Anticipating Tomorrow - Shaping the future of the Irish food and drink market towards 2020 - Bord Bia

Anticipating Tomorrow - Shaping the future of the Irish food and drink market towards 2020 - Bord Bia
Shaping the future of the Irish food and drink market towards 2020
Anticipating Tomorrow - Shaping the future of the Irish food and drink market towards 2020 - Bord Bia
Anticipating Tomorrow - Shaping the future of the Irish food and drink market towards 2020 - Bord Bia
By Aidan Cotter, Chief Executive, Bord Bia       1
Executive Summary                                3
1. From the past to the future; exploring the   11
		 changing landscape
2. Scenarios for the future of the Irish food   21
   and drink market
		    Round the Table                           23
		    From the Greenhouse                       25
		    Off the Menu                              27
		    In the Lab                                29
3. A vision for the future                      37
4. Strategic priorities                         45
5. How to use this report: from scenarios       53
   to strategy
Appendix 1 – Methodology                        59
Appendix 2 – Prioritised drivers in full        74
Appendix 3 – About Henley Centre                82
Anticipating Tomorrow - Shaping the future of the Irish food and drink market towards 2020 - Bord Bia
Looking back 13 years from 2007

                                                                                                                                                                                                                          1994 The term
                                                                                                                                                                                                                          'Celtic Tiger' is
                                                                                                                                                                                                                          coined as a
                                                                                                                                                                                                                          metaphor for
                                                                                                                                                                                                       1996 BSE crisis
                                                                                                                                                                                                                          the Irish
                                                                                                                                                                                                       in Britain
                                                                                                                                                                                                       resulting in an
                                                                                                                                                                                                       EU-imposed ban
                                                                                                                                                                                                       on the export of
                                                                                                                                                                                   1997 Tesco          British beef.
Foreword                                                              If the Irish industry is to remain competitive in a world that is more
                                                                      and more impacted by the forces of globalisation – both positive and
                                                                                                                                                                                   starts trading
                                                                                                                                                                                   again in Ireland.
By Aidan Cotter, Chief Executive, Bord Bia
                                                                      negative – it needs to be both forward and outward looking. This
We have commissioned this report as we believe that it is vital       report will help us to do both.
that the Irish food and drink industry looks proactively at its                                                                                                1998 The start of
                                                                                                                                                               discount store retail
future environment. Bord Bia has a crucial role to play in helping    Looking back 13 years from 2007 there have been significant changes                      shopping as the first
organisations look to the long term, in order to help them plan       in the food and drink market, some of which were anticipated, many                       Aldi opens in
strategically and to help them thrive.                                which were not. This shows us the importance of looking out to the                       Ireland. By 2006
                                                                      future – not just 2 or 3 years but more strategically toward the longer                  there were 102 Aldi
                                                                                                                                                               and Lidl stores
Competing successfully in the domestic Irish market is a              term. This is the purpose of Anticipating Tomorrow. The scenarios in                     nationwide.
precondition for the industry’s success in the international          this report are designed to enable the industry to understand and to
marketplace. The role of the domestic market has never been           manage the future more effectively and allow us all to explore different
more critical. A decade of economic prosperity has transformed        views of how the future might play out. We have used the scenarios
the environment in which the industry operates, as the market has     to identify our preferred vision for the market in 2020. I believe it is
grown, in terms of scale, complexity and sophistication. It now has   aspirational, worthwhile and rewarding and that we must do all we can
the capacity to sustain an ever more thriving and dynamic industry    to achieve it. The strategic priorities that this report identifies are crucial
while also becoming a powerful platform for companies with            in helping Irish food and drink companies to thrive in the future and we
                                                                                                                                                                                 1999 Euro
ambition to prepare for the challenges and opportunities of the       at Bord Bia are committed to making this happen.                                                           introduced into
global marketplace.                                                                                                                                                              Ireland in cashless            1999 Land
                                                                      This project helps us all to improve our understanding of the future.                                      form.                          dedicated to organic
                                                                                                                                                                                                                production is
The dynamic nature of domestic demand offers a platform               It identifies ways in which the market is likely to change, and clearly
                                                                                                                                                                                                                25,475ha, an increase
for trial and innovation, fostering an ever improved capability       outlines how to mitigate the potential risks and also capitalise on                                                                       of over 80% since
to compete in export markets. As Ireland’s largest indigenous         the exciting opportunities that the future holds. Now we must act                                                                         1995. The number of
sector, success domestically and abroad is critical to the future     on this knowledge.                                                                                                                        certified organic
                                                                                                                                                                                                                producers increased
prosperity of Ireland. The industry currently employs 158,000
                                                                                                                                                                                                                for the same period
people and represents some 8% of Ireland ’s economy.                                                                                                                                                            by over 391%.

1      Anticipating Tomorrow
Anticipating Tomorrow - Shaping the future of the Irish food and drink market towards 2020 - Bord Bia
Wider trends                                                                                                                                                2004 The Irish
        1996-2002 In 1996, Ireland          2002 Irish population increases        2002-2006 on average 46,000                                                      functional foods market
        reached its migration 'turning      by 8% since 1996 to 3.9 million        per year more immigrants than                       2004 Smoking                 is valued at €100 million
        point,' becoming a country of       people.                                emigrants in Ireland.                               ban is imposed               a year and is growing by
        net immigration. In each year                                                                                                  in Ireland.                  10% per annum.
        between 1996 and 2002 on                                                                                2002 Launch of
        average there were 23,000 more                                                                          Euro notes and                                                                    2005 PERIscope 2005 reveals that
        immigrants than emigrants in                                                                            coins.                                                                            Irish consumers are eating ‘out of
        Ireland.                                                                                                                                                                                  home’ regularly with 1 in 4 eating
                                                                                                                                                                                                  out on a weekly basis.

                                                                                                                                                                                                   2005 The National Taskforce on Obesity report is
                                                                                                                                                                                                   issued, reflecting growing health concerns. The
                                                                                                                                                                                                   report reveals that there were 2000 premature deaths
                                                                                                                                                                                                   in Ireland due to obesity in 2005 and that obesity in
                                                                                                                                                                                                   Ireland is increasing by at least 1% per year.

                                                                                               2002 Levy
                                                                                               introduced on                                                                2006 Exports of Irish food and drink
                                                                                               plastic bags in                                                              exceed €8 billion for the first time.
                                                                             2001 Foot and     Ireland. Plastic bag
                                                                             Mouth disease     consumption
                                                                             outbreak in       drops by 95%.                                      2007 The first all-Ireland farmers market takes place in
                                                   2001 BSE crisis on        the UK.                                                              Athlone. From only a handful a few years ago, 126 farmer's
                                                   continental Europe.                                                                            markets are now established across the country.
                                                   Beef consumption
                                                   falls by 27% in the EU.                                                  2007 The market share of
                          2000 Central                                                                                      international food retailers in
                          distribution                                                                                      Ireland reaches 35%.
                          transforms the retail
1999-2002 A focus         landscape. Musgrave
on food safety and        develop the first
traceability is           central distribution
reflected in the          network for chilled,
establishment of a        fresh and frozen
number of regulatory      goods in Ireland. This
bodies: the FSAI (Food                                       2004 Ireland's mean annual                    2005-2006 Dublin house                             2007 Broadband subscriptions                  2007 – Irish population
                          allows produce to be               temperature has increased by                  prices grow by 16% in a year.                      reach 602,000 in Ireland                      reaches 4.3 million, its highest
Safety Authority of       delivered fresh to
Ireland) in 1999, the                                        0.7°C since 1890, at an average               The average house price in                         which accounts for 60% of all                 level since 1871, an 8% increase
                          stores within 24                   rate of 0.06°C per decade, and                Ireland has risen to more than                     internet subscriptions. In 2005,              since 2002.
FSA (Food Standards       hours. Other retailers
Agency) in the UK (set                                       is set to continue to rise.                   € 350,000 since 1996.                              broadband only accounted for
                          follow suit.                                                                                                                        19% of subscriptions.
up in 2000), and the
EFSA (European Food
Safety Authority) in
                                                                                                                                                              Shaping the future of the I rish food and drink mark et towards 2020                  2
Anticipating Tomorrow - Shaping the future of the Irish food and drink market towards 2020 - Bord Bia
Executive Summary

