In order for Ireland to continue its growth in exports to Asia, it must create consumer trust and grow awareness of its green image in these markets.
This is according to KPMG, who recently released its latest report, 'The Strategic Importance of Asia for Ireland's Agri-food Sector'.
Exports of Irish food and drink to Asia has skyrocketed in recent years, with exports tripling in value from 2007 to 2017, with exports last year worth around €1.3 billion.
Over the last ten years, Irish dairy has been the main export to Asian markets, accounting for 66% of total exports during the ten-year period.
In second comes meat, which only accounts for 18% of total exports during the same period.
Potential Pitfalls
David Meagher, head of KPMG’s Food, Drink and Agribusiness group, has said all the work has been done to facilitate the opportunity for the Irish Agri-food sector, but there remains a number of pitfalls we must avoid.
One of the main pitfalls, according to Meagher, is to react to changing consumer trends. Meagher said that Ireland has historically directed its efforts towards satisfying British customers, which now must change.
“We must now develop a deeper understanding of the specific tastes and preferences of Asian consumers so as to better cater to their markets,” he said.
“Asian supply chains are founded on trusting relationships, which require an investment of time and adherence to etiquette protocols.
“Without a profound understanding of our new trading counterparties, the Agri-food sector will not succeed in breaking into the Asian market.”
He also highlighted that Ireland's ‘green’ image is a competitive advantage unique to our agri-food sector.
“At the same time,” he continued, “the sector is exposed to food scares and scandals such as melamine-laced milk in China, European horsemeat and numerous outbreaks of Campylobacter.
“The Irish sector will not succeed if we do not continue to invest in consumer trust.”
Ireland does have a number of key competitive advantages in the agri-food sector, including; Temperate climate favouring grass-based livestock, Lack of dependency on intensive feed systems, Iconic drinks brands, Established and credible quality assurance regimes, EU single market access, and World class dairy research capability.
He also noted, however, Ireland’s agri-sector’s dependence on direct payments and the dairy commodity product mix as major difficulties facing the industry, as well as our cost competitiveness and exposure to global commodity pricing and access to finance.
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