Consumer trust and green brand key to growing exports to Asia - new report
A new report by KPMG has said that for Ireland to continue its growth in exports to Asia, it must ensure consumer trust and grow awareness of its 'green' image.
Exports of Irish food and drink to Asia have more than quadrupled over the last seven years to reach €1.3bn, according to a new report by KPMG.
But its head of Agribusiness, David Meagher said the Irish sector will not succeed if we do not continue to invest in consumer trust.
Ireland, he said, must react to changing consumer trends and having historically directed our efforts towards satisfying the British consumer, we must now develop a deeper understanding of the specific tastes and preferences of Asian consumers so as to better cater to their markets.
Difficulties faced by the agri-food sector, he said, include the depth of key relationships, red tape and regulation, the physical distance from Ireland to China, the deficient insight into preferences of Asian consumer, the lack of scale and low meat profitability at a farm level.
He also said that other difficulties include the agri's sector dependence on direct payments and the dairy commodity product mix, as well as our cost competitiveness and exposure to global commodity pricing and access to finance.
The report also outlines a number of priorities for Ireland’s agri-food export sector to expand its position as a global supplier in satisfying the demand for quality, safe and nutritious food to rapidly growing consumer middle classes in Asia including:
- Consistently delivering world-class biosecurity
- Further developing awareness of ‘green’ brand in Asian countries
- Prioritising sustainable food production
- Signing high quality trade agreements with Asian customers
- Articulating a collective industry vision
- Investing time and resources in understanding Asian consumer trends
More than a quarter of all the meat produced worldwide is eaten in China and consumption rates are continuing to rise.
Asia accounted for over 10pc of exports in 2017, which compares to just over 3pc in 2010. China is the largest market for Irish food in Asia.
Over the past 10 years, Irish food and drink exports to Asia have risen from €350m in 2007 to €1.3 billion in 2017. Of this total figure, dairy is the most significant category with a total of €850m of exports to Asia last year.
Irish dairy exports to Asia in 2017 grew 6pc, to €850m, and China is now Ireland’s second largest dairy export market.
Japan is one of the largest meat importers in the world and the recent Japan-EU trade deal offers new opportunities for Irish producers.
In 2017 over 40,000t of Irish beef was sent to Japan with a tariff of 38.5pc.
Over the next 15 years this is expected to reduce to 9pc in increments, the report states, which will make Irish beef exporters significantly more competitive.
The Irish pigmeat sector is performing well in the export arena with a 16pc increase in the value of exports last year. International markets accounted for 25pc of pigmeat exports in 2017.
Currently beef consumption per capita in China is relatively low in comparison to other countries.
However, consumption is rising fast and over the last 30 years Chinese demand for meat has quadrupled with the country now consuming one quarter of the world’s meat supply, according to the report.
However, Chinese consumers do not recognise the advantages of ‘grass-fed’ as much as consumers in other countries and there is strong competition from other established exporters with cheaper, grain-fed alternatives, the report states.
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