Objective                                                                  in Ireland include an ageing population, smaller household size         proprietary knowledge base. In addition, a series of highly
                                                                           and an increased focus on tackling obesity. Global factors such         interactive workshops with industry stakeholders and those from
This report explores the future of the Irish domestic food and             as climate and resource shortage are also affecting the wider           other sectors were held during Spring-Summer 2007 in order to
drink market in 2020, and subsequent or resulting implications and         operating environment of the food and drink industry and need to        listen to a diverse range of viewpoints and ensure co-creation of
opportunities for the industry. The report is intended to enable           be factored in to any organisational planning.                          the final output.
all Irish food and drinks companies, large or small, to plan for
future success and for other stakeholders, including Bord Bia, to          The dynamics of the Irish food and drink market itself have also        A wide array of perspectives have been gathered to shape the
understand their role in helping all companies achieve this goal.          changed significantly and are being shaped by both supply and           views presented by this report. Both large and small businesses
                                                                           demand. Consumers are spending more money than ever on eating           have been consulted to ensure that the challenges faced by each
Four scenarios have been developed which help to explore the               and drinking, and their tastes are changing. Familiar notions such as   are considered equally. Wider stakeholders have been drawn in to
future, and allow the identification of a vision for the market in 2020.   'convenience' are becoming more sophisticated as consumers are          the process to provide balance. Notably we have consulted with
Key strategic priorities for the industry have also been identified, in    less prepared to make trade-offs and seek several benefits from one     young students to understand their concerns for the future and
order that all companies and stakeholders can effectively manage           product. Health and wellbeing is also evolving, as people become        then test the realities of the vision defined through the process.
future threats and leverage future opportunities.                          more aware of the link between health and nutrition and attempt         After all, the young are often the vanguard for change in society.
                                                                           to balance out their indulgent moments with healthier options.
Context                                                                                                                                            The scenarios
A combination of wider external and more internal factors have                                                                                     A helpful way to think about the future is to remember that while
shaped the changing consumption landscape in Ireland. The                  This report is grounded in a robust and rigorous assessment             it is uncertain, and much of it is beyond our control, individuals
strength of the Irish economy and the emergence of the 'Celtic             of existing statistical data and evidence, which has formed the         and organisations can influence some aspects of it and prepare for
Tiger' in the early 1990s is a key factor. Forecasts indicate that the     backdrop for the development of the scenarios and the preferred         possible outcomes. Scenarios focus on the key uncertainties and
economy will continue to grow but that the rate of growth per              vision. This has been supplemented with a series of interviews with     therefore help organisations to rehearse the future.
head is expected to slow to about 2% per year to 2015. Other               industry stakeholders as well as those from outside. The report also
important considerations for the future of the domestic market             draws on existing desk analysis and Henley Centre HeadlightVision’s     The four scenarios that emerged were developed through the

3       Anticipating Tomorrow
Anticipating Tomorrow - Shaping the future of the Irish food and drink market towards 2020 - Bord Bia
crossing of two identified axes of uncertainty – ‘Motivations for          The scenarios do not represent the policy position of Bord                 • From the Greenhouse; Natural & Nutritious – In this world,
Eating’ and ‘Attitudes towards Consumption’ (see page 21)                  Bia or of the Irish food and drink industry; rather, each                     consumers are focused on improving their health through
– which are likely to play a large role in the future of the Irish food    scenario represents an extreme view of the future and is designed             functional foods, without hurting the environment. High-tech
and drink market.                                                          to provoke and challenge existing views of what the future                    sustainable greenhouses flourish as families and farmers find ways
                                                                           might hold. The scenarios depict key social, economic, political,             to grow specialist functional foods. Many people have a personal
‘Motivations for Eating’ explores what motivates consumption               environmental and organisational drivers of change that interact              nutrition and environment advisor, meaning that knowledge
of food and drink by consumers. At one extreme, ‘Food as Ritual’           in different ways in each of the four worlds. The most likely                 about the link between health, food, and the environment is
captures the sense that food is about togetherness and enjoyment           scenario for the domestic food and drink market in 2020                       widespread. Taste and enjoyment of food is still important but the
and is part of the social fabric of society. At the other extreme, ‘Food   probably involves a combination of all four worlds                            emphasis is on the natural and nutritional value of foods. Food is
as Performance’, food is viewed by consumers as a means to an              outlined below.                                                               often fresh or preserved using techniques that lock-in or enhance
end rather than an end in itself. Food is consumed for its functional                                                                                    the food’s function. More natural food means a reduction in
benefits at this end of the spectrum.                                      • Round the Table; Local & Ethical – Spurred by environmental                food yields which means that food and drink can be expensive in
                                                                              shocks, this is a community-minded world where consumers are               this world. As such, those who can’t afford a sufficient supply of
‘Attitudes towards Consumption’ explores consumers’ broad                     highly concerned about the environment. Most food is grown                 ‘superfoods’ may not be so healthy.
attitude towards consumption. At one extreme, ‘Our Planet’                    locally and supply chains are short as consumers buy direct
encapsulates the sense that consumers’ consumption patterns                   from the producers where possible. Big brands struggle unless           • Off the Menu; Indulgent & Experimental – This is a highly
are significantly impacted by their concerns about environmental              they are able to feel credibly ‘local’ and ethical. Priority goes to       experiential world in which consumers continue to indulge in new,
sustainability and the future of the planet. Individuals take proactive       growing high yield and multi-purpose crops which can be used               exotic and indulgent eating experiences, despite government
measures to limit their own environmental impact at this end of               for both food and fuel. As a result, food choice is more limited           attempts to discourage such behaviour. Eating out is the norm,
the spectrum. The other extreme – ‘My Life’ – reflects people’s               but consumers still find ways to enjoy eating. Group mealtimes             meaning that restaurants have more power than retailers.
determination to live their lives on their own terms. Consumers               are the basis for social gathering and there is a strong sense of          Restaurant brands begin to be more trusted than retail brands.
resent attempts to constrain their behaviour and sometimes go to              community. People are both physically and mentally healthy in              Some products with high-energy footprint, or poor ethical
extreme lengths to continue consuming goods and services.                     this world.                                                                production standards are banned, but this only fuels a growing
                                                                                                                                                         band of ‘rebel’ consumers who find ‘underground’ ways to enjoy

                                                                                                                                           Shaping the future of the I rish food and drink mark et towards 2020               4
Anticipating Tomorrow - Shaping the future of the Irish food and drink market towards 2020 - Bord Bia
the food they want. Consumers have lots of fun in this world but     itself and for consumers.                                               Consumers demand transparency of health claims, ingredient
    suffer from health problems related to over-indulgence.                                                                                      sourcing and production methods. Clear consumer expectations
                                                                         While recognising that thirteen years is not far off, the vision        exist which are defined by guidelines; market forces ensure the
• In the Lab; Performance & Achievement – A strong individual           also reflects that the world will have changed in significant ways      compliance of producers and manufacturers. There is limited need
   desire for self-improvement and achievement in all aspects of life    between now and then. In order for the food and drink industry          for legislative intervention.
   fuels this world. Food and drink are viewed as tools to improve       to flourish, the vision for the market needs to take into account the
   health in order to maximise performance, rather than sources          social, economic and environmental forces that are changing the         The food and drink industry has found solutions to improving food
   of pleasure. Consumers eat on-the-go, often consuming multi-          day-to-day lives of Irish citizens.                                     yields using natural and environmentally friendly techniques and
   functional nutrients and vitamins to enhance their diet. Advanced                                                                             ways of preserving foods that lock-in or enhance their nutritional
   technology means that food is virtually indistinguishable from        To help articulate what the domestic Irish food and drink market        value. Food processing has been redefined in this world – it no
   medicine. The persistent sense of ‘survival of the fittest’ creates   would look and feel like if the preferred vision was achieved, a        longer has connotations with artificial additives and ready meals
   high stress levels. Therefore, whilst physical health improves for    narrative has been developed which acts as a ‘fifth scenario’,          but is all about finding the best possible combinations of fresh,
   most consumers, mental health is a significant problem.               capturing key elements of the desired future for the market in 2020.    natural foods to create ‘super products’ packed with health
                                                                                                                                                 boosters that meet the needs of an increasingly on-the-go society.
There are a number of critical challenges and opportunities which        Vision narrative (abbreviated)
result for the industry from the scenarios; these – and a set of         In this world, great importance is placed on the health-enhancing,      Room for indulgence still exists! Consumers still seek variety and
strategic dimensions across the scenarios – are explored in the full     functional and natural benefits of food and drink. Consumers have       new experiences in food and drink and revel in the delight of great
body of the report.                                                      high levels of concern for the environment and, where possible,         tasting produce well made.
                                                                         buy fresh products sourced either locally or within Ireland. This
The Vision for 2020                                                      environmentally responsible, healthy behaviour prevails about           The health of the nation is vastly improved. Obesity has declined
                                                                         80% of the time, with more indulgent forays at the weekends or on       rapidly amongst children. Unfortunately, some will still have to live
This report identifies a vision for the Irish domestic food and drink    special occasions.                                                      with the legacy of poor diet in their formative years. Obesity still
market in 2020 which is aspirational, yet achievable. It should                                                                                  prevails for a proportion of consumers in their 20s and 30s who
motivate the industry to work towards creating a better future for                                                                               missed out on the nutrition education of their younger peers and

5         Anticipating Tomorrow
Anticipating Tomorrow - Shaping the future of the Irish food and drink market towards 2020 - Bord Bia
who struggle to change their existing unhealthy eating habits.           The priorities are not designed or intended to incorporate every          Bord Bia’s commitment
                                                                         future action which the industry (and/or other key players) will need
The focus on growing locally is good for Irish branded food and          to take going forward. They are those that have been identified as        Bord Bia is committed to integrating the report findings into its
drinks but the high demands of ensuring both traceability                requiring specific strategic action in order that the preferred vision    plans and programmes for the industry. It will also give companies
and functionality means that some foods are more limited in              can be achieved in the future. The priorities are as follows:             the opportunity to engage further as it develops these plans and
supply and consequently, more expensive: a price that society is                                                                                   invites contributions, reflections and suggestions from those in the
generally more than prepared to pay for the preservation of the          • Strong consumer connections                                             industry and more widely to ensure the right priorities are defined
environment and better health.                                           • Flexibility, creativity and innovation                                  and programmes are delivered effectively.

