Lastest news

Agribusinesses spending more money on R&D

Jun 29, 2018
The sixth annual KPMG Agribusiness Irish Farmers Journal report shows an increase in spending on R&D. Three years ago, less than 30% of companies spent between 2-4% on R&D. Today, that has increased to half of agribusinesses surveyed spending 2-4% on R&D.

Agribusinesses have identified innovation as the most important driver of growth in their business with 41% of respondents saying that innovation was the most important –  up from 20% three years ago. But it’s not easy to innovate, with 40% of respondents citing innovation as the biggest challenge. While there are three types of innovation – process, product and business model innovation –  the majority of agribusinesses surveyed are targeting process innovation followed by new product development. The biggest challenge to successful innovation is finding the right people, with 40% of companies identifying this as the key challenge. Over the last three years, innovation has overtaken scale and integration along the supply chain as the second most competitive advantage behind reputation and brand strength for agribusinesses surveyed.

Agribusiness has seen huge acquisitions in the food industry. For example, Kraft/Heinz, Monsanto/Bayer, Syngenta/ChemChina, Danone/Whitewave, Sainsbury/ASDA. There is now an increasing awareness of the need to grow outside of acquisitions. The ability innovate is seen as key to this. KPMG Ireland also sees a shift in what a food is defined as (fake meat, milk etc), how it is consumed and how it is bought – and this is affecting how the food is produced with an increased emphasis on ethics and welfare forcing the traditional primary producers to adapt new business models.
 
The KPMG Agribusiness Irish Farmers Journal report also looks at:
 
  • Growing food without land;
  • Fake meat – the rise of alternative proteins;
  • Dark supermarkets – the future of food shopping; and
  • Driverless tractors.

Commenting on this year’s report, David Meagher, Partner-in-Charge for Agribusiness at KPMG, said: “Irish agribusiness faces an exciting yet challenging time. Issues such as Brexit loom large on the agenda, however the opportunities provided by innovation and technology are also the focus of agribusiness leadership. Staying relevant to consumers whilst remaining profitable will be the ultimate acid test in the near to medium-term.”

Download the full report here.

Source: KPMG Ireland.