In our February-March issue, NR champions the cream of the NI crop, continuously striving to meet consumer demand.

As consumers become increasingly more aware of the benefits of buying local produce, so has the focus of retailers on ensuring they have the best of Northern Irish and Irish produce on their shelves. The advantages are two-fold as it also encourages a further focus on sustainability.

The need for local has only been emphasised in the last number of years, with Brexit, covid, the Ukraine war and issues around the Red Sea shipping crisis changing how we view the supply of food and how we supply food.

Indeed, recent rises in potato prices in supermarkets represent wider issues in the supply chain, with fruit and vegetable shortages on shop shelves highlighting the difficulties with relying heavily on imported produce.

“What happened there has highlighted that the farther the field from the shelf, the more unpredictable the supply of it is. The closer the product is grown, the more reliability there will be for getting that product to the shelves,” Deputy President of the Ulster Farmers’ Union, John McLenaghan explained to NR.

“There are of course other benefits to this such as cutting down distance and costs and improving sustainability. Vegetables grown here will have a higher nutrient density and value compared to those grown in bulk in a quicker period,” he added.

As Michael Bell, Executive Director of the Northern Ireland Food and Drink Association (NIFDA) points out, for a region of our size, Northern Ireland punches well above its weight.

“Together with what I call the wider ‘eating ecosystem’ – farming, transport, cold stores, packaging, retail – we are a £4.9 billion industry, supporting 113,000 jobs. We feed 10 million people,” said Mr Bell.

“Over the past year, Northern Ireland food and drink companies have continued to grow and drive that success through what has been a challenging environment. Inflation, hyperinflation even, continued to be an issue throughout 2023. Prices of feed, fertiliser and energy remained high, driving the price of food at a rate that had not been seen for multiple generations.”

Northern Ireland is a hot bed of producers and manufacturers, who are only too keen to show off their wares to customers across the province – and in our latest issue we celebrate them all!

FIND THE FULL LOVE LOCAL FEATURE IN THE FEBRUARY-MARCH ISSUE OF NEIGHBOURHOOD RETAILER HERE

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Our NIFDA members are world renowned for quality, innovation, and commercial success – and we have the awards to prove it.

Together with what I call the wider ‘eating ecosystem’ – farming, transport, cold stores, packaging, retail – we are a £4.9 billion industry, supporting 113,000 jobs. We feed 10 million people. For a region of our size, that is impressive. We punch well above our weight.

Over the past year, Northern Ireland food and drink companies have continued to grow and drive that success through what has been a challenging environment. Inflation, hyperinflation even, continued to be an issue throughout 2023. Prices of feed, fertiliser and energy remained high, driving the price of food at a rate that had not been seen for multiple generations.

Sadly, while we are now seeing prices in some commodities begin to retreat, many of the factors driving inflation have not yet abated. The supply chain is still shouldering the bulk of this increased cost, but inflation is not going away any time soon.

FOOD INFLATION

In June the Groceries Code Adjudicator, Mark White, released the results of the GCA Groceries Sector Survey. Now in its 10th year, the survey gives suppliers the opportunity to share confidentially their experiences of negotiation over the past year. The survey unsurprisingly named inflation as a challenge, with over 90% of suppliers who responded to the survey requesting at least one cost price increase in the previous 12 months, but 28% of respondents reported either a refusal to consider a cost price increase from a retailer, or an unreasonable delay in reaching a decision on a request.

However, despite difficulties around inflation, the survey shows that suppliers think retailers have improved in their compliance to the Code and the average compliance score across the retailers was 92%.

Food inflation has been higher than at any point over the past decade, affecting businesses and consumers everywhere. Food and drink manufacturers have been doing their best to absorb these increased costs, but inevitably some price increases must be passed on, and industry continues to engage with retailers to ensure inflation is reasonably managed across the supply chain.

SUSTAINABILITY

The biggest long-term challenge we face as an industry, and as a society, is of course sustainability. Northern Ireland has set ambitious targets to lower our greenhouse gas emissions, and NIFDA members want to play their part in our collective journey to net zero. Food and drink companies in Northern Ireland are already implementing bold strategies to help move the sector towards that goal, both on farm and the factory floor.

Much of this work was highlighted in our ‘Balancing Act’ Sustainability Report, produced by KPMG Ireland earlier this year. As well as providing case studies of sustainability projects from local food and drink companies, the report focuses on the results of a sector-wide survey of NIFDA members on these issues and highlights the progress that still needs to be made.

The report highlights gains that have been made to date and demonstrates how NIFDA members are taking action, with 83% of firms having dedicated teams in place to lead on sustainability. Case studies show initiatives food and drink manufacturers are taking – from scaling up resourcing and expertise, investing in renewable energy and setting science-based targets, to innovations in food labelling, sustainable intensification and nature protection.

INVESTMENT NEEDED

However significant challenges remain, if we are to achieve the emissions reductions goals as set out in the NI Climate Act. Key obstacles to progress outlined in the report are the lack of capital investment support, and the overall political vacuum. 86% of NIFDA members surveyed do not think there is sufficient funding support to deliver on sustainability, while 77% believe clear policy direction would strengthen the industry’s response to environmental challenges.

