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"New Realities in Asian Markets for Ireland:The Success of Origin Green" Aidan Cotter

Aidan Cotter of BordBia gave the speech at the Asia Ireland Food and Agritech Forum in Cork, 14 July as part of Asia Business Week Ireland 2015

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"New Realities in Asian Markets for Ireland:The Success of Origin Green" Aidan Cotter

  1. 1. Asia Matters Asia Ireland Food and Agritech Forum 14 July 2015 Cork Institute of Technology, Cork @asiamatters_biz #AsiaIrlFood @asiabizweek In Food We Trust
  2. 2. 14 July 2015 Cork Institute of Technology, Cork New Realities in Asian Markets for Ireland: The Success of Origin Green. Aidan Cotter Chief Executive, BordBia (Irish Food Board)
  3. 3. Growing the success of Irish food & horticulture Growing the success of Irish food & horticulture “New Realities in Asian Markets for Ireland” … and the Role of Origin Green Aidan Cotter Tuesday, 14th July 2015 Asia Ireland Food and Agritech Forum
  4. 4. Growing the success of Irish food & horticulture 0 1 2 3 4 5 6 7 8 9 10 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 Billions 3 billion 7.3 billion 6 billion 5 billion 4 billion 9 billion World Population 1950 - 2050 54% in cities 66% in cities 30% in cities Source: UN World Population Prospects; the 2012 revision What’s Driving Global Demand for Food…… 8 billion
  5. 5. Growing the success of Irish food & horticulture 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 China India Other Asia Japan United States EU Others Shares of Global Middle Class Consumption, 2000-2050 Source: OECD Working Paper “3 billion consumers will join the middle classes over the next 20 years” changing lifestyles, shifting dietary habits” India and China Make Waves in the Global Middle Class
  6. 6. Growing the success of Irish food & horticultureSource: UN World Population Statistics, 2012 More than three of every four people live in Asia or Africa % 0 10 20 30 40 50 60 70 Asia Africa Europe Latin America North America Oceania 59 18 9 9 5 1 2010 2015 2025 Africa +302m Asia +364m Latin America +61m North America +29m From 2015 to 2025 population will grow by 760m
  7. 7. Growing the success of Irish food & horticulture Global population continues to grow older 0 10 20 30 World Asia Europe North America Africa 15 15 27 25 6 2010 2015 2025 % of population aged over 60 …in Europe, by 2025 more than 200 million people will be over 60 …
  8. 8. Growing the success of Irish food & horticulture Source: OECD & FAO Agricultural Outlook 2015-2024 Emerging markets driving global demand 0 10 20 30 40 50 Beef Pigmeat Poultry Sheepmeat Butter Cheese WMP SMP Fish World Developing OECD Global demand for livestock & fish products (% Ch 2024 vs. 2012-2014 average)
  9. 9. Growing the success of Irish food & horticulture 990 FAO Food Price Index 1990 to date, 2002-2004 = 100) 50.0 100.0 150.0 200.0 250.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Nominal Price Index Real Price Index 2008 2011
  10. 10. Growing the success of Irish food & horticulture 0 2 4 6 8 10 12 2009 2010 2011 2012 2013 2014 €7.2bn €7.9bn €8.9bn €9.1bn €10.0bn €10.5bn Source: CSO Irish Food and Drink Exports 2010 - 2014
  11. 11. Growing the success of Irish food & horticulture 0 2 4 6 8 10 12 2010 2011 2012 2013 2014 3.4% 4.3% 5% 6% 8.6% Billions(€) ROW Asia Asia’s Share of Irish Food and Drink Exports is growing
  12. 12. Growing the success of Irish food & horticulture Total Irish Food and Drink Exports to Asia €267m €383m €453m €605m €902m 2010 2011 2012 2013 2014
  13. 13. Growing the success of Irish food & horticulture Export Growth by Region 2014 vs. 2013 (% Change) -10 -5 0 5 10 15 Int. Markets Continental EU United Kingdom 15 2 0
  14. 14. Growing the success of Irish food & horticulture Growth in exports to International Markets: Asia Dominates 58 36 18 11 9 0 20 40 60 80 Rest of Asia China Nth. America Middle East Africa Food and drink exports by region (% Change on 2013)
  15. 15. Growing the success of Irish food & horticulture China €547m S. Korea €47m Malaysia €44m Japan €58m Thailand €40m Philippines €39m Vietnam €38m Singapore €33m Other €54 2014: Total: €902m Irish food & drink exports to Asia: China Dominates
  16. 16. Growing the success of Irish food & horticulture Dairy €530m Prepared Foods €114m Beef Offal €58m Pigmeat €108m Seafood €49m Beef €21m Beverages €18m Other €5m Total: €902m Irish food & drink exports to Asia: Dairy Dominates
  17. 17. Growing the success of Irish food & horticulture Irish food & drink exports to China growing rapidly No. 2 Dairy Market No. 2 Pork Market No. 6 Overall 0 100 200 300 400 500 600 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 €Millions
  18. 18. Growing the success of Irish food & horticulture Irish Dairy Exports to China growing rapidly 0 50 100 150 200 250 300 350 400 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Other Whey Butter & cheese Milk Powders IMF €m
  19. 19. Growing the success of Irish food & horticulture
  20. 20. Growing the success of Irish food & horticulture
