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Irish food industry targets German expansion as Brexit looms

Bord Bia (The Irish Food Board), is increasing its investment in the German food and beverage market as Irish exporters continue to look outside the traditional UK market to build the business. Speaking at Anuga, the biggest food fair in the world, where a record 34 Irish companies are exhibiting, the CEO Tara McCarthy outlined the strategic importance of the market and its geography.

“Irish food and drink exports to Germany performed impressively in the first half of 2017 with a year-on-year increase of 24 percent, driven by significant growth in dairy, sheepmeat, horticulture, seafood, prepared foods and beverages. It is a premium market, our sixth largest, with an estimated value of €600m last year. Sustainably produced food is increasingly sought by German consumers and we are offering our customers a solution to this demand through our Origin Green program.”

“We are investing further in the market and we have identified a number of initiatives particular to the region to be funded under the recent Brexit allocation from the Department of Agriculture, Food and the Marine.”

High level of engagement in the market
The German grocery retail market was worth €234bn in 2016 and is forecast to be worth €259bn by 2021, a growth rate of 10.5 percent (IGD Retail Analysis, 2017). The market is highly competitive and consolidated, with the largest operators accounting for around 85 percent of total sales.

Bord Bia has committed considerable time and resources to the German market to exploit its potential for Irish food and drink exporters. It is Ireland’s sixth largest export market for food and drinks with an estimated export value of €600m for 2016.

Export performance to date for 2017 has been very strong (up 24 percent), driven by increases in Dairy and Prepared Foods. Significant increases have also been recorded for sheepmeat (+14 percent), seafood (+26 percent), pigmeat (+19 percent), edible horticulture (+25 percent) and beverages (+9 percent).

Private label penetration is also one of the highest in Europe at approximately 45 percent with an increased focus on tiered private label ranges and private label extension into niches such as organic, vegan, and vegetarian and ready meals.

Post-Brexit initiatives in the German market
Bord Bia’s Brexit response initiatives are concentrating on the following areas:

  • Consumer, customer and market Insights: to understand better the consumers in Germany specially and also the rest of Europe and in South East Asia and China.
  • Route to market: Developing tools for exporters to support Bord Bia's new enhanced strategic marketing process. Marketing and business development activities and “Feet on the Street” to retain expertise on the ground in emerging markets to help Irish exporters identify potential opportunities.
  • Origin green: Developing insight to understand further the resonance of Origin Green and sustainability in target markets and in promotions.

Identifying German opportunities for private label suppliers
Tara McCarthy highlighted the opportunities for private label partnerships in Germany: “We want to unlock opportunities by matching Irish suppliers to suitable retailer accounts and to enable growth for Irish food and drink companies and those German retailers. The research will deliver an understanding of private label in key retailers and focus on 10 food categories.”

Some 45 percent of retail sales in the German market is through private label and it continues to grow.

This project will build on Bord Bia’s European Private Label program involving 21 Irish companies and the successful model previously used to conduct category research across 6 categories in three markets. The research funded under the Brexit initiative will now focus on 10 categories to identify Private Label opportunities for the German market. These categories are yogurt, frozen value-added chicken, ice-cream and frozen desserts, functional meal replacements/superfoods, chocolate and frozen pizzas/pies.

Earlier consumer insight from Bord Bia into private label opportunities in Germany and the Netherlands revealed the potential for growth in each of these markets whether through exploiting growth in a particular category or offering innovative solutions to boost retailers’ business through providing choice and innovation to their customers within a category.




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