The Strategic Importance of Asia for Ireland's Agri-food Sector
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The Strategic Importance of Asia for Ireland’s Agri-food Sector
Introduction Contents
Agri-food is defined as our indigenous Foreword 2
primary agriculture, food and beverage, Michael Creed, TD Minister for Agriculture, Food and the Marine
fisheries and fish processing, forestry The Future Asian Demand for Food 4
and forestry processing sectors. Alan Dukes Chairman, Asia Matters
This report outlines the current land- Ireland’s Potential Food Export Capacity 6
scape and future opportunity for Irish David Meagher Head of Agribusiness, KPMG in Ireland
Agri-food exporters to Asia. Snapshot 8
As Asian countries advance to become A Vision for Success 10
the foremost consumers of global food
supply, Ireland is uniquely placed to Observations from a Global Agri-food Standpoint 11
Ian Proudfoot Global Head of Agribusiness, KPMG
help satisfy demand for quality, safe
and nutritious food. The Role of Bord Bia 12
Tara McCarthy CEO, Bord Bia
Co-ordinated Initiatives to Drive Strategic Growth 14
Insights:
Dairy Sector Insight 16
Meat Sector Insight 18
Other Agri-food Sectoral Insight 20
Routes to Asian Markets 22
Follow-up Points of Contact 26
1
The Strategic Importance of Asia for Ireland’s Agri-food Sector Foreword
Foreword
Michael Creed, TD Minister for
Agriculture, Food and the Marine
I am delighted to avail of this oppor-
tunity to underline the importance
of Asia for the development of Ireland’s
Agri-food and fisheries sector, and
I would like to acknowledge the work
of Asia Matters and KPMG in putting
this very useful report together, given
Asia’s strategic importance for Irish
Agri-food exports.
Ireland’s Agri-food sector is heavily export- one ounce of product if they did not have these and has great natural and business resources
focused. We are a country of over 5 million assurances.
‘I believe the very positive in our people and our environment.
people that produces enough food to feed Since taking office as Minister for Agricul- trading relationships that I believe the very positive trading relation-
50 million. Therefore the pursuit and devel- ture, Food and the Marine in 2016, I have had ships that Ireland has with Asian countries will
opment of new markets for Irish Agri-food the pleasure of visiting China, Japan, South
Ireland has with Asian play a crucial role in enabling us to attain our
exports is an ongoing and central component Korea, Singapore and will shortly be visiting countries will play a crucial ambitious targets as set out in the Food Wise
of the strategic development of the Agri-food Indonesia and Malaysia. During this same 2025 strategy, and will enable us to continue
sector. The Food Wise 2025 Strategy (see p.14), period I have also had the honour of meeting
role in enabling us to attain the great strides we have seen in this area. Total
Ireland’s national plan for developing the with numerous high-level delegations visiting our ambitious targets’ Agri-food exports globally have increased by
sector, outlines the huge potential for growth Ireland from Asia. During all of these meetings over 74% from 2009 to 2017, to €13.6 billion,
in exports to new, emerging and existing the major point I always take away is the with the most significant growth taking place
markets, particularly in Asia. Of course the excellent reputation that the Irish Agri-food in non-EU destinations (+162%), which in turn
decision for the UK to leave the EU has further sector has gained in this region. is driven by growth in exports to Asia (+280%).
exacerbated this requirement. China is a strategically important partner I was delighted to recently announce the
The remarkable success of our food exports for Irish Agri-food. It is our third-largest trading opening of the Chinese beef market to exports
in recent years is based heavily on the cred- partner in this sector. I value the mutually from Ireland. The opening of this key market
ibility of our food safety, animal disease control beneficial business and trading relationships presents an excellent opportunity for the Irish
and regulatory systems, and on our efforts to between our countries and see great oppor- beef sector, from farmers through to processors,
advance and prove our sustainability credentials. tunities for building on this as China has a in line with the market development theme
The countries in Asia who import our dairy, growing demand for food and beverages that of our Food Wise strategy. Opening and de-
beef, sheepmeat, pork, horticulture products, are safe, nutritious and produced to the highest veloping new markets is also a key part of our
whiskey and consumer foods, would not import quality standards. Ireland ticks all these boxes response to the uncertainties arising from Brexit.
2 3
The Strategic Importance of Asia for Ireland’s Agri-food Sector The Future Asian Demand for Food
The Future Asian Demand for Food
Alan Dukes Chairman, Asia Matters
The Agri-food sector is of vital
importance to the Irish economy
and a core competency focus
of Asia Matters. Understanding
the future Asian demand for food
is vital if Ireland is to succeed in
the rapidly evolving Asian markets.
As former Irish Minister for Agriculture, I keenly influences has led to a growing demand for less understanding of what consumers, often in around 30 million people) has driven the market
appreciate the positive impact across all of traditional foods such as meat and milk. All of distant markets, really want, and communicating for imported meat, especially beef.
rural Ireland of the success of Irish food and these factors, together with higher purchasing those messages back to Irish farmers and food Brexit clearly presents a very significant
agribusiness companies. power and increasing exposure to international companies. challenge for Ireland’s Agri-food sector. Divers-
This is now the Asian century as Asia dietary trends, result in a growing demand for Equally important is the communication ification into new global markets is a key risk
accounts for 40% of global GDP and 60% imported food. of key messages about what makes Irish food mitigation response to the uncertainties arising
of the global population with rapidly growing Within the dairy sector, Ireland now acc- unique to the international market. Asia is a from Brexit. Ireland has a highly valuable unique
consumer middle classes who have developed ounts for 15% of global infant formula supply, key target area. selling point in our safe and sustainable food
new dietary tastes as a result of their foreign is highly successful at the premium end within In Bord Bia’s Prioritising Markets: Oppor- chain supply as exemplified by Origin Green,
travel experience. Urbanisation is one of the the Chinese market and is now expanding into tunities for Growth, Asian countries are critical and the industry integrated agriculture and food
leading causes of the increasing demand for key South East Asia markets like Indonesia, with China, Indonesia and Japan at the fore- research of Teagasc.
