John Hood is Director of Food and Drink at Invest Northern Ireland where he leads a team that works with more than 200 businesses across the region, helping them grow, innovate and develop by providing financial and advisory support.
Q How significant is the food and beverage sector to the Northern Ireland economy?
A Very significant. Food and drink is our largest manufacturing sector, representing around a quarter of manufacturing output, a quarter of manufacturing employment and a quarter of manufacturing exports.
From an economic development perspective and in terms of the geographical spread, it’s more than just the figures. If you look at the constituents within the supply chain: the producer, the primary farmer, the processor, the retailer and the consumer, it is probably the only area of economic development that touches everyone in Northern Ireland to a greater or lesser extent.
Q What is the level of interest from firms seeking to export to Great Britain or the Republic of Ireland, compared to elsewhere in the world?
A To put it into context, at the minute, we only sell three per cent of our produce outside of the European Union (EU) and no matter what way you look at it, there are some limitations to the amount of product that we have.
The second issue is there are a lot of opportunities in the food and beverage sector around the world, but we don’t yet have a large enough range of companies to fully avail of all the opportunities.
When you consider other markets it’s not just about selling. You need to understand the relationship, whether you deal with a retailer directly or through a distributor. You need to understand what the price point is and crucially, make sure you have an export health certificate, which may have been negotiated at an EU, UK or Northern Ireland level.
Logistically, have you someone on the ground if there are issues? Selling into outside markets is more complicated and complex than people think. Our job is to try and simplify that. I think it’s about managing the expectations of firms and encouraging them to test themselves out in the near-shore markets such as Great Britain and Republic of Ireland.
The Great British market as we sit today is still a net importer of food and beverage by approximately £24 billion a year, so there will be a lot of opportunities to sell into it when the UK exits the EU, under whatever terms.
Ultimately, the pure, natural quality of our food and beverages will sell anywhere in the world. But, we have got to make sure we match the opportunity with the capability and capacity of our companies.
Q How do you compare the levels of support from Invest NI to similar agencies in the Republic of Ireland or Great Britain?
A The levels of support are governed across the EU so anything that is done has to be consistent with European guidelines on regional aid. If you look at what we do in food and beverage, we have a dedicated business development team whose job it is to promote the pure and natural quality of Northern Irish food and drink and to help facilitate sales.
We provide R&D support to companies seeking to engage in innovative research. Across innovation, there’s a range of support, whether that be a design programme for branding or innovation vouchers to deal with particular production issues.
We’ve got a skills growth programme to make sure the companies have the skills that they need to be as efficient and effective as possible.
The things that other regions offer, Invest NI will offer as well to our companies and we have to encourage firms to make maximum use of those services. Across Ireland food and beverage is a key area of focus which may mean that our local companies receive more dedicated attention than might be the case in Great Britain.
No matter how much investment we put in as a government, the companies will be putting in more than we are. That’s the purpose of our job, to de-risk it and make them feel more comfortable making that investment. If a company is ambitious, wants to be innovative, improve its efficiency and productivity and the skills of its people, we will work alongside them.
Q What practical things are Northern Irish food and beverage clients doing in anticipation of Brexit?
A One of the biggest challenges around the exit from the European Union has been uncertainty. That said, Great Britain remains our largest market so even in the worst-case scenario, our largest market will remain open and still present opportunities.
The other thing is that we have seen companies stockpiling, whether it be raw or packaging materials. Others have taken space in other jurisdictions because they have been required by their suppliers to have some kind of facility within the EU, that will allow them to continue to supply.
From an Invest NI perspective, we have a range of products and solutions available including a self-assessment online tool to try and allow companies to understand some of those issues that are likely to be of greatest concern to them.
There is support available from consultancy advice and guidance on how to deal with Brexit up to a maximum of £50,000 and specialist advice on issues such as customs, tariffs and taxation.
Q What thing would you do (if you had the power) to transform the sector in Northern Ireland?
A It goes back to encouraging firms to make the investment that will make businesses as efficient as possible. That’s the one thing. If you begin to focus more on the profitability rather than the turnover, whether that be through investment in physical capital, human capital or through identifying markets that potentially give a better return, Northern Ireland could be transformed.
If we could turn companies that are making 1.5 to two per cent profit into companies that are making eight to nine per cent profit, it will be transformational.
Ultimately, I believe we have the pure, natural quality products that would sell anywhere in the world. We’ve got to make sure that we manufacture them to the highest standards that we can, to the best of our ability and sell where we get the maximum return.