UK: Record Food and Drink Export Growth for Q1

31 May 2017 --- The first quarter of 2017 saw exports of all UK food and drink grow to £4.9billion (US$6.2 billion) which is an 8.3% increase on last year and represents the largest first quarter exports value on record.

Britain’s top three export products remain whisky, salmon and chocolate. Export growth to non-EU countries (+9.4%) increased at a faster rate than those to the EU (+7.4%).
 
Ireland, France and the US are the top three destinations for UK food and drink in terms of overall value and positive growth was reported in all top 20 markets. The only exception was Spain which saw a 21.6% decrease compared with 2016.
 
Export growth to non-EU countries grew at a faster rate than those to the EU.
 
The three export markets that saw the greatest percentage growth in value in Q1 were South Korea, which saw an increase of 40.3%, Belgium an increase of 37.3%, and South Africa which went up by 31.2%. Beer was the key driver in export growth to South Korea, while wheat and barley were behind the rise in Belgian exports, and animal feed boosted those to South Africa.
 
Exports of salmon saw the largest value growth, up 52.3% in Q1, with wine experiencing the largest increase in terms of export volume, up 13.8%.
 
While the fall in the price of the pound had helped to boost UK export competitiveness, this currency weakness has also led to an increase in the cost of many essential imported ingredients and raw materials. 

This has resulted in the UK’s food and drink trade deficit increasing by 19% to -£6.2billion (US$7.9 billion) in Q1 2017. The impact of weaker sterling on British exports is expected to be seen in Q3 2017 as companies negotiate new sales agreements with overseas buyers.
 
Ahead of the General Election on June 8, Food Drink Federation has called upon the next Government to recognize strategic importance of UK food and drink and the huge untapped export potential among UK manufacturers. 
 
At present only 20% of food and drink manufacturers actively export and FDF wants to work in partnership with Government to scale-up its provision of specialist export support in food and drink.
 
“The growth of food and alcoholic drink exports we've seen in Q1 is very encouraging news for our industry. We want to work with Government to take advantage of increased demand for UK products overseas and the opportunities that leaving the EU is expected to create. We would encourage the new Government to look to Bord Bia (the Irish Food Board) as inspiration in creating an organization to help turbocharge sales of UK food and drink globally,” says Ian Wright CBE, Director General, FDF.
 
“It is also very pleasing to see non-EU exports performing beyond expectations. As the UK leaves the EU growth in exports is hugely important to our sector. We hope that with the determination of businesses and the assistance of the new Government, we can open more channels and provide a further boost to the UK’s competitiveness on the world market.”
 
Elsa Fairbanks, Director, Food & Drink Exporters Association (FDEA), welcomes the latest food and drink export figures. “We would like to see Government further encourage exporting by ensuring producers have the skills and support to enter new, challenging markets post-Brexit,” she says. 
 
“We must not ignore the importance of existing and very strong EU markets which still represent 65% of food and drink exports and this must be a priority as Brexit negotiations start. Ease of access to EU markets will continue to be vital to our industry in future as many food and drink products are not suited to export to distant markets. Although we recognize the need to explore new opportunities, leaving the EU should not mean ignoring those we already have.”

FDF's industry ambition is to grow exports of branded food and non-alcoholic drink by a third, from a 2014 baseline, reaching £6bn by 2020.