food imports in Asia. The move from rural Thailand, Vietnam and Malaysia. For the Irish front. More than a quarter of all the meat With the global Irish dairy champions like
to urban living has resulted in a decrease in beef sector, the opening of the key Chinese produced worldwide is eaten in China and Ornua, Kerry, Glanbia and Carbery to global best-
the proportion of the population engaged in market presents an excellent opportunity consumption rates are continuing to rise. In in-class companies like Alltech and Devenish
subsistence farming and an associated decrease for farmers and processors. The EU Japan Japan, younger consumers are developing a that have evolved from agri-business to agri-
in the proportion of the population that are EPA, due to come into effect in March 2019, taste for steaks, aged beef and leaner red meat. technology companies, Ireland is well positioned
self-sufficient. This factor, together with the will present significant growth potential for Indonesia’s economy has grown at a steady to achieve the ambitious target of almost
ageing of the rural population, will have major Ireland’s Agri-food sector. 5.8% over the last 10 years and is predicted to doubling agri exports to €19 billion with the
consequences for the agricultural labour force The Food Wise 2025 Strategy (see p.14) be in the top seven economies in the world creation of 23,000 additional jobs by 2025.
and for production in rural communities. The has a subtitle of ‘Local Roots, Global Reach’, by 2030. The rapidly growing, more urbanised
evolution of dietary patterns due to western reflecting the importance of gaining a deep and prosperous middle class (estimated to be
4 5
The Strategic Importance of Asia for Ireland’s Agri-food Sector Ireland’s Potential Food Export Capacity
Ireland’s Potential Food Export Capacity ‘The opportunity for the Irish
David Meagher Head of Agribusiness, KPMG in Ireland Agri-food sector is too great
to overlook’
We must develop relationships and find Key competitive advantages of the Irish
a route to the Asian market Agri-food sector:
Asian supply chains are founded on trusting • Wealth and experience of human capital
The scene for this report has been set; relationships, which require an investment
of time and adherence to etiquette protocols. •
(technical and entrepreneurial skills)
Temperate climate favouring grass-based
we know that Asian demand is on the Without a profound understanding of our new
trading counterparties, the Agri-food sector will •
livestock
Lack of dependency on intensive feed
rise, and that Ireland produces quality, not succeed in breaking into the Asian market.
•
systems
Iconic drinks brands
safe and nutritious food. But, with We must maintain brand and reputation
Our ‘green’ image is a competitive advantage
• Established and credible quality
assurance regimes
regulatory, geographical and sustain- that is unique to the Irish Agri-food sector.
The positive impact of Bord Bia’s Origin
•
•
EU single market access
Recent investment in dairy production
ability challenges in mind, how best Green programme adds a credibility to this
image which translates into value. At the same •
and processing
World class dairy research capability
can we marry the two? That is to say, time, the sector is exposed to food scares and
scandals such as melamine-laced milk in China,
• Irish ability to invest in people and forge
relationships
what is Ireland’s potential to export European horsemeat and numerous outbreaks
of campylobacter. The Irish sector will not Difficulties faced by the Agri-food sector:
food to Asia over the long-term? succeed if we do not continue to invest in
consumer trust.
• Depth of key relationships
• Red tape and regulation
(both Chinese and Irish/EU)
We must react to changing consumer trends • Physical distance from Ireland to China
Having historically directed our efforts towards • Lack of land mobility
satisfying the British consumer, we must now • Deficient insight into preferences of
develop a deeper understanding of the specific Asian consumer (including cultural
The Agri-food sector is one of national import- pitfalls which we must avoid in order to stave tastes and preferences of Asian consumers so differences and language barriers)
ance and pride. It is our largest indigenous off international competition and safeguard this as to better cater to their markets. • Lack of scale
Irish industry, uses Irish raw materials and, valuable sector for generations to come: • Low meat profitability at a farm level
because it is based throughout the country, We must collaborate and dependence on direct payments
adds to the vibrancy of our rural communities. We must innovate and drive We are at our best when we work together. • Dairy commodity product mix
Furthermore, it remains predominantly Irish- entrepreneurship Collaborative approaches to innovation, • Cost competitiveness and exposure
owned. The Agri-food sector has successfully innovated sustainability, development of Asian alliances, to global commodity pricing
At the same time, Ireland is a small open to produce more food on less land than ever brand protection and a joined up response • Access to finance
economy with a unique exposure to the downside before. This trend must continue. The Irish to the changing demands of Asian consumers
associated with Brexit. It makes sense, therefore, Government must facilitate continued support are critical to the future success of the sector.
to expand the destination markets for our food for Agri-food research and development so The private Agribusiness sector must continue
exports. Fortunately, there is a clear opportunity that we maximise the efficiency with which to engage with, and leverage from, Govern-
to help satisfy increased Asian demand for safe, we use our natural resources. ment bodies and vice versa.
nutritious food.
Hard-won developments such as the We must foster a sustainable industry In conclusion, the opportunity for the Irish Agri-
Economic Partnership Agreement with Japan, In view of the ever-increasing demand for food sector is too great to overlook. While the
the Chinese beef deal, and Cathay Pacific and protein, Ireland must future-proof its Agri- journey is not without its challenges and pitfalls,
Hainan’s direct flights between Ireland and food sector in order for it to remain viable our rich agricultural history and current world
China are all testaments to the work done in for generations to come. Depleted fish stocks class infrastructure puts us in superior standing
facilitating this opportunity for the Irish Agri- are already a cause of concern. to capitalise on this export market in a time of
food sector. However, there are a number of global disruption.
