“Ireland is open for food, beverage and ingredients manufacturing businesses!”, that is.
Ireland has committed to become Europe’s food manufacturing center and gateway to the EU, said representatives of Enterprise Ireland at a well-attended meeting hosted by Enterprise Ireland and the “Food Industry Team” of the Chicago law firm, Freeborn & Peters LLP on November 5th, at Chicago’s University Club.
Ireland’s government and dairy and meat industries, meanwhile, have targeted New Zealand as their benchmark competitor in a decisive effort to transform Ireland into a global, export-driven dairy and meat powerhouse producer, as part of an ambitious plan dubbed Food Harvest 2020. Noting that the EU represents about 25% of the world’s consumer spending power, Enterprise Ireland representatives David Butler and Jonathan McMillan affirmed the Irish government’s commitment to lure American food, beverage and nutritional products manufacturers to Ireland through incentives and bolstered support structures.
“Once in Ireland, you will have full access to the EU”, they noted.
Citing the 2012 IMD World Competitiveness Rankings report, speakers pointed to Ireland’s:
- No. 1 worldwide rankings for investment incentives, skilled labor, flexibility and adaptability
- No. 2 ranking in the world for openness to foreign investment
- No. 2 ranking in Europe, for overall productivity and business environment.
The organic dynamism of Ireland’s food sector has already been evident in the U.S.: witness the rapid and decisive market share carve outs in the American food and food industry supplier network by Irish companies big (Kerry, Glanbia) and small (Megazyme) that occurred during the 1980s and ‘90s. One must remember that Ireland (pop. 4.8 million) is a country that punches well over its weight.
Ireland offers a natural base for American food and beverage companies, maintained Irish Minister for Agriculture, Food and the Marine, Simon Coveney. Coveney went on to explain that in anticipation of the removal of EU milk production quotas in 2015, Ireland’s 5-Year Food Harvest 2020 Plan will launch a multi-pronged effort to upgrade its agricultural supply chains through government incentives and human capital and food technology investments, with a strong emphasis on sustainable agricultural practices and green technology applications.
Freeborn & Peters attorney John Shapiro noted that the increased confluence of U.S. and EU food quality and safety expectations and regulations will further smooth the entry of U.S. companies into the EU and that the EU is too large a market to ignore. Also, both sides of the Atlantic share similar business environments, cultures and consumer and regulatory trends (e.g., sustainability, increased protein consumption and “clean labels”).
Dairy and meat: high hurdles and major makeovers
Minister Coveney noted that, while Ireland’s milk and meat production lags well behind New Zealand’s, “New Zealand and Ireland share very similar production conditions”. Both countries, for example, rely heavily on pastured herds, which raises the possibility of value-added marketing of the nutritional and environmental benefits associated with pasture (versus intensive feed-based) milk and livestock production. Both Ireland and New Zealand place a high priority on agricultural sustainability and environmental initiatives.
New Zealand produced 19,173 million liters of milk in 2011/2012, versus 5,198 million liters for Ireland over the same period, according to the UK-based DairyCo Marketing Information. That is a high hurdle to overcome.
Food Harvest 2020 delineates aggressive development targets that require increasing milk production by 50% by 2020, together with 40-50% increases in beef, pork and lamb production, said Coveney.
In separate comments made to BEST VANTAGE Inc., Coveney allowed that there were many structural differences that needed to be overcome. Irish dairy herd sizes are still very small, averaging 50-99 head per farm, and milk production efficiency is very low. Plus, pasturage is expensive and underutilized in comparison to New Zealand and EU dairy powerhouses, such as Denmark, Belgium and the Netherlands.
“However, all these hurdles are surmountable. We view this as a great opportunity for growth through structural improvements,” said Coveney, himself a former livestock manager.
Much of the anticipated growth in herd expansion is expected to come from improved land utilization and feed optimization. Given Ireland’s reputation as Europe’s “Celtic tiger”, it would appear foolhardy to underestimate its ability to meet its Food Harvest 2020’s targets.
Asked if the placement of increased “sustainability” burdens on Irish meat and dairy producers and would hamper rather than enhance agricultural efficiencies, Coveney strongly disagreed. “That’s what the farmers thought would happen at first, but when they began to see how sustainability considerations actually improved their efficiencies and saved them money, their attitudes changed.”
— Dan Best is the President of BEST VANTAGE Inc.
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