FOOD companies seeking to boost revenue are most likely to launch new products and services in the coming year and least likely to raise prices, according to new research.
The survey by PwC and the non-profit body Love Irish Food found most executives at small and medium-sized food enterprises are optimistic of growth in 2020.
Some 88pc of the approximately 70 executives polled said they expect to grow sales, including 34pc who expect to see more than 10pc gains in revenue next year. By contrast, 10pc expect revenues to remain the same and only 2pc foresee a decline.
When asked to choose what activities beyond organic growth would drive revenue gains next year, 22pc said they would launch new products and services, 19pc would seek operational efficiencies, 15pc would grow new markets, and only 6pc would raise prices.
“The survey highlights evidence of optimism among Irish SMEs around growth into 2020, notwithstanding a difficult trading environment,” said Love Irish Food executive director Kieran Rumley.
“There are considerable challenges in areas such as availability of skills across the board from operational to technical to management.
“This in turn highlights the need for a greater take-up of available apprenticeships in the industry.”
When asked what level of investment they intended to make in 2020 to grow their business, 63pc said under €500,000, 17pc €500,000-€1m, 6pc €1m-€3m, 10pc over €3m and only 4pc nothing.
“It’s encouraging to see that the majority of survey respondents are looking to invest in their companies in the coming year,” Mr Rumley said. “For certain food sectors, this represents a significant growth opportunity, specifically for those import substitution sectors.
“However, behind these positive signals there remains the worrying inability of Irish food producers to recover adequate costs, forcing them to continue to operate on even tighter margins.”
When asked if they had delayed investment because of Brexit-related uncertainties, 31pc said yes, 69pc no.
And the vast majority, 84pc, said they have an environmental sustainability plan in place and will use it to improve green efficiencies in 2020.
Mr Rumley said: “Food companies are taking the sustainability challenge seriously with many planning to invest in initiatives to improve the environment. This, together with the strong regional dispersion of the food industry base, contributes greatly to overall sustainability.”