Opportunities for food business growth
Many of the food businesses surveyed are looking beyond the domestic market to drive sales and secure future growth. 44% saw an increase in their international sales in the past 12 months. 41% of food businesses identified exporting to new markets as the biggest opportunity for growth in the next 12 months.
The journey to international sales is complex. Some of the most common challenges faced by food businesses exporting to international markets are market entry and distribution (56%) and logistics and supply chain (44%).
Northern Ireland (59%) and the European Union (EU) (39%) are the primary markets, followed closely by Great Britain (37%). Emerging markets including South America, Asia and the Middle East also feature as export destinations. Changing consumer preferences and expanding economies in these markets can create strategic opportunities for Irish food businesses.
Stephanie, takes a closer look at the steps involved in assessing an international market and getting your product ready for export:
1. Understand the market
Research thoroughly: Before approaching a new market, build comprehensive knowledge about how the market operates and the factors influencing it. This will help you identify the key areas to focus your efforts. See the due diligence article on page 26 for the steps involved.
Identify differences: Recognise that the domestic market and export market can differ significantly in terms of consumer tastes, preferences, government policies and cultural factors. UHT milk, for example, is very popular in mainland Europe but not in Ireland.
2. Financial feasibility
Assess financials: Evaluate the financial feasibility of exporting your product. Work with your ifac advisory team to develop accurate and realistic financial projections to support your export plan.
3. Conduct market analysis
Macro-level overview: Start with a broad analysis of the market to identify key consumer perceptions, expectations and trends in your product category. Use data from global data sources, like Kantar and Mintel, and collaborate with Bord Bia for accurate information. Germany, for example, is one of the leading markets for organic products.
Market dynamics: Identify the major retailers and suppliers in the market. Determine if a single supplier dominates your category and understand whether the market is driven by private label or branded products. This involves physically visiting stores in international markets, looking at the producer codes (if available) and reviewing the products on-shelf and compiling your analysis based on this.
4. Develop market insights
Category understanding: Gain a deep understanding of your category by analysing its market value, retail pricing strategy, branding, packing, weight and unique selling points (USPs). This will allow you to assess the financial feasibility of your product and establish a guide retail price and weight that is widely accepted within the category. The USP of Kerrygold butter, which is sold globally, earning over €1bn in annual retail sales in 2019, is that it is made with milk from grass fed cows, which gives its rich yellow colour.
On-site visit: Visit the market to conduct a gap analysis by physically checking what products are available in what stores. This will help you identify any gaps where your product could fit, assess trends, and decide if you need to tweak your product for better market fit.
5. Competitor analysis
Review competitors: Identify direct and indirect competitors, analyse their strengths and weaknesses, and understand the broader market dynamics. Gather information on product quality, leading brands, and pricing.
Networking: Engage with other Irish producers in the market to learn from their experiences.
6. Connect with key stakeholders
Develop your proposition: Before approaching buyers, create a compelling product proposition based on your research. Ensure it highlights the benefits and unique elements of your product.
Engage with retail buyers: Contact retail buyers in the target market. Distributors in the region and government agencies, like Bord Bia, can connect you with retail buyers in the target market. This will help you determine if there is demand for your product.
This story was first published in our 2024 Food & Agribusiness Report.
