At one time, the only food Ireland was known for was the potato. Thankfully this is no longer the case. Irish food is now feted worldwide for its quality and taste, with exports of food and drink generating billions of euro in revenue every year.

Products such as lamb and beef were always highly valued abroad but the past few years have seen a huge increase in the variety of foods exported and the markets in which they are sold.

Last year, Irish food exports were worth €6.8 billion, a slight increase on 2001, and An Bord Bia, the body responsible for promoting the Irish food sector, expects this to rise again in 2003.

The biggest growth was in the meat, prepared foods and drinks sectors. Prepared foods include chilled or frozen foods, confectionery and long-life products.

However, exports in some sectors, such as dairy and horticulture, were lower than in 2001.

"We are pleased that Irish food and drink exports resumed growth in 2002 and expect to see a continued growth this year - especially in prepared foods, beef and beverages. However, growth in some sectors such as dairy, pigmeat and sheepmeat remain challenging," according to Mr Michael Duffy, chief executive of An Bord Bia.

A Government agency, An Bord Bia was established to promote and develop the market for Irish food and drink. To this end, it organises trade fairs and other marketing campaigns.

Also essential to the development of the international market for Irish foods are the numerous companies, large and small, that have worked to develop a market for the goods they produce.

One such company is the Kerry Group. Formerly a co-operative, Kerry became a public company in 1986 and, since then, has been engaged in an ambitious expansion drive that has seen it buy several food companies in different parts of the world. In addition to these acquisitions, it is one of the largest exporters in the food sector.

The group has operations in 15 countries spread over five continents.

Last year, sales totalled €3.8 billion, more than 60 per cent of which were recorded outside Ireland. Other European markets accounted for 34 per cent of sales, American markets 25 per cent and sales to the rest of the world represented 4 per cent of total group sales.

Director of corporate affairs at Kerry, Mr Frank Hayes, believes one of the main reasons for the company's success is its ability to anticipate consumer trends and provide products that meet those changing demands.

"Kerry's success is due to the fact that we have focused on the more modern niches. By focusing on trends, we have looked at areas where consumer demand exists," he says.

Those niche markets include products that offer nutrition, convenience and health, and particularly "value-added" items such as ready-to-eat and indulgence-type foods.

In addition to producing well-known brands such as Denny and Kerry Spring Water, the company supplies ingredients for other producers and own-brand products for large retail chains.

Just as businesses operating in the technology sector have had to add value to their products and services by becoming more innovative and quality-driven, the successful food export companies have also started to move up the value chain.

To do this, they have invested more money in research and development to produce products that will ultimately sell for more, thereby generating a larger profit.

Last year, Kerry spent €78.5 million on research and development programmes.

Image is also a very important tool in marketing Irish food abroad. The traditional image of the unspoilt rural environment conveys a sense of quality and comfort, particularly in relation to food and drink.

Established in 1961, the Irish Dairy Board (IDB) operates as a co-operative and is one of the State's largest exporters and a major food distributor in overseas markets.

"We represent the dairy industry in terms of exporting a range of dairy products to markets around the world," explains Mr Pat Ward, marketing manager with the IDB.

The main markets for Irish dairy products are in EU countries such as Germany, Britain, Spain and France, but demand is growing in other areas, including Australia, North and South America, the Middle East and Asia.

The board's activities span three main sectors - consumer foods, food ingredients and commodity trading. The IDB markets most of its consumer products under the Kerrygold brand, such as Dubliner cheese, which is made by the Carbery Group in west Cork.

This year is the 30th anniversary of the introduction of the Kerrygold brand to the German market and Germany remains one of the largest markets for Irish dairy products.

"The perception of Ireland is very important in terms of how the German consumer perceives the food," says Mr Ward.

For this reason, the traditional "green, clean" image of Ireland has played an enormously important part in attracting overseas customers.

However, the combination of foot-and-mouth disease (FMD) and BSE has had a negative impact on the dairy market in general, causing a squeeze on prices.

"Demand has been a bit weak in the commodity product area," he explains.

"The fact that we are so close to Britain and seen as a European source [of produce\] - that didn't help."

To counteract the negative effect of FMD, the IDB has embarked on an extensive advertising campaign and is working closely with the Department of Agriculture and embassies around the world to restore the positive image of Irish dairy products. Last year it spent more than €17 million on advertising and promotion in overseas markets.

Another reason for the poorer dairy market is the weakened US dollar. Most of the IDB's business is conducted in dollars and a weakened currency can cause a reduction in demand.

However, he believes the market is very competitive and Irish producers will increasingly have to compete with those from other countries. "Any effort that would help to promote Ireland as a high-quality food source would be a help," he says.