"New Realities in Asian Markets for Ireland:The Success of Origin Green" Aidan Cotter

Asia Matters

Asia Ireland Food and Agritech Forum 　

14 July 2015Cork Institute of Technology, Cork

@asiamatters_biz #AsiaIrlFood @asiabizweek

In Food We Trust

14 July 2015Cork Institute of Technology, Cork

New Realities in Asian Markets for Ireland: The Success of Origin Green.

Aidan CotterChief Executive, BordBia (Irish Food Board)

Growing the success of Irish food & horticulture


“New Realities in Asian Markets for Ireland”… and the Role of Origin Green

Aidan Cotter Tuesday, 14th July 2015

Asia Ireland Food and Agritech Forum


1950

1960

1970

1980

1990

2000

2010

2020

2030

2040

2050

0

1000000000

2000000000

3000000000

4000000000

5000000000

6000000000

7000000000

8000000000

9000000000

10000000000

3 billion

7.3 billion

6 billion

5 billion

4 billion

9 billion

World Population 1950 - 2050

54% in cities

66% in cities

30% in citiesSource: UN World Population Prospects; the 2012 revision

What’s Driving Global Demand for Food……

8 billion


100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0% 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

China

India

OtherAsia

Japan

United States

EU

Others

Shares of Global Middle Class Consumption, 2000-2050

Source: OECD Working Paper

“3 billion consumers will join the middle classes

over the next 20 years”

changing lifestyles,shifting dietary habits”

India and China Make Waves in the Global Middle Class

Growing the success of Irish food & horticultureSource: UN World Population Statistics, 2012

More than three of every four people live in Asia or Africa%

Asia Africa Europe Latin America North America Oceania0

10

20

30

40

50

60

70

59

18

9 95 1

2010 2015 2025

Africa+302m

Asia+364m

Latin America +61m North America +29mFrom 2015 to 2025 population will grow by 760m


Global population continues to grow older

World Asia Europe North America Africa0

10

20

30

15 15

2725

6

201020152025

% of population aged over 60

…in Europe, by 2025 more than 200 million people will be over 60 …


Source: OECD & FAO Agricultural Outlook 2015-2024

Emerging markets driving global demand

Beef Pigmeat Poultry Sheepmeat Butter Cheese WMP SMP Fish0

10

20

30

40

50

World Developing OECD

Global demand for livestock & fish products (% Ch 2024 vs. 2012-2014 average)


990 FAO Food Price Index1990 to date, 2002-2004 = 100)

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 201550.0

100.0

150.0

200.0

250.0

NominalPrice Index

Real Price Index

2008

2011


2009 2010 2011 2012 2013 20140

2

4

6

8

10

12

€7.2bn

€7.9bn

€8.9bn €9.1bn

€10.0bn€10.5bn

Source: CSO

Irish Food and Drink Exports 2010 - 2014


2010 2011 2012 2013 20140

2000000000

4000000000

6000000000

8000000000

10000000000

12000000000

3.4% 4.3% 5% 6% 8.6%

ROW

Asia

Asia’s Share of Irish Food and Drink Exports is growing


Total Irish Food and Drink Exports to Asia

2010 2011 2012 2013 2014

€267m

€383m€453m

€605m

€902m


Export Growth by Region

2014 vs. 2013 (% Change)

Int. Markets Continental EU United Kingdom-10

-5

0

5

10

15

15

2

0


Growth in exports to International Markets: Asia Dominates

Rest of Asia China Nth. America Middle East Africa0

20

40

60

80

58

36

1811

9

Food and drink exports by region (% Change on 2013)


China€547m

S. Korea€47m

Malaysia€44m

Japan

€58m

Thai-land €40m

Philippines

€39m

Vietnam€38m

Sin-gapor

e€33m Other

€54

2014: Total: €902m

Irish food & drink exports to Asia: China Dominates


Dairy€530m

Prepared Foods€114m

Beef Offal€58m

Pigmeat

€108m

Seafood€49m

Beef€21m

Beverages€18m Other

€5m

Total: €902m

Irish food & drink exports to Asia: Dairy Dominates


Irish food & drink exports to China growing rapidly

No. 2 Dairy MarketNo. 2 Pork Market

No. 6 Overall

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 20140

100000000

200000000

300000000

400000000

500000000

600000000


Irish Dairy Exports to China growing rapidly

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 20140

50,000,000

100,000,000

150,000,000

200,000,000

250,000,000

300,000,000

350,000,000

400,000,000

OtherWheyButter & cheeseMilk PowdersIMF

€m




Chinese Consumer Trends:………………… Evolving

Food Choice

Food Safety

Taste

Country of Origin

HealthNatural Production

Convenience

Indulgence


Retail Environment in China: “Extremely Fragmented”

Traditional Supermarkets

Serve “mass” market low income

groups

Stocking local product, low

opportunity for premium imported

Growing MNC Hypermarkets

A platform with mixed success in China

(failure to localize

Serving mass market with local and imported

food products

Emerging Premium Supermarkets

Serving burgeoning upper middle class and high income +

expat

A key market for premium products such as imported

shellfish


Rise in use of mobile technology

Source: McKinsey Global Institute, March 2013


http://www.google.co.uk/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRxqFQoTCKmogZ7c0MYCFccq2wodPKkIZA&url=http://www.chinainternetwatch.com/11183/strong-growth-online-shopping-market-q3-2014/&ei=fM-fVan6KcfV7Aa80qKgBg&bvm=bv.96952980,d.ZGU&psig=AFQjCNHmhRteE6Pl61P_PovwFETI-RtwRg&ust=1436622925440052


Market Entry Strategy in China

Having a Presence

on the ground!

