEHHQZHOOGRFXPHQWHG locations in NI. NI PROTOCOL COVID-19 /RFNKDUW VYLHZRIWKH1,3URWRFROZKLFKFUHDWHV 7KHIDUPHUIDFLQJVLGHRIWKHEXVLQHVVOLNHWKHIRRG the unique trading position of NI with both the EU processing side, incurred extra costs in protecting DQG8.KDVWREHkULVNEDVHGZLWKSURSRUWLRQDODQG DJDLQVW&29,'EXW/RFNKDUWLVWKDQNIXOWKDWIDUP SUDJPDWLFFRQWUROVWKDWSURWHFWWKH(8VLQJOHPDUNHW ing and food processing was able to continue with SDUDOOHOWRRSHUDWLQJZLWKLQWKH8.PDUNHWy OLPLWHGGLVUXSWLRQXQOLNHPDQ\RWKHUVHFWRUVRIWKH He goes on to explain the big challenge at present HFRQRP\ LVLQERXQGIURP%ULWDLQWR1,EHFDXVHRIFRQWUROV 7KHUROORXWRIYDFFLQHVDQGWKHUHRSHQLQJRIKRV that were designed decades ago that didn’t foresee SLWDOLW\JLYHV)DQH9DOOH\RSWLPLVPIRUWKHUHPDLQGHU WKHVFRSHRIWHFKQRORJ\DVZHOODVEHLQJIRUDGLIIHU of this year, and if the EU and UK can agree a suitable ent purpose. and proportionate suite of border controls for trade 7KH\GRQRWUHpHFWFXUUHQWSURGXFWWUDFHDELOLW\RU in and out of Britain, the business is well placed to ,7V\VWHPV keep progressing. 38

037-038 agribusiness.indd 38 06/05/2021 15:42:06 IRISH farmersjournal.ie FARMERS JOURNAL

victory in the wrong game

Ian Proudfoot, global head of agribusiness, KPMG International, considers export challenges and the value of New Zealand’s success in conquering COVID-19

ntil recently, New Zealand The game we have played is one everybody was ranked as having the VWDUWHGSOD\LQJHDUO\LQDoQLWHJDPH\RXZLQ best health response to the by vanquishing the virus. COVID-19 pandemic of The result of this game has given the community any country in the world (it within our bubble a combination of comfort and has just been surpassed by complacency (so much so the incumbent Labour Singapore). A combination government won an unprecedented electoral major- of our geographical remote- ity in October 2020). It is a game premised on a belief ness, full border closure to that global norms will come back and will be what non-citizens and residents they were before. and a series of short, hard The challenge is that New Zealand is a nation lockdowns have enabled our that grows and sells food to the world and the government to deliver on an elimination strategy. industry is getting strong signals that “normal” This has allowed life to return to a high level of in our markets is very different to “normal” a year normality compared to the rest of the world. We are ago. We sense that the rest of world stopped playing ZRUNLQJIURPWKHRIoUFHWUDYHOOLQJIUHHO\DURXQGWKH our game months ago and recog- country, enjoying sports events and concerts and nised that COVID-19 is in fact an DEOHWRGLQHRXWZLWKRXWDQ\VLJQLoFDQWUHVWULFWLRQV LQoQLWHJDPHRQHZKHUHWKHUXOHV But normal is not normal and as we watch vac- FRQVWDQWO\FKDQJHWKHSOD\LQJoHOG cination levels rise around the world with no clear shifts and the participants evolve. timetable for our arms to be jabbed there is a grow- It is not a game about winning but one about LQJFRQFHUQDPRQJRXUIRRGDQGoEUHVHFWRUWKDWZH adapting quickly to new realities so that you can have played and won the wrong game. remain a strong and sustainable player in the 39