6 7
The Strategic Importance of Asia for Ireland’s Agri-food Sector Snapshot
Snapshot
Japan
Outlined on the adjacent map
26 26
are highlights of Ireland’s
Agri-food exports to Asia in 15 4
2017. Indirectly, it also exposes S. Korea
export opportunities which China
16 3
the Agri-food sector would 526 100
do well to further develop
28
and exploit, such as prepared
consumer foods to China Taiwan
and Japan, or dairy to Malaysia India Hong Kong
19
and Indonesia. 1 92 77
Thailand
Philippines
11 5 Vietnam
33 39
20
Malaysia
Irish Food and Drink Percentage of 10-Year Irish Exports 26
Exports to Asia to Asia by Agri-food Category € Million Indonesia
€m
1,400 15
Infant Formula
1,200
Dairy
1,000 Dairy 66%
Cheese
800 Meat 18%
Milk Powder
600 Prepared
Consumer Pigmeat
400 Food 8%
Beef and Beef Offal
200 Seafood 5%
Seafood
0 Beverages 3%
Prepared Foods
2007 08 09 10 11 12 13 14 15 16 17 Whiskey and Liquor
8 9
The Strategic Importance of Asia for Ireland’s Agri-food Sector
1 Observations from a Global Agri-food Standpoint
Ian Proudfoot Global Head of Agribusiness, KPMG
65 2
Having oversight of KPMG’s global
Agribusiness network, Ian Proudfoot
is in a unique poisition to offer obser-
A Vision for Success vations and insight to Irish Agri-food
exports seeking to establish or expand
their presence in Asia.
5 3 While ultimately the secret to success in the same way in Britain and be able to detect policy changes
is investing time, the following are key Germany – why do it in China, in advance of them happening
learnings from his global Agri-food Japan or Indonesia? as rules and regulations can change
standpoint: • I would always argue when seek- quickly and valuable markets can
ing out premium niches for high vanish overnight.
The Importance of Trust values for products, ensuring
• Consumers in many Asian markets you maintain a range of market The Role of Technology
have limited trust over the prov- opportunities is prudent. • Events such as Singles Day high-
4 enance of the products that they light the dominant role that
are being sold – if it is not being Food as a Brand ecommerce platforms play in Asian
counterfeited it is not worth buying. • Never overlook the fact that food retail markets, and demand to get
• One of my clearest recollections is increasingly becoming just premium placements on market
from my first trip to Shanghai another branded fashion item; platforms like AliBaba and JD.com
was being taken to see the in- fashions change very quickly and is intense.
store laboratory in a hypermarket can be influenced. • People research products and
1. Ireland 4. Invest time getting to know our Asian operated by an international • Having a carefully designed social make buying decisions based on
counterparties and articulate a unified retail chain as consumers expec- media strategy, effectively using information that they can source
2. Agri-food sector: the farmers, fishermen,
and consistent industry vision ted the company to test all the social media platforms like WeChat, online, so your brand has to have
horticulturalists and food businesses
product coming into the store. and engaging with the right key credibility in domestic markets.
who act as the custodians of our natural 5. Emergence of Asia as a global superpower
• Invest time and do your due opinion leaders are critical to • Exploring how you create country
resources and environmental riches
6. Return value to the Irish economy by diligence on prospective business succeeding in Asian markets. storefronts on these platforms
3. Delivering quality, safe and nutritious helping achieve a target of €19 billion in partners and only finalise a deal and link with their increasing
food in a smart (innovative) and green Agri-food exports by 2025 when you are comfortable that Be Flexible bricks and mortar assets is critical
(sustainable) manner values and aspirations are aligned. • First mover advantage is critical to securing prime electronic real
Invest time in finding the right in Asia, and in my experience, estate on these sites.
business partner. Asian entrepreneurs are less
risk averse than their Western Pricing
A Collection of Diverse Markets counterparts. • Never, ever forget the importance
• You would not sell products • Build indigenous networks to of price.
10 11
The Strategic Importance of Asia for Ireland’s Agri-food Sector The Role of Bord Bia
The Role of Bord Bia
Tara McCarthy CEO, Bord Bia, Irish Food Board
In a global trading environment
where many economies are
becoming more protectionist,
Asian markets are embracing
a positive global trade mind-set.
Evidence of Asia’s positive global trade mind-set business development opportunities. Given China, Vietnam, Singapore, South Korea and
is clear from China’s One Belt, One Road policy the vastness of the regions it’s important to
‘Exports of Irish food and Japan with a mission to Indonesia and Malaysia
as well as positive agreements between the EU be able to prioritise our presence and activities. drink to Asia have more than imminent. In 2017, Bord Bia was successfully
and Japan and most recently the EU and South With that in mind Bord Bia, in partnership with awarded the opportunity to promote EU beef
Korea. From Bord Bia’s perspective Asia is an the Department of Agriculture, Food and the
quadrupled over the last and lamb in China and Japan as part of a three-
increasingly important market for Irish food Marine has completed a market prioritisation seven years to reach €1.3 year €3.75m campaign. Off the back of this
and drink and this trend looks set to continue programme over the last year. The main ob- success it was announced in October 2018 that
for the foreseeable future. jectives of this work have been to examine
billion’ a further €3.93m has been secured to promote
Exports of Irish food and drink to Asia have the potential attractiveness of different markets EU beef and pigmeat across South Korea,
more than quadrupled over the last seven years and determine the potential for Ireland to Philippines and Vietnam until 2021.
to reach €1.3bn. The region accounted for over supply growth opportunities. It came as no 2018 has been an exciting time as we have
10% of exports in 2017, which compares to just surprise that from a dairy and meat perspective recruited additional Market Specialists in
over 3% in 2010. China is the largest market eight of the top 15 markets identified lay in our Singapore and Shanghai offices and are
for Irish food in Asia. In 2017, it was Ireland’s Asia. The output of this work will guide Bord currently in the process of identifying a suit-
2nd largest market for dairy and pigmeat. With Bia’s resources and activities in the region over able representative to be placed in Tokyo
Ireland’s position, secured earlier this year, as the coming years. delivering opportunities in North East Asia.
the first EU member state approved to export The role of the Department of Agriculture, We remain strongly committed to Asia
beef, good opportunities for further growth exist Food and the Marine (DAFM) is critical in the and our strategy, in line with that of our
as Chinese demand continues to grow across region both in terms of advancing market access stakeholders, is to work diligently to nourish
key sectors. and growing the profile of Ireland as a supplier our relationships with existing partners and
Bord Bia’s role is to strategically assist of safe, secure and sustainable food and drink high quality prospects in the region with a
Irish companies in building a strong market products at both G2G and B2B level. Since 2015, view to helping deliver sustainable business
understanding of the region and help identify Ministerial Trade Missions have taken place to relationships for our Irish exporters.