Hopefully the new year will bring with it a restored Northern Ireland Executive, and a political will to deliver both growth and sustainability for our industry. Key to unleashing this potential is a capital investment support scheme.

Many of the projects with the highest potential to improve productivity and sustainability require investment, yet Northern Ireland remains the only jurisdiction on these islands without such a capex scheme in place. In June the Irish Government announced a €32 million investment in the agri-food sector to ensure the delivery of 12 important capital projects in food processing plants across the Republic of Ireland.

‘The biggest long-term challenge we face as an industry, and as a society, is of course sustainability’

Since 2020, food manufacturers south of the border have benefitted from €100 million in funding from the Capital Investment Scheme for the Processing and Marketing of Agriculture Products. Under the scheme, 34 projects have been backed, unlocking a total of €420 million in public and private investment.

Industry has engaged with cabinet ministers to highlight the pressing need for a similar investment programme for Northern Ireland, but from our meetings with the Chancellor and Secretary of State, the UK Government sees this as a devolved issue. Without ministers in place, any progress on such a targeted investment programme on this side of the border has been stalled.

We want to work with the Department of the Economy to help deliver its 10x strategy, but to embrace the benefits of advanced manufacturing, new technologies and innovation, we need support. Targeted investment in food and drink processing is vital if we are to enhance sustainability, encourage further innovation, make efficiencies to limit the impact of inflation, and modernise the industry so it continues to be seen as an employer of choice by the young people who will be future leaders.

LOOKING AHEAD

Looking ahead to 2024, there is lots to look forward to. On 6^th February, supported by NIFDA and Invest NI, the UK Food and Drink Export Council (FDEC) will be hosting its first Northern Ireland event, aimed at NI food and drink businesses who want to boost their export capacity and reach. The FDEC is an important forum for industry, and gives us the opportunity to collaborate with government and industry partners from across the UK to learn from each other’s successes and share expertise.

The biggest event on the food and drink calendar for the coming year is the Northern Ireland Food and Drink Awards, which return on Friday 15^th March. The awards are firmly established as a key indicator of quality for food and drink manufacturers and give local companies of all sizes the opportunity to showcase their products to a judging panel including key customers. We are really looking forward to launching the awards and opening nominations in January, so watch this space.

GOVERNMENT ENGAGEMENT

NIFDA will continue to engage with government at all levels over the next 12 months on the issues that affect our industry. Many of the challenges around Brexit, the NI Protocol and subsequently the Windsor Framework have now been worked through, and we will continue to liaise with government to ensure the implementation of the framework is as smooth as possible.

Work also continues on the deposit and return scheme, which is planned for 2025. It is important that policymakers learn the lessons from its implementation in Scotland, and our NIFDA plastics and packaging forum will continue its engagement to ensure any policy in this area is practical and workable.

There is no doubt that the coming year will have its challenges, and most of the market headwinds we faced as an industry in 2023 will still be there next year. But Northern Ireland food and drink is resilient, innovative, and tenacious. I am confident that those attributes will lead the industry to further success in the year to come. For our part at NIFDA, we will continue to give a voice to this great industry.

TO READ THE NIFDA ASSOCIATION REVIEW IN THE 2024 NEIGHBOURHOOD RETAILER YEARBOOK AND MARKETING GUIDE, CLICK HERE

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Produced by KPMG Sustainable Futures, in collaboration with the Northern Ireland Food and Drink Association (NIFDA), the Balancing Act report outlines the challenges and opportunities the sector faces on sustainability and the ESG (Environmental, Social and Governance) agenda.

Firms across every sub-sector of Northern Ireland food and drink were surveyed for the report, with almost three quarters (74%) of respondents pointing to decarbonisation as the highest priority for their business, followed by waste reduction and circular economy.

INVESTMENTS AND INNOVATIONS

The report highlights gains that have been made to date and demonstrates how NIFDA members are taking action, with 83% of firms having dedicated teams in place to lead on sustainability. Case studies show initiatives food and drink manufacturers are taking – from scaling up resourcing and expertise, investing in renewable energy and setting science-based targets, to innovations in food labelling, sustainable intensification and nature protection.

However, no-one doubts the challenge if Northern Ireland is to achieve emissions reductions targets as set out under the NI Climate Act. The report points to the lack of capital investment support, and the overall political vacuum in Northern Ireland as key obstacles to progress. 86% of NIFDA members surveyed do not think there is sufficient funding support to deliver on sustainability, while 77% believe clear policy direction would strengthen the industry’s response to environmental challenges.

Michael Bell OBE, Executive Director, Northern Ireland Food and Drink Association (NIFDA) said: “As the largest single manufacturing industry in Northern Ireland, food and drink is the jewel in the crown of the local economy. For decades we have shown consistent growth, and today we contribute £4.9bn value added and support some 113,000 jobs across the supply chain.

