European Food Supply Chain
For Ireland’s food and drink businesses, the market of nearly 500 million consumers in Europe represents a huge opportunity over the coming years. The drive towards sustainability with its concerns about ‘food miles’ – the distances over which produce travels before getting to our plates – will favour suppliers from Ireland in the eyes of European retailers. On the global scale Ireland is ‘local’ to this European market which simply hasn’t the agricultural capacity to feed itself. This market pull, coupled with the existing ‘farm-to-fork’ traceability measures in Ireland and the national branding campaign of An Bord Bia (Origin Green), means that Irish food companies are in a prime position to offer European retailers a solution to their green procurement needs.
The big retail chains have nearly all committed to greening their supply chain and promoting this to their customers. Research over the past few years have shown a strong and growing preference amongst consumers throughout Europe for healthier and safer food. The retail chains are the intermediary between the producer and the consumer and they hold immense power in the marketplace as over 70% of food is bought in the top 5 retail chains in Europe. The retailers are making demands on producers to prove their credentials in respect of sustainability. which means showing how their company meets with environmental and social criteria as well as price. Retailers are advertising to consumers that ‘you can trust us to buy responsibly on your behalf so you can shop in safety’. This is just old fashioned business practice of making it easy for the customer to buy.
For the producers, their are advantages once these retailers’ demands are met, though of course making the necessary changes to production pracitces may incur time, money and effort. For a respoonsible producer, convincing a knowledgeable buyer in B2B scenarios can be easier than advertising to fickly end users. Ireland’s temparate climate, farm practices and labelling systems have worked to grant Irish food a good image throughout Europe. For the Irish food producers there is the perception of trust, quality and safety associated with Irish food already established in the marketplace, so going the next step to establishing sustainability credentials is pushing at a half-open door.
Some of what is needed is to gain a clarity on how to present the already good work being done to meet these new supply chain demands. Looking to the future, it is probable that increasing sustainability demands will continue be made on producers. There is a need to devise ways to ‘future-proof’ the business practices to meet these. This will require strategic know-how, planning and some fundamental changes to meet resource efficiency demands and Irish producres are better placed than most to meet the future.