Strategic priorities                                                     • Visionary leadership                                                    We envisage that these key initiatives will include:
Two sets of strategic issues informed the development of these           • Improving efficiency
priorities. Firstly, a number of challenges for the industry that are                                                                              • Developing closer relationships with schools to increase awareness
common to all the scenarios have been identified (‘Imperatives’).        • Effective routes to market                                                 about where food comes from, nutrition, cooking skills;
Secondly, those additional actions required to achieve the vision
were identified ('Preferences’). A synthesis of these two sets of        The priorities are discussed in the Strategic Priorities chapter of       • Participating in the university job fairs and ‘milk round’ as a
challenges has determined the critical strategic priorities which the    the report.                                                                  coherent industry group in order to reach those with low
industry should address going forward.                                                                                                                awareness of the industry and what it can offer to graduates;
                                                                         From scenarios to strategy
It is important to emphasise that whether the priorities emerged                                                                                   • Developing a skills training scheme across the industry which
primarily from the Imperatives or the Preferences, they have been        This report aims to assist the industry in taking ownership for              raises standards and encourages more talented people to enter it;
identified through the workshops and subsequent analysis as              shaping its own future both individually and collectively. The
critical elements of a successful strategy if the industry is to shape   purpose of undertaking futures work is to impact the present, and         • Focusing more specifically on ‘celebrating winners’ to encourage
the realisation of its preferred vision.                                 the vision and strategic priorities identified here provide a valuable       innovation and maintain industry morale;
                                                                         starting point for this endeavour.

                                                                                                                                        Shaping the future of the I rish food and drink mark et towards 2020              6
Anticipating Tomorrow - Shaping the future of the Irish food and drink market towards 2020 - Bord Bia
• Providing guidance and industry benchmarks to companies that             Menu and In the Lab. This chapter also provides ‘glimpses into         Please note that
   wish to understand and reduce their environmental footprint and          the future’ by highlighting existing products or services which are
   improve transparency;                                                    likely to be much more common place in each of the scenarios.          • If you are interested primarily in the scenarios and the emerging
                                                                            In addition this chapter explores the qualitative and quantitative        vision, please turn directly to chapters three and four.
• Identifying best practice in the industry in other countries, as well    dimensions of the scenarios in order that they can be assessed and
   as from other sectors e.g. pharmaceuticals, retailing, logistics, and    explored relative to each other.                                       • If you would like to explore the strategic issues for industry
   how we can learn from it;                                                                                                                          which the report identifies, please turn to chapter five. Chapter
                                                                           • Chapter three describes the vision for 2020, as well as a               six provides guidance on how to use these priorities to inform
• Increasing financial support for consumer research, thereby helping        quantitative assessment of this aspiration.                             strategy development within your own organisation.
   industry to track evolving consumer trends and the resultant
   implications for the market in a cost-effective and timely manner.      • Chapter four focuses on the strategic priorities and discusses the   • In addition to the full report, Bord Bia has produced a scenarios
                                                                              importance of each of these in anticipating and preparing for           booklet which has been designed to be a concise and actionable
Bord Bia welcomes further discussion and consideration of                     the future.                                                             document that contains suggestions on how to use the scenarios.
these initiatives.
                                                                           • Chapter five offers a guide to using the report and suggests
Reading this report                                                           ways in which organisations can use the report to improve their
                                                                              strategic responses.
• Chapter one provides the wider context for this report by
   analysing the important internal and external factors that              • Finally the report has three appendices. The first outlines the
   are influencing food and drink consumption both today and                  project methodology, while the second details the eighteen
   going forward.                                                             prioritised drivers which formed the basis for the axis and
                                                                              scenario development. Appendix three provides brief details
• Chapter two focuses on the four detailed scenarios which have              of Henley Centre HeadlightVision, the strategic marketing
   been developed - Round the Table, From the Greenhouse, Off the             consultancy which developed the report.

7       Anticipating Tomorrow
Shaping the future of the I rish food and drink mark et towards 2020   8
1. F
    rom the past to the future;
   exploring the changing landscape
1. From the past to the future; exploring the changing landscape

A combination of both wider external and more specific local            Higher growth rates in recent years have been underpinned by the          “In spite of the dangers that exist, the Irish
factors are responsible for shaping the changing consumption            property boom; with this slowing, economic growth is likely to slow       economy is basically robust and can look
landscape we are witnessing. Both sets of factors have been taken       too. The question mark over how growth rates and the economy
                                                                                                                                                  forward to an average growth rate in GNP per
into account throughout the scenario process, and are explored in       will play out in the next decade led to the driver ‘Uncertain future of
detail here.                                                            Irish economic growth’ being prioritised in the scenarios process. As
                                                                                                                                                  head of around 2% per year out to the end of
                                                                        an important yet uncertain driver, it is central to the development       the next decade.”
Internal factors                                                        of the scenarios.                                                         ESRI Medium-Term review 2007

One of the most important factors forming the backdrop to this          The size and productivity of Ireland’s workforce is a key factor in
changing landscape is the strength of the Irish economy (Figure 1).     determining economic growth. Productivity in Ireland is now the
Since the emergence of the ‘Celtic Tiger’ in the early 1990s, Ireland   second highest in the European Union and from 1997 to 2006, the
has continued to experience a period of economic growth and             employment rate rose from 56.1% to 68.1%. Rising demand for
success – GDP per capita is almost 40% above the EU average1.           labour has created a skills shortage and labour costs have increased
                                                                        accordingly. Indeed wages across all sectors increased on average
However, while forecasts indicate that disposable income and the        by 5.7% between 2006 and 2007, above the rate of inflation and
economy as a whole will continue to grow, the rate of growth per        over twice the European average, which is 2.6%. Looking to 2020,
head is expected to slow to about 2% per year to 20152.                 employment and the size of the labour force are predicted to
                                                                        continue to grow but at a slower rate than previous years (Figure 2).

11      Anticipating Tomorrow
0               2005                        2020
                                                                             2020                                                                                                                                                             -20         -9.6
                                                 2005                                                                                      UK    Rest
                                                                                                                                                 EUEUof   Rest of Africa
                                                                                                                                                          Europe            Asia   America Other
                                                                                                                                                                                           nationalities Not
                                                                                                                                                                                                         stated                                 -20                                -10.3

                                                                                                                                                                                                                                       % ch
                                                                           2020                                                                             Europe                           nationalities stated

                                               2005                                                                                              EU       Europe                           nationalities stated                              -20                 2010                      2015              2020

                                                                                                                                                                                                                                                                   2010                      2015              2020
                                                                                                                                                                                                                                                                 2010                      2015              2020

Figure 1: Ireland’s Economic Growth Forecast to 2020                                                  Figure 2: Ireland’s employment and labour force growth rate to 2020                                     Figure 3: Projected population growth to 2020

           1010                                                                                                        66
           10                                                                                                          6
             99                                                            GNP
                                                                            GNP                                                                                                                                                             6 6Million
             9                                                             GNP                                         55                                      Employment
                                                                                                                                                                Employment          Labour
             88                                                            GNP
                                                                                    headd                              5                                       Employment           Labour Force                                            6 Million
                                                                           GNP per hea d

 average annual growth rate

                                                                                                       average annual growth rate

             77                                                                                                        44

                                                                                                                                                                                                                      size of population

             7                                                                                                         4


             66                                                                                                                                                                                                                             5 5Million
             6                                                                                                                                                                                                                              5 Million
             55                                                                                                        33

             5                                                                                                         3


                                                                                                                                                                                                                         of of

             33                                                                                                        22                                                                                                                   4 4Million


             3                                                                                                         2                                                                                                                    4 Million

             11                                                                                                        11            average
                                                                                                                       1             average annual growth rate                                                                             3 3Million
                                                                                                                                                                                                                                            3 Million
             0                                                                                                  00                                                                                                                                   2005                 2010                      2015      2020
              1990-95              1995-00
                                     1995-00       2000-05
                                                     2000-05   2005-10
                                                                 2005-10      2010-15
                                                                                2010-15   2015-20
                                                                                            2015-20                                  1995-00     2000-05        2005-10        2010-15       2015-20                                                   2005                 2010                      2015      2020
                                                                                                               1990-95                 1995-00     2000-05        2005-10        2010-15       2015-20                                               2005                 2010                      2015      2020
           1990-95                 1995-00         2000-05     2005-10        2010-15     2015-20                1990-95             1995-00     2000-05        2005-10        2010-15       2015-20

Source: ESRI Medium-Term Review 2007                                                                  Source: ESRI Medium-Term Review 2007                                                                    Source: NCB Report 2020

