It is no understatement to say that the food and drink sector is one of the key pillars of the Northern Ireland economy and it is also an industry that has a massive impact on daily life for all of us.
At the recent annual dinner held by the industry’s trade body, the Northern Ireland Food & Drink Association (NIFDA), the significance of the industry was, as you’d expect, highlighted very clearly.
Our food companies sell £4.8 billion of local produce a year, 67 per cent of which is sold outside of Northern Ireland, making it the largest contributor to sales in the local manufacturing sector.
The sector also employs 22,000 people directly and another 78,000 more in farming and support services, with NIFDA noting that every job in a NIFDA member company generates at least three more in the supply chain.
In addition, it is a massive contributor to our tourism offering, with Northern Ireland recently being named the ‘Best Food Destination’ at the prestigious International Travel and Tourism Awards in London.
Given this scale and impact, there is good reason why many people inside and outside the industry are concerned about what impact Brexit might have on our food and drink producers. Frictionless trade with the Republic of Ireland and continued unhindered access to both Great Britain and European markets is of utmost importance, while there are also potential implications for availability of staff, food safety, currency fluctuations and the general logistics and cost of trade.
However, despite the sense that we are living through some of the most uncertain times experienced by Northern Ireland’s food and drinks industry, Danske Bank is confident about its future and is continuing to provide support for some incredibly innovative food businesses.
Ciaran Rafferty, Corporate Banking Manager at Danske Bank, explains: “While Brexit has of course dominated the conversation lately, we believe there is a huge amount to be confident about in the local food and drink sector.
“We have seen so many examples of companies who are looking beyond the risks of today and inspiring us with their drive to create new products. For these companies, innovation is hardwired into how they think, and how they do things.
“Danske Bank works with a range of food, drink and agri companies – from big international companies like SHS and Devenish Nutrition, to recognisable UK brands like Finnebrogue, Gilfresh and Mash Direct, as well as smaller, artisan producers such as Ballylisk Cheese, Simply Fruit and P McCann Cider Company.
“From smaller artisan brands, to bigger corporates, we are seeing companies being ever more innovative in their processes, in their investments and in the way they bring products to market. It is this innovation that we believe will help the industry navigate through 2019 and beyond.
“Innovation isn’t just about creating more competitive advantage. It means taking risks, trying the impossible, and ignoring previously accepted boundaries.
“As stakeholders, it means we acknowledge that not every research & development project is going to result in an instant hit new product or double the productivity of a manufacturing line. Innovation is, by definition, a process of trial and error.
“The key to the successful partnerships we have built with food and drink companies is that we really try to understand how the companies operate and what is driving their strategy. We invest a lot of time understanding their business and where they want to go to, and we tailor our offering to their needs accordingly,” says Rafferty.
Adding: “Innovation can be driven by global megatrends or recognising gaps in a local marketplace. But whatever is driving the decision, the action requires investment of time and money, creative thinking and a willingness to take risks to drive change.”
He notes too that there has never been more statutory support for innovation. Consider the range of support mechanisms currently available which can be used to leverage additional Bank funding:
- funding of up to 50 per cent or more for R&D projects;
- the UK R&D tax credit regime;
- patent box for lower corporation tax; and
- government sponsored specific funders of Innovation, such as Export Finance, Innovate UK, who will provide tactical funding (grant and subordinated loans) alongside traditional bank lenders.
Anyone who thinks that large food and drink companies do innovation better than smaller companies should remember that Schweppes didn’t see the opportunities in the craft gin and spirits boom. Yet, back in 2005, a small innovative UK company called Fevertree Drinks created premium mixers to serve this emerging trend. Today, Fevertree is worth £3.5 billion.
In the Guild of Fine Foods most recent Great Taste awards more than 200 local companies from Northern Ireland were awarded the top rating. These were companies of all sizes.
We must do more to recognise the contribution these innovative companies make to our local food and drinks industry and make sure we are creating the conditions for future innovation to thrive.