“Key to that success has been the industry’s commitment to quality through data, science and innovation. Going forward, producing food in the most sustainable way will be crucial to our continued growth. We know that addressing our carbon footprint is the biggest long-term challenge we face as a society. The food and drink industry wants to play its part, working with academic and research partners to leverage new technologies that make processes more efficient, productive and sustainable.”

‘HONEST REFLECTION’

Michael Bell OBE said that while the report demonstrates the how NIDFA members are rising to the challenge and improving their impact on the environment, he stressed that the continuing political stalemate and instability is “constraining progress”.

“While emissions targets have been set out under the NI Climate Act, without ministers we don’t have the policy coordination nor political drive to meet these goals,” he added.

“Similarly, transformational sustainability projects also require investment, yet Northern Ireland remains the only jurisdiction on these islands without a government capital investment support scheme.

“The report is an honest reflection on the progress we have made so far, and how far we still have to go. It is vital that we collaborate across the supply chain, and processors continue to work closely with our farming partners, academia and government on the innovation that will drive us forward on sustainability.

“Net zero won’t happen overnight, and it won’t be cost-free, but we will get there with stable politics and the right support.”

Russell Smyth, Head of Sustainable Futures, KPMG Ireland said: “While the Northern Ireland food and drink sector benchmarks well against other jurisdictions, it still has a long journey to achieve long-term sustainability.

“It’s encouraging that our report has found that NI companies accept and are committed to achieving this ambition. However, it also concludes that they need further support and continued technological innovation to achieve this goal.”

• The full report, Balancing Act – Assessing current sustainability opportunities and challenges for the Northern Ireland Food & Drink Sector can be found on the NIFDA website https://nifda.co.uk/wp-content/uploads/2023/11/KPMG_NIFDA-report_FINAL_DIGITAL-VERSION.pdf

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Addressing over 250 industry and political leaders, George Mullan, NIFDA Chair and Managing Director of ABP in NI said that the lack of ministerial decision making has held the industry back, as firms develop strategies to meet emissions targets set by the NI Climate Act.

Held in partnership with KPMG Ireland, the NIFDA annual dinner took place at the Hilton Hotel, Belfast on Thursday 12^th October, where Sainsbury’s Chief Executive Officer Simon Roberts was keynote speaker.

Speaking after the dinner, NIFDA Chair George Mullan said: “Northern Ireland food and drink is globally renowned for its commitment to innovation, quality and commercial success. We are export focused and feed some 10 million people.

“Thanks to the ingenuity and tenacity of our food and drink companies, the industry has grown significantly and remains Northern Ireland’s biggest manufacturing sector.

‘BOLD STRATEGIES’

“The biggest challenge we face at present is not just to continue that growth, but to do so in the most sustainable way. Industry wants to play its part in reducing climate emissions. Our customers demand it, consumers expect it, and it is the right thing to do.

“Reducing the environmental footprint of our industry also makes good commercial sense, as sustainability often goes hand in hand with efficiency. If we get sustainability right, we will not only reduce our emissions, but also improve our profitability and safeguard our industry for future generations.

“NIFDA members are already implementing bold strategies to reduce emissions at both factory and farm level. However, with ministers in place we could do even better. While we have emissions targets set by the NI Climate Act, the lack of a functioning Executive means we don’t have the political drive and policy coordination needed to meet these long-term ambitions.

“At NIFDA we leave politics to the politicians, but my message to local party leaders is this. We can lead the world on sustainable food production, we can grow this industry further while reducing its carbon footprint, but we need Ministers in place to work with us and fight our corner.”

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Run in partnership with KPMG Ireland, the event will be held on Thursday 12^th October in the Hilton Hotel, Belfast.

With 300 people expected to attend, the event is widely recognised as an opportunity for food and drink leaders to come together to celebrate the industry, discuss challenges it faces and look to opportunities for growth.

Speaking ahead of the dinner, NIFDA Executive Director Michael Bell OBE said: “We are delighted to have Simon join us at our annual dinner this year, as we celebrate Northern Ireland’s biggest manufacturing industry and discuss the key issues that are facing NIFDA members.

‘CHALLENGING TIMES’

“These are challenging times, and over the past year we have seen unprecedented levels of food inflation, as energy, feed, and fertiliser prices rose as a result of the war in Ukraine and other global factors.

“Despite the challenges the industry faces, Northern Ireland food and drink continues to grow and the focus of NIFDA members remains on producing high quality, sustainable food and drink for our customers. Across the supply chain, we generate billions in value added to the local economy and support some 113,000 jobs across Northern Ireland.

“With the right support, we can grow even further with the right capital investment and export marketing support from government.”

Russell Smyth, Head of Sustainable Futures, KPMG Ireland said: “We are delighted to be sponsoring this year’s event.

“The NI food and drink sector remains one of NI’s most important and successful sectors, however as observed from our recent sector-wide survey, it faces significant challenges in responding to the climate and broader sustainability agenda. We look forward to exploring this in more detail on the night.”

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