For many people in Ireland, the past decade has meant a rise in                                       flow reflected a rising number of migrants from outside the EU.                                         1 Quarterly Economic Review 2007
wealth and prosperity. However, there is evidence of a significant                                    Most recently there has been a surge in immigration from the new                                        2 ESRI 2007
                                                                                                                                                                                                              3 NCB Report 2020
minority who are vulnerable and at risk. The proportion of the                                        EU member states3. Ireland’s population is set to become more
                                                                                                                                                                                                              4 Department of Health, Ireland
population at risk of poverty (according to the CSO categorisation)                                   culturally diverse as can be seen in the importance of ethnic foods
was 20% in 2005, the latest year for which figures are available. This                                in the vision narrative.
is one of the highest ratings across the EU and is a reflection that
the strong growth, which has benefited most of the population,                                        Ireland has also experienced many of the demographic changes
has also left a section of society increasingly isolated. The scenarios                               witnessed in other developed economies of the world. The average
seek to represent how this dichotomy plays out in the future – for                                    household size has fallen to 2.85, in contrast to a figure of 4.0 in
example, Off the Menu is a desirable scenario for some sections of                                    1966. The average age at which women give birth is rising, and
society but leaves others vulnerable and excluded. Indeed all four                                    fewer couples are having children than ever before. Women enjoy
scenarios reflect both ‘good’ and ‘bad’ as they seek to represent                                     a life expectancy of almost 82 and men just over 774. We have seen
plausible views of how the future may play out.                                                       significant growth in the number of apartments built, particularly
                                                                                                      in the larger cities in order to accommodate the rise in people who
The rising demand for labour has been met with reduced                                                choose to live on their own. This plays out in different ways in the
unemployment and a growth in migration. We have seen net                                              four scenarios. For example, more communal living emerges in
migration into the country every year since 1996. This has and will                                   Round the Table as house prices force individuals to consider new
continue to fuel population growth. The population is forecast to                                     ways to live their lives. In the Lab is a more individualistic world,
grow by 25% between 2005 and 2020 (Figure 3).                                                         where living on one’s own remains popular for those who can
                                                                                                      afford it.
New migrants are expected to continue to come primarily from
within the EU but are also expected to arrive from Asia (Figures                                      Ireland also faces the challenge of an increasingly ageing
4 & 5 ). In the 1990s, people who had formerly emigrated from                                         population – as does most of Western Europe (Figure 6). While
Ireland constituted half of the migrant inflow. Subsequently the                                      rates are slower in Ireland in the shorter term, over the medium

                                                                                                                                                                                              Shaping the future of the I rish food and drink mark et towards 2020                                                    12
2000                                                                        2001                          2002      2003      2004            2005        2006                                                 1994-1995                             1994-1995             1999-2000   1999-2000   2004-2005   2004-2005                       2003                20042003 20052004 20062005 20072006 20082007 20092008 20102009 20112010 20122011                                                                                           2012
                                      2000                                                                        2001
                                                                                                                   2000                         2002
                                                                                                                                                 2001     2003
                                                                                                                                                           2002     2004
                                                                                                                                                                     2003           2005
                                                                                                                                                                                     2004       2006
                                                                                                                                                                                                 2005         2006

                                                         Figure 4: Current and projected migrant population in Ireland                                                                                                                                      Figure 5: The nationalities of the current non-Irish population in                                                                                         Figure 6: Population growth forecasts for each age cohort in Ireland
                                                                                                                                                                                                                                                            Ireland in 2006

                                                                                                                                        Total population
                        Average annual growth rate (millions)

                                                                   6                                                                  Total population
                                                                                                                                                 Total population
                       Average annual growth rate (millions)

                                                                                             Average annual growth rate (millions)

                                                   6                                                                                  6 Born in Ireland                                               5.334

                                                                                                                                                                                                                                                                                                                                                                                                                % change of cohort from 2005 base year
                                                                                                                                      Born in Ireland
                                                                                                                                                 Born in Ireland                                   5.334         5.334

                                                                                                                                                                                                                                                                                                                                                                                                               % change of cohort from 2005 base year

                                                                                                                                                                                                                                                                                                                                                                                                                                                                              % change of cohort from 2005 base year
                                                                   5                                                                    Not born in Ireland                                                                                                                                  180,000
                                                   5                                                                                  Not
                                                                                                                                      5 born in  NotIreland
                                                                                                                                                       born in Ireland                     4.334                                                                                          180,000     180,000    163,227                                                                                                                                 50                                                                         0-15      15-24   25-44        45-64   65+             total
                                                                                                                                                            4.131                                                                                                                                                                                                                                                                                                                                                                0-15       15-24
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            0-15    25-44
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     15-24       45-64
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 25-44   65+
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          45-64         total
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          65+                total
                                                                                                                                                         4.131      4.131               4.334       4.334                                                                                    160,000          163,227      163,227                                                                                                       50                                                                            50
                                                                  4                                                                              3.735                                                                                                                                    160,000     160,000                                                                                                                                                                                                                                                                                      37.7
                                                                                                                                              3.735       3.735                                                                                                                              140,000                                                                                                                                                     40

                                                                                                                                                                                                                                                             Population size
                                                   4                                                                                  4                                                                                                                                                                                                                                                                                                                                                                                                                              33.5                       37.7                 37.7
                                                                                                                                                                                                                                                                                          140,000     140,000                                                                                                                            40                                                                            40

                                                                                                                                                                                                                                                            Population size

                                                                                                                                                                                                                                                                                                  Population size
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  33.5          33.5
                                                                                                                                                                                                                                                                                             120,000 112,548                                                                                                                                             30                                                                                                                       26.4                     27.1
                                                                 3                                                                                                                                                                                                                        120,000 112,548
                                                                                                                                                                                                                                                                                                      120,000 112,548                                                                                                                                                                                                                                           24.4                                    27.1    24          27.1
                                                                                                                                                                                                                                                                                                                                                                                                                                         30                                                                            30                                                      26.4           26.4
                                                  3                                                                                   3                                                                                                                                                      100,000                                                                                                                                                                               20.3                                                                      24.4         24.4                               24                    24
                                                                                                                                                                                                                                                                                          100,000     100,000                                                                                                                                            20                     20.3                                                                       20.3
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           15.6            16.6
                                                                                                                                                                                                                                                                                              80,000                                                                                                                                                             13.4 12.2                                                                                             16.6          16.6      14.2
                                                                  2                                                                                                                                                                                                                        80,000      80,000
                                                                                                                                                                                                                                                                                                                                                                                                                                         20        9.9 20 10.213.4 12.2    13.4
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        15.6         15.6                   14.2              14.2
                                                   2                                                                                  2                                                                                                                                                       60,000                                                                                                                                        10 9.9       10.29.9      10.2 8.1 12.2
                                                                                                                                                                                                                                                                                                                                                 46,952                           45,597                                                                                 8.1          8.1
                                                                                                                                                                                  1.0                                                                                                      60,000      60,000                          35,326 46,952      46,952               45,597       45,597                                       10                                                                            10
                                                                  1                                                                                                         1.0           1.0                                                                                                 40,000
                                                                                                                                                                                                                                                                                           40,000      40,000                24,425 35,326     35,326      21,124                                                                        0
                                                   1                                                                                  1 0.395                                                                                                                                                 20,000                      24,425      24,425            21,124
                                                                                                                                                                                                                                                                                                                                                                    21,124                                                            0                                                                                  0
                                                                                                                                     0.395        0.395                                                                                                                                    20,000      20,000                                                      16,131       16,131
                                                                                                                                                                                                                                                                                                                                                                                                                                       -10                                                                                                                                             -4.1
                                                                    0                                                                                                                                                                                                                             0                                                                                                                                                                                                                                                                                 -4.1              -4.1
                                                                                                                                                                                                                                                                                               0        UK0     Rest of Rest of Africa            Asia     America Other            Not                                             -10                                                                                -10
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         -9.6                         -10.3
                                                    0                                                                                 0                                                   2020                                                                                                                                                                                                                                                                                                            -9.6                     -9.6
                                                                                                                                                   2005                                                                                                                                              UK       Rest
                                                                                                                                                                                                                                                                                                                EUof Rest Restofof Africa
                                                                                                                                                                                                                                                                                                                            Europe   Rest of Asia
                                                                                                                                                                                                                                                                                                                                               Africa America
                                                                                                                                                                                                                                                                                                                                                          Asia Other
                                                                                                                                                                                                                                                                                                                                                                   America     Other
                                                                                                                                                                                                                                                                                                                                                                                 Notstated Not
                                                                                                                                                                                                                                                                                                                                                                     nationalities                                                     -20                                                                                                         -10.3       -10.3
                                                                                                                                                 2005       2005                        2020         2020                                                                                                                                                                                                                           -20                                                                                -20
                                                                                                                                                                                                                                                                                                              EU         Europe
                                                                                                                                                                                                                                                                                                                          EU         Europe                       nationalitiesnationalities
                                                                                                                                                                                                                                                                                                                                                                                 stated      stated                                                                                                                               2010                      2015                                2020
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                2010       2010           2015         2015                   2020             2020