12 13
The Strategic Importance of Asia for Ireland’s Agri-food Sector
Co-ordinated Initiatives to Drive Strategic Growth
Through its Department of Agriculture,
Food and the Marine, and Bord Bia,
the Irish Government has a cohesive
approach to the growth of the Agri-food
sector, reflecting the collective industry
vision, in a range of strategic initiatives
outlined here.
The Food Wise 2025 Strategy factor in the promotion of Ireland’s sustainable
Food Wise 2025 sets out a 10 year plan for the Agri-food offering.
Agri-food sector. It underlines the sector’s unique
and special position within the Irish economy, Bord Bia’s Prioritising Markets:
and it illustrates the potential which exists for Opportunities for Growth
this sector to grow even further. The opportunity to enter new marketplaces
The Food Wise 2025 strategy was agreed by is one every ambitious food and drink company
a committee of 35 stakeholders from the Agri- must consider at some point. Whilst the UK
food sector. It foresees a sector that acts more and European markets remain vitally important
strategically and achieves a competitive critical for Irish food and drink manufacturers, divers-
mass in the international marketplace while ification in the international marketplace has
targeting more quality conscious consumers been a strengthening component of our industry
who will recognise and reward Ireland’s food over the last decade.
producers for their sustainable production The Prioritising Markets report offers concise
and high quality produce. overviews of 75 in-depth studies conducted
across a range of priority markets by Bord
Origin Green Bia. It represents the most detailed and broad
Origin Green is Bord Bia’s food and drink sus- ranging study of the international opportunity
tainability programme. This programme enables ever undertaken on behalf of our food and
Ireland’s food industry to set and achieve meas- drink industry.
urable sustainability targets that respect the
environment and serve local communities more Bord Bia: PERIscope China
effectively. PERIscope is Bord Bia’s comprehensive review
At a farm level, the programme undertakes of food attitudes, shopping and cooking trends
almost 800 independent sustainability assess- amongst a nationally representative sample of
ments each week. Following each audit, the adults.
farmer receives notification of the results in This report is a comprehensive review
a feedback report on the farm’s performance, of purchasing and eating habits amongst a
with reassessments every 18 months. This nationally representative sample of adults
allows them to make informed decisions on in the Chinese market. It covers topics such
improving the sustainability of their farms as eating at home, attitudes towards cooking,
while also improving their efficiency and farm local food, sustainability, the environment,
viability. Origin Green is a key contributory grocery shopping and health and wellbeing.
14
The Strategic Importance of Asia for Ireland’s Agri-food Sector Dairy Sector Insight
Dairy Sector Insight Ornua is the driving force of Irish have grown up on dairy and whilst
dairy exports and is Ireland’s largest many middle-class shoppers are
exporter of primary dairy products, familiar with cheese, it is mostly
exporting to over 110 countries processed cheese that is sold in the
globally. Asia is an exciting strategic region. This opens up significant
growth market, not only for Ornua, opportunities for Kerrygold to grow
Over
By far the biggest category within drink products. Last year represented
owner of the Kerrygold brand, but its consumer offering in the rapidly
Ireland’s Agri-food export sector the largest increase in value of Irish
for the Irish dairy sector generally. expanding and sophisticated dairy
is that of dairy. The temperate Irish food and drink exports, increasing 89%
Three-fifths of the world’s population category. We see a shift in demand
7 billion
climate and grass-based livestock to €83 million. Rapidly rising demand
live in Asia and its dairy consumer base to natural cheese, based upon
provide for quality and nutritious for dairy imports can be seen in other
is expanding via a growing teen and trends in other markets and upon
produce which are well placed to Asian countries that are not currently
young adult population, and a growing increasing consumer knowledge about
satisfy Asian demand. importing large volumes from Ireland,
litres of milk produced
Ornua’s Asian focus middle class. Irish dairy exports to Asia the nutritional and taste benefits
such as Indonesia and Malaysia. This
After the abolition of quotas in 2015, represents a significant opportunity
in Ireland in 2017 Sean Ryan General in 2017 grew 6%, to €850 million, and of natural cheese. Ireland offers
China is now Ireland’s second largest consumers a compelling purchase
the Irish dairy industry has grown for the Irish dairy industry. Manager Ornua Asia dairy export market. While the volume option due to its grass-fed dairy
significantly with over 7 billion litres Dairy has lower barriers to entry
Dairy exports Ornua is an Irish Agri-food growth is primarily driven by demand production system, its quality milk
of milk produced in Ireland in 2017. than meat into Asian markets, however
in 2017 reached cooperative, which markets and for milk powders and infant formula, and its rigorous food safety standards.
