Article appeared in issue 6, 2021
In advance of Food Ingredients Europe (FiE), Margaret Butler, sector manager, dairy ingredients at Bord Bia (the Irish Food Board) outlines how a mix of online and offline engagement can communicate the unique nature of Irish dairy
Food Ingredients Europe (FiE) takes place in Frankfurt this year and we’re delighted to be participating with three of our dairy clients joining us on the Bord Bia stand. It’s one of the first physical events that we’re attending with our dairy clients in Europe since Covid-19 restrictions took hold, so we’re looking forward to a good 3D show!
Obviously for all of us, the past 18 months have been a challenge but there’s a real appetite in our dairy companies to attend shows like FiE and safely meet with customers face-to-face. Virtual interaction has been a fantastic stopgap and hybrid events are likely to be a feature of the future but meeting in-person definitely has its advantages. We’re currently planning our 2022 dairy activities and trade shows are a significant feature of those plans – we’ll be guided by our dairy clients as to what shows they want to attend and we’re mindful that these events can be a significant investment, both financially as well as time away from the desk, so return on investment is key for us.
Dairy is the most valuable of Ireland’s food and drink export sectors. In 2020, we exported 1.6 million tonnes of dairy products to 140 countries, worth in excess of €5bn, and that product was bought by retail, foodservice and ingredient customers, the latter primarily of which is the focus of FiE.
Often, showcasing Ireland in markets where the target audience has never heard of the country and forging relationships, particularly with new customers, can be quite difficult to replicate in a virtual setting. Having said that, it would be remiss not to recognise that the virtual connectivity that was achieved of late absolutely paid dividends and we’ve certainly come a long way in understanding and using multi-communication platforms during Covid-19. It’s something that we’ve had significant engagement and success with in Bord Bia and we intend to leverage technology in a significant way into the future to promote and communicate the world-class attributes of Irish food, drink and horticulture to a global audience – and dairy will feature prominently in that messaging.
On that note, we have a trio of virtual dairy trade missions, led by Minister for Agriculture, Food and the Marine, Charlie McConalogue and Minister for State, Martin Heydon, commencing in late October in Vietnam, Malaysia, and Thailand. This is our second year embarking on a virtual trade mission in the South East Asia region and although we’d prefer to travel with our dairy clients and meet customers in person, this is the next best thing. We’ve recruited in excess of 1,000 customers for these events who, after hearing official addresses from the ministers, ambassadors, Bord Bia CEO Tara McCarthy and dairy experts, will meet virtually with our dairy industry on a one-to-one basis to discuss potential business opportunities.
These markets were chosen as they represent strategic importance for many of our dairy clients, particularly for high-quality and functional milk powders. The applications for these products are vast and cross the spectrum, from bakery and confectionary to high-end premium offerings such as life-stage and sport nutrition. Combined Irish dairy exports to Vietnam, Malaysia, and Thailand have increased by over 74% since 2016 and we’re hopeful that we can build on that number in the years ahead. It’s rewarding to see Irish exporters build their ingredient and branded presence in these markets particularly when their physical presence is limited owing to travel restrictions, which look likely to remain for some time to come.
In Ireland, we have some of the most technically advanced ingredient processing plants in Europe, producing dairy products and solutions with high specificity, in a safe, independently verified, sustainable way – that’s not easy to replicate and it’s a factual message that we’re intent on communicating at every opportunity. Consumers right around the globe are becoming even more conscientious about the products they chose to purchase and consume. Bord Bia recently conducted one of the most extensive global surveys of thought leaders, consumers and trade buyers’ collective attitudes to sustainability, with respondents located in Ireland and across 12 of our most important export markets. Through that research we learned that 75% of consumers globally have made efforts to purchase more sustainably produced food and drink in the past year. 72% of trade customers rank strong sustainability credentials as a key factor when choosing suppliers, and this finding was particularly pronounced in Europe. The complexities of communication around sustainability were also a key call-out of this research, but we’re confident that through our verified and relatable proof points, we’re well positioned to communicate that message fluently and clearly to a global audience.
