The Irish food and beverage sector has enjoyed an international reputation for innovation and high-quality research and development for many years. Indeed, global brands such as Kerrygold, Baileys Irish Cream Liqueur, and Guinness are all the product of Irish innovation.
"The first thing I'd say about R&D and innovation in the Irish food industry is that it is something we are very good at, but could be better of course," says KPMG partner Ken Hardy. "I see a huge amount of hidden or unsung R&D going on in firms I work with. But that's the right way to go about it, keep it under wraps until you've got something to bring to the market."
The R&D efforts he sees range from raw-material identification and substitution projects, process improvements, packaging innovations, initiatives to reduce salt, sugar and artificial food colourings in food products, and projects to extend their shelf life.
“Our clients are also working on projects in areas like automation,”he adds. “They are using the technology for picking and sorting ingredients. This requires machines to handle precious and fragile products and is very complex. It is as much a mechanical and engineering and packaging challenge as it is a food technology challenge.”
There is a competitive driver at work in much of this, he notes. “Food companies face price-point issues. If someone is doing something similar for less the companies have to look at alternative raw materials, packaging, waste, energy consumption, automation, and so on. All of these can help reduce costs. But companies can only do this if they have an R&D focus. They know their products and processes better than anyone else. A third party really can’t do it for them.”
Enterprise Ireland food division manager Orla Battersby agrees. "At its simplest it is about developing market-led new or improved food products to meet changing customer needs," she says. "But it's actually more complex than that. It's about embracing an innovation culture right throughout the business. It's about adopting a customer-centric approach in every area from the people you hire to the technologies and processes you use, right through to packaging and the way you sell your products."
Enterprise Ireland has supported just under 100 R&D projects in the food sector since 2013. Companies involved range from large companies to SMEs to start-ups. “Start-ups by their nature are innovative,”says Battersby. “Their success is based on this and they are able to command premium prices because of the innovative nature of their products.”
One company supported was Keohanes Seafood of Cork. “They realised that many consumers did not like the hassle of preparing and cooking fish and were the first company in Ireland to produce a microwaveable skin film range of products,” says Bettersby. “This means the consumer never has to touch the product. They have brought fish from the fish counter in retail to the chilled convenience aisle.”
Another Cork-based company, Dairy Concepts, is manufacturing hand-held nutritious dairy snacks for children using patented milk-casein technology. "The USP of the company's Fruchee snack is that it has more than 40 per cent less sugar and higher calcium, protein and Vitamin D than its competitors," says Battersby.
The company also participated in Food Works, the Enterprise Ireland, Bord Bia and Teagasc supported accelerator programme that helps develop the next generation of scalable export driven Irish food businesses.
Scientific and research base
R&D need not be specifically focused on finished products according to Teagasc director of research Frank O’Mara. “It can help companies deal with specific issues, challenges and problems,” he says. “For example, there was an issue with chlorates in the dairy sector as a result of the residue of cleaning processes at farm and processor level. That presented issues for some secondary processors and the processers needed R&D capability to deal with it.
“A big part of what we do is provide the scientific and research base to help with product and process innovation,” he adds.
One outcome of that research is the Ornua soft cheese plant in Saudi Arabia. Powder made in Ireland is shipped out to the plant and reconstituted as soft cheese. “It would be completely impractical to transport the product over that distance, but this innovation makes it possible to sell Irish soft cheese in that market,” says O’Mara.
Powder technology is critically important to the dairy industry.
“On the food ingredients side, how we dry milk powders and process them has a huge impact on their use afterwards. A lot of dairy exports are in the B2B area but that doesn’t mean that there is not a lot of innovation involved in the products they produce. We help the industry add value to commodity products. One of the things about powders is how they reconstitute and how they behave when you add water. You can produce different characteristics depending on the temperature and the speed you dry the milk at. They are looking at what customers want to use the ingredients for and producing powders that will meet their needs.”
Enterprise Ireland provides a wide range of supports for R&D in the food and beverage sector. For in-company R&D projects this includes the Agile Innovation Fund, which gives companies support of up to 50 per cent of eligible project expenditure up to €300,000.
“This is very useful for projects which need to happen very rapidly,”says Battersby. “We fast track the approval process and companies can get projects done very quickly. We also have a number of other R&D supports available to client companies in areas such as collaborative innovation projects with colleges, accessing funding under the EU Horizon 2020 programme.”
There are also other supports available through the tax system, according to Ken Hardy. These include the R&D tax credit which is worth 25 per cent of eligible expenditure and the Knowledge Development Box which lowers the corporation tax rate to 6.25 per cent on revenue streams arising out of R&D activity.
“The state has done a good job of supporting and encouraging R&D and innovation,” he adds. “But just like the industry, it needs to continuously improve its offer as well. Competing jurisdictions are constantly looking for ways to improve their R&D support environment and the UK will be more free in what it can do in that area after Brexit.”