A new survey shows that 88% of Irish food companies expect revenue growth in the year ahead, with 34% of these companies expecting revenue growth of over 10%.
The SME Irish Food Barometer was carried out by PwC and Love Irish Food.
It also reveals that while companies are optimistic about the growth prospects for their own businesses, they are less certain about the future performance of the economy.
Almost all respondents – 96% – confirmed that they are planning some form of capital investment next year in order to develop their business, with 10% saying this investment would be in excess of €3m.
But just 16% of SME food firms believe that economic growth in Ireland will improve in the year ahead, 50% say it will remain unchanged and 34% say it will decline.
As a small open economy, this is not surprising given external uncertainties, PwC said.
Today’s barometer also shows that just 6% of Irish food companies expect to achieve price increases in current trading conditions.
PwC said this suggests that margin improvements will be derived from advances in technology and operational efficiencies.
The barometer shows that key challenges curtailing growth prospects include availability of labour (43%), trade wars and tariffs (37%), operational costs such as energy, insurance and rates (28%), volatile commodity prices (21%) and embracing the sustainability agenda (17%).
84% of companies confirmed that they have an environmental sustainability plan in place to make improvements in 2020. Key areas for this investment are energy consumption, reducing plastics and water usage.
On Brexit, just 31% of companies surveyed said they had delayed investment in the organisation due to the UK’s planned departure from the European Union.
Any delayed investment was mainly in areas such as production capacity, operational resources innovation and marketing.
Grace McCullen, Senior Manager at PwC Ireland Retail & Consumer Practice, said the survey highlights optimism about the future growth potential for Irish food companies.
“They are also keen to seek operational efficiencies through innovation and technologies to improve margins, cost competitiveness and satisfied consumers,” Ms McCullen said.
“With the domestic market being the priority for growth prospects, expanding into new markets and new products should not be ignored. The UK will exit the EU at some point and that will give rise to new opportunities for manufacturing food products in Ireland that may have been supplied from the UK,” she added.