British food and drink exports enter decade of growth predicts FFB

Food and drink exports are entering a decade of sustained growth according to market development consultancy, Food from Britain (FFB) as it announced today (20th April) the UK’s 2005 food and drink export figures. With overseas sales up 3% to £9.9 billion over the last 12 months, FFB believes that there are more opportunities than ever before for UK manufacturers overseas, and that emerging countries in Asia and the Middle East will play a significant role in this development as many embryonic markets continue to evolve.

This positive outlook comes as Britain’s food and drink export market emerges from a difficult decade and sees overseas sales recover to their highest level since 1996, when BSE hit. Diversification has been key to Britain’s success during this difficult period according to FFB; markets continue to grow strongly and this can be clearly seen with South Korea and Canada entering the top ten export countries, up 22% and 1% respectively, and China making its inaugural appearance in the top 20, growing by an impressive 62% in the last 12 months alone.

As world-class innovators in food and drink, Britain’s manufacturers are also taking advantage of new distribution channels, looking beyond just the traditional branded retail opportunities. Private label, especially in countries such as Spain, Belgium and the Netherlands, is now a growing area for UK manufacturers, as is foodservice particularly in the ex-pat strong-holds of Spain, Portugal, France and Dubai. These are contributing factors in FFB’s prediction for record growth in the run-up to 2015.

“We have grown stronger as an industry over the last 10 years, growing exports back to nearly £10 billion without the contribution of red meat. This has built a solid platform for the future,” said David McNair, Chief Executive of Food from Britain. “But to reach our full potential in the global marketplace, the UK food and drink industry needs to recognise exporting as a strategic route to long-term growth. The opportunities are certainly increasing but competition for these emerging markets is fierce against exporting heavyweights like France, Germany and the US, so we need to shed our UK-centric attitude and encourage more companies, both big and small, to put exporting on the business agenda.”

With an increase of 3% in 2005, food and drink exports to the EU continue to see strong growth, and now account for £6.4 billion. Ireland remains the UK’s number one market with an 8% increase to £1.8 billion, while France at number two also rose by 2% to £1.2 billion. Germany also showed strong recovery in 2005, gaining 5% to finish the year at £579 million.

The successful integration of the new member states to the EU is now also paying dividends, with exports showing strong growth of 11% to £191.1 million overall to these countries. Poland was one of the star performers in this region, with sales up 35% to £55 million, resulting from good gains in frozen fish, poultry, spirits and soft drinks. Other countries to watch include Cyprus, which increased sales by 14% to £36 million and the Czech Republic up 18% to £21 million.

Exports have also seen good recovery in non-EU markets, again showing an increase of 3%, significantly contributing to the overall performance in 2005. The biggest gains were made in the Asia Oceania region, which saw sales growth of 14% and double-digit increases in every country, except Japan, which dropped 5% to finish at £153 million. But it is China that represents one of the biggest opportunities for UK food and drink exporters over the next decade according to FFB, as it is one of the fastest growing markets for UK exports in the world.

Sales of alcohol, and especially Scotch Whisky, continue to the most important export product category and grew by 2% in 2005, representing more than a quarter of all overseas sales. There was also good news for the UK’s farmers as fresh meat exports showed strong signs of recovery, up 10% for the full year to £735 million. Beef started to make in-roads from a small base, up 25% in the last 12 months to £25 million. This is expected to rise even further in 2006 and beyond with the lifting of the EU’s export restrictions.

Other product categories performing well include: seafood, up 5% to £931 million with sales to China (up 72% to £33.2 million) helping to drive this success; cheese, up 8% to £218 million; breakfast cereals, up 7% to 303.3 million; soft drinks up 16% to £169 million; and chocolate confectionery up 7% to £285 million, with sales to France particularly strong (up 15% to £32 million).

“This is the third consecutive year that food and drink exports have continued to rise,” continued David. “With the return of beef to European menus and the continued expansion into new markets, we are confident that 2006 will be a defining year for UK manufacturers overseas.”