Our dairy farmers produce milk from grass that is naturally high in beta carotene and is the reason why our butter and cheese have a distinctive yellow colour. Irish dairy cows spend on average 240 days out on pasture, grazing. We bring our animals indoors during the harsher winter months that coincides with our calving season. Our herds are small by international comparison with about 80 cows per farm and we don’t operate an intense farming system. Owing to our animal welfare practices and stringent quality standards that include the Sustainable Dairy Assurance Scheme (SDAS), Origin Green and Grass Fed standard, all of which are scientifically based from data collected at farm level and collated and verified by independent auditors, our dairy industry can communicate relatable and clear proofpoints to global consumers – that is hard evidence that dairy from Ireland is produced in a safe, sustainable, animal and environmentally benign way. What shows like FiE allow us and our clients to do, is communicate the unique selling points (USPs) of Irish dairy to a large audience of buyers housed in one place. A key message for us is one of positive differentiation – communicating what it is that sets Ireland and Irish dairy apart. The Irish dairy industry is a global leader in transparency, sustainability, innovation, technological advancements, and animal welfare, and these USPs offer value to customers. It’s important that these messages are delivered to both customers and consumers at home and abroad and the efforts of our dairy farmers and wider industry are rewarded.
Like most sectors, it’s been a tough 18 months, but Irish dairy once again flexed its muscle and performed exceptionally well against all kinds of headwinds. The effective closure of foodservice as a result of Covid-19 lockdowns was a massive blow – it’s a significant channel through which product is traded. As noted earlier, the dairy sector recorded a phenomenal performance last year, realising €5bn for the 1.69 million tonnes exported. It’s a remarkable achievement by farmers, processors, and exporters when you contextualise that performance against the multifaceted challenges that presented themselves. Retail sales and shifts in buyer behaviours have been largely attributed to the success of last year but so too was the commitment of our Irish dairy farmers and the agility of our processors who were able to pivot, changing sku formats and sizes for example, to keep in-demand pipelines full. 2021 to date has continued that positive trajectory with strong demand from China in particular.
Weather plays a huge part in milk output and in the year to date it’s been favourable, putting us on track to exceed 2020 milk output, possibly by 4-5%, which would see us produce in the neighbourhood of 8.6 billion litres of milk. That eight billion-plus litres of milk will find its way to some 140 markets in the form of butter, cheese and dairy powders in the main. Notwithstanding the ongoing Covid-19 uncertainties, 2021 has thrown up some significant new challenges particularly around logistics and increasing costs of inputs right throughout the supply chain. Energy costs, oil and oil-derived goods, plastics, and wood have surged in price. Long before the shortages of containers and drivers dominated the daily news headlines, our dairy industry was grappling with exponential costs and scarcity of equipment. It’s a headache that’s still with us for some time to come we feel, but on the back of two very good years, and with global dairy prices remaining buoyant, the outlook to year end is positive.
Today’s customers are very savvy. They demand transparency and want to know where and how their consumables are produced and dairy in no exception. We talk a lot about trends in the food business and part of what we do in Bord Bia is try to identify those trends that are coming down the track and crucially, those that have the magnitude to stick and become habitual – that’s what will form the demand of the future and we share those insights with our dairy clients. Butter and cheese are two good examples.
For years the narrative was, I would say, misplaced or misunderstood, with active encouragement to use alternatives. But what was omitted from that dialogue was the nutritional content and naturalness of these products which are made with minimal processes and less than a handful of ingredients. Now these products are recognised for their goodness and the vital function they play in the maintenance of a health balanced diet. For dairy ingredients and foodservice style products, we see that savviness I mentioned in many ways.
Customers, like those attending FiE, are exceptionally knowledgeable about what works and what doesn’t work for them. It’s a customer looking for the perfect stretch and melting point for their grated pizza cheese or burger slices, or a bakery customer who needs a constant supply of butter delivered at the right temperature to ensure perfect results in their finished goods, or an infant formula customer looking for nutritionally dense, demineralised whey or skim milk powder that is produced in a safe, sustainable and wholly transparent way.