Rising input costs and other inflationary pressures are the top threats to growth among small food companies, according to a sample surrey by Love Irish Food and PwC.

The survey carried out in March and April 2022 canvassed the views of 68 food SMEs.

"Food producers now face a tidal wave of challenges that encompass near doubling of energy costs, limited availability of key food and non-food ingredients, wider supply chain issues, and labour retention costs," said Kieran Rumley, executive director of Love Irish Food.

"The food industry is set for the biggest challenge that it has faced in many decades,” he added.

However, 85% of the respondents said they are confident of increasing turnover through 2022.

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"While the confidence of food businesses in their own strengths provides hope, some companies in the food sector will clearly struggle with the challenging market conditions," Rumley continued.

Owen McFeely, director of PwC Retail & Consumer Practice, added: "The fact that SMEs are confident about their own organisations’ growth in the face of economic uncertainty is testament to their resilience and their confidence to weather current challenges.

"They have become accustomed to dealing with recent challenges. Brexit and Covid-19 have tested their crisis management and business resilience capabilities. Continuing to become sustainable businesses will also be a key focus, with over half planning to work towards a net zero commitment.”

Key sustainability investments reported are in the areas of energy consumption (78%), packaging and plastics reduction (68%) and water usage (50%), and over 70% of respondents are working towards a net-zero commitment, despite just 19% having made the commitment.

The top three general areas for investment are are operational efficiencies (48%), production automation (41%) and new products and services (44%).

Meanwhile, half of respondents are considering pay increases to attract and retain key staff, and 33% will invest in people and skills despite majority concerns about talent availability.

Over six out of 10 respondents specified increasing social media presence and investment in sustainability and in quality and standards as key brand building actions.

Photo: (l-r): Kieran Rumley, Owen McFeely, and Mary Sadlier of Coole Swan.