Ireland should adopt a strategy of developing a world-class agricultural industry by 2016 and set itself the goal of becoming the most efficient, most highly innovative food and drink country in the world."
That's according to the Pathways for Growth report prepared for Bord Bia, in 2010, by Prof David Bell and Mary Shelman of the Harvard Business School.
The report also identified the lack of export-oriented entrepreneurs, as opposed to small artisan producers, attracted to the Irish food and drink industry. The authors regard this as a significant challenge facing the sector, yet fundamental to its long-term performance and continued success.
“A limited number of successful “serial entrepreneurs” exist within the industry, but new entrants, with global ambitions, are very rare”, the report says.
So at a time when Ireland’s agri-food industry is performing strongly, with exports valued at €9 billion last year – a record high – and the sector is being touted as a potential future leader in the Irish economy, why does it fail to attract so few new entrepreneurs with scalable ideas that could create new jobs?
The lack of suitable financial support is one key factor. In the 1980s, when Ireland saw the first real attempt to develop a consumer food industry, significant seed capital supports were available to get businesses up and running. Today we can see the dividends in the development of a strong consumer foods sector: think Green Isle, Rye Valley, and Cuisine de France. Today those supports are no longer available.
In addition, developing and launching a new food product on to the market is a daunting task, fraught with challenges and difficulties. To take it one step further and scale up to become a successful player on the export market is an ambitious undertaking for most people and many businesses.
Each year nearly 80,000 new food and drink products are launched around the world but, according to Mintel, only 2 per cent grow to an annual turnover of more than €10 million. More than 30 per cent fail in year one and the death toll is higher in years two and three.
In more than three-quarters of those failure cases “me too” products – a different version of an existing product – is cited as the reason for failure.
Before embarking on a new career path as a food entrepreneur, there are three key questions to consider. First, will your product be desirable to consumers? Second, is it commercially viable in the current marketplace? Finally, is it possible to make it with current technology? If you can satisfactorily answer each of these questions, you have hit the innovation sweet spot.
Combined resources
The long-term vision for the Irish food industry is one that thrives on a business culture that is open and attractive to entrepreneurs and that connects what is needed with what is possible by merging superior consumer and market understanding with leading-edge technology.
With this in mind, Bord Bia, Teagasc and Enterprise Ireland combined their resources to launch the inaugural Food Works programme in March 2012. The initiative is aimed at creating and nurturing Ireland's next generation of global food entrepreneurs.
Food Works is the first comprehensive collaboration between the three support organisations, with each bringing something unique to the table. Teagasc offers its technical expertise; Enterprise Ireland the commercial and business element and Bord Bia a wealth of marketing and consumer insight.
Fundamental to the development of the programme was input and insight from some of Ireland’s most successful food entrepreneurs. Their experiences underlined the need for individual coaching, direction, access and networking for new entrepreneurs. Coaching helps by screening ideas from the outset, planning market strategies and preparing viable business plans. Direction is required in terms of where to go for technical, marketing and production expertise. Access to investors, retailers and distribution contacts were identified as frequent stumbling blocks for new entrants to the food sector.
Global ambitions
In the first year, Food Works attracted 100 applications and now in its final stage, the programme is working with 11 new companies. In addition to support from the advertising industry through the Institute of Advertising Practitioners in Ireland, each successful participant has a business adviser, attends tailored workshops with expert speakers and industry peers, has access to Bord Bia's research, receives feasibility funding from Enterprise Ireland and technical assistance from Teagasc.
As these entrepreneurs work on all aspects of establishing a company with scalable export reach and global ambitions, it marks the beginning of a pipeline for many new and strong Irish food brand stories.
Mary Morrissey is director of the Food Works p rogramme. For details on Food Works 2013, see foodworksireland.ie
