A new suite of supports from Bord Bia aims to help food and drink companies through the Covid-19 crisis, as the extent of the pandemic’s shock to business becomes apparent.

Bord Bia’s Navigating Change marketing supports response strategy includes bespoke supports for producers and food/drink manufacturers, alongside other government supports.

According to Bord Bia, the strategy is focused on three areas: understanding, client supports and future-proofing.

To boost understanding, Bord Bia is pledging to keep clients up to date on the impact of Covid-19 on worldwide trade. This will be done through charting consumer insights and the provision of sectoral insights to manufacturers.

In addition, a bi-weekly markets focus report will be published to detail supply and demand trends and implications across the supply chain worldwide, along with podcasts throughout the week.

In Association with

In the area of client supports, Bord Bia is launching a €1m marketing grant programme to help Irish producers accelerate e-commerce and expand marketing activities. Training and mentoring programmes will also be on offer, while practical changes have been made to the agency’s Origin Green and Quality Assurance audit procedures during the pandemic.

To help food/drink companies plan for a post-Covid-19 future, Bord Bia said that it will also be providing specific supports throughout this crisis, bespoke to each phase so that clients can adapt to new market conditions.

Bord Bia also said that it is tracking how consumers behave during the crisis, which will allow it to identify new behavioural norms that are likely to emerge.

Indicators tracking will focus on themes including how consumers are cooking to how people are socialising. The first four indicators – shielding, comfort cooking, trace tech and simply safe – are available here.

Tara McCarthy (pictured), CEO of Bord Bia, said that the Navigating Change supports are highly tailored to tackle the specific impacts the Covid-19 crisis is having on the Irish food, drink and horticulture industry.

“A core dynamic has emerged whereby food and drink companies are seeing a dramatic reduction in demand from foodservice customers countered by spiking demand in retail for different products,” McCarthy added.

“At the same time, factory floor constraints, supply chain challenges and varying international market dynamics all have the potential to cause significant disruption.

“Covid-19 is an unprecedented challenge for our industry; the scale and enormity of the challenges we face are changing rapidly and so too must our supports.”

Covid-19 Impact

Bord Bia is reporting that Covid-19 is affecting all aspects of the Irish food and drinks industry, but the impact is very different across sectors.

Key trends identified include

Retail/foodservice see-saw effect: The foodservice industry is experiencing a near-total collapse in demand due to the temporary shutdown of the hospitality sector.

Lost sales are running at an estimated €6.9bn for some of Europe’s largest foodservice markets (Germany, France, Italy and Spain).

Retail and grocery, meanwhile, is experiencing dramatic increases in demand. However, with significant redundancies across Europe and the US, medium-term consumer spending in retail is projected to reduce from current peaks as consumers’ disposable income is potentially impacted.

Sector impact: The beef sector is experiencing ‘carcass imbalance’, wherein consumer demand for lower-value cuts like mince is increasing, while demand for higher-value steak cuts (often sold to foodservice restaurant customers) is falling sharply.

Milk processing in the dairy sector is continuing under strict physical distancing procedures.  Fall-off in demand in foodservice has been replaced by consumer demand through retail.

Cold storage facilities for products is increasingly difficult and costly to obtain, which may pose problems as the sector enters peak milking season.

Prepared consumer foods manufacturers that are foodservice-focused have been most strongly affected to date, while retail sales have performed well in most cases, although some products have been affected by the focus on core products by retailers.

Alcohol has witnessed a severe fall off in the on-trade and travel retail, although some of this loss has been alleviated by a strong pick-up in the off trade. A number of distilleries have commenced producing hand sanitisers over recent weeks to utilise capacity.

Logistics remains one of the key challenges facing the seafood sector. It has become more costly to service export markets, with many lorries only partially filled. Additionally, getting products to Asia has become a major challenge due to the shortage of reefer capacity.

China reawakening: During the past fortnight, China’s economic capacity utilisation rate had recovered to 78% of pre-Covid-19 levels. While Covid-19 impacts are expected to linger into June, recovery is expected to be well underway by the second half of 2020.

Some 90% of foodservice outlets have reopened in China and the Bord Bia China team said that it is tracking market movements closely.

Full details of Bord Bia’s Navigating Change COVID-19 Response programme and suite of supports is available at: https://www.bordbia.ie/industry/COVID-19-information/.

The deadline for applications for the marketing grant is Thursday, 16 April 2020.