The easing of decade-long trade sanctions against Iran by the developed world offers packaged food makers an opportunity to access the country's 80-million-strong consumer base.
At the end of April, Ireland's state agency Bord Bia embarked on a trade mission with 17 Irish food producers to explore the potential of the market.
UK-based food industry news portal Just-Food has caught up with representatives from the mission, including the Irish Minister for Agriculture, Food and the Marine Michael Creed, to find out more.
Bord Bia is Ireland’s trade development body promoting the sale of Irish food and horticulture products abroad.
> Michael Creed, Minister for Agriculture, Food, Marine
In common with a number of markets in the Near and Middle East region, population, demographic and social factors would make the Iranian market attractive for Irish-based companies.
Iran's profile as a key player in the region will make it a key focus for any nation with agro export-related ambitions such as Ireland and could be considered a gateway to the region.
Ireland has an ambitious strategy for the growth of its agri-food sector up to the year 2025 and deeper engagement with export markets such as Iran are a key feature of this plan.
Given demographic trends in Iran, coupled with previous trade patterns, it could be expected that beef, sheep meat and dairy/infant formula products represent key opportunities. These were also the products which Ireland once exported in large volumes to Iran and so the trading relationship between both countries is already well established.
The companies, which accompanied us on the trade mission, saw significant opportunity for collaboration in these and other sectors and we would expect that we will start to see progress on these in the future.
Trade restriction considerations have receded over the recent past in terms of allowing the smooth operation of key trade facilitating financial infrastructure. This will be good for Irish and Iranian companies wishing to develop lasting, mutually beneficial trade and business relationships.
Ireland's previous interactions with other food importing countries have always sought to expand the relationship beyond just trade to encompass broader issues such as the sharing of expertise and knowledge in the agri-food sector, and again this may be something that can also be developed between the two countries.
> Aidan Cotter, CEO, Bord Bia
With a well-educated population of 80 million people, some 40% of whom are under 25 and an economy anticipated to expand by over 2% annually over the coming years, the lifting of sanctions will offer new trading opportunities in Iran for Irish food exporters to increase their share of the market.
Ireland's food and beverage exports to Iran in 2015 consisted mainly of juices, butter and prepared foods.
While exports of dairy produce, including infant formula, were a feature in the past, this trade has suffered in recent years. Access for Irish beef was secured in April 2012 and the Irish Department of Agriculture has been engaged in bilateral contact with Iranian authorities for some time to finalize the arrangements that will allow for the opening of the sheep meat trade.
The lifting of sanctions on Iran opens the way for Irish food exporters to explore trading opportunities in the second-largest economy in the Middle East. As the economy grows and demand for premium food products outstrips domestic supply, Iran is looking to countries like Ireland to supply high-quality, safe and sustainably-produced food.
While it is too early to measure the success of the visit in monetary terms, it achieved its objective in providing a comprehensive insight into the dairy and retail sectors and identifying business opportunities in Iran.
The high level of engagement from the Irish and Iranian companies at the information seminar and networking event, the learnings from retail outlet management during store visits and the concrete offer from the Iran Dairy Industries Company to examine proposals on the supply of private label, branded own-label or collaboration on investment, development and distribution, bodes well for the future.
The Iranian food industry showed a deep interest in the full range of the Irish dairy offering and while the lifting of sanctions has not yet removed all obstacles to trade, the frank and informative presentation at the seminar by Iranian legal and financial experts as well as the high level of engagement between exporters and buyers ensures that business opportunities will multiply as the economy grows, and sanctions recede.
> Colin Clarke, Glenstal Foods
At Glenstal Foods, we specialize in a full range of dairy products for retail and horeca (Horeca is an abbreviation used in Europe for the sector of the food industry that consists of establishments that prepare and serve food and beverages. The term is a syllabic abbreviation of the words Hotel/Restaurant/Cafe).
Our Glenstal Foods Traditional Irish Cheddar Cheese brand is currently available in Iran in some of the high-end retailers such as Palladium Supermarket in Tehran.
We hope to expand our reach in the market through increased distribution and expanding our product range available in the market. Our Glenstal Foods Traditional Irish Creamery Butter is one product we hope to enter into Iran following our recent market visit and study.
Iran is an interesting market for us for a number of reasons. While it has substantial dairy production, it does not have the same product offerings as we do in Ireland or Europe. There is an openness and desire among consumers to try new dairy products.
Iran's retail landscape is still quite traditional, but I believe that will change in the coming years. We do offer a deli range which can be cut and wrapped in-store so I think this could work well in the traditional trade channels while our pre-cuts might be more suitable for modern trade. I feel as modern trade develops, so too will our brand and its market presence.
Obstacles to success in Iran include the lack of imported produce on shelves currently and payment challenges—the lack of bilateral agreements for electronic transfers. In order to develop the market, we need to take a strategic view on where we want to be in the medium- and long-term. It will take time to develop such a difficult market.
With the lifting of sanctions, it is likely consumers will be interested in trying more imported products.
> Liam Hyland, Green Isle Foods
The two biggest challenges we face is Iran's banking system, which needs to be stabilized as well as prohibitive import tariffs. The fragmented retail landscape is also a factor as well as freezer availability, but we believe if we find the correct route to market, these obstacles can be overcome.
We are presently reviewing all our options for market entry and we are developing alliances and partnerships in Iran to provide us with a strong foundation to enter the market once the market infrastructure stabilizes and improves.
We hope these relationships will grow from strength to strength in the future, allowing us to develop our brands and products in the region.
