Amid cost pressures and tariff shifts, the Irish food and beverage sector is rising to the challenge, reports Lucy Ryan, head of Food & Beverage Sector at Bank of Ireland.
Ireland’s food and beverage sector recorded €9.4 billion in exports during the first half of 2025, a 17% year-on-year increase, according to the latest Bank of Ireland Food & Beverage Sector H2 2025 Outlook citing Central Statistics Office data.
The growth was led by strong performances in meat and dairy, which rose by 17% and 32% respectively, with all sub-sectors reporting gains.
“Operators are proving resilient and overall the industry in Ireland has remained buoyant”
Despite the export strength, operators continue to face a challenging environment marked by high input costs, rising food inflation, and global trade volatility. Food inflation in Ireland reached 4.8% in July, outpacing the EU average of 3.6% and the UK’s 4.5%.
Global instability
Lucy Ryan, Sector Lead for Food & Drink at Bank of Ireland, noted that “whilst global instability and high input costs are factors affecting daily trade, operators are proving resilient and overall the industry in Ireland has remained buoyant.”
The introduction of a 15% US tariff on EU alcoholic beverages in August has complicated trade dynamics for Irish drinks exporters.
The exclusion of a zero-for-zero tariff agreement in the EU-US Framework Trade Agreement has placed Irish producers at a disadvantage compared to UK and Northern Irish exporters, who face a lower 10% rate. Canadian tariffs on alcohol remain significantly higher at 35%.
Alternative markets
Some Irish exporters are now pivoting to alternative markets, with Canada emerging as a key target. Minister for Agriculture Martin Heydon recently met with the Ontario Liquor Board to discuss opportunities for Irish whiskey, following the removal of US whiskey from shelves in Ontario due to retaliatory tariffs.
Domestically, Irish grocery retailers reported strong performance in the 12 weeks to mid-July. Dunnes Stores retained the top position, while Lidl posted the highest growth at 9% year-on-year, reaching a record market share of 14.2%. Kantar data also shows that 47% of grocery spend in the UK is now on own-label products, reflecting consumer sensitivity to rising prices.
Food safety remains a priority following several listeria-related recalls. The Food Safety Authority of Ireland has increased oversight, with more frequent testing and enhanced traceability measures. The rise in recalls is attributed to improved detection methods and increased consumption of chilled, prepared foods.
Globally, commodity prices remain volatile. The FAO Food Price Index rose 1.6% in July, driven by increases in meat and oil prices. Cocoa prices, which peaked at over $12,000 per tonne in March 2024, have since declined to under $7,500, though remain significantly above pre-2024 levels. Coffee prices are expected to stay elevated due to weather disruptions, supply chain challenges, and new EU deforestation regulations.
Sustainability remains a strategic priority. Ireland’s Food Vision 2030 aims to position the agri-food sector as a global leader in sustainable systems. While progress has been made, particularly in energy efficiency, further acceleration is needed. Ireland’s plastic packaging usage remains the highest per capita in Europe, and recycling rates have stagnated.
On the corporate front, M&A activity in the sector remained solid despite a 7% decline in transaction volume compared to H1 2024. Notable deals included Valeo Foods’ acquisition of Italian bakery brands Melegatti 1894 and Freddi Dolciaria, and Greencore’s £1.4 billion purchase of Bakkavor.
Looking ahead, the outlook for H2 2025 is moderately positive. Export diversification, automation, and sustainability initiatives are expected to underpin sector resilience. “Continuing to maintain Ireland’s quality produce is critical, with a circular food system key to future success,” Ryan asserts.
Top image: Photo by engin akyurt on Unsplash
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