Nearly half (44%) of food and agri-businesses have delayed investment over the past year due to uncertainty, but four in five (80%) are optimistic about their business performance over the coming 12 months.

ifac, the professional services firm specialising in farming and agri-business, found that optimism among the business community has risen by 25% compared to last year despite the widespread caution around investment.

Some 80% of businesses reported input costs are rising, and that costs are the number one challenge for their business, followed by trade and tariffs and staffing availability.

"For others, exploring opportunities to differentiate through sustainable practices is key. Sustainability is now a core part of operations. Back in 2019, just 43% of companies were using sustainable packaging," said David Leydon, group head of growth and agrifood consulting at ifac.

"Fast forward to 2025, and 83% of respondents report receiving a similar or increased number of requests for sustainability data from their customers in their value chain over the past year.

"This emphasises how crucial it is to have expert advice to address the challenges identified in our report, such as rising costs, foreign exchange fluctuations, sustainability, and the rapid adoption of AI."

The 2025 Food and Agribusiness Report also found that more than three-quarters (77%) of owners do not have a clear succession of leadership transition plan in place.

The same proportion (77%) are using artificial intelligence tools such as ChatGPT and Microsoft Copilot. In terms of the main uses, marketing, sales and advertising (53%), market research (40%) and new product development (26%) leads the way.

However, only a quarter (27%) are confident that they understand the data security and privacy risks in navigating AI.

Some 83% of respondents report receiving a similar or increased number of requests for sustainability data from their customers in their value chain over the past year.

A further 89% of businesses have maintained or grown international sales in the past 12 months, with the UK and Europe remaining key markets. Market entry and distribution were cited as the key challenges to growing exports.

In 2024, the value of Irish agrifood exports increased by 5% to €17 billion (Bord Bia), maintaining the upward trajectory seen in previous years. This is reflected in our survey, with 56% of respondents seeing a growth in their international sales in the past 12 months.

Half of the respondents export to the UK, and one in four to the US. However, 66% of those exporting to the US cite tariffs as a top challenge, while 70% overall face FX risk.

Additionally, seven in 10 (70%) are not invoicing in euros, exposing them to currency volatility.

Recruitment plans remain broadly in line with 2024, with 41% of businesses surveyed planning to increase the size of their workforce in the next 12 months, up two percentage points from last year (39%).

While recruitment and retention are still challenging, there is an improvement in sentiment from last year. 60% of business owners are finding recruitment difficult; this figure is down from 77% in 2024. 

Staff retention difficulties have also eased, falling to 23% from 35% in 2024. Yet awareness of upcoming regulation remains low, with 46% of leaders still unaware of the new EU Wage Transparency Act due in 2026.

Photo: David Leydon, Head of Growth and Agrifood Consulting at ifac and Jenny Melia, Enterprise Ireland CEO. (Pic: Supplied)