As capacity, processing facilities and tariffs and red tape can still present a
€4.6
sells dairy products on behalf of there is growing value in the natural Ornua’s focus going forward in Asia
Irish dairy companies expand, so too challenge for Irish companies export-
its members: Irish dairy processors cheese and butter segment, offering is on bringing high quality, safe
do our export capabilities. ing dairy based products. For example,
and Irish dairy farmers. The significant opportunities for Kerrygold. and nutritious grass-fed, natural
The Irish dairy industry is heavily to export dairy into Indonesia sellers
billion
cooperative is Ireland’s largest Unlike their parent’s generation, cheese and butter to an ever-growing
export focused with €4.6 billion worth are required to obtain a dairy import
exporter of Irish dairy products. Millennials and Generation Z in Asia population of eager consumers.
of Irish dairy products exported to permit from the Indonesia Depart-
almost 140 countries in 2017. The ment of Agriculture, complete plant
experience and expertise that we have approval certification via the Director-
in exporting to international markets ate General of Livestock Services and To almost
Milk Powder Top 6 Global SMP Importers 2015
140
is key to our continued growth into have a valid Halal certificate reviewed
Thousand Tonnes – Milk Equivalent 2016
Asia. Over the past 10 years, Irish by the Indonesia Ulema Council. Case Study 2017
food and drink exports to Asia have Ireland’s ability to produce high-
countries
* Data is from FAO Dairy Market
risen from €350 million in 2007 to quality dairy ingredients with word- Irish dairy commodity powder
€1.3 billion in 2017. Of this total figure, class food safety standards is a exports increased in 2017 with
dairy is the most significant category competitive advantage in the Asian growth attributed to rising demand 350
Mexico
with a total of €850 million of exports market. Other competitors such as around the globe from international markets. Asian
to Asia last year. The highest prop- New Zealand and the Netherlands markets offer ample opportunities 300
Philippines
ortion of this goes to China where also leverage these aspects of their for export of Whole Milk Powder,
China
preparations for infant milk formula own production systems. Initiatives Irish food and drink exports Skimmed Milk Powder (SMP), 250
Indonesia
lead the way. like Origin Green help to promote to Asia in 2007 Whey, Casein and others.
€350
Asia is a strategic export market our ‘natural’ image and emphasizes 200
Malaysia
for Ireland as populations, incomes Ireland’s grass-based production Data from the Food and Agriculture
Algeria
and consumption of dairy continues system and sustainability competency. Organisation (FAO) shows that four 150
million
to grow in many Asian markets. Another challenge for Irish dairy out of the top six SMP importers in
Bord Bia’s ‘Prioritising Markets’ exporters in the Asian markets is the world are in Asia. This shows 100
(see p.14) report identified Indonesia, strong competition from other export the scale of the opportunity that
Malaysia, Vietnam, Philippines, countries such as New Zealand. exists for supply of dairy into Asia. 50
Irish food and drink exports
South Korea, Japan and China as Progress is being made in this area Especially when rising populations,
to Asia in 2017
markets that could be targeted by and this is highlighted by recent trade demand and disposable income are 0
€1.3 billion
dairy exports. deals such as the EU Japan Economic taken into account.
Growth was recorded in 2017 Partnership Agreement and the EU- Positive health effects from dairy use taglines such as ‘Drink, Move, the rise in popularity of growing-up
dairy exports from Ireland to well Vietnam trade deal. These agreements are widely advertised and are a key Be Strong’, ‘Building Strong Families’, milk powders in many Asian countries.
established markets such as China reduce costs on Irish dairy exports selling point in Asian markets. For ‘The Nutritious Taste Your Kids The increase in this product category
and the Philippines. The Philippines and allow us to be more competitive example Dutch Lady Milk Indus- Will Love!’. represents a high-value potential target
is becoming an increasingly sub- with other established players in these tries Bhd, the market leader for The emphasis on families in the for Irish dairy ingredients.
stantial importer of Irish food and markets that are not subject to tariffs. drinking milk products in Malaysia above marketing carries through to
16 17The Strategic Importance of Asia for Ireland’s Agri-food Sector Meat Sector Insight
Meat Sector Insight
5th
Ireland’s beef industry is renowned Japan is one of the largest meat
for its natural, grass-fed production importers in the world and the recent
system, strong traceability controls Japan-EU trade deal offers new
and advanced genomics schemes. opportunities for Irish producers.
Ireland is the fifth largest net beef
In 2017 over 40,000 tonnes of Irish
exporter in the world with exports
The green, natural image of beef was sent to Japan with a tariff
valued at €2.4 billion in 2017
Ireland along with high food safety, of 38.5%.
traceability and quality assurance Over the next 15 years this is
standards means that we have a expected to reduce to 9% in incre-
unique offering for the Asian market.
With disposable incomes growing,
emerging middle classes expanding
ments. This will make Irish beef ex-
porters significantly more competitive.
This offers notable potential for
€127
and urbanisation increasing in
many Asian countries, the potential
for Irish meat exports has never
Irish companies to increase supply
volumes and profitability as well as
the potential to explore other cuts
million
been greater. that may not have been commercially The value of Irish exports of beef
In 2017, Bord Bia won a contract viable under the old regime. to Asia in 2017 (of which €92m
to promote EU beef and lamb to The Japan deal also offers sub- relates to beef offal)
businesses in China, Japan and stantial opportunities to other areas
€146
Hong Kong. The campaign promotes of the Irish meat industry, particularly
‘Excellence in Food Safety and Sustain- for the pigmeat sector.
ability’. The expertise and skills that
million
Bord Bia have and further develop Pigmeat
in this project are of great advantage The Irish pigmeat sector is perform-
to beef businesses in the EU and in ing well in the export arena with a
Ireland. 16% increase in the value of exports
The value of Irish exports of
last year. International markets
pigmeat to Asia in 2017
Beef accounted for 25% of pigmeat exports
In 2017, Ireland exported over in 2017. Strong growth was seen in
Chinese Beef Deal
20 ×
550,000 tonnes of beef. Of this, only exports to Japan and the Philippines, continues to grow and urbanisation a similar proportion stating that their
34,000 tonnes were exported to with China staying relatively persists. preference is to buy from companies
international markets outside of the unchanged. In 2007, Irish exports to China The entry of Irish beef to the that are aware of the impact of en-
UK and Europe. There was some A priority for the Irish pigmeat were approximately €350 million, Chinese market is not without its vironmental issues. This represents
The average Chinese person
positive features for Ireland-Asia sector is reducing dependency on in 2017 this figure reached almost challenges as we will need to try the prospect for Irish beef exporters
now consumes 20 times more
exports as over 55% of international the UK market by expanding market €1.3 billion. The new beef deal rep- and secure a premium for our beef. to market to this growing segment
meat annually than they did
exports were destined for the access and growing exports to other resents an opportunity for Ireland Chinese consumers do not recog- of Chinese consumers.