                                                         Source: NCB report 2020                                                                                                                                                                            Source: CSO                                                                                                                                                Source: CSO

                                                         term, the country will face real challenges in terms of caring for                                                                                                                             6   world will be overweight and more than 700 million will be obese8.                                                                                         such pressures evolves differently in each of the four scenarios.)
                        10                                                                                                                                                                                                               6                    6
                                                         the10elderly, providing adequate pensionsGNP
                                                                                                    and maintaining a viable                                                                                                                                Obesity undoubtedly represents a significant challenge in the                                                                                              The growing demand on world markets for oil and geo-political
                                                                                                                                                                                                                                                                                                                                                                                                                         6 Million
                  9                                          9                                   GNP     GNP                                                                                                                                            5
                                                                                                                                                                                                                                                            world                       Employment        Labour Force
                                                         dependency      ratio.                                                                                                                                                                               5 today.
                                                                                                                                                                                                                                                                                                                                                                                                                        Millionis 6resulting
                                                                                                                                                                                                                                                                                                                                                                                                                                    Million  in shortages in supply. Crude oil prices were
                                 8                                                                GNP per hea d                                                                                                                          5                                             Employment
                                                                                                                                                                                                                                                                                              EmploymentLabour Force
                                                                                                                                                                                                                                                                                                                Labour Force
                                                                                                                                                                                        GNP per GNP
                                                                                                                                                                                                hea dper hea d
  average annual growth rate

                                                                                                                                                                                                                           average annual growth rate

                  8                                                                          8
                                                                                                                                                                                                                                                                                                                                                                                                                       three times higher in 2006 than they were three years earlier9 and
average annual growth rate

                                                                average annual growth rate

                                                                                                                                                                                                                         average annual growth rate

                                                                                                                                                                                                                                                             average annual growth rate
                                 7                                                                                                                                                                                                                      4

                                                                                                                                                                                                                                                                                                                                                                                                 size of population
                  7                                                                          7                                                                                                                                           4

                                                                                                                                                                                                                                                                                                                                                                                               size of population

                                                                                                                                                                                                                                                                                                                                                                                                                                                         size of population
                                 6                       With the proportion of the population aged over 60 forecast to                                                                                                                                                                                                                                                                                                such   pressures have informed the development of the scenario
                                                                                                                                                                                                                                                                                                                                                                                                                         5 Million
                  6                                           6                                                                                                                                                                                                                                                                                                                                                       5 Million 5 Million
                                 5                       increase to 20% by 2020, while at the same time those aged under                                                                                                                               3                                                                                                                                                              narratives, for example, forcing individuals to travel less and rely
                  5                                           5                                                                                                                                                                          3                                                3
                                 4                       25 are
                                                                 decreasing in size, the population will have different food                                                                                                                                Global issues such as climate change and resource shortage                                                                                                 on local service providers in Round the Table.
                                                                                                                                                                                                                                                                                                                                                                                                                        4 Million
                                 3                       and3drink desires to today. Equally, the desire to maintain good                                                                                                                2
                                                                                                                                                                                                                                                        2   are 2affecting the wider operating environment of the food and                                                                                            4 Million 4 Million
                  2                                      health
                                                              2   and wellness will be a driving factor in consumption and                                                                                                                                  drink industry. The scenarios and the vision recognise that by                                                                                            Biofuels (fuels made from crops such as wheat, rapeseed, corn
                                                         lifestyle choices. This is illustrated in all four scenarios (although in
                                                                                                                                                                                                                                                            2020     average annualstresses
                                                                                                                                                                                                                                                                1 average
                                                                                                                                                                                                                                                                                    growth rate
                                                                                                                                                                                                                                                                                            and associated legislation will play                                                                                      and    sugar) are increasingly being seen as plausible alternatives
                  1                                           1                                                                                                                                                                          1                                 average
                                                                                                                                                                                                                                                                           annual growth
                                                                                                                                                                                                                                                                                          growth rate                                                                                                                   3 Million
                                 0                                                                                                                                                                                                                                                                                                                                                                                    3 Million 3 Million
                  0                                      different
                                                              0     ways) and most significantly in the vision.                                                                                                                       0                     a prominent role in the world at large. (However, the response to                                                                                         to petrochemicals.
                                                                                                                                                                                                                                                                                                                                                                                                                                2005        A growing
                                                                                                                                                                                                                                                                                                                                                                                                                                                 2010  proportion  of agricultural 2020
                                                                                                                                                                                                                                                                                                                                                                                                                                                                 2015              land,
              1990-95    1995-00     2000-05      2005-10     2010-15    2015-20                                                                                                                                                   0        0  1995-00      2000-05     2005-10     2010-15     2015-20                                                                                                                                                                  2005                                                   2005        2010     2010         2015          2015            2020                 2020
            1990-95 1990-95
                       1995-00 1995-00
                                   2000-05 2000-05
                                                2005-10 2005-10
                                                            2010-15 2010-15
                                                                       2015-20 2015-20                                                                                                                                               1990-95 1995-00  1995-00
                                                                                                                                                                                                                                                          2000-05 2000-05
                                                                                                                                                                                                                                                                      2005-10 2005-10
                                                                                                                                                                                                                                                                                  2010-15 2010-15
                                                                                                                                                                                                                                                                                              2015-20 2015-20
                                                                                                                                                                                                                                  1990-95 1990-95
                                                         Amongst the wider population there have been changes in                                                                                                                                            Table1: Potential impacts and vulnerabilities for Ireland resulting from climate change (temperature increase)
                                                         people’s lifestyles. The growing service sector has fuelled the growth
                                                         of more sedentary and less structured living. Between 1995 and                                                                                                                                                Up to 1ºC change                                                                                                                                                 Up to 2ºC change                                                                                                       More than 2ºC change
                                                         2004, employment in the service sector in Ireland increased by
                                                                                                                                                                                                                                                                       Longer growing season                                                                                                                                            Reduced soil moisture                                                                                                  Sea level rise and flooding
                                                         58%, compared with an increase of 6% in the manufacturing
                                                         sector5. With modern living has come the rise of modern ailments,                                                                                                                                             Potential for new crops e.g. soybean                                                                                                                             Water shortages in summer                                                                                              Loss of coastal habitats
                                                         and society has continued to get increasingly obese6 and levels of
                                                                                                                                                                                                                                                                       Increased production of existing cereal and grass crops                                                                                                          Fish stocks may suffer due to                                                                                          Increase in intense/extreme
                                                         reported stress are significant7. Obesity levels are unlikely to have
                                                                                                                                                                                                                                                                                                                                                                                                                                        change in water temperature                                                                                            weather events
                                                         dissipated substantially over the next thirteen years and this forms
                                                         a backdrop to each of the scenarios; the legacy of today is deep                                                                                                                                              Heat stress leads to poor animal health                                                                                                                          Increased demand for irrigation
                                                         rooted and will leave a major challenge for future generations. It
                                                         is projected that by 2015, approximately 2.3 billion adults in the                                                                                                                                 Source: NCB report 2020

                                                    13                                                                                 Anticipating Tomorrow
ars                                                                                                                        18-35 years                  36-50 years             51-64 years                                                                                                                                                                                18-35 years               36-50 years            51-64 years

           Figure 7: Average weekly household expenditure on food 1994-2005                                                                                                                   Figure 8: Foodservice market size in Ireland                                                                                                                                                                                                                Figure 9: Deli market size in Ireland to 2012

                                                                                                                                                                                                                                                                                                                                                                                                                                                          160                                                                                                                                                                                                                  1200
                    160                     8                                                                                                                          142.74                         12008160                                                                                                                                                                                               1084   1101      1122
                                                                                                                                                                                                                                                                                                                                                                                                                                142.74 1128                                     1200                                                                                                                                      1084   142.74
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 1101     1122     1128
                                                                                                                                                                                                                                                                                                                                                                                         1039       1062                         6.8bn                    140                                                                                                                                             1039   1062
bn                  140                     7                                                                                                                                        6.8bn                7140                                                                                                                                                                    993                               6.4bn                                                                                                                                                                       993
                                                                                                                                                                        6.4bn                         1000                                                                                                                                                            914                          117.67 6.1bn                                                                 1000                                                                                                   914            117.67                                                                   1000
                                                                                                                                       117.67               6.1bn                                                                                                                                                                                                                          5.7bn                                                          120
                    120                     6                                                                                  5.4bn            5.7bn                                                     6120                                                                                                825                                                              5.4bn                                                                                                                                                          825                                                                                                                                     763
                                                                                                                                                                                                       8005100 763                                                                                                                                     5bn                                                                                                                                                                                                                                                                                                                      800


                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               Euro billions
                                                                                                                    5bn                                                                                                                                                                                                                                                                                                                                   100                            800
                          Euro billions

                                                                                                                                                                                                                                                                                                                                                                                                                                                                Euro billions
                                                                                                                                                                                              Euro billions
                    100                     5
                                                                                4.2bn                                                                                                                           4.2bn                                                                                                                                                                                                                                                                                              70.75