039-040 agribusiness.indd 39 06/05/2021 15:40:57 YEAR OF BREXIT

game in whatever the now normal reality is that the Managing the challenges world serves up to you. So what are the now normal realities that organisations around the world need to be thinking about as they seek to maintain and build The challenges we face cannot be eff ectively managed from within our international customer relationships in the world South Pacifi c bubble. As a result, the biggest unknown we currently as it is today, not how it was a year ago or how our face is what the runway looks like to reintegrate into the world. When intuition tells us normal should be? will we be vaccinated, when will our borders reopen and when can 7KHoUVWFKDOOHQJHDQ\H[SRUWHUUDLVHVUHODWHVWR we travel freely to engage face to face with customers and partners VXSSO\FKDLQDQGWKHVLJQLoFDQWSUREOHPVWKH\DUH around the world? Our success in eliminating COVID-19 and winning facing in getting product to a customer, regardless of our fi nite game will be worth nothing if we do not adapt quickly and where they are in the world. become a player in the infi nite game that is already the everyday ,QPRVWH[SRUWHUVKDGDURXQGFRQ reality for the rest of the world. oGHQFHWKDWWKHLUSURGXFWVZRXOGEHGHOLYHUHGRQ schedule despite the global supply chain for food DQGoEUHSURGXFWVEHLQJVWUHWFKHG You could be relatively certain that a container would be moved from A to B for the cost agreed and ,WLVDOVRPRUHZLGHO\DFNQRZOHGJHGWKDWDG would generally arrive on time. dressing these issues is not the sole responsibility That is not the case anymore. I have heard many of governments. Organisations are either part of the H[HFXWLYHVWDONDERXWWKHGD\WRGD\IUDJLOLW\RIWKHLU solution to these structural problems or they are supply chains in recent months. inherently part of the problem. Costs are higher, access to containers highly 7KLVUHTXLUHVDGLIIHUHQWOHQVWREHDSSOLHGWRWUDG UHVWULFWHGDQGFRROVWRUDJHFDSDFLW\LVPD[LQJRXW ing relationships, particularly with many suggesting UHJXODUO\2QVFKHGXOHGHOLYHULHVQRZVLWDWDURXQG that globalisation of the food system has contributed FOHDUO\LOOXVWUDWLQJWKHFKDOOHQJHVH[SRUWHUVDUH to inequitable food access. The need to invest in facing. WUDGHUHODWLRQVKLSVDQGGHPRQVWUDWHWKDWWUDGHGHOLY Assuming higher freight rates are here to stay and HUVSRVLWLYHEHQHoWVWRDOOKDVEHFRPHDSULRULW\IRU EHFRPHSDUWRIWKHQRZQRUPDO,H[SHFWH[SRUWHUV RXUH[SRUWVHFWRU to be challenging their business models and supply The Trade for All Agenda implemented by the NZ FKDLQVWRDVVHVVLIWKH\DUHoWIRUSXUSRVHLQWKLVQHZ JRYHUQPHQWLVIRFXVHGRQSURPRWLQJWKHEHQHoWVRI world. DUXOHVEDVHGWUDGHV\VWHPWRDOODQGLVEDFNHGE\LQL WLDWLYHVWKDWGHSOR\RXUDJULIRRGNQRZOHGJHDQGH[ INTELLECTUAL PROPERTY pertise to support marginalised communities within Consequently, the importance of intellectual our trading partners to produce their own food. property (be that genetics, growing systems or 7KHH[SRQHQWLDOOLIWLQWKHXWLOLVDWLRQRIGLJLWDO DOJRULWKPV DQGEUDQGVZLOOLQFUHDVHH[SRQHQWLDOO\ WHFKQRORJLHVLQWKHODVW\HDUKDVEHHQZHOOGRFX It is not impossible to envisage a situation where a PHQWHG,WKDVGUDJJHGWKHDJULIRRGVHFWRURQH WUDGLWLRQDOIRRGH[SRUWHUWUDQVIRUPVLQWRDOLFHQVRU of the last bastions of the analogue era, into the RIDQ,3EDVHGSURGXFWLRQV\VWHPDQGJHQHUDWHV digital age years earlier than it would have achieved their return from the efforts of farmers and growers XQGHULWVRZQVWHDP)RUH[SRUWHUVWKLVPHDQVWKDW around the world. FRQVXPHUVQRZH[SHFWDSURGXFWWRFDUU\DGLJLWDO The role of China in the global food system will footprint to support its provenance and provide full usually be raised in the same breath as supply chain traceability. It creates a wealth of new opportunities FKDOOHQJHV,WLVLPSRVVLEOHWRRYHUVWDWHWKHLQpXHQFH to utilise data to tailor product solutions and supply that the Chinese market has on global demand and FKDQQHOVWREHWWHUPHHWWKHQHHGVDQGH[SHFWDWLRQV pricing, even if you sell nothing to China. of consumers. African swine fever in the Chinese pig herd has GULYHQJOREDOSURWHLQPDUNHWVDV&KLQDVRXJKWLP CLIMATE ports to replace domestic production. Government While it dropped off the front pages over the last year, support for milk as a core element of a healthy diet WKHUHVSRQVHWRFOLPDWHFKDQJHUHPDLQVWKHHUDGH has underpinned dairy markets. On the other hand, oQLQJLVVXHWKDWWKHJOREDOFRPPXQLW\IDFHV:KLOH companies have had markets closed to them because 1HZ=HDODQGKDVDOUHDG\HQVKULQHGD]HURFDUERQ of political tensions between governments. In recent goal into legislation, work is ongoing on how the PRQWKV1HZ=HDODQGH[SRUWHUVKDYHZDWFKHGRQDV IRRGDQGoEUHVHFWRUZLOOSOD\LWVSDUW2XUOHJLVODWLRQ Australian wine, grain and red meat companies have recognises that not all greenhouse gases behave in seen Chinese markets evaporate as the governments KEY POINTS the same way in the long term and therefore adopts a of the two countries faced off over the source of the GLIIHUHQWDSSURDFKWRPHWKDQHDPXFKVKRUWHUOLYHG pandemic. This highlighted the narrow path that ÔNew Zealand gas which is inherent to pastoral animal agriculture. must be negotiated between traditional political isolated de- 2XUH[SRUWHUVKDYHVSHQWWKHODVWGHFDGHRUPRUH allies (particularly the US) and important economic spite COVID-19 responding to “food miles” claims which have been relationships, particularly China. victory. FRQVWUXFWHGEDVHGRQSHUFHSWLRQUDWKHUWKDQVFLHQ ÔChallenge WLoFDQDO\VLV)HDULVJURZLQJWKDWDSURGXFW VFDUERQ STRUCTURAL INEQUALITY in striking a footprint could soon become another mechanism Another now normal reality that organisations are balance with XVHGWRIDFLOLWDWHQRQWDULIIEDUULHUV DQGHYHQFDUERQ FRPLQJWRWHUPVZLWKUHODWHVWRWKHJURZLQJDZDUH China. import duties). ness and acknowledgement of the level of structural ÔClimate There is consequently a recognition that while inequality in society. This has been brought into change legislation may allow time for an economically sharp focus in the last year by the food inequity that remains era- SUDFWLFDOWUDQVLWLRQWKHUHLVDVLJQLoFDQWFKDQFHWKDW the pandemic has highlighted but also by the focus defi ning issue. market access may need faster action and product placed globally on the Black Lives Matter movement. innovation to retain a ticket to play. 40

039-040 agribusiness.indd 40 06/05/2021 15:41:06 SUSTAINABILITY AGENDA The need to tackle climate change has made sustainability an essential element of every business. Being sustainable requires varying degrees of reimagining what a business is about and one of the most striking is Bord na Móna, whose core business has transcended from peat harvesting to renewable energy. Irish agriculture and food production has already travelled a long way but the road to sustainability is never-ending and the journey will continue.

041 agribusiness.indd 41 07/05/2021 10:46:28 SUSTAINABILITY chain TRACK

Short food supply chains and direct-to-consumer selling are often touted as solutions to weak farm incomes. But does the model add up? Lorcan Allen reports

