Agri food sector needs states supports to reach full potential

Market Background

The agri food sector remains the shining light across Ireland in terms of job creation, wealth creation and getting all of Ireland back on its feet, not just in the major urban centres.

But we ask the question: how can this sector be supported to continue to grow and develop in the years ahead?

Q. What exactly does Enterprise Ireland (EI) do to support our food and beverage companies?

A: Enterprise Ireland partners with entrepreneurs, Irish businesses and the research and investment communities to develop Ireland’s international trade, innovation, leadership and competitiveness.

The ultimate objectives are increased exports, employment and prosperity in Ireland.

The food and beverages sector is a priority sector for Enterprise Ireland and it works closely with clients in supporting them in the areas of expansion, innovation, competitiveness, leadership and raising finance so that they can become successful, global players.

EI sees a vibrant artisan food sector in Ireland and is working with these companies in helping them scale their production and move into export markets.

The challenge for EI is to find opportunities within these companies who have both the potential and ambition to grow their business.

There is a vibrant artisan food sector in Ireland and the challenge is to find the opportunities that have the potential and ambition to grow their business and export. EI is working with a number of artisan companies to assist them to scale and develop products with export potential.

Q. What are the immediate challenges facing food and drinks companies and particularly companies in the early stages of setting up?

Sourcing external investment and funding remains a key challenge for companies in the sector. Cashflow is critical to business survival and success and ensuring a company is properly financed is paramount. Companies need to ensure they have an offer that is not a ‘me-too’ and brings additional value to both the consumer and the retailer.

Q. How is this need to source external investment addressed?

Enterprise Ireland provides feasibility funding support of up to 50% in grant support to help food entrepreneurs validate the commercial viability of their business and develop a robust business plan.

EI offers competitive feasibility funds aimed at stimulating new high potential startups outside of the greater Dublin area. Enterprise Ireland recently ran a call under the female entrepreneur feasibility fund which gained a lot of interest.

While the food sector is well balanced in terms of gender, Enterprise Ireland’s food division is trying to encourage more women into the sector, particularly at the start-up stage.

Competitive start fund

Launched in December 2010, the purpose of this fund is to accelerate the growth of start-up companies that have the capacity to succeed in global markets.

Given the difficulties facing entrepreneurs at the critical start-up stage, this fund provides €50,000 up-front equity funding and mentoring support to individuals.

Since its launch, there have been 14 calls for applications. Two hundred projects have received support with a number developing their businesses.

HPSU funding

EI provides financial support to start-up companies that have the ability to generate sales of €1m and employ 10+ staff within the first three years of trading.

External investment

Enterprise Ireland regularly makes linkages between companies looking to raise investment and the investment community.

Following discussions with Enterprise Ireland, the Halo Business Angel Network (HBAN) established a food syndicate in 2012.

This is an all-island group of experienced investors, who have relevant industry experience in the food, drink and nutraceutical industries.

The food syndicate is seeking to support a range of companies within these sectors who are export orientated and have a plan to grow the business.

These investors are also willing to take on a strong advisory/mentoring role in some instances and we see this ‘smart’ money as being very important in helping companies to get to the next stage of growth.

Banking relationships

In 2009, EI created a banking relationships team, which is focused on assisting our companies to secure and maintain funding that will facilitate their growth.

The team has established a close working relationship with the SME lenders to encourage them to build their sectoral expertise and address the critical funding requirements of viable SMEs. This includes encouraging the lenders to support companies entering new overseas markets, introduce new financial solutions and review the merits of individual applications on a case-by-case basis.

The team works with the other government stakeholders, which includes the Credit Review Office and Microfinance Ireland.

Q. What other challenges do food companies face?

A: EI cannot emphasise strongly enough the importance of putting the best team in place to run and grow the business.

Enterprise Ireland focuses on enhancing the management capability of client companies, through a number of short and long-term programmes.

Our short-term programmes are grouped under ‘Excel at Export Selling’ and are one-day workshops, followed by one-on-one consultancy and centre around building our companies’ export sales capabilities.

Long-term programmes include the Leadership 4 Growth, Accelerated Growth and Musgrave Supplier Development programme for some of the earlier stage companies.

Leadership 4 Growth is run in conjunction with the IMD in Switzerland and IMI in Dublin and supports the development of leadership competencies of management teams so they are best placed to grow their companies to scale. To date, 80+ food companies have completed this programme.

Entreprenurial progamme

Innovation is essential for business development and success. This programme helps companies to develop and launch new exciting products which the consumer wants and is willing to pay for.

EI’s range of entrepreneurial programmes such as FoodWorks, EnterpriseSTART, Ideagen and New Frontiers help early stage promoters understand what it takes to run a business and equips them with the necessary skills to do just that successfully.

EI’s FoodWorks programme, which was developed in collaboration with Bord Bia and Teagasc, is their flagship programme for developing new food and beverage entrepreneurs and provides training and support to promoters to help them to bring their novel food business ideas from kitchen concept stage to market-ready.

The programme launched in 2012 with 29 participants and 11 of these were invited to participate in the final phase of the programme.

Three of these companies have received high potential start-up funding from Enterprise Ireland in the meantime.

The beauty of FoodWorks is that the companies are brought through a structured validation process that helps them to assess that their product is both commercially and technically feasible and attractive to the current consumer.

Enterprise Ireland provides feasibility funding to the entrepreneurs throughout the FoodWorks programme.

At the end of the programme, the final projects are presented to both retailers and potential investors.

The idea has to be very strong – it must be different and appealing to the consumers, and the promoters have to have the ambition to grow the business. However, we feel that the formal training provided under a programme such as Foodworks will stand to these entrepreneurial promoters in the longer term and assist them in becoming investor-ready earlier.

For food entrepreneurs at an early idea stage, EI’s New Frontiers intensive entrepreneurial programme, which is run with the institutes of technology throughout the country, is ideal and gives support and training to entrepreneurs to move from business proposition to investor-ready stage.

Enterprise Ireland supports the entrepreneur through a range of supports including mentoring, incubation space, workshops and €15,000 scholarship payments.

Examples of current food companies on the programme include Una’s Pies and National Organics Baby Food.

Q. What other Enterprise Ireland supports are available?

A: Ideagen is an initiative designed to bring together entrepreneurs and researchers. These entrepreneurial programmes are run throughout the regions regularly and are complemented through workshops on export awareness.

EI has a dedicated ‘get export ready’ helpdesk to help food businesses with a successful domestic business to start looking at developing the international business.

Access to incubation space

Enterprise Ireland through the Community Enterprise Centres has supported a range of incubation spaces around the regions, some of which have dedicated food space.

At a regional level, the new local enterprise offices (LEO) will offer an enhanced service for small rural enterprises. LEOs have a network of 31 offices across the country.

The LEOs will draw on the successful County Enterprise Board (CEB) model and Enterprise Ireland will work very closely with the LEOs to ensure there is an appropriate matching and linking of national policy and programmes at a local level.

Enterprise Ireland continues to support and build capability among high potential start-ups throughout the regions that have the ambition and potential to develop successful global businesses.

And EI has also set up a micro-enterprise and small business division to provide best-in-class support to micro and small businesses throughout the country.