Eating habits give food for thought
A revolution is taking place in the way food is sold and consumed across the world. The traditional system whereby consumers visited large supermarkets, trucked around aisles, and queued at a check-out desk is under extreme pressure. As that change unfolds Irish food producers and marketeers have an enormous opportunity to prosper.
This change is being created by dramatic changes in the way consumers behave and communicate. Younger consumers, in particular, have shifted their preferences towards authenticity, sustainability and affordability when choosing their foods and beverages. They do so while moving towards far greater eat out or eat at home options. They engage with food sellers around these preferences differently via technology in the form of mobile or other digital devices.
All of this is revolutionising the way in which food is sold and purchased. Imagine a scenario whereby a Deliveroo courier can arrive at your apartment with a high-end prepared meal direct from a small artisan restaurant and do so at an affordable price. Imagine, too, that this consumer only messaged their preference via text a couple of hours before consuming. That circle from order to consumption marks a distinct threat to existing forms of food distribution and a golden opportunity for entrepreneurs who can seize the market unfolding before them.
Add to this idea some demographic numbers. In a recent investor presentation Kerry Group outlined data showing the global population growing from 7.3bn now to 9.7bn by 2050. Within that expansion they calculate 2.7bn new middle class consumers will exist in the Asia-Pacific region alone by 2030, eight times larger than all other regions combined.
These consumers are arriving amid unprecedented change in the way food is demanded. There is increased awareness, courtesy of technology and information sources such as Google, of authentic food sourcing that taps natural product and does so on a sustainable way that helps manage climate change. Those food producers that can deliver such attributes ought to be able to capitalise on these changes in a major way.
Ireland is ideally placed to ride these changes well. Its food is broadly sourced from grass-fed milk and cattle.
Grass is increasingly recognised as an optimal source of natural food produced in an environmentally positive context. Our food companies, unlike other taste and nutrition companies globally, originate in the primary production of food. By contrast, many others have legacies in the chemical industry and struggle to bring true heritage to their brands and products. Irish companies have that heritage factor in abundance.
Already, Irish companies have grown a presence around the world. Yet they remain, by and large, small companies in a global context. Kerry Group, for example, has a stockmarket value of €15bn whereas Unilever has a value of £135bn.
This, for me, suggests a large canvas exists on which the Irish food industry can develop a much larger, but sophisticated, presence on world food and beverage markets.
If our companies can tap into the explosion in demand for naturally produced high quality food and drink they can create wealth and employment in abundance.
By combining the skills already in place with both organic and acquisition-led investments Irish companies can build out operations in developing markets that turbo charge their growth. Irish food and drink companies can also build more robust business models that help deal with Brexit while diversifying the range of markets that Ireland can rely on for growth over coming decades.
Joe Gill is director of corporate broking with Goodbody Stockbrokers. His views are personal.