                     80                                                         70.75                                                                                                                  6004 80                                                                                                                                         70.75                                                                                                                                                                                                                                                                                                                    600

                                            4                                                                                                                                                                                                                                                                                                                                                                                                                                            600

                     60                                                                                                                                                                                   3 60                                                                                                                                                                                                                                             60
                                            3                                                                                                                                                            400                                                                                                                                                                                                                                                                             400                                                                                                                                                                                    400
                     40                     2                                                                                                                                                              2 40
                                                                                                                                                                                                         200 20                                                                                                                                                                                                                                            20                            200                                                                                                                                                                                    200
                     20                                                                                                                                                                                    1
                                                                                                                                                                                                                                                                                                                                                                                                                                                            0                                                                                                                                                                                                                     0
                      0                     0                                                                                                                                                              0 0                                                                                                                                                                                                                                                                                               0
                                                        1994-1995                                                                                                                                                                                         1994-1995                                                                                                                           1999-2000                       2004-2005                                                                          1994-1995                                                                        1999-2000               2009 2004-2005                                              2003
06                                                         2000                                                     2001       20021999-20002003             2004     2004-2005
                                                                                                                                                                         2005         2006                                                          2000 2004
                                                                                                                                                                                                                                                  2003        20012005                                                                                                         2002
                                                                                                                                                                                                                                                                                                                                                                                2006       2003
                                                                                                                                                                                                                                                                                                                                                                                         2007    2008 2004
                                                                                                                                                                                                                                                                                                                                                                                                         2009       2005
                                                                                                                                                                                                                                                                                                                                                                                                                    2010         2006 2012
                                                                                                                                                                                                                                                                                                                                                                                                                              2011                                                                                2003     2004                                                        2005     2006    2007     2008            2010    2011      2012

           Source: Household Budget Survey 2004/2005 (preliminary figures)                                                                                                                    Source: Mintel 2006                                                                                                                                                                                                                                         Source: Mintel

           particularly in developing countries such as Brazil and Mexico, is                            On the demand side, consumers are spending more money than                                                     5 OECD 2006 Annual Labour Force Statistics
                                                                                                                                                                                                                        6 Irish Health Promotion Unit
           being devoted to6 crops for    biofuels    rather than for food10. With                       ever on eating     and Total
                                                                                                                                           populationaverage weekly spend of food has

                                                                                                                                                                                                                                         Average annual growth rate (millions)
                                       Total population                                                                 6
                                                        Average annual growth rate (millions)

 5.334                                                                            5.334                                            Born in Ireland                                             5.334                    7 36% of the Irish population say they feel 'regularly stressed' according to
                                       Born in Ireland
           powerful world leaders such       as President Bush determined to rely                        doubled between 1994/1995                     and 2004/2005 from €70 to €142

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              % change of cohort from 2005 base year
                                                                                                                                                                                                                                                                                                              % change of cohort from 2005 base year
                                                                                                                        5          Not born in Ireland                                                                    the World Health Organisation (This is below the EU average of 39%)
                             5 180,000 Not born in Ireland                                                                           180,000                                                                                                   180,000
           more on biofuels11, this situation 163,227
                                                         set to continue. 4.334                          (Figure 7). In addition50 to this, tastes     0-15
                                                                                                                                                         4.131 and    consumer
                                                                                                                                                             163,227                  needs
                                                                                                                                                                             25-44 4.334 45-64 have 65+        total 8 The World Health Organisation
                                                                                                                                                                                                                                                      50           Mediacentre
                                                                                                                                                                                                                                                                  163,227          15-24      25-44        45-64      65+       total
                                 160,000                                                                                             160,0003.735
                             4                  3.735                                                    evolved     and4 this is
                                                                                                                                40 reflected        in  the   kind    of items    on   which      people                9
                                                                                                                                                                                                                     37.7  Reuters             140,00040                                                                              37.7

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     Population size
                                 140,000                                                                                             140,000

                                                                                                                                                                                                                                                                                                                                                         Population size
                                                                                                Population size

                                                                                                                                                                                                                        10 The    knock-on    effects
                                                                                                                                                                                                                                               120,000  on  food  supply    have   already    been     seen   in parts   of
           Looking forward 3to120,000
                                  2020, 112,548
                                          the impact of climate change cannot be                         now spend3money.       30 Some
                                                                                                                                     120,000 of      the key changes in consumer
                                                                                                                                                  112,548                                          spend
                                                                                                                                                                                                     26.4                  27.1
                                                                                                                                                                                                                           the 24world. In Mexico     30
                                                                                                                                                                                                                                                                                                                       26.4                 27.1
                                                                                                                                                                                                                                               100,000 mass protest resulted as the    20.3 cost of the staple maize
                                                                                                                                                                                     24.4                                                                                                              24.4                                      24
                                 100,000                                                                                             100,000                           20.3
           ignored on both a global
                                          and  local    level. Like  many     parts   of the             are   captured   through
                                                                                                                                20     ‘Rise
                                                                                                                                                 of   the   connoisseur
                                                                                                                                                       13.4 12.2
                                                                                                                                                                                15.6            and
                                                                                                                                                                                                                14.2                            80,00020
                                                                                                                                                                                                                           was priced out of the diet of the          everyday
                                                                                                                                                                                                                                                                        13.4 12.2 Mexican. This year alone, world
                                                                                                                                                                                                                                                                                                  15.6           16.6
                             2                                                                                          2              9.9        10.2                                                                                                     9.9     10.2
           world, Ireland is witnessing
                                  60,000     higher temperatures. Ireland's    46,952
                                                                                       mean              ‘Growth
                                                                                                                     of ethical10consumption’
                                                                                                                                      60,000               which 8.1
                                                                                                                                                                     were1.0identified 46,952as two                        market
                                                                                                                                                                                                                                       maize prices    have increased from 8.1
                                                                                                                                                                                                                                                60,00010                          2.4 to 3.5 dollars
                                                                                                                                                                                                                                                                                                   46,952 per bushel                 45,597
                                                                          1.0                                                                                                                                                                   40,000                                 35,326
           annual temperature1     has0.395
                                  40,000 increased by 0.7°C
                                                             24,425since 1890 and is
                                                                                           set to 16,131 highly significant drivers
                                                                                                                                              during the scenario
                                                                                                                                                                        24,425process.                21,124
                                                                                                                                                                                                                           (35   litres). Reuters  20070                      24,425                         21,124
                                                                                         21,124                                                                                                                    16,131                       20,000                                                                   16,131
                                  20,000                                                                                              20,000                                                                            11 Mr Bush announced           new targets of producing 7.5b gallons of ethanol by-4.1
           continue to rise12.0 This 0may not seem like a significant increase but                                      0      -10         0                                                              -4.1
                                                                                                                                                                                                                           2012     which   would
                                                                                                                                                                                                                                                     consume     40%    of US   maize  (Irish  Independent,
                                           UK      Rest of Rest of Africa      Asia2020 America Other          Not                           -9.6 UK        Rest of Rest -10.3
                                                                                                                                                                            of Africa        Asia     America Other               Not                     UK -9.6 Rest of    Rest of Africa -10.3  Asia      America Other            Not
           differences in temperature of just    2005one or two degrees Celsius could
                                                   EU       Europe                                       Onestated
                                                                                                 nationalities   such change-20in consumer     2005 tastes is demonstrated by the
                                                                                                                                                            EU         Europe                                              1st February
                                                                                                                                                                                                                  nationalities   stated    2007) -20             EU         Europe                                     nationalities stated
                                                                                                                                                                                                                                                                     2010                           2015                           2020
           significantly affect agricultural productivity and the nature of the                          growing popularity of eating2010             out which has risen2015       significantly                 2020
                                                                                                                                                                                                                        12 IPCC
           crops that will thrive in Ireland (see Table 1 on previous page). The                         since 2000. This is illustrated by the value of the foodservice market
           impacts of bio-fuel and climate change are uncertainties for which                            which in 2000 was worth €4.2billion. By 2006 the value of this
           preparation is needed. Both could significantly influence the cost of                         market was €6.8billion (Figure 8). This trend comes to the fore in the
           food and drink manufacturing and production.                                                  Off the Menu scenario.
           The food610and drink market                                                    10
                                                                                   There is  strong evidence of consumers’ increasing desire for higher

                                                                  GNP                      9                                             GNP
                                                       Employment GNP per
                                                                       Labour      quality in  the5 food  that they eat as shown in the
                                                                                                      6 Million                         prominence ofLabour Force
                                                                                                                                    Employment                                                                                                                                                                                                                                                                                                                                                               5                                            6 Million                                                Employment                    Labour Force
er hea d
                        8                                                 hea dForce       8                                             GNP per hea d
           The dynamics of the Irish domestic food and drink market have
                                                                                                                                                                                                            average annual growth rate

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                average annual growth rate
                           average annual growth rate

                                                                                                                                                                                                                                                                                 average annual growth rate
                           average annual growth rate

                                                                                           7                                                                                                                                                                                                                                                                                                                                                                                                                 4
                      4 7                                                                         4