t’s mid-March and lambing season is in full swing on Kilmullen Farm in Newcastle, Co Wick- consumer can really add to the workload. It means low. Owned by the Bourke family, Kilmullen Farm is taking on the role of farmer, processor, marketer, one of the best-known sheep farms in Ireland. logistics specialist and sales agent all in one. For Eamon Bourke, the third generation of his k:H UHYHU\RSHQZLWKRXUFXVWRPHUVDERXWSULF- family to farm at Kilmullen, March will be his busi- ing. Last year we charged €195 for a whole lamb and est time of the year on the farm as he busies himself despite the exceptionally high factory prices this ODPELQJGRZQKLVpRFNRIHZHV+RZHYHUWKHODPEV year, we are adding only a small increase. It will be born this spring on Kilmullen Farm will not go to the based on weight with a 19kg lamb €190, €20kg €200 local meat factory. and so on.” Instead, these lambs are raised and fattened 7KHUHZLOOEHYHU\OLWWOHSUHPLXPWKLV\HDUWR before they are ready to be butchered directly on the UHpHFWDOOWKHH[WUDZRUNLQYROYHG farm. The Bourkes package and box their own lamb +RZHYHUIRUWKH%RXUNHIDPLO\WKHGLUHFWWR DQGKDYHEHHQVHOOLQJGLUHFWWR,ULVKFRQVXPHUVIRU FRQVXPHUPRGHOFOHDUO\SURYLGHVRWKHUUHZDUGVWKDW 10 years. are much harder to measure. (DPRQ VZLIH0DUJDUHWLVWKHGULYLQJIRUFH k,MXVWORYHDQGYDOXHWKHFRQQHFWLRQZHKDYH behind Kilmullen Farm’s direct-to-consumer with our consumers. I get such a huge buzz from IRRGEXVLQHVVDQGVKH VYHU\KRQHVWDERXWWKH meeting our customers at the farmers’ market. At demands of this business model. WKLVVWDJH,NQRZWKHLQGLYLGXDOSUHIHUHQFHVRIPDQ\ “There are plenty of times when I ask myself are RIWKHP7KHUHLVDZKROHFRQYHUVDWLRQWKDWJRHV we crazy to be doing what we’re doing,” says Marga- with each order of lamb. We get to share in their spe- ret. cial occasions, the reason for the barbecue, we trade k:HFRQWURODEVROXWHO\HYHU\WKLQJLQWKHSURFHVV recipe tips and talk of life. These are the experiences of producing our lamb. We raise, butcher and pack- you cannot put a price on,” says Margaret. age all of the lambs. We do all of the marketing and “So for me the rewards of this business model WUDQVSRUWDQGZHSD\WKHIHHVWRKDYHDVSRWDWWKH are twofold. It allows us to be the price-setter but farmer markets we go to,” she adds. WKHUHLVGHoQLWHO\DOLIHVW\OHHOHPHQWWRWKLVEHFDXVH )DUPLQJLVDODERXULQWHQVLYHRFFXSDWLRQDWWKH it allows us to connect with people. I’m so proud of best of times but selling your produce direct to the the lamb cuts we produce and there’s a great thrill 42

042-044 agribusiness.indd 42 07/05/2021 10:48:23 IRISH farmersjournal.ie FARMERS JOURNAL

Given the persistently low incomes for most Irish farmers, particularly in beef and sheep enterprises, many commentators believe very short supply chains or the direct to consumer business model is the solution for Irish farmers seeking to earn a better income from their farm. By bypassing the processors, retailers and various other middle men dotted throughout the food supply chain, they argue farmers will be able to set their own prices for their produce and make a sustainable return for their products, just like the Bourke family. However, a new report by Agriculture Stratégies, a French think-tank on agriculture and food policy, reveals short supply chains are not delivering the superior returns for farmers that might be expected. According to the report, direct selling to consumers does allow farmers to get a premium sales price for their produce, albeit there is a ceiling on how much any consumer is willing to pay for food given the competitiveness of the sector.

It allows us to be the price-setter but there is defi nitely a lifestyle element to this because it allows us to connect with people

Despite the available premiums, the report concludes that most of the higher sales price is consumed in the increased production, transport and marketing costs for the farmer, which the consumer does not see. Alessandra Kirsch is a director of research at the Agriculture Stratégies think-tank and author of the report. Speaking to the Irish Farmers Journal, Kirsch says that there is a perception that direct-selling to consumers or very short supply chains are the solution to the income challenges in farming. in the feedback you get from However, she says this perception ignores customers about your own the increased costs placed on the farmer, not produce,” she adds. to mention the added labour required to pro- Many Irish farmers will duce, process, package and then sell the food. identify with this pride in the food they produce but Margaret getting the direct feedback and interaction with the and Eamon FRENCH STUDY end consumer is obviously something few farmers Bourke, with As part of her study into this area, Kirsch analysed ever get to experience. their children, WKHSURoWDELOLW\RIDQXPEHURI)UHQFKEHHIIDUPHUV Direct selling to consumers via farmers’ markets Samuel and who were selling beef direct to consumers (Table 1 – and local supply chains is still relatively niche in Ire- Eleanor, page 44). land. Given Ireland’s small population and the food operate Her research shows these beef farmers were able sector’s focus on supplying global export markets, Kilmullen Farm, to achieve a sales price of €12.16/kg of meat from the majority of farmers supply their produce to the a direct-to- selling direct to consumers, which is a little under local co-op or meat processor. consumer food €4,200 for a 500kg carcase animal. In contrast, the prevalence of short food supply business in Co Based on the French beef price of €3.75/kg this chains in many European countries is much higher. Wicklow. year, the farmer would have taken home just under According to a 2016 report by the European Parlia- €1,900 if he/she had sold the ment, about 15% of EU farms sell more than half animal directly to the factory. their produce directly to consumers. So on a turnover basis, direct Greece is the EU member state where direct-sell- selling looks impressive. ing to consumers is most prevalent, with 25% of all However, when the extra costs farms selling at least half their production direct to of the business consumer. In France, 21% of farmers sell at least half model are in- of their produce direct to the consumer or within cluded, the added short food supply chains. value is much less. Kirsch’s research In contrast, less than 5% of Irish farmers sell some shows the additional cost to these of their produce directly to the consumer or within farmers to process, package, very short supply chains. transport and market their 43

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own beef was just over €1,600, or €3.25/kg, per animal on average. Once all the additional costs are included, French farmers who operate a direct-to-consumer business model make an extra €500/head, which is less than an extra €1/kg on their base beef price if they had sold the animal directly to a factory. And while a €1/kg price increase is not to be dis- missed in the beef sector, it is important to note how much extra workload and effort is required on the part of the farmer to achieve it. “In agriculture, the question of working time is often overlooked by farmers as many of them never count the cost of their own labour,” says Kirsch. “This is a common trait among farmers because they are passionate about what they do. They do not see it as a profession where you count your hours,” she adds. Kirsch says French consumers who buy directly from farmers are willing to pay some level of a pre- KEY POINTS job to be done here is to make the main food supply mium but they still expect food to be priced broadly chain work. Forcing farmers to work even harder for similar to what they would pay in a supermarket ÔDirect sales a small premium in order to make a living is not the given the elimination of middle men in the supply from farm to answer,” says Kirsch. chain. consumer “In France, we have a new law which is designed creates a to stop food being sold for prices below the cost of CHEAPER premium but production. But French supermarkets don’t want to In many cases, she says, many consumers believe adds a huge increase the price of food for their consumers so this food they buy directly from farmers should be workload with law is having little impact. The only area it seems to cheaper than in the supermarket because they think processing, be working is for the price of milk,” she says. there are less people taking a cut along the chain. marketing and “Consumers do not see the increased work- logistics. CONSUMER LABEL load, production costs and risks for the farmer in ÔReport by France has also introduced a new consumer label this model so their willingness to pay a premium is French think- on certain food items which reads “C’est qui le limited,” says Kirsch. “Many consumers ignore the tank shows Patron?” or “Who’s the boss?” in English. The aim of economies of scale in the modern food industry that short this new label is to try to empower French consum- which makes food so affordable,” she adds. supply chains ers to choose food products with this label, which Like the Bourke family in Co Wicklow, farmers aren’t the guarantees a fair share of the price goes direct to the right across Europe engage in the direct-to-consum- answer to the primary producer. er business model because they enjoy the connec- farm incomes Kirsch says there needs to be more initiatives like tion with the consumer and having control of their problem. this to try to solve the problems in the traditional own business. ÔValue of food supply chain instead of telling farmers they However, the volumes sold via direct-selling or time spent must invest in a direct selling business model. local supply chains will always be small. In Brussels, working is of- The EU has made a start to tackling this incred- the current European Commissioner for Agriculture ten overlooked ibly complex problem by introducing a directive on and Rural Development Janusz Wojciechowski re- as many farm- unfair trading practices. However, there is still a long peatedly talks up the merits of local supply chains as ers don’t count road to travel before equilibrium is restored in food the solution to weak farm incomes across Europe. the cost of pricing. Kirsch rejects this idea and says European farm- their labour. Affordable food is hugely important for the 500m ers should not be forced down this road as a per- consumers that live in Europe. Yet a balance has to ceived solution to low farm incomes, especially with be found between affordability for the consumer all the increased costs and risks that come with it. and sustainability for the farmer. Otherwise, the “The EU is not showing the courage needed to family farm model of food production in Europe will tackle the real problems with farm incomes. The real struggle to survive for much longer.