50 years ago
Philippines and 11% for Hong Kong. international markets. to significantly increase this figure. nise the advantages of ‘grass-fed’ as There are big opportunities for
Growth was also recorded in export much as consumers in other countries Origin Green and digital marketing
figures to Vietnam, Singapore and Sheepmeat Currently beef consumption per and there is strong competition here. Irish beef exporters and trade
Thailand. Sheepmeat exports from Ireland are experiencing a growth in demand capita in China is relatively low from other established exporters bodies will need to work together to
Strong competition from Indian are relatively small in comparison for sheepmeat with Hong Kong, in comparison to other countries. with cheaper, grain-fed alternatives. create and communicate the Irish beef
buffalo meat and Australian beef to some other sectors within the Vietnam, Taiwan and Malaysia all However, consumption is rising fast However, Bord Bia’s Periscope story and brand. As one of the most
can be felt in Asian markets. Chinese meat industry. However, exports looking promising. China has seen and over the last 30 years Chinese report last year identified a growing digitally connected countries in the
domestic production of beef is also are growing, with a 12% increase a recent rise in demand for lamb, demand for meat has quadrupled proportion of environmentally world, China presents the opportunity
growing. However, it is believed in value in 2017 versus 2016. where mutton would have historically with the country now consuming conscious consumers with 7 in 10 for the high quality and high value of
that these producers will be unable South East Asia holds many been the primary consumption source. one quarter of the world’s meat Chinese adults claiming to be more Irish beef to be communicated through
to keep up with fast growing con- possibilities for Irish sheepmeat This shift can be attributed to rising supply. This growth is expected to conscious of environmental issues digital channels and social media.
sumption rates. exporters. Many Asian markets consumer incomes. endure as the middle class population in their choice of products today, with
18 19The Strategic Importance of Asia for Ireland’s Agri-food Sector Other Agri-food Sectoral Insight
Other Agri-food Sectoral Insight
Other Agri-food exports from of seafood has trebled in over the Irish Seafood
Ireland to Asia mainly comprise last 25 years. China and South Korea exports in 2017
seafood, prepared consumer foods, are significant export markets for
beverages and Agri-tech animal
nutrition products.
Ireland and both saw growth in
Irish trade last year. The largest
subcategories of seafood exports to
€666
Seafood
According to the Food and Agriculture
Organisation, consumption of seafood
China were molluscs (23%), crab (22%)
and mackerel (18%). Molluscs were
also very important in Irish seafood
million Carbery’s Asian
Ambitions
is projected to grow by 42 million exports to South Korea at 85%, Jason Hawkins CEO
tonnes per annum over the next 10 followed by whiting (10%) and horse to over
Carbery Group
70
years, as the world population is set mackerel (2%).
to reach 8 billion people by 2025.
Throughout Carbery’s 50 years
Irish seafood exports are growing Chocolate confectionery
countries
of existence, we have always
and last year approximately €666 Chocolate confectionery includes all
looked to grow across new with manufacturing and product relationships and customers right
million worth of seafood was sent chocolate based products, including
products and in new markets. development operations in Ireland, across Asia. We are continuing to
to over 70 markets around the world. boxed chocolates, moulded chocolate
UK, Italy, USA, Brazil and Thailand. invest in our infrastructure, in terms
This export value represented a bars, chocolate covered bars, seasonal worldwide
With a strong focus on investments Our strategy to diversify into new of assets and people, across Asia
10% increase on 2016 value. Species novelties and local specialities.
in technology we have broadened our products and markets is even more with a view to significantly grow our
exported included pelagic fish, Premium boxed chocolates are a
product portfolio across our Dairy, important in today’s world of Brexit regional business along with our
shellfish and white fish with mackerel, particular area of growing potential Global consumption
Nutrition and Taste platforms to and trade war uncertainties. We partners and customers. Carbery is
herring, horse mackerel, haddock, for export. Asian countries with of seafood is projected
service the needs of our customers view Asia as being a particularly committed to the Asian marketplace
whiting, mussels, prawns and brown growing demand for luxury products to grow by
globally. We have evolved from a important market for us as we move for the long term and as such we will
crab amongst the most commonly such as Hong Kong and Japan are
42 million
business focused on servicing the forward. Building on our presence in continue our journey from West Cork
produced species. particular targets for this sector.
Irish and UK markets to a business Thailand we have developed business into the global marketplace.
In 2017, Asian seafood exports In 2017 a slight increase in Middle
tonnes
generated €79 million of revenue Eastern and North African markets
representing approximately 12% helped to balance a decline in sales
of total seafood exports. This was to European markets.
a 10% increase on the previous year. Ireland has a number of strong,
A Vision for Whiskey Consumer demand for innovative of relationships, she notes: ‘At
per annum over the premium products with a strong Tipperary Boutique Distillery,
Demand for seafood is growing in premium chocolate brands involved
next 10 years The Irish Whiskey Association story has given rise to a new we are lucky enough to benefit
Asia as it is an important protein in the export market. These companies
has an ambitious strategy to grow generation of smaller independent from an intergenerational family
source for the expanding middle can leverage the Irish heritage, artisan
exports to 12 million cases per distilleries seeking to establish relationship with our Chinese
class. This has been highlighted in image and high quality to leverage the
annum by 2020, and to double them their share of the market’s forecast importer, which is of enormous
China where per capita consumption brands in a global marketplace.
