Moypark highlight importance of Innovation for the Agri-food sector at Balmoral show
The Balmoral show broke records again in 2017 with over 100,000 visitors over the first 4 day show – best in its 149 year history. Agri Food was well represented at the show with the finest that Northern Ireland has to produce available in the Agri Pavillion. The traditional Ulster Bank sponsored lunch heard Janet McCollum of MoyPark highlight the importance of Innovation as a key driver of success for MoyPark and the wider sector. Innovation drives growth, creates differentiation and helps secure premium positioning for products. Northern Ireland producers have increasingly been at the forefront of product development. Given the Moypark story, it is clear that innovation is a long term project and requires continued investment to generate long term success
Consolidation in the Meat Industry in Northern Ireland
The long anticipated announcement of the creation of a joint venture between the UK meats businesses of Dawn Meats and Dunbia has been made. The deal, which is still subject to Competition Commission approval, will see Dawn Meats own a majority stake in the combined UK entity. The Republic of Ireland operations of Dunbia being sold separately to Dawn Meats.
Strategically this should allow the combined Group to achieve significant synergy savings as the business competes in the highly competitive meat sector. Pressures on consumer spending, grocery retailer price competition and the additional costs of Brexit will all force producers to review their cost bases again and indeed consider the option of consolidation.
Cider, Popcorn and Ice cream for Breakfast
Long Meadow’s Blossom Burst Cider walked off with the Belfast City Airport £30k Marketing Award this month. The shortlisted Top 10 Competition Finalists included a broad range of the very best of Northern Ireland’s food and drink produce. The renowned food critic Charles Campion commented on the strength of the product quality, the pitches and importantly the passion of the participants. Campion is onward to the Great Taste awards where he will sample over 50,000 products across the UK! – Northern Ireland will be well represented again in 2017.
UK M&A activity down due to Brexit but International Buyers eyeing up cheaper UK assets
The recent Grant Thornton UK Food and Beverage Insights report indicated that M&A activity was sluggish in Qtr 1 2017, 15% below Qtr 4 2016. General uncertainty due to Brexit and increased costs due to currency impacting corporate profitability are sighted as the main reasons for the drop in activity. That’s said the fundamentals of corporates still demanding strong turnover and profit growth requiring acquisition, drives to secure competitiveness through cost synergies and the level of money for investment all point to more activity in the market later in 2017. The fall in sterling in the latter half of 2016 has made UK assets even more attractive with foreign buyers. Private equity continues to invest in the sector from turnaround/consolidation through to high growth segments. The recent sale of Karro Meats Group (including our beloved Cookstown sausages) by Endless to CapVest for £180m shows the potential for super return in what might be seen traditionally as a low return sector.