Table 1: Profi tability of a number of French beef farmers who were selling beef direct to consumers

Farmer 1 Farmer 2 Farmer 3 Farmer 4 Average Carcase weight (kg) 413.2kg 490.8kg 555.2kg 557kg 504.05kg Total additional expenses per kg of carcase €3.42 €3.01 €2.96 €3.58 €3.24 Sales price excluding taxes (€/kg) €13.08 €11.37 €11.37 €12.80 €12.16 Meat effi ciency (meat weight/carcase weight) 65% 70% 69% 67% 68% Gross margin from direct selling (€/kg of carcase) €5.08 €4.94 €4.91 €4.99 €4.98 Added value from direct selling €448 €463 €506 €550 €492 44

042-044 agribusiness.indd 44 07/05/2021 10:48:45 IRISH farmersjournal.ie FARMERS JOURNAL BORN a champion entrepreneur

Prior to his tragic death just over two weeks ago, Denis Lynn spoke to Lorcan Allen about the Finnebrogue story. Following consultation with his family it was felt that the interview should be carried in this year’s Agribusiness report in memory of Denis. He was described by Stuart Irwin from KPMG, our partners in this report, as “one of a kind and an archetypical entrepreneur, an absolute visionary in the NI agri-food sector whose energy and enthusiasm will be sorely missed”. The Irish Farmers Journal and KPMG extend our condolences to his family and everyone at Finnebrogue – Justin McCarthy

he story of Northern Ireland EVOLUTION artisan food company Finn- In a bid to turn things around, the second evolution ebrogue is one of evolution. In of Finnebrogue took place – one which would be the mid-1980s, founder Denis GHoQLQJIRUWKHFRPSDQ\ Lynn originally started off the “We were making venison sausages and burgers. business importing French fries from But the market was too small to gain any real scale. the Netherlands. So, in 2006, we decided to try making pork sausages After the best part of a decade as this would allow us to utilise our equipment LPSRUWLQJ)UHQFKIULHVWKHoUVWHYROX PRUHyKHVD\V tion of Finnebrogue took place as Lynn “I didn’t know how to make pork sausages when decided to try his hand at venison. ZHoUVWVWDUWHG%XWQRWNQRZLQJPHDQW,FRXOGVHH The move into venison was clearly a things differently. When I look at any product I ask major learning curve for the Co what’s wrong with it and how can it be made Down native. WKHEHVWLWSRVVLEO\FDQEH"yVD\V/\QQ “I lost a fortune in venison. I thought I was go- Finnebrogue enlisted the help of Bernard ing to lose the business and my home farm. I really Mense, a German master sausage-maker, to help underestimated the overheads and costs of the busi- develop a new, premium product ness. One thing I’ve certainly learned from that time for the UK and Irish market. ZDVWKDWo[HGRYHUKHDGVNHHSPRYLQJyVD\V/\QQ Taking this new approach to 2YHUDVL[\HDUSHULRG/\QQVD\VKLVYHQLVRQ making sausages, Finnebrogue business had racked up £200,000 (€235,000) in losses, produced a new high-end range which was enormous money for a privately owned of sausages which Lynn describes as having more business. By 2006, he says the business had run out kMXLFLQHVVDQGVXFFXOHQFHyEDNHGLQ of cash and the support of the banks. 7KHFRPSDQ\ZRQLWVoUVWVXSSO\FRQWUDFW 45

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for its sausages in 2006 with UK retailer Marks & Spencer (M&S) and the new range performed really well. By 2009, Finnebrogue had secured the entire contract to supply premium sausages to M&S stores throughout the UK and Ireland. Interestingly, while Finnebrogue quickly established itself as a premium producer of artisan sausages, the company held back from taking the obvious next step – producing a range of rashers. “I was really unhappy with the nitrates issue in pork. And I didn’t want to start producing bacon rashers until we could get around that,” says Lynn. After years of research, Lynn eventually came across a Spanish company called Prosur, which had GHYHORSHGDQDWXUDOpDYRXULQJPHWKRGIRUEDFRQ using fruits and spice extracts. Collaborating with 3URVXU)LQQHEURJXHoQDOO\ODXQFKHGLWVUDQJHRI nitrate-free bacon in 2018 under a brand called “Naked”. The company has since extended the brand to its range of sausages and cooked ham. The Naked brand is just over two years old but Lynn estimates that it is valued at more than £30m (€35m) already. GROWTH The rapid growth in the Finnebrogue business can be FOHDUO\VHHQLQLWVWRSOLQHoJXUHV,QZKHQWKH business had just won the entire contract to supply Finnebrogue it with a range of eight new plant-based products, M&S with its top-tier range of sausages, Finnebrogue sausages. including meat-free kievs, nuggets, goujons, rashers had annual sales of £3.5m (€4.1m). and mince. This year, Lynn says the business will generate “We’re going to produce meat-free alternatives to VDOHVRIdP çP ZKLFKUHpHFWVDFRPSRXQG sausages, rashers, beef and chicken. But for plant- annual growth rate of 38% for the past 12 years. based alternatives to succeed they need to perform Keeping up with this pace of growth was something like traditional animal-based products, be cheaper of a nightmare, admits Lynn. and be just as nutritious,” says Lynn. In the last six years, Finnebrogue has invested “Right now, meat and dairy alternatives cost three £90m (€106m) in capital projects to build extra ca- times the price of traditional products. But every pacity across its network of processing. week they are getting cheaper. And they are also get- The most recent investment is a £30m (€35m) ting better and getting more nutritious,” he adds. capital project to build a new facility to produce plant-based alternatives to traditional meat products. INVESTMENT For Lynn, the plant-based revolution in food will Underlining the potential growth in demand for be the third major evolution of Finnebrogue. The plant-based foods, Lynn says Finnebrogue’s new company has launched a new range of plant-based purpose-built facility for making plant-based will alternatives to traditional chicken, pork and beef have the option to double capacity over the coming products under its Naked brand. years as the market grows. Earlier this year, Finnebrogue announced it had Lynn says he fully intends for Finnebrogue to won a new contract with UK retailer Asda to supply tackle the likes of Impossible Foods and Beyond Meat head-on over the coming years as the market for plant-based foods expands. However, while Finnebrogue is clearly targeting plant-based as a market for future growth, Lynn believes traditional meat will still be an important part of human diets. “I think there will still be a market for meat in the future but it will be really high-quality meat. I am already eating less meat because I believe it is better for me and better for the planet. But when I do eat meat I want it to be really high-quality,” says Lynn. $VSDUWRIWKLVpLJKWWRSUHPLXPSURGXFWV)LQQ ebrogue is on the verge of publishing environmental scores on all of its front of pack labelling from this year. “We’ve got ourselves into a position where we’re going to be able to start publishing enviro scores on all our products later this year. Some of the largest food companies in the world are really engaged with us on this,” says Lynn. “I love eating pork but we need to start thinking Finnebrogue factory. about what an eco-pig would look like in terms of its 46

