FDBusiness.com

Ifac, which provides specialist advisory services for the Irish farming, food and agri-business sectors, has launched its 2019 Food & AgriBusiness Report. Overall, the findings point to a less than positive outlook across Ireland compared to last year, including a 20% decrease in optimism and a 100% increase in concern over Brexit. Less than one in five business owners have a succession plan in place.

Additionally, compared to 2018, 81% report that margins are static or falling. Conversely, one in four businesses plan to recruit in the next 12 months and a massive three out of four businesses are taking action to reduce their impact on the environment.

Key findings of ifac’s Food and AgriBusiness 2019 report include:

• 100% increase in concern about Brexit (increasing from 21% to 42%)
• 81% of companies do not have a clear succession plan in place
• Sustainable packaging, veganism and provenance are all influencing food businesses in Ireland
• 74% of food and agribusinesses are taking initiatives to reduce their impact on climate change – managing waste and by-products is the most common action (43% are purchasing sustainable packaging)
• Private label retail is playing an increasing role as a route to market – 62% of food businesses who use this route to market have seen double-digit growth in their private label sales over the past five years
• 55% of companies would not consider selling their business in the next five years
• 48% of companies do not invest in R&D
• 48% of companies saw an increase in turnover
• Fewer businesses are looking for bank finance – down 30% year-on-year
• 26% of companies now use State grants to help grow their business.

At a recent event in Dublin to mark the launch of the Food and AgriBusiness 2019 report, ifac’s Head of Food and AgriBusiness, David Leydon, said: “At ifac we admire and have tremendous respect for all of the entrepreneurs across Ireland who make up our food and agribusiness sector. These owners are under increasing pressure on multiple fronts, from Brexit and climate change to trade deals and emerging market forces. It is, therefore, unsurprising that these findings would reveal a time of turbulence and uncertainty for most across the sector and confirm that these businesses are feeling less optimistic about the short-term future.

“While our Food and AgriBusiness 2019 report explores what’s driving this less positive outlook it also contains advice and tools to support business owners through these challenges, and to grow profitable and sustainable businesses for the future. We believe that careful planning is the best way forward and with ifac’s help business owners can optimise their tax structure, take a blended approach to finance, start to really plan their financial future, and build a robust business strategy. We must remember that the long-term future of the sector, led by resilient entrepreneurs across Ireland, is extraordinarily bright, despite the current challenges.”

The Tánaiste and Minister for Foreign Affairs and Trade, Simon Coveney TD, who delivered the keynote at the launch event said: “Ifac has been using its financial expertise and sectoral experience to drive growth throughout the food and agribusiness sector and its report today is further evidence that our SMEs remain exposed to the challenges ahead. All of these businesses play an increasingly important role in Ireland’s local and national economy. They need to act and take on the professional advice that’s needed, from ifac and others, so that they can sustain the jobs and wealth they have created and respond to the challenges of the sector and Brexit.”

John Donoghue, ifac’s Chief Executive, said: “Our Food and AgriBusiness report tells the story of the sector in 2019 and the increasing intensity of the challenges faced by business owners across Ireland; businesses who drive regional development and provide local employment. They need support from consumers, banks, professional advisors and relevant State Departments, particularly with Brexit on the horizon. Entrepreneurs in the sector are resilient and robust, their long-term future is exceptionally bright. We will be working hard to make sure our clients meet the challenges head on and achieve their business goals.”