85% of Irish food businesses have reported input costs and inflation as the biggest threat to the growth of their enterprises.
That is according to the results of the 2024 Food Barometer Survey conducted by Love Irish Food and Bank of Ireland.
The survey gathered responses from over 100 Irish food small and medium-sized enterprises (SMEs).
The results signalled a generally positive outlook with 80% of Irish food and drink producer respondents confident in their businesses for the year ahead and predicting future growth.
Input costs
Seven in 10 (71%) Irish food businesses are planning to launch new products or services in the next 12 months.
The biggest expansion areas are expected to be in business innovations (25%), the attraction of new customers (21%) and the development of new products (21%).
Six in 10 Irish food businesses are planning to invest in enhanced brand awareness measures and cutting-edge commercial digital strategies.
Meanwhile, over half of the companies surveyed reported production automation and operational efficiencies as key investment areas.
Despite the optimistic outlook, 85% of companies cited rising input costs and inflationary pressures as the biggest threats to growth.
Other concerns include wage inflation (66%) and labour availability (55%) – with a lack of appropriate skills and high accommodation costs the top concerns when it comes to labour availability.
The survey indicated that retaining staff remains a key priority for Irish food businesses.
While 59% adopt the fully on-site model, 91% of those employing a hybrid/remote working model want to keep it.
With an eye on staff retention, over half of the companies surveyed are considering making changes to their training and development programmes and almost half of all respondents are considering introducing more wellbeing benefits and granting their staff pay rises.
Sustainability
Sustainability measures also remain a top priority for Irish food businesses, with 74% of companies reported to have embedded sustainability into their overall business practises.
The top areas delivering better sustainability outcomes are reduced energy consumption (84%) and the introduction of sustainable packaging (82%).
Key business benefits from embedding sustainability solutions include product innovation (64%), process efficiencies (64%) and increased revenue (61%).
Executive director, Love Irish Food Kieran Rumley said: “In the context of significant geopolitical uncertainty it is promising to see such confidence in Irish food businesses in their growth potential, despite these producers facing challenges in the areas of inflation and labour retention.
“There have been noticeable developments since last year with businesses investing in sustainability measures positively impacting on input costs, such as reducing energy consumption, reduced packaging and water consumption.
“It is heartening to see this confidence continue as investment extends through other areas of their businesses.”
Head of Food & Beverage Sector, Bank of Ireland Lucy Ryan added: “Whilst there are ongoing challenges being faced in the sector, it is encouraging to see such positivity amongst Irish food producers in the survey responses.
“Product innovation, developing new markets and enhanced staff retention practises are clearly priority areas, and I am also delighted to see companies placing an emphasis on implementing targeted sustainability measures.
“Irish food producers are keenly aware of both the environmental benefits and to their own bottom line by implementing ongoing sustainability measures, and we will continue to provide them with meaningful supports to help them thrive in this area.”
The survey was carried out in March and early April 2024 by Bank of Ireland and Love Irish Food, among 106 Irish food SMEs.