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KEY POINTS impact on the environment. Or what does an eco- cow look like? Ô Started with “I think that’s where there will still be a market importing for really high-quality meat products that have chips before minimal impact on the environment. That might moving into frighten farmers but Ireland is perfectly set up to take venison. advantage of this because of the grass-based farming Ô Lost money, system,” he adds. contract for premium FUTURE sausages with Lynn came to the meat industry as an M&S was the outsider, which allowed him to see things big break- differently and create the through. differentiated, high- Ô Future meat end products that has market will set his company apart be for for the last decade. high-qual- His ability to see ity meat things differently means alongside he does not see plant- plant- based foods as a threat to based his core pork business today. alternatives. Instead, he has jumped at the opportunity this new market will present and invested heavily to get the capacity in place to meet the future demand growth he believes will inevitably come for plant-based alternatives. “I honestly don’t see a slowdown coming. The growth story of this business is only start- Finnebrogue originally started ing,” says Lynn. off its business importing French fries from the Netherlands.

045-047 agribusiness.indd 47 07/05/2021 10:56:02 SUSTAINABILITY Brown TO GREEN

In a wide-ranging interview, Bord na Móna chief executive Tom Donnellan outlines his vision for the future of the company and how it can help tackle the climate crisis. Lorcan Allen reports

hen Tom Donnellan joined Bord na Móna in 2018, the company was facing a very uncertain future. The growing climate crisis meant the days were numbered for its core business of harvesting peat, which had become unsustainable on a number of fronts. 3ODQQLQJSHUPLVVLRQIRUWKHSHDWoUHG Bord na Móna, Donnellan recognised that he had to power stations in the midlands was coming JHWWKHFRPSDQ\EDFNWRDoQDQFLDOO\VRXQGSRVLWLRQ to an end and the public service levy (PSO) oUVW that effectively supported Bord na Móna was At the time, Bord na Móna’s horticulture busi- also due to end. ness and fuels business (peat briquettes) were losing On top of these major headwinds, the com- money, while the company’s core business of selling pany was haemorrhaging money due to an unbal- SHDWWRJHQHUDWHHOHFWULFLW\ZDVRQO\SURoWDEOHGXHWR anced cost structure and the Irish Government had the PSO levy. Mostly, the company’s cost structures just introduced a carbon tax on all fossil fuels. It was had grown to an unsustainable level. a perfect storm for a company that is almost as old as the Irish state. PROFITS “When I joined Bord na Móna, the company In 2017, the year before Donnellan joined, Bord na was at a crossroads. There was a real concern as to Móna had made an operating loss of €6.1m, while whether it could continue as an entity. Many felt that pre-tax losses were close to €15m. climate change was the death knell for the company In a bid to turns things around, Bord na Móna and they couldn’t see a way forward,” says Donnel- underwent a major restructuring programme in lan. DQGDVLWVWULSSHGRXWRIo[HGFRVWV “At the time, the strategy was to keep harvesting from the business, an unusual step for a semi-state peat up until 2030. That was plan A. And plan B was company. to keep harvesting peat after 2030. There was no vi- 7KHPDMRULW\RIWKHVHo[HGFRVWVZHUHUHODWHGWR sion for the company outside of peat,” he adds. staff, as the company had become “top heavy” with A native of Co Clare, Donnellan joined Bord na too many management layers. Móna from the private sector having worked most Over 400 employees left the company as part of recently for Alcatel Lucent, a France-based telecoms a voluntary redundancy scheme, with half of these giant owned by Nokia. However, before he could redundancies in some form of management role. For begin to think about a new strategic direction for an old institution like Bord na Móna this restructur- 48

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ing process came as something of a shock, particu- loads of opportunities. We developed a new strat- larly for local communities in the midlands. egy for the company called “Brown to Green” and Between 2018 and 2019, Bord na Móna incurred repositioned Bord na Móna as a climate solutions almost €80m in restructuring charges related to business,” says Donnellan. redundancies and the closure of certain operations. As part of this new strategy, Bord na Móna will The business is now on a much sounder footing and have four new business units dedicated to: Donnellan said he expects Bord na Móna to deliver Ô Renewable power generation. DVLJQLoFDQWSURoWIRUZKLFKZLOOEHWKHoUVW Ô Resource recovery and the circular economy. SURoWLQIRXU\HDUV Ô Peatland restoration and management. Donnellan says Bord na Móna will also be debt Ô New business and innovation. IUHHWKLV\HDUIRUWKHoUVWWLPHLQWKHFRPSDQ\ VKLV tory, having slashed its net debt from over €170m just RENEWABLE POWER four years ago. Transitioning into renewable power generation was :LWKWKHoQDQFHVRI%RUGQD0QD VORZO\KDSSHQLQJZKHQ'RQQHOODQoUVWDUULYHGDW stabilised, Donnellan and his team Bord na Móna. The company operated a number of set about creating a new strate- wind farms around the country, was beginning to gic direction for the company. develop its biomass capacity to fuel its power station “Climate change was seen in Edenderry, Co Offaly, and also owned a 5.6MW by many as a threat to Bord na biogas plant in Kildare. Móna but it actually presents However, the new strategy for Bord na Móna has seen a step change in its ambitions in this area. k:H YHJRQHIURPEXLOGLQJDQHZUHQHZDEOH project every four years to now building two projects Tom Donnellan, chief HYHU\\HDU:H YHGRXEOHGWKHVL]HRIWKHWHDPLQRXU executive of Bord na Móna. renewable power division to 200 and these are all \ Damien Eagers Photography really high-skilled jobs,” says Donnellan. 49

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With the fi nances of Bord na Móna stabilised, Tom Donnellan and his team set about creating a new strategic direction for the company.

