UK: Record growth for food and drink exports in H1

18 Aug 2017 --- Exports of all British food and drink products for the first half of 2017 have jumped by 8.5 percent, creating the largest growth on record. Data from the UK organization, the Food and Drink Federation, shows UK exports reached £10.2bn (US$13.1 billion), with exports to the EU27 growing at a faster rate than to non-EU markets, increasing the share of sales to the EU to 61.2 percent.

Continuing to lead the way are sales of branded food and non-alcoholic drinks with exports up 11.3 percent on H1 2016.

And the UK's top three export products are whisky, salmon and beer, with the top three export destinations being Ireland, France and the US.

Contrary to recent export trends, stronger growth was reported to EU countries (+9.0 percent) than to countries outside the EU (+7.6 percent).

Positive growth was reported in all top 20 markets, apart from Spain and Japan. Spain saw a 17.6 percent decrease compared with H1 2016 due to a drop in commodity exports such as wheat and barley, while Japan was marginally down by 2 percent.

The three export markets that saw the greatest percentage growth in value in H1 were South Korea (+77 percent), China (+35 percent), and Belgium (+39 percent). 

The rapid growth in exports to growing East Asian markets was led by South Korea fast gaining a taste for British beer and overall exports surged to £156.3m (US$201 million). 

The US is the UK's top non-EU market for exports of branded food and drink, reaching £91.5m (US$118 million) in H1 2017, up from £87.8m (US$113 million) in 2016. 

Top UK branded goods sold to the US in H1 included food preparations, bread, pastry, cakes, puddings and sweet biscuits and America has been identified by the UK Government as providing significant opportunities for a trade deal post-Brexit.

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 16 percent to £12.4bn (US$15.9bn) in H1 2017.

FDF recently commissioned Grant Thornton to undertake an economic contribution report, which identified China (£274.3m (US$353.4m) in H1), India (£50.7m (US$65.3m) in H1) and the UAE (£164.8m (US$212.3m) in H1) as the top three target markets that food and drink companies would like to target. 

These countries were prioritized by the companies surveyed based on their scale which affords a sizeable middle-class target customer base with strong and growing demand for quality Western products.

“The growth of food and alcoholic drink exports is very encouraging. 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,” says Ian Wright CBE, Director General, FDF.

“It is great to see such strong growth in our exports to the EU Member States. The EU remains an essential market for UK exports as well as for suppliers of key ingredients and raw materials used by our industry. We believe there are significant opportunities to grow our sector's exports further still.”

“The continuing weakness of sterling is a concern. However, we hope that with the determination of businesses and the assistance of Government, we can open more channels and provide a further boost to the UK's competitiveness on the world market.”

Food Minister George Eustice MP adds how encouraging the latest figures are and how UK standards are well sought after around the world.

"We have ambitious plans to produce and export more of our fabulous foods around the world and more businesses are trying exporting for the first time,” he says. 

"Last week we announced further market access to China for pork producers and UK beef will soon be heading to the Philippines. We will continue to work with industry to open new opportunities.”

“It is pleasing to see exports perform so strongly in the first half of the year, with UK food and drink exporters seeing the largest figures on record. Our core markets in the EU and North America are showing healthy growth and is something we should protect and build on in the months ahead,” adds Elsa Fairbanks, Director, FDEA.

“Asian markets have also seen impressive growth and this is clearly a region we should turn our attention to further as exporters in the future.”

FDF's industry ambition is to grow exports of branded food and non-alcoholic drink by a third, from a 2014 baseline, reaching £6bn (US$7.7bn) by 2020.