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         size of population
           changed significantly in recent years and are being shaped by
                                                                                                                                                                                                                                                                                      size of population

                        6                                                                  6          5 Million                                                                                                                                                                                                                                                                                                                                                                                                                                           5 Million
           supply and demand with the scenarios process identifying drivers                5
                      3 5                                                                         3                                                                                                                                                                                                                                                                                                                                                                                                          3
           from both sides.
                        4                                                                  4

                                           2 3                                                                                                                                                                                           3                                                         2                      4 Million                                                                                                                                                                          2                                            4 Million

                                                        2                                                                                                                                                                                2

                                           1 1                                                                    average annual growth rate                                                                                             1                                                         1                                                                        average annual growth rate                                    Shaping the future1 of the I rish food
                                                                                                                                                                                                                                                                                                                                                                                                                                                                       average   and drink
                                                                                                                                                                                                                                                                                                                                                                                                                                                                               annual growthmark
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             rate et towards 2020                                                                                                                                         14
                                                                                                                                                                                                                                         0                                                                                3 Million                                                                                                                                                                                                                       3 Million
                                           0                                                                                                                                                                                                                                                       0                                                                                                                                                                                                         0                                                                           2005                      2010                     2015                               2020
                                                                                                                                                                                                                                                                                                                                                                           2005                       2010                      2015                2020
Figure 10: Percentage of energy from food and drink eaten ‘out’

                                                          40%                                                          35%
                                                          30%                                                                         25%
                                                                                    19%                                                          18%

                                                                                 women                                                     men

                                                                           18-35 years            36-50 years                51-64 years

                Source: North/South Ireland Food Consumption Survey 2001

                 the drivers ‘Consumer desire for perceived fresh’ and ‘Increasing                                                                            match approach to their purchases, buying a combination of                                                      total value of agricultural output produced in Ireland by 2015
                 desire for balance and wellbeing’ as consumers recognise the                                                                                 branded and own-label or even items from the discounter brands.                                                 would be 8% lower than it would be otherwise17.
                 link between good food and good health. The deli market has
                8therefore witnessed a high level of growth as consumers show an 160                                                                          Looking to the supply-side of the market, 142.74
                                                                                                                                                                                                             the rise of the big   1200
                                                                                                                                                                                                                                                                              The strictness of legislation regarding
                                                                                                                                                                                                                                                                                                                 1084 issues 1122
                                                                                                                                                                                                                                                                                                                        1101 such as1128food labelling, food
                                                                                                                                                                                                                                                                                                      1039  1062
                7                                                    6.8bn            140                                                                                                                                                                                                       993
                 increased willingness to purchase
                                                     fresh and
                                                   6.1bn          specialised produce 120                                                                     players in the retail sector   show no signs of abating and this was 1000
                                                                                                                                                                                        117.67                                     a                                          safety825standards and food marketing will place growing demands on
                6                   5.4bn                                                                                                                                                                                                                                   763
                5rising to an estimated €1,039million in 2007 from €763million in
                              5bn                                                                                                                             key consideration when analysing drivers and assessing scenario 800
Euro billions

                                                                                                                                                                                                                                                            Euro billions
                                                                                       80                                                                           70.75
                                                                                                                                                                                                                                                                              "3 in 10 people in Ireland claim to have

                42003 (Figure 9). Another indication of the increased popularity of                                                                           development.    The growth of Tesco worldwide is continuing at 600
                3fresh produce can be seen in the relatively small growth in the
                                                                                                                                                              a great pace supported by new retail formats – Tesco in Ireland 400                                             changed their eating habits to be healthier in
                 frozen food sector which has risen only 6% between 2000 and                                                                                  showed growth of 16.6% in 2006. By 2007, Tesco had 93 stores in 200
                 2005   (from €298million to €316million).
                                                                                        0                                                                     Ireland, bringing in over 1 million customers a week14. Although         0
                                                                                                                                                                                                                                                                              the last 12 months."
                                                                                                                                                                  1994-1995           1999-2000            2004-2005                                                        2003 2004 2005   2006                                           2007   2008   2009       2010     2011   2012
                                               2000               2001         2002       2003         2004           2005          2006                      there has been some consumer backlash over ‘Tescopoly’15 and                                                    PERIscope 4, 2007
                Another growth area is the ready meals sector which has also risen                                                                            a growth in the popularity of local produce, this looks unlikely to
                with €112.4million spent in 2005 compared with only €67million                                                                                significantly affect the retailer’s success going forward. Further                                              producers. Whilst these factors will present challenges to all businesses,
                in 2000, highlighting the increased importance placed on                                                                                      consolidation can also be expected.                                                                             it is likely to be the small business sector that will struggle the most to
                convenience by busy consumers when making grocery choices.                                                                                                                                                                                                    adapt to the changes new legislation will demand.
                                                                                                                                                              The influence of legislation is difficult to predict but a restructuring
                Consumers are shopping for food differently as they become                                                                                    of the Common Agricultural Policy (CAP) and changes to the World                                                From a consumer demand perspective, the food and drink
                increasingly  savvy    in their dealings with brands (‘Rise of the savvy
                              Total population                                                                                                                Trade Organisation (WTO) will no doubt affect the competitiveness                                               market of today can be characterised as one in which the
                  Average annual growth rate (millions)

                consumer’ and Born‘Growth
                                    in Ireland of own label products' were      identified as                                                                 of the Irish food and drink industry16. For example, further trade                                              majority of consumers are struggling to improve their health

                                                                                                                                                                                                                                                                                    % change of cohort from 2005 base year
                      5       Not born in Ireland
                important drivers). While branded
                                                4.131    goods  are  still
                                                                  4.334    important,   fewer                                                                 liberalisation
                                                                                                                                                                         180,000through WTO reforms will lead to reductions in
                                                                                                                                                                                          163,227                                                                             and wellbeing
                                                                                                                                                                                                                                                                                      50       whilst0-15seeking 15-24easy     and convenient
                                                                                                                                                                                                                                                                                                                            25-44        45-64      65+ ways  total to buy
                      4      associate 3.735own label products with inferior quality. In                                                                      agricultural    supports
                                                                                                                                                                         140,000          and   subsidies, and greater competition from                                       and consume
                                                                                                                                                                                                                                                                                      40      food. Three quarters (77%) 33.5             of Irish consumers        37.7
                                                                                                                                                                     Population size

                fact a3 recent MORI survey found that 45% of respondents want                                                                                 imports. 120,000
                                                                                                                                                                         The main      beneficiaries of such reforms would be large
                                                                                                                                                                                  112,548                                                                                     claim they
                                                                                                                                                                                                                                                                                      30 try to eat foods that are low                 or
                                                                                                                                                                                                                                                                                                                                     24.4  lower     in
                                                                                                                                                                                                                                                                                                                                                     26.4 fat  and    83%27.1
                                                                                                                                                                         100,000                                                                                                                                     20.3 18
                retailers to offer a wider variety of own-label lines than they                                                                               scale corporations
                                                                                                                                                                                       operating in low-cost environments such as                                             try to buy
                                                                                                                                                                                                                                                                                      20 foods that      are
                                                                                                                                                                                                                                                                                                     13.4 12.2
                                                                                                                                                                                                                                                                                                               natural       . However,
                                                                                                                                                                                                                                                                                                                                15.6          while
                                                                                                                                                                                                                                                                                                                                               16.6    consumers
                      2                                                                                                                                                                                                                                                                   9.9   10.2
                currently do13. Consumers are also very willing to take a mix and                                                                             Brazil, India   and China. It is projected that with
                                                                                                                                                                          60,000                                 46,952WTO reform, the 45,597                                 are aware
                                                                                                                                                                                                                                                                                      10 of the need to stay healthy, their actions do not always
                                                                                                                1.0                                                                    40,000                            35,326
                                                          1                                                                                                                                                     24,425                   21,124                                                                               0
                                                                   0.395                                                                                                               20,000                                                      16,131
                15                                              Anticipating Tomorrow                                                                                                      0                                                                                                                                 -10                                                            -4.1
                                                          0                                                                                                                                                                                                                                                                        -9.6
                                                                                                                                                                                                UK   Rest of   Rest of   Africa   Asia   America Other         Not                                                                                           -10.3
                                                                                 2005                                        2020                                                                                                                                                                                            -20
                                                                                                                                                                                                     EU        Europe                            nationalities stated
                                                                                                                                                                                                                                                                                                                                          2010                         2015                        2020
match their good intentions. Pressures such as lack of time and       "72% of grocery shoppers in Ireland, always                         13 IPSOS MORI 2007
energy mean that consumers may have to compromise their               or sometimes check the labels for country                           15 This is a term invented by anti-Tesco consumers in the UK, referring to
healthy eating ideals, finding themselves grabbing convenience
                                                                      of origin."                                                             Tesco’s seeming monopoly over the food retail market
foods on-the-go rather than spending time making healthy meals19.                                                                         16 Bord Bia Annual Report, Chairman’s statement
Consumers are also eating out more and cooking in the home            PERIscope 4, 2007                                                   17 Teagasc Annual Report 2005
less frequently. This behaviour is much more common amongst                                                                               18 PERIscope 4, 2007
                                                                                                                                          19 HCHLV Henley World 2006 – 30% of EU consumers say that they ‘eat on
the younger age cohorts and thus this behaviour pattern is likely     organic food in Ireland is growing.
                                                                                                                                              the go much more than I used to’ and over 25% of EU consumers say that
to continue in the future, assuming their eating habits remain        Average spend on organics per month has grown from €29 to €40           they ‘don’t have enough time to spend cooking and preparing food’; 23%
the same. An acknowledgement of the duality of even the most          between 2003 and 2007.                                                  of people eat in their car at least once a week, PERIscope 4, 2007
well-intentioned consumers can be found in the vision itself, where                                                                       20 HCHLV Henley World 2006
                                                                                                                                          21 In a number of interviews with those in Irish industry, the rising costs of
consumers make healthy choices most of the time yet indulge at        "56% of consumers across Ireland agree ‘I am more                       doing business were cited as a critical challenge both currently and going
weekends and on special occasions.                                    conscious of environmental issues in my choice of                       forward. Costs include the significant regulatory burden, wage levels,
                                                                                                                                              insurance costs, waste management costs and high utility bills. Retailers
Many consumers adopt a ‘credit-debit’ approach to consumption
                                                                      products today.'"                                                       interviewed expressed similar concerns about their cost burden.
                                                                      PERIscope 4, 2007                                                   22 For further background on scenario development as a futures
by balancing out their indulgent moments with healthier food
                                                                                                                                              methodology, please see ‘Scenarios: The Art of Strategic Conversation’ by
or drink. Smart shoppers are seeking out the best value, often                                                                                Kees Van Der Heijden, Wiley & Sons 2004, and ‘The Art of the Long View:
mixing and matching high end, premium products with those             Increasingly, consumers are considering the wider environmental         Planning for the Future in an Uncertain World’ by Peter Schwartz, Wiley &
from discount chains. Some also seek out more artisan produce at      impact of their shopping and eating habits; environmental               Sons 1997
farmer’s markets and local outlets.                                   sustainability is rising up the consumer agenda even though it
                                                                      remains a rare – or sometimes modal – consideration for some.
Traceability and quality assurance remain important to consumers
who want to be reassured about the origins of their food20. Linked
to this concern is the growing popularity of organic food. Although
still small at 0.5% of the total Irish food market, the market for