“The goal is to develop a really diverse portfolio of close to 270MW per annum. renewable energy assets over the next decade. These The company also received planning permis- will be a mixture of wind, solar, battery and biogas sion last year to begin work on a 90MW wind farm at assets,” he adds. 'HUU\DGGLQ&R/RQJIRUGZKLFKZLOODOVREHWKHoUVW This year, Bord na Móna is in the process of con- wind farm to include a battery storage facility on site. structing a 75MW wind farm at Cloncreen, Co Offaly, Bord na Móna has also started the planning following an investment of €100m, while the second process for an 85MW wind farm between Birr and phase of its wind farm in Oweninny in Co Mayo is Cloghan in Co Offaly, while it is at the pre-planning also nearing completion. stage for two new wind farms at Ferbane and The Oweninny wind farm is a 50-50 joint venture Edenderry in Co Offaly and another planned for Bal- EHWZHHQ%RUGQD0QDDQG(6%7KHoUVWSKDVHRI livor in Co Meath. the farm was completed in 2019 and has capacity for Outside of wind, Donnellan says Bord na Móna is 93MW of renewable power. getting ready to begin construction of a new 807ha When the second phase is completed, the renew- solar farm at Timahoe in Co Kildare, which would able energy capacity of the wind farm will increase to produce up to 70MW of renewable power. The com- more than 170MW per annum. pany is also planning a new large-scale biogas facility A third phase is also planned for Oweninny, which at Cúil na Móna bog in Co Laois, which would be would further increase its renewable energy capacity able to produce renewable bio-methane from up to WRIODQGoOOZDVWH Meanwhile, at its Edenderry power plant, Bord na Móna hopes to continue producing electricity at the facility after its current planning expires in 2023. New business From 2023, the company will not be allowed to burn peat at the facility and is instead aiming to use 100% biomass to generate electricity at Edenderry. The fi nal division of the repurposed Bord na Móna This would eliminate the need for peat altogether will focus on new business developments and and see 850,000t to 900,000t of biomass used every investments in innovation. year as feedstock for the plant. The company is opening a new “green innova- Bord na Móna has submitted its planning ap- tion hub” at Lough Boora in Co Off aly, which will plication to continue to operate the Edenderry power be backed by the EU’s Just Transition fund. Don- plant after 2023 solely on biomass but this is likely to nellan says Bord na Móna has a long track record face opposition from environmental groups. of innovation and hopes the new green hub will be a centre for incubating new business ideas and CIRCULAR ECONOMY innovations linked to sustainability and climate When Donnellan and his senior management team solutions. stood back and looked at Bord na Móna, the other The green innovation hub is backed by Enter- DUHDZKHUHWKH\VDZVLJQLoFDQWJURZWKRSSRUWXQLW\ prise Ireland and will also include collaborations was in its waste management business AES. At the from Athlone IT, Maynooth University, Limerick time, many within the company saw AES as non-core IT, Kilcormac Development Association and Off aly to Bord na Móna and felt it should be sold. County Council. Instead, Donnellan has doubled down in this area and sees Bord na Móna as being a major consolidator 50

048-051 agribusiness.indd 50 06/05/2021 15:34:19 IRISH farmersjournal.ie FARMERS JOURNAL

in the waste management industry over However, the waste management sector the coming years as the concept of the in Ireland remains highly fragmented circular bio-economy gains momen- today with a lot of family businesses tum. operating throughout the country. Today, the company operates a Given its scale, Donnellan feels Bord traditional waste collection service na Móna is perfectly placed to act as a and two major recycling plants. consolidator in this sector as smaller, 7KHoUVWUHF\FOLQJSODQWLVORFDWHG family-owned businesses are unlikely in Drogheda and recycles used tyres to be able to fund the required capital into a product called crumb rubber, investments in new technology that will which is then used in astro turf pitches be needed to continue in the industry. and other similar surfaces. This business now recycles half of the PEAT 1.5m used car tyres in Ireland every year and Nothing illustrates the unfolding transition at has also developed schemes to help farmers Bord na Móna like the changes that are happen- dispose of old tyres that may have once been used to ing on the 80,000ha of bogs it still owns today. cover silage pits. At its peak, Bord na Móna harvested up to 6.5m The second recycling business operated by Bord Bord na Móna tonnes of peat every year. The majority of this peat na Móna is based in Littleton in Co Tipperary at the wind farm. was used to fuel the power stations in the midlands site of an old peat briquette factory. This facility has but it was also used to create peat briquettes and WKHFDSDFLW\WRSURFHVVWRISODVWLFoOOHYHU\ provided an important raw material for the horticul- year and is currently expanding to include recycling ture sector. capability for bottled plastic. At the start of this year, Bord na Móna formally Outside of recycling, AES operates the largest announced it had ceased all peat harvesting opera- ODQGoOOVLWHLQ,UHODQGDW'UHKLG&R.LOGDUHDQG tions. The value of Ireland’s peatlands is now clearly DQRWKHUODQGoOODW&¥LOQD0QDLQ/DRLV linked to their capacity to act as a vast carbon sink. The company aims to transform its Drehid site Over the coming years, Bord na Móna will invest LQWRZKDW VNQRZQDVDkVXVWDLQDEOHODQGoOOyZKHUH €126m in an unprecedented bog rewetting pro- all waste is stored in a lined cell structure that programme across 33,000ha (82,000 acres) of land.