again to 24 million cases by 2030. investment and growth. One such value in the establishment of a
Irish indigenous operation is the trusting relationship. With regard
It further aims to grow Irish Whiskey’s Tipperary Boutique Distillery to breaking new ground in other
‘Growing middle classes in emerging ageing), nutracueticals, sports nutrition, global market share from 4% to 12% which is aiming to increase its Asian Asian countries, we’ve found that
by 2030. Asian countries account exports going forward. Managing finding the right importer isn’t
markets are becoming increasingly early years child and infant nutrition, for relatively little (circa 1%) of total Director Jennifer Nickerson enough. We’ve only experienced
sophisticated and are demanding convenience foods and in addition exports of Irish Whiskey, so the notes the difficulty for Agri-food growth in sales once we’ve managed
opportunity is evident in the overall small and medium enterprises to put boots on the ground and
products to fulfil a growing range food which can be shown to be natural, context of the industry’s future, in complying with Chinese and tell our story face-to-face.’
of functional and life stage needs sustainably produced and meets a range with reference to the strength of the Taiwanese importation paperwork In Japan, whiskey is enjoyed
Scottish whiskey and surging Asian and specific labelling requirements with lots of water and ice, and in
from health and wellbeing (vitamin of ‘free from’ requirements.’ demand for whiskey, particularly by comparison to the USA, Russia China with cold green tea.
and protein enhancement, healthy —Department of Agriculture, Food & the Marine, Food Wise 2025 in India and China. or Australia. On the importance
20 21The Strategic Importance of Asia for Ireland’s Agri-food Sector Routes to Asian Markets for Irish Food, Beverage and Agri-Business Companies
Routes to Asian Markets for Irish Food, at HQ back home in Asia. Currently Asian
embassies in Ireland include China, India, Japan,
agencies and business organisations, there
are many relevant senior stakeholders who
Beverage and Agri-Business Companies Korea and Malaysia with the expectation that
Indonesia, Thailand and Vietnam will open an
can help Irish agri-companies. As always, it
depends on who is introducing you and how
Martin Murray Executive Director Asia Matters and embassy in Dublin in the near future though
Ireland is currently handled from London
your offering is of value to the local economy.
Introduction from the Irish government or
Honorary Consul of The Republic of Indonesia in Ireland similar to The Philippines. As is always the case
with government officials, progress depends
peer Asian government colleagues is deeply
respected. In talking with asean ministries
on getting buy-in from a sufficiently senior of agriculture, they have all said that subject
official with the right contacts internally. Most to correct introduction and clear value offering,
When Irish companies want to embassy staff sincerely wish to help and again
here you need to be specific on the ‘ask’ and
they would be happy to assist. In essence this
means that if an Irish company wished to enter
access Asian markets, the key approach in a timely manner before you plan
to visit the market. Equally the ‘who’ is just as
a new Asian market with a specific business
plan of value added benefit to the local economy
challenge always is to strategically important. Clearly the Ambassador is the most
important and may directly assist or direct you
in terms of employment and upskilling, the
ministry could possibly assist by recommending
build relationships of trust with to a relevant colleagues who handles agri-
culture, for example the Agricultural attaché
up to five reputable local partners. Clearly such
a screening would save significant time and
the right partners. for Indonesia who handles Europe is based in
Brussels. Despite the goodwill, given limited
money in finding the right strategic partner in
a key Asian market. Similar opportunities exist
resources amidst significant time demands in China, Japan and Korea though with certain
including political, cultural and consular additional cultural and operational complexity.
relations, Asian embassies may simply be a first
step and may link you into sister trade agencies 5. With Ireland and UK – Japanese trading
who are very business focused like jetro for companies
Japan and kotra for Korea which are both based The sogo shosha are very large Japanese trading
in London and can particularly be of value. companies with global reach and have been
trading internationally in a wide range of goods
3. Within Asia – Team Ireland in Asia and services for over 150 years. These companies
Parallel to the significant growth in Asia are embedded across Asia with huge industry
market trade growth for Ireland is a significant networks, have tremendous insight into
increase in Team Ireland resources on the changing market trends and can collect your
Finding the right partners can be time consum- Enterprise and Innovation also have a core ground who have good business networks product from Ireland and handle all distribution
ing and therefore expensive and can delay market team dealing with market access challenges, and can open relevant doors. In addition to to local delivery into Asian markets. Clearly
growth plans. can advise and feed your concerns into EU Bord Bia colleagues, Irish Ambassadors and you pay accordingly for this service but it is
Accordingly, with the proviso that you are Asia trade discussions and agreements. Finally, their teams along with Enterprise Ireland certainly a very efficient channel for quality Irish
very clear on what you wish to do in-market you should engage with sector experts in and IDA Ireland across Asia are particularly food products to be taken from factory floor
within a defined time scale and what specific consultancy firms with global reach such as helpful to Irish executives. The Irish Embassy and put directly on to the supermarket shelves
partner profile you are seeking, Asia Matters KPMG who can liaise with Asian colleagues in Beijing has an Agricultural attaché seconded in Asia. Like all Japanese companies, the sogo
would recommend for Irish companies to on the ground in market. The re-opening of from the Department of Agriculture, Food shosha are obsessed with quality and if you have
consider five avenues within which to actively the Chinese market to Irish beef exports after and the Marine. You can see a full list of Irish a global best-in-class product valued by Asian
engage in partner search. 18 years is a significant development. Equally Embassy staff in Asia on www.dfa.ie. In Asia consumers, then this is a relatively quick route
the EU Japan EPA (Economic Partnership government approval really matters and there to market. Mitsui has an office in Dublin and
1. Within Ireland – Irish organisations Agreement) is of particular importance to is no more important Irish government official the other sogo shosha all have offices in London:
Of course the first point of call here would Ireland’s Agri-food sector. Due to commence on the ground than the Irish Ambassador Mitsubishi, Marubeni, Sumitomo and Itochu.
