Most small and medium-sized food businesses expect their revenues to grow in the coming year, according to a new study from Love Irish Food and PwC.
The Irish SME Food Barometer 2021 found that 75% of companies in the sector are optimistic about their growth prospects.
The results suggest that there is a broader sense of optimism in the industry, with 65% of companies confident the economy will improve over the next 12 months.
Despite the challenges related to Covid-19 and Brexit, this figure is up from just 16% at the end of 2019.
However, research shows that 22% of companies believe that economic growth will decline in the coming year.
Owen McFeely, director of PwC Retail and Consumer Practice, said the study reveals “cautious optimism” about the business prospects for Irish food SMEs.
“These organizations have experienced major disruptions in their operations for over a year and, with investment plans, they are now eagerly awaiting a milestone,” he said.
The impact of Covid-19 is the biggest threat to the food and beverage industry, according to the survey.
However, Kieran Rumley, executive director of Love Irish Food, said commodity price volatility is now a new and significant threat to businesses.
“It is unlikely that SMEs will be able to shoulder the burden of these additional costs for long and may eventually be forced to pass them on as consumer prices rise,” he said.
Love Irish Food is working to increase the support offered to businesses throughout 2021, with greater support from retailers interfacing with the retail grocery industry, as part of its mission to do advancing the future of Irish food and drink brands, ”he added.
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Research also indicates that there will be a significant increase in the levels of capital investment made by companies in the food and beverage sector, after a major stall during the pandemic.
69% of those surveyed said they would not delay investing in the next 12 months, compared to 62% who said they delayed such an investment in the past 12 months.
At the same time, 20% of those surveyed confirmed that they plan to launch new products or services to boost their business growth in 2021, while a total of 11% will enter new markets.
Respondents also indicated that environmental sustainability remains a high priority on their agenda, with 60% of respondents saying the importance of having an environmental sustainability strategy in place has increased this year.