Over three-quarters (77%) of businesses are optimistic about the coming 12 months in comparison to 55% last year, according to research carried out for our 2021 Food & AgriBusiness Report.
Turnover levels also have a positive story to tell with a rise in the number of businesses reporting an increase. However, there has been a 35 percentage point jump in the number of companies experiencing input cost price increases (from 36% to 71% in 2021).
Change in consumer habits and digital change are two main long-term effects of the pandemic according to those surveyed.
Optimism levels across the sector have increased year-on-year to a four year high, with 77% of businesses optimistic about the future compared to 55% last year. 16% are neutral on their outlook and only 8% are not optimistic at all. Optimism across all demographics is at its highest levels since we began the ifac sentiment survey in 2018.
66% of businesses view changes in consumer habits as the biggest long-term effect of COVID-19. Digital change, business diversification and enhanced financial management also feature but changing consumer habits is by far the most significant change according to business owners.
In 2021, 36% of companies reported an increase in turnover compared to 30% in 2020. Those experiencing an increase were more likely to be medium sized businesses rather than small businesses.
Of those reporting an increase, 43% saw an increase of 6-10% while 16% saw an increase of 21% or more.
The number of businesses reporting a decrease in turnover fell from 51% to 36%. COVID-19 led to a significant rise in businesses reporting a decrease in turnover last year. While this year’s figures are an improvement, the number of businesses which experienced a decrease in turnover is still almost double pre-pandemic figures in 2019 (19%).
71% of businesses indicate an increase in costs this year, almost double last year’s figure (36%). One third of these businesses have experienced an increase of between 6% and 10%.
The number of businesses whose costs have remained the same or decreased has dropped from 64% to 29%.
For half of SMEs, net margin remains the same year-on-year. SMEs reporting a decrease in margin has dropped by 5 percentage points while those who experience an increase in margin lifted by 5 percentage points.
Download the Irish Food & AgriBusiness Report 2021
From Brexit to Covid, trade deals and changing consumer behaviour, Irish food and agribusiness owners have had an extraordinary 12 months