always be Bord Bia given their expertise and in March 2019, the EU Japan EPA will see Japan who is knowledgeable, deeply respected and
increasing market presence in Asia. Equally the eliminating duties on more than 90% of EU can be a font of insight, guidance and support. There is a Japanese saying that ‘you buy in
international division within the Department agricultural exports from day one opening up Depending on the country and number of your own language, you sell in the customer’s
of Agriculture, Food and the Marine has con- new market opportunities from cheese to meat Irish working locally, there may also be non- language’. Beyond linguistics there is the need
siderable knowledge and networks in Asia and to whiskey for Irish companies. competitive Irish agri firms already present and to show the necessary cultural respect from first
is also highly supportive of Irish companies an Irish Chamber of Commerce who can assist. contact by displaying good business etiquette
and DAFM can advise you of specific Asian 2. Within Europe – Asian organisations to begin building the necessary trust in the
country market access criteria beyond those In Ireland itself the Asian embassies can be 4. Within Asia – Asian organisations personal relationships. If you move beyond
from Ireland. The Department of Business, a useful door opener to relevant colleagues Within Asian government ministries, state standard technical and finance criteria, we
22 23The Strategic Importance of Asia for Ireland’s Agri-food Sector Routes to Asian Markets for Irish Food, Beverage and Agri-Business Companies
ultimately prefer to do business with people Note: In Asia never leave chopsticks standing
we like and continue to do business with people up in rice as only used in funerals, particularly
we trust. Win – win partnerships in Asia are Buddhist.
perceived in a different time frame. Reliable
partners want long term relationships and very 4. Important to distinguish communication
often this includes a personal friendship for life. style and level of formality between business
As long as you keep your quality commitment, meetings and evening socialising2/2drinking2/
loyalty is strong. Nevertheless, Irish and Asian karaoke. It is critical not to mix the two,
cultures at a general level have core differences whereas socialising builds good personal
which Irish people must respect to build bonds relations, meetings next day are formal
of trust and sustainable partnership. The and focused.
following are key points of business etiquette
to be observed. 5. In Muslim democracies like Indonesia
and Malaysia, people are very friendly
1. In Asia, government is very powerful and and respect a similar authenticity from
in meetings with government officials, there Irish people. As with all cultures, a few
is a strict hierarchy where attention to the words of greeting and appreciation in the
most senior person is vital. As throughout local language works wonders. Given the
Asia, their sense of honour ‘face’ before languages are almost identical it is possible
others is most important. Regardless of to use same for both. Here I give the
rank, role or age, people are not criticised Indonesian version:
in front of others. This also applies to Selamat Pagi: Good morning
corporate meetings. Formality and polite- Selamat Siang: Good afternoon
ness are essential in all of Asia. Group Selamat sore: Good evening
behaviour is carefully observed to judge Selamat malam: Good night
harmony2/division and clarity re: leadership Apa kabar?: How are you?
and real messaging. Kabar baik: I'm good
Terima kasih: Thank you
2. Irish people often meet Western-educated Sama Sama: You are welcome
English speaking Asians. These tend to be Saya John dari Irlandia: I am John
middle management and below. Business from Ireland
is dominated by older Asians who perhaps Indonesians are friendly, cheerful and
do not speak English or are shy to do so as relatively informal so it is fine to use first
do not wish to lose face. In meetings look name. It is a good idea to call every man
at the most senior person who will sit down Pak and every woman Ibu, e.g. they will call
first2/eat first – hierarchy is similar to meet- you Pak John or Ibu Mary.
ing military. Do not only look at English
speaker interpreter2/2colleague. Asians are Note: Many Indonesians do not carry business
often expert negotiators and always keen cards and prefer to use WhatsApp over email so
to find sustainable ways to make new sales make sure you are on WhatsApp before you visit
in strategic sectors. and for key people, connect on WhatsApp before
end of meeting. (Similar to WeChat for people
3. Like all of Asia, life is often organised around in China.)
food and respect for dining etiquette is
appreciated, e.g. the most senior eats first, In summation, Irish companies need to ensure
shared food with the tastiest pieces is left that their value proposition is clear and distinct
for others, use of chopsticks/trying to, filling and of real value in market. Furthermore, Asian
other person’s glass. Food is shared in group partners need to see that you bring more to
setting – with different use of chopsticks the table than simply quality products and
or spoon or both. Anecdotally it is said that finance but also knowledge, innovation and
Koreans use metal chopsticks as historically a commitment to long term local partnership.
royalty used silver chopsticks to detect poison
in food, a then favoured way of assassination.
24 25The Strategic Importance of Asia for Ireland’s Agri-food Sector
Follow-up Points of Contact Notes
The Department of Agriculture, Food and
the Marine is a department of the Government
of Ireland. The mission of the department
is to lead the sustainable development of
a competitive, consumer focused Agri-food
sector and to contribute to a vibrant rural
economy and society.
Asia Matters is Ireland’s only Asia think tank,
a member driven knowledge and connectivity
hub for Asian business and partnership.
Chairman Alan Dukes is former Minister for
Agriculture.
KPMG is a leading professional services firm at
the heart of business in Ireland. Our national
and international cross functional agribusiness
professionals focus on understanding the issues
faced by agribusiness companies and developing
tailored solutions to meet these challenges.
Bord Bia is an Irish state agency with the aim
of promoting sales of Irish food and horticulture
both abroad and in Ireland itself. It acts as a link
between Irish producers and their customers
worldwide.
Teagasc – The Agriculture and Food
Development Authority is the semi-state
authority in the Republic of Ireland responsible
for research and development, training and
advisory services in the Agri-food sector. It
provides research, advisory and education
in agriculture, horticulture, food and rural
development in Ireland.
Bord Iascaigh Mhara is the agency of the Irish
state with responsibility for developing the
Irish marine fishing and aquaculture industries,
which it helps by providing technical expertise,
business support, funding, training and pro-
moting responsible
26Priorities for Ireland’s Agri-food Export Sector to Become Asia-ready • Consistently deliver world-class biosecurity • Further develop awareness of ‘green’ brand in Asian countries • Innovate with Asian customers • Develop future Asia-facing, Agri-food leaders • Prioritise sustainable food production • Coordinate and collaborate to deliver a joined up approach • Sign high quality trade agreements with Asian customers • Articulate a collective industry vision • Encourage exporters to invest the time and put feet on the ground • Find ways to widen channels of Irish- Asian connection • Know your customer
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