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90% of food and agri-businesses taking climate action – IFAC

The seventh annual ifac Food and Agribusiness Report provides a comprehensive overview of the state of food and agri-business companies.
Pictured at the launch of the ifac Food and Agribusiness Report 2024: Andrew Brolly, Ifac fractional CFO service; James Loughran, MD Loughran Brewing Stores and Leinster Enviromentals; David Leydon, head of food and agri-business, Ifac; and Amy Ward Whelan, Ifac food and agri-business.

This year, the focus turned to internationalisation, a crucial theme for many of the business owners and leadership teams that Ifac works with. David Leydon, head of food and agri-business with Ifac, tells us more.
"The report titled, Getting your business fit for export is Ireland’s only annual temperature check of food and agri-business SMEs and contains insights from industry leaders in over 120 food and agri-businesses," said David.
"Exporting has always been important for our large food companies and co-operatives. Some agri-engineering companies have also made a significant impact internationally. Already, two thirds of respondents to our survey are exporting," he added.
However, there is now a need to accelerate exporting efforts, especially for small- and medium-sized companies. He explained: "For SMEs in the agri-sector, the scaling and growth of the dairy sector over the past decade was very welcome and created an attractive growth market. However, this has now plateaued, and for many agri-businesses orientating for export is a key priority.
"For food businesses, considering that the Irish market is smaller than the combined Manchester/Liverpool/Birmingham market in the UK highlights the potential for accelerated growth if the product-market fit is correct."
While the challenge of developing an export business should not be underestimated, according to David, the potential rewards are substantial and include:

  • Increased revenue from a larger market.
  • Accelerated innovation as a team considers new customers and new products.
  • Diversified risk especially for those companies working in a number of international markets.
  • New long-term growth opportunities as capacity builds in the business.
  • Increased support from Government agencies, particularly, Enterprise Ireland.

Sustainability

Ninety per cent of respondents are taking some form of climate action, according to the report. Companies reported a variety of sustainability initiatives. David elaborated: "The number-one area reported was reducing energy usage, closely followed by waste reduction. This year sees an increased focus on waste compared to last year’s report, where only 46 per cent of respondents listed ‘managing waste and byproducts’ as an initiative being undertaken to tackle climate change.
"Sustainability is becoming increasingly important for many Irish businesses who may be encountering more sustainability questions from customers, suppliers, funders and regulators. Forty-four per cent of food and agri-businesses surveyed stated that they were receiving requests for sustainability information from customers. These same SMEs are continuing to face a myriad of pressures, from rising costs and climate risks to increased competition and skills shortages."

Other key findings in this year’s report include:

  • Rising costs: 81 per cent of Irish agri-businesses grapple with rising input costs amid a push for global growth.
  • Exporting: 41 per cent of Irish food companies see exporting as key to growth in 2024 with more than two-thirds of Irish agri-businesses now exporting.
  • Optimism: 64 per cent of Irish food and agri-business SMEs are optimistic about 2024 despite rising costs (up 10 per cent compared to 2022).
  • Business performance: 80 per cent have maintained or increased their turnover in the past year. The biggest challenges to growth include the cost and availability of inputs (63 per cent) and the cost of finance (23 per cent).
  • Cashflow: 38 per cent face short- to medium-term cashflow challenges.
  • Innovation: The launch of new products and services (50 per cent) and investment in R&D (23 per cent) are considered opportunities for growth among food and agri-businesses.
  • Recruitment: While 38 per cent plan to employ more people over the next 12 months, three in four find it difficult to recruit the right people, and 46 per cent struggle to meet the salary expectations of qualified candidates.

Artificial intelligence: Only 16 per cent of business leaders feel confident that they have a good understanding of the applicability of AI for their business.

Succession planning: Only 23 per cent have a succession plan in place for the safe transfer of their businesses in the future. 

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