Understand the market

Find the right

partner

Negotiate a win-win

deal Execute!

This does “not” happen overnight. It can take anywhere from 12-18 months to gain traction in the market! The most import step –

Choosing the RIGHT PARTNER


Exporting Food & Beverage Products to China

Look at Food Additives! Many legal

in the EU are banned in

China

Ex certain sugars in

confectionary

Look at Marketing Claims

Organic Labelling“Cost Restrictive”

Does your partner / Customer have an import licence


South KoreaSouth KoreaIndonesiaVietnam

Consumer insights through ethnography in dairy markets





A World Leader in Sustainability

Measuring what matters…

Accreditation, independent verification…

Performance based on science innovation and best practice…

Every farm and food manufacturing businesssigns up to the sustainability agenda…


Energy Emissions Water

Biodiversity Socio-economic data

Traceability Welfare

Environment Animal Health

Food Safety


Farm Quality & Sustainability Audits

45,000 Beef Farms 90% of Beef Exports, Audited & Carbon Footprinted

18,000 Dairy Farms100% Milk production, participants entering audit cycle

Pigmeat, Poultry, Eggs, Horticulture, GrainSustainability measures being implemented

90,000 carbon assessments on farms to date


Company Recruitment Pipeline

460 Companies Registered90% of exports

189 companies at workshop/ plan development phase

167 plans being processed

104 plans acceptedOver 75% of exports



http://www.google.ie/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&docid=x6ojPiw8MYr4IM&tbnid=_StfR4SZdyRQ0M:&ved=0CAUQjRw&url=http://www.temp-masters.com/?page_id=9&ei=8qV5U7ufD8P20gXi4YHYCg&bvm=bv.66917471,d.ZWU&psig=AFQjCNEgXA3He7q54f-45Co6iVI98ua3ww&ust=1400567662794121

http://www.google.ie/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&docid=f1_YCKRu3lncYM&tbnid=whlYLcxZxv6RkM:&ved=0CAUQjRw&url=http://www.cambridge-news.co.uk/News/Councillors-voice-opposition-to-planned-Royston-Tesco-stores-opening-hour-extension-bid-20140518120612.htm&ei=QqZ5U9uWHPDa0QWU1IGIAg&bvm=bv.66917471,d.ZWU&psig=AFQjCNGGGvDKLjhRIZT8b3K4HiK6ztdrAw&ust=1400567744125956

http://www.google.ie/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&docid=NPvGDDfV2Pwc3M&tbnid=xG5xcK6M0yHJsM:&ved=0CAUQjRw&url=http://www.mikeroweworks.com/2013/03/fair-oaks-farms-delivers-more-than-milk/&ei=pql5U6LXI6Gk0QXal4GIAg&psig=AFQjCNEXfIZ7AEnyzHs4M_0ir9CdQid3yA&ust=1400568583404330

http://www.google.ie/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&docid=2OcujhLCEqH3CM&tbnid=epQw68J8FKKdoM:&ved=0CAUQjRw&url=http://goodlogo.com/extended.info/ahold-logo-3416&ei=G5CxU6mcO4ye7Aab8oFQ&bvm=bv.69837884,d.ZGU&psig=AFQjCNGjggqE9Ske_7L0aIbD2uQ6BWcC9Q&ust=1404232084114331

http://www.google.ie/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&ved=0CAQQjRw&url=http://www.examiner.com/article/starbucks-101-what-is-the-story-behind-the-siren-logo&ei=sBixU7DjBonF7Ab8qIDIBw&bvm=bv.69837884,d.ZGU&psig=AFQjCNH10BxIlvxKFxq1gOF1YDu1q_wAHQ&ust=1404201520174756

http://www.famouslogos.org/logos/unilever-logo









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THE WORLD WILDLIFE FUND

AND WE’VE SEENA FEW MAJOR WINS

IRELAND BECAME THE FIRST COUNTRY TO COMMIT TO THIRD-PARTYVERIFIED, 100% SUSTAINABLE FOOD EXPORTS BY 2016


Our Approach

ETHNOGRAPHY

2 researchers

48 home visits

36 store visits

300 hours in-field

14 brand clinics

Shanghai

Beijing

Chengdu

Consumer insights through ethnography in dairy markets


Emerging Urban Middle Class will become the future mainstreamers

Western lifestyles have influenced consumption patterns

Growing concern for their environmentSoul Searching – questioning money and materialismThe Urban Lifestyle is Challenging Chinese Desire For Balance


Core Consumer Insight

Chinese consumers believe that countries that produce the best food balance the needs of people today and tomorrow


Communicating Irish Dairy

Clean & Green is strongly

associated with NZ and the Netherlands

Science is strongly

associated with the US & Germany

No-one owns the cross

generational message of

sustainability


Origin Green resonates with

Chinese consumers…

…because this multi-dimensional brand message…

…is about a balanced

approach to food production…

…that is genuinely different to NZ and

other countries.

Communicating Irish Dairy


Components of S & P 500 Market Value

Intangible Assets Tangible Assets1975 1985 1995 2005 2010

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

83

68

3220 20

17

32

6880 80

Source: Ocean Tomo



“New Realities in Asian Markets for Ireland”… and the Role of Origin Green

Aidan Cotter Tuesday, 14th July 2015

Asia Ireland Food and Agritech Forum