                                                                                                                               Shaping the future of the I rish food and drink mark et towards 2020                    16
The importance of looking to the future

It is all too easy for organisations – and sometimes whole industries
– to get caught up by short-term planning cycles – preparing for
the next 6-12 months with budgetary and cost pressures top of
mind. At a time when the Irish food and drink industry is under
significant pressure, with rising costs of doing business21 and
increasing global competition, it is more important than ever that
the industry takes a proactive approach to the future.

Effective futures work links back from the future to today, informing
decisions and driving strategy at the individual company and
overall industry level. There are no future facts; it is critical to look
to the present to provide clues about the food and drink market of
the future. Scenario development helps to determine what are ‘real
leads’ which point towards specific futures and distinguishes these
from ‘false trails’ that will lead nowhere.

A scenario development methodology was adopted to explore
the future as it is robust (grounded in existing evidence) and uses
current data as the starting point for the analysis22.

17      Anticipating Tomorrow
Shaping the future of the I rish food and drink mark et towards 2020   18
2. S
    cenarios for the future of the
   Irish food and drink market
2. Scenarios for the future of the Irish food and drink market

Scenario development is a type of futures work which focuses on            structure and an increasing focus on reducing waste. The drivers             The vertical axis: Attitudes towards Consumption
critical uncertainties. A helpful way to think about the future is to      interact in different ways in the scenarios. They move in different
remember that while it is uncertain, and much of it is beyond our          directions, depending upon how the axes of uncertainty push and              At the ‘Our Planet’ end of the axis, all consumption is viewed with
control, we can influence some aspects of it and prepare ourselves         pull to create four plausible and internally coherent – but extremely        sustainability, environmental and ethical concerns in mind. People
for possible outcomes. Futures work is not about predicting or             divergent – worlds.                                                          are aware that unbridled consumption cannot continue and are
forecasting the future, but rehearsing for it: creating and exploring                                                                                   taking proactive, assertive measures to limit their own consumption
multiple possible futures, with the purpose of taking responsibility       Whatever future it is that an organisation or individual might               footprint.
for what the future holds.                                                 prefer or fear most, it is important to remember that these four
                                                                           worlds will probably co-exist, and that the most likely scenario             At the ‘My Life’ end of the axis, despite the constraints of
Good futures work improves organisational agility because it               for the domestic food and drink market for 2020 involves                     increasingly strict regulations around all types of consumption,
increases the speed at which organisations – from public sector            a combination of all of them. While the descriptions and the                 people are determined to live their lives on their own terms; they
to business to third sector – are able to identify and respond to          associated illustrations represent extremes, elements of all four are        resent their behaviour being constrained and go to extreme
change in their environment. It helps organisations identify future        happening right now – at home and around the world – therefore               lengths to pursue continued consumption.
strategy that will be robust against a range of future responsibilities.   included in the scenarios are cutting-edge, global examples of
                                                                           where the future might lie.                                                  The scenario names help to embed them as a strategic tool within
The research and thinking that went into this report identified two                                                                                     organisations and allow them to be easily referenced.
axes of uncertainty which are likely to influence the future of the        The horizontal axis: Motivations for Eating
Irish domestic food and drink market: consumer Motivations for                                                                                          Note that the scenarios do not represent the policy position
Eating and Attitudes towards Consumption. The four scenarios               At the ‘Food as Ritual’ end of the axis, food is about togetherness,         of Bord Bia or of the Irish food and drink industry; they are
emerged from the crossing of the two axes.                                 enjoyment and is very ritualised. Food is the ‘glue’ of society regardless   intended to provide provocative stimuli about how the future
                                                                           of whether people live in a city or the countryside. At the ‘Food as         might play out when we consider the extremes of possibility.
Each of the scenarios depicts key social, economic, political,             Performance’ end of the axis, food is seen as a means to an end rather
environmental and organisational drivers of change. These include          than an end within itself. Food is consumed for functional benefits
rising obesity, experience society, changing household and family          rather than broader, social and/or emotional reasons.

21      Anticipating Tomorrow
Figure 11: Scenarios

                   Round the Table                              Our Planet                                        From the Greenhouse
                   Local & Ethical                                                                                   Natural & Nutritious

                                                                   Attitudes towards Consumption
                                                                                                                                            Food as
                       Food as Ritual   Motivation for Eating                                      Motivation for Eating

                   Off the Menu                                  My Life                                                 In the Lab
                   Indulgent & Experiential                                                              Performance & Achievement

Source: Bord Bia

                                                                                                      Shaping the future of the I rish food and drink mark et towards 2020   22
Round the Table

Spurred by increasingly serious flash flooding and extreme weather      make the dishes, as their parents were too busy to teach them            In terms of challenges, new skills will be required to increase the
conditions, a more community minded world has developed.                when they were young. As a result, many communities rely on              efficiency and indeed viability of increased local food production.
The challenging weather conditions have led many individuals            ‘nannies’ – who are renowned for finding ingenious ways to make          Mass market production would be undermined in this world due
to believe that they must consider the wider environmental              tasty meals from limited ingredients – to cook for them on special       to its high energy and resource usage but questions surround what
consequences of their actions in order to avoid a worsening             occasions. Cooking skills are highly revered and growing numbers         model of production could feasibly act as a replacement.
situation for the generations that follow. Communities seek to          of people actively pursue the skills to improve their social standing.
reduce their consumption of natural resources and the impacts of
their lifestyles by sourcing locally and trading essential supplies.    Big brands and corporations struggle here unless they can prove
                                                                        their local credentials and are ethically and environmentally
In order to save on resource consumption, priority goes to growing      responsible throughout their supply chain. However, their
high yield and multi-purpose crops that can be used for both            economies of scale and knowledge base may allow them to lead
food and fuel, such as rapeseed oil. As a result, food choice is more   the way in terms of environmentally friendly advances around
limited and dependent on local environmental conditions. Periodic       reducing packaging and using multi-purpose crops to increase
scarcity may be experienced in bad crop years, meaning that some        energy efficiency.
people suffer from nutritional deficiencies such as scurvy. However,
generally people are both physically and mentally happy in this         Opportunities and challenges for the industry
world. Health problems such as obesity and heart disease are
virtually eliminated as a result of eating healthy, simple food.        The main opportunities for the industry in this world centre on local
                                                                        and regional manufacturers. They could lead the way in finding
The pleasures of large group eating and community life boost            innovative ways to use a more limited set of ingredients or look
mental health. At the same time, the ritual of group eating is both     into new techniques for growing a wider range of foods locally. The
fun and more energy-efficient, replacing pub culture as the main        opportunities for larger manufacturers are more limited given the
form of social gathering. While great recipes and ideas are always      challenges of being a big brand in this localised world.
available on the internet, few people have the skills required to

23      Anticipating Tomorrow
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