  21. 21. Growing the success of Irish food & horticulture Chinese Consumer Trends:………………… Evolving Food Choice Food Safety Taste Country of Origin Health Natural Production Convenience Indulgence
  22. 22. Growing the success of Irish food & horticulture Retail Environment in China: “Extremely Fragmented” Traditional Supermarkets Serve “mass” market low income groups Stocking local product, low opportunity for premium imported Growing MNC Hypermarkets A platform with mixed success in China (failure to localize Serving mass market with local and imported food products Emerging Premium Supermarkets Serving burgeoning upper middle class and high income + expat A key market for premium products such as imported shellfish
  23. 23. Growing the success of Irish food & horticulture Rise in use of mobile technology Source: McKinsey Global Institute, March 2013
  24. 24. Growing the success of Irish food & horticulture
  25. 25. Growing the success of Irish food & horticulture Market Entry Strategy in China Having a Presence on the ground! Understand the market Find the right partner Negotiate a win-win deal Execute! This does “not” happen overnight. It can take anywhere from 12- 18 months to gain traction in the market! The most import step – Choosing the RIGHT PARTNER
  26. 26. Growing the success of Irish food & horticulture Exporting Food & Beverage Products to China Look at Food Additives! Many legal in the EU are banned in China Ex certain sugars in confectionary Look at Marketing Claims Organic Labelling “Cost Restrictive” Does your partner / Customer have an import licence
  27. 27. Growing the success of Irish food & horticulture South KoreaSouth KoreaIndonesiaVietnam Consumer insights through ethnography in dairy markets
  28. 28. Growing the success of Irish food & horticulture
  29. 29. Growing the success of Irish food & horticulture
  30. 30. Growing the success of Irish food & horticulture
  31. 31. Growing the success of Irish food & horticulture A World Leader in Sustainability Measuring what matters… Accreditation, independent verification… Performance based on science innovation and best practice… Every farm and food manufacturing business signs up to the sustainability agenda…
  32. 32. Growing the success of Irish food & horticulture Energy Emissions Water Biodiversity Socio-economic data Traceability Welfare Environment Animal Health Food Safety
  33. 33. Growing the success of Irish food & horticulture Farm Quality & Sustainability Audits 45,000 Beef Farms 90% of Beef Exports, Audited & Carbon Footprinted 18,000 Dairy Farms 100% Milk production, participants entering audit cycle Pigmeat, Poultry, Eggs, Horticulture, Grain Sustainability measures being implemented 90,000 carbon assessments on farms to date
  34. 34. Growing the success of Irish food & horticulture Company Recruitment Pipeline 460 Companies Registered 90% of exports 189 companies at workshop/ plan development phase 167 plans being processed 104 plans accepted Over 75% of exports
  35. 35. Growing the success of Irish food & horticulture
  36. 36. Growing the success of Irish food & horticulture
  37. 37. Growing the success of Irish food & horticulture THE WORLD WILDLIFE FUND AND WE’VE SEEN A FEW MAJOR WINS IRELAND BECAME THE FIRST COUNTRY TO COMMIT TO THIRD-PARTY VERIFIED, 100% SUSTAINABLE FOOD EXPORTS BY 2016
  38. 38. Growing the success of Irish food & horticulture Our Approach ETHNOGRAPHY 2 researchers 48 home visits 36 store visits 300 hours in-field 14 brand clinics Shanghai Beijing Chengdu Consumer insights through ethnography in dairy markets
  39. 39. Growing the success of Irish food & horticulture Emerging Urban Middle Class will become the future mainstreamers Western lifestyles have influenced consumption patterns Growing concern for their environment Soul Searching – questioning money and materialism The Urban Lifestyle is Challenging Chinese Desire For Balance
  40. 40. Growing the success of Irish food & horticulture Core Consumer Insight Chinese consumers believe that countries that produce the best food balance the needs of people today and tomorrow
  41. 41. Growing the success of Irish food & horticulture Communicating Irish Dairy Clean & Green is strongly associated with NZ and the Netherlands Science is strongly associated with the US & Germany No-one owns the cross generational message of sustainability
  42. 42. Growing the success of Irish food & horticulture Origin Green resonates with Chinese consumers… …because this multi-dimensional brand message… …is about a balanced approach to food production… …that is genuinely different to NZ and other countries. Communicating Irish Dairy
  43. 43. Growing the success of Irish food & horticulture Components of S & P 500 Market Value Intangible Assets Tangible Assets 0% 20% 40% 60% 80% 100% 1975 1985 1995 2005 2010 83 68 32 20 20 17 32 68 80 80 Source: Ocean Tomo
  44. 44. Growing the success of Irish food & horticulture Growing the success of Irish food & horticulture “New Realities in Asian Markets for Ireland” … and the Role of Origin Green Aidan Cotter Tuesday, 14th July 2015 Asia Ireland Food and Agritech Forum

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