Irish firms look to Japan for functional lead

The functional foods sector offers strong growth opportunities for the Irish food industry, according to Enterprise Ireland, a government-funded development body. The organisation last month ran a trade mission to Japan to assess the success factors of the booming health foods market there and to build relationships between the countries' food businesses.

Companies such as Glanbia, Dairygold, the Kerry Group and Kilkenny Springwater participated in the event along with research institutions including the University College of Cork (UCC) and BioResearch Ireland. Irish representatives met with Japanese companies like Yakult and Calpis as well as visiting research institutes. The event in Japan follows a similar mission to Finland in November last year.

Functional foods has been targeted as an area which could add value to Ireland's established food industry. Mr Noel Treacy TD, Minister of State at the Department of Agriculture and Food, who led the mission, said the visit would give Irish companies "the opportunity to learn from the experience of the Japanese functional foods industry, and will provide them with exposure to existing and emerging technologies"​.

He added that Japan is recognised as a world leader in pioneering and developing the functional foods industry. "National government policies have actively stimulated a cultural and health environment that supports the sector and have combined with a truly innovative research and industrial community to bring Japan to this world-leading position today. In Ireland, we believe that we have the capacity to expand in this growing sector and we are committed to emulating this collaborative approach by government, industry and the research community that has proved so successful in Japan,"​ he added.

While the event was attended mainly by dairy and beverage companies, the sectors currently driving functional food development in Europe, there is also potential for Irish companies producing cereal bars and other health foods, said Enterprise Ireland's manager of the Dairy and Drinks department Eddie Hughes, who organised the event.

However the aim is also to develop ingredients for functional foods, such as probiotics, and to build on enteral and clinical nutrition. Ireland already has a strong cluster of food ingredients firms, mainly in dairy, but also has three of the world leaders in infant nutrition, (Abbott, Wyeth and Numico) present in the country.

"Enterprise Ireland identified functional foods as a key segment for growth a couple of years ago. While some of the larger companies have already been developing this area, we want to encourage smaller firms to build alliances with those leading the sector in Ireland and also hope to see more start-ups,"​ said Hughes.

"We also want to raise the R&D agenda among the larger companies,"​ continued Hughes. "In Ireland we tend to spend less on R&D per sale of product than many other European countries, so we want to develop this."​

Ireland also has a low corporate tax regime and a strong pharmaceutical presence, factors which are attractive to outside investors.

"Japan has the technology and proven experience in functional foods whereas we have the market in Europe. With the expansion of the European Union, we will have a larger consumer base than both the US and Japan,"​ added Hughes.

Functional food sales in Ireland in 2000 came to €15 million according to Enterprise Ireland, although they expect opportunities in the manufacturing sector to be worth €200 million within the next five years. While most Irish companies do not have the scale to develop internationally recognised food brands, a growing food ingredients sector offers much to overseas investors.

An inward mission from Japan is planned for the end of the year or beginning of 2004.