A key finding from research conducted by IFAC - the farming, food and agribusiness professional services firm - shows that 83% of Irish food and agribusiness SMEs do not have a clear succession plan in place.
The research suggests that this is mainly due to the fact that the owners have not thought about it, business viability and no interest from the next generation. Four in 10 medium-sized companies are planning to hire next year, however, 63% of all employers are saying its somewhat or very difficult to find the right people to run the business. Another area for concern is the growing costs for food and agribusiness SMEs. Cost pressure is evident across the industry with 86% of medium sized businesses experiencing increases in business running costs averaging at 5%. Only 3% of companies saw a decrease in costs.
Commenting on the research, David Leydon, Head of Food and AgriBusiness at IFAC said: “While optimism levels are high for the coming 12 months, our report highlights a number of issues which are concerning. Brexit is looming but many businesses (49%) are not planning for the implications of Brexit, costs are increasing right across the board which is impacting on margin while recruiting the right team to grow food and agribusinesses is proving difficult. However, this is tempered by a buoyant economy in Ireland where 84% of their sales are derived. From a longer term planning perspective clear succession plans are rare with 83% of the food and agribusiness SME’s not having a defined succession plan. However, 40% of businesses are open to selling in the next 5 years which is higher than might be expected in the sector.In terms of digital transformation which many companies are going through, broadband, not surprisingly, is still an issue in rural Ireland. Online trading is slow to get going with only 7% of companies doing a significant level of online trading, while social media is an important marketing communication channel for 62% of businesses. Here, Facebook outperforms all other social platforms in terms of usage and effectiveness."
The research was conducted on behalf of IFAC by Amarch Research. 200 food and agribusinesses from across the country were surveyed. They range in size, location, years established and turnover giving a representative cross section of the sectors.