tects the natural environment while also capturing The company aims to trap 109m tonnes of C02 the naturally occurring gases from the waste to be back into its peat soils after decades of draining and used as renewable biogas. harvesting. Donnellan believes this new division of Bord na Móna already has a biogas facility up and Bord na Móna will be key to its success as it seeks to running at Drehid and it is now planning a second reposition itself as a climate solutions business. ELRJDVSODQWDWLWV/DRLVODQGoOO Alongside this, Bord na Móna has said it will This concept of producing renewable energy from KEY POINTS cease making peat briquettes in the coming years, waste is an important part of Bord na Móna’s strat- Ô Traditional which are hugely popular with Irish consumers. egy for its waste management division as it feeds into business loss- However, the company says it has recently devel- its broader strategy for a circular economy. making. RSHGDQHZkJUHHQEULTXHWWHyPDGHIURPUHQHZDEOH The entire waste management industry is chang- Ô €80m biomass. ing rapidly thanks to technological advancements. restructuring On the horticulture side, Donnellan says a 8SWRQRZ,UHODQGKDVH[SRUWHGDVLJQLoFDQWSRUWLRQ costs but debt QXPEHURILWVPDMRUUHWDLOFXVWRPHUVLQWKH8.DQG of all its waste, with most of its plastic recyclables free in 2021. abroad have been seeking an alternative to tradi- shipped overseas. Ô Goal to de- tional peat for growing plants for the past number of The EU is clamping down on member states velop diverse years. H[SRUWLQJWKHLUZDVWHPHDQLQJVLJQLoFDQWLQYHVW- portfolio of And while peat is still the key input for the ment will be required in the Irish waste management renewable horticulture sector today, renewable forms of plant sector over the coming decade to build new waste energy. compost are coming on stream that will eventually processing or recycling facilities. displace traditional peat once stocks run out.

funnel money into green or sustainable today are looking for,” he says. FUTURE business opportunities. Overall, Donnellan’s goal is to bring While he’s only been with the company As part of this capital investment Bord na Móna full circle where it will be for three years, Tom Donnellan has programme, Donnellan expects employ- a fully fledged climate solutions busi- already achieved a lot at Bord na Móna. ment levels in Bord na Móna to increase ness. With the company now in a healthy back to about 2,000 people from its As of today, about 75% of the com- financial state, Donnellan is planning current level of 1,500, which would be pany’s turnover comes from renewable a €1.6bn programme of capital invest- an important boost to the midlands energy and sustainable products but ments over the coming decade to drive economy that has so depended on the Donnellan says this figure will have the required change in Bord na Móna as company for many generations. reached 100% by 2025. part of its “Brown to Green” strategy. “The midlands of Ireland is part of It still has a road to travel but if Bord the DNA of this company. There’s great na Móna completes its transition to the CAPITAL loyalty to Bord na Móna from communi- climate solutions business as laid out in Raising the required capital doesn’t look ties here and we have a responsibility Donnellan’s “Brown to Green” strategy, like it will be an issue for the company to be more relevant than ever to those it certainly can lay claim to being one of with Donnellan reporting really strong people. We want to be a provider of re- the most impressive business transfor- interest from financial markets eager to ally high-value jobs that young people mation stories in Irish history. 51

048-051 agribusiness.indd 51 06/05/2021 15:34:27 SUSTAINABILITY

Solving the ammonia c nundrum

Irish agribusiness Easyfix built its success on best-in-class animal welfare solutions. Now it is turning its attention to the sustainability agenda, writes Lorcan Allen

he 1990s was a time of enor- In particular, a building boom took off within mous change in Ireland. After Irish agriculture as farmers began to invest in proper centuries in the doldrums, KRXVLQJIDFLOLWLHVIRUOLYHVWRFNIRUWKHYHU\oUVWWLPH an economic boom took off The advent of the slatted shed in Irish farming was in Ireland as our economy a crucial turning point in terms of animal welfare, began to change dramati- manure management and grassland farming. cally. Fuelled by foreign direct The installation of proper winter housing was par- investment by some of the ticularly important for Irish farmers in the western world’s largest multination- part of the country, where heavier rainfall typically als, Ireland emerged as one results in longer periods indoors for livestock. of the world’s fastest-growing economies in the world dur- INNOVATION ing the 1990s. Seeing all these concrete slatted tanks going up on The nature of employment also changed with a KEY POINTS farms all around him, Galway native Michael Earls much greater emphasis on highly skilled roles that began thinking about the next logical question – was hadT not existed previously. Even the Irish national Ô Rubber- a cow really designed to be standing on concrete slats football team reached levels that had previously been covered slats for prolonged periods of the year? XQLPDJLQDEOHDVWKH\TXDOLoHGIRUWKHDQG were slow to With this question in mind, Earls began experi- World Cups. catch on with menting in the mid-nineties with rubber slats on his And just as every other area of Ireland was Irish farmers. home farm in Athenry, Co Galway. After much trial FKDQJLQJVRWRRZDV,ULVKDJULFXOWXUH7KHLQpRZRI Ô Solving am- DQGHUURUKHHYHQWXDOO\GHYHORSHGWKHoUVWLWHUDWLRQ European funding into Irish farming over the 1980s monia problem RIZKDWPRVWIDUPHUVNQRZWRGD\DVWKH(DV\o[VODW and 1990s via the Common Agricultural Policy (CAP) on Irish farms rubber system. UHVXOWHGLQVLJQLoFDQWLQIUDVWUXFWXUHLQYHVWPHQWRQ will be tricky. (DUOVSDWHQWHGKLVQHZGHVLJQDQG(DV\o[ZDV farms up and down the country. born as a company in 1996. This year, the company 52

052-054 agribusiness.indd 52 06/05/2021 15:32:22 IRISH farmersjournal.ie FARMERS JOURNAL

