Ireland’s investment in dairy innovation is not good enough – Enterprise Ireland
Irish investment in dairy innovation is not near the best in the world and needs to improve significantly, according to Michael Cantwell, Director of Food Division, Enterprise Ireland.
Speaking at the Teagasc/ICOS dairy conference ‘The End of the Beginning’ he said that Irish dairy innovation is lagging behind that of world leaders such as Danone and, if Ireland wants to take advantage of the removal of milk quotas, we need to “up our game”.
There are some companies who invest very heavily in research and development (R&D) in Ireland, but there are many who don’t.
He said that as a rule of thumb, dairy companies such as the Arla and FrieslandCampina would invest 0.8-1% of turnover back into R&D, while global food giants such as Nestle would invest approximately 3-4% turnover in R&D.
However, Irish dairy companies on average invest 0.5% of turnover back into research and development, but he said that the percentage is skewed by better companies investing more than that.
“If you compare us against who we want to compete with we simply don’t spend enough on R&D. There is a necessity to improve greatly the focus of Irish food companies on R&D.”
Further partnerships, he said, are needed within the industry. “We need to achieve scale, through partnerships and collaborations in the dairy industry.
We have gone from 169 dairy processors and it’s now 20-something, but it still needs to move that little bit more.
The food sector in Ireland accounts for 67% of all large companies in Ireland, he said, and the food industry has a huge knock on impact on the economy. “Within that it’s dairy and that’s where we’ll see the growth in the coming years.”
Ireland now accounts for 10% of global exports of infant milk formula, he said, yet 14 global food companies are larger than Ireland’s total food sector.
We are small but we are nimble. We have an innate ability to compete and win but we are small.
The big challenge, he said, is to continue to move away from commodity supports. “We don’t want to be another Fonterra as the value-add is not there.
“If we miss the opportunity to go value-add in the dairy industry and just go volume we will miss the whole opportunity that is there.”
The last 18-24 months have seen 36 individual investments in Ireland worth €730m of investment, he said.