celebrates 25 years in business. It has grown from a one-man operation based out of a farmyard to a business that employs almost 50 people and has export sales in over 60 global markets. Indeed, almost two-thirds of the company’s sales today come from export markets. 'HVSLWHLWVJOREDODSSHDOWKH(DV\o[ slat rubber system wasn’t an easy sell at oUVWVD\V1LDOO(DUOVVDOHVPDQDJHUZLWK (DV\o[ “Back in the 1990s, most Irish farmers were just so happy to have a slatted shed for their cattle. The idea of rubber slats ZDVTXLWHDGLIoFXOWVHOODWWKHWLPH%XW Irish farmers really care about the welfare of their livestock and we slowly changed their mindsets about rubber slats over the years,” says Earls. Having steadily built up the business LQ,UHODQG(DV\o[JRWLWVoUVWRSSRUWXQLW\ to export in the early 2000s when it won VRPHEXVLQHVVLQWKH8.DQGWKH1HWKHU lands. However, it wasn’t until 2008 that WKHFRPSDQ\JRWLWVoUVWELJEUHDNLQWHU nationally when it was asked to take part in a study on veal production systems by Wagenin- ABOVE: JHQ8QLYHUVLW\LQWKH1HWKHUODQGV Easyfi x feed ANIMAL WELFARE barriers. Anyone who has any experience of agriculture in WKH1HWKHUODQGVZLOONQRZKRZDQLPDOZHOIDUHLV LEFT: by far the biggest concern among Dutch consum- Easyfi x HUV$VVXFK(DV\o[ZDVDVNHGWRSDUWLFLSDWHLQWKH mats. Wageningen study to trial its rubber slats from an animal welfare and performance perspective. “Animal welfare is a huge concern for Dutch consumers, particularly in its veal industry. We agreed to take part in the Wageningen study and our slat rubber system would have got a lot of recognition from the results of that study,” says PJ %XUNHVDOHVGLUHFWRUZLWK(DV\o[ In the years that followed the release of WKH:DJHQLQJHQVWXG\(DV\o[EHJDQWR attract international customers from all over the world, including farming powerhouses such as the US and Germany. The company now operates dedicated international sales of- oFHVLQWKH8.*HUPDQ\DQG6RXWK 'DNRWDLQWKH86(DV\o[LVFXUUHQWO\ looking at opening a fourth interna- customers,” he adds. WLRQDOVDOHVRIoFHLQ6SDLQ While slat rubber remains the number Ronan Boyle, who leads a lot of the RQHSURGXFWIRUWKHFRPSDQ\(DV\o[KDV LQWHUQDWLRQDOVDOHVIRU(DV\o[DWWULEXWHV Easyfi x founder increasingly innovated over the last decade to the company’s success in global markets Michael Earls. develop more and more new products. to its mindset. The company has a contract to supply rub- “One of the key things that makes EHUoWWLQJVWR'H/DYDO (DV\o[DVXFFHVVIXOFRPSDQ\LVRXUDSSURDFKWR the global milking machine business. We really believe in the face-to-face and manufacturer, while it has also personal approach to customers. You have to be branched into manufacturing mobile and you have to get in front of customers,” plastic products says Boyle. for the equine “A meat processing company from Botswana industry. contacted us a number of years ago saying it needed %XW(DV\o[ V to upgrade its lairage facility. A week later I was in core business Botswana meeting the company and we got the remains inside the farm shed. As contract for supplying the rubber mats. You can ac- well as manufacturing slatted complish an awful lot by taking that approach with rubber, the company offers 53

052-054 agribusiness.indd 53 06/05/2021 15:30:50 SUSTAINABILITY Future

While Irish agriculture faces some daunting challenges over the coming years, most of which relate to sustainability and cutting emissions, farmers should be confi dent that technologies will emerge to solve these problems. Ammonia is perhaps the trickiest problem of all to solve but the agriculture industry is developing solutions to the challenge. The new slurry management system from Easyfi x is just the latest technology to emerge that has the potential to off er Irish farming a whole suite of options when it comes to reducing its environmental impact. Of course, adoption of new technology will be slow unless it is properly incentivised by regula- tors. Moving the dial on behavioural change at farm level means the EU and the Department of Agriculture and farm advisors needs to support farmers on making these, often costly, investments on their farms. Just as the investment in slatted sheds in the 1980s and 1990s yielded major improvements in animal welfare standards, subsidising a new wave of investment in ammonia reducing technology across European farms will yield major benefi ts for air and water quality.

plastic cubicles, feed barriers, cow mattresses and Easyfi x mats In 2020, Teagasc published a strategy roadmap many other plastic-based products. and cubicles. for reducing ammonia emissions in Irish agriculture, which outlines 13 different measures that farmers SUSTAINABILITY can take to reduce ammonia. +RZHYHU(DV\o[LVQRZEHJLQQLQJWRORRNDWQHZRS The two standout technologies from this road- portunities that could take the company in interest- map were protected urea and low-emissions slurry ing new directions. Having built a business focused spreading (LESS). Together, these two measures on the environment above the slats in a slatted shed, alone would deliver up to 80% of the target outlined (DV\o[KDVPDGHDUHFHQWDFTXLVLWLRQWKDWZLOODOORZ in the ammonia marginal abatement cost curve LWWRJREHORZWKHVODWVIRUWKHoUVWWLPH (MACC) at a cost of €5.5m per annum. In March of this year, the company announced They would result in a 10% cut in ammonia emis- it had acquired a new slurry management system sions from Irish farms and bring ammonia levels FDOOHGk$HURPL[yZKLFKFDQGUDPDWLFDOO\ORZHUDP down to 107 kilotonnes per annum, which is well monia emissions from stored slurry. below the emissions ceiling set by the EU. (DV\o[VDLGLWZLOOUHEUDQGWKHV\VWHPDV(DV\o[ However, both of these measures only deal with Slurry Technology and that it will form a new divi- DPPRQLDORVWLQWKHoHOG$FFRUGLQJWRWKH(3$WKH sion within the company. Having built a successful storage and housing of livestock manure is the source business on rubber products, this is clearly a new of almost half (47%) of all ammonia emissions in GHSDUWXUHIRU(DV\o[ZKLFKZLOOWDNHLWRXWVLGHLWV Ireland. core business. As such, intervention within the slatted shed or Yet there is clearly opportunity in this space. The housing unit offers major potential to slash am- sustainability agenda is only going to intensify in Eu- monia, which has a very negative impact on air and ropean agriculture and ammonia is one of the most water quality. GLIoFXOWFKDOOHQJHVIDFLQJIDUPHUVLQPDQ\FRXQWULHV EPA $QGWKLVLVWKHRSSRUWXQLW\WKDW(DV\o[LVWDUJHW In Ireland, almost 100% of ammonia emissions fi gures LQJQH[W7KH$HURPL[V\VWHPLWUHFHQWO\DFTXLUHGLVD come from agriculture. For the past three years, WHFKQRORJ\WKDWLVoWWHGLQVLGHDVOXUU\VWRUDJHWDQN ammonia emissions in Ireland have consistently show Irish The system injects air into the slurry at intermittent H[FHHGHGWKHFHLOLQJRINLORWRQQHVSHUDQQXPVHW ammonia phases, which keeps the slurry agitated at all times E\WKH(3$ and helps greatly reduce ammonia emissions from 7KHPRVWUHFHQWoJXUHVSXEOLVKHGE\WKH(3$ emissions stored slurry. show Irish ammonia emissions in 2018 stood at 119.3 in 2018 Trials conducted by Wageningen show the system kilotonnes. stood reduced ammonia emissions from stored slurry by Reversing this trend of rising ammonia emissions more than 50% compared to normal slurry storage. is going to be tricky for Irish farmers, especially since at 119.3 Given the urgent need to reduce emissions of all the EU has set an even stricter limit on ammonia lev- kilo- kinds, a future where it will be mandatory to include els for Ireland for the coming decade with the ceiling a system like this in all new slurry storage units or lowered to just 112 kilotonnes. tonnes slatted tanks is foreseeable. 54

052-054 agribusiness.indd 54 06/05/2021 15:31:43 VIDEO • CONTENT • DESIGN Find out how we can help you during Covid-19 GREAT WORK FOR GREAT CLIENTS

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