FDF details coronavirus impact to UK food export industry

Overall exports have understandably fallen for the first time since 2015, but data from the Food & Drink Federation (FDF) has highlighted some positive news for UK exports. 

Three of the UK’s top export markets grew in the first half of 2020. Sales to China (+0.3 percent), Canada (+6.7 percent) and Norway (+46.9 percent) all went up, partly due to increased sales of pork, which saw value growth (+17.5 percent) with sales of £300 million. This growth was largely driven by exports to China, which purchased £132 million of UK pork in H1. However, of the UK’s top ten export product categories, pork alone experienced this growth.

While the fall in exports is clearly linked to the global impact of COVID-19, analysis by KPMG (as part of the report), highlights that differing markets are at varying stages of the Covid lifecycle. China is currently experiencing a period of growth, whereas other nations are in recession.

KPMG identified brand trust as a key driver of consumer purchasing decisions across all markets, revealing reasons for optimism for exporters throughout the remainder of the year. While overall exports of branded products fell by 7.1 percent in H1, sales of branded products to non-EU markets grew by 1.9 percent. 

Future export opportunity in Japan

Looking further ahead, the UK-Japan preferential trade agreement announced in September presents a key opportunity for exporters. Japan is currently the world’s largest net importer of agri food and drink, and represented the UK’s 19^th largest market in H1 – worth £124.5 million. Demand for imported food and drink in Japan is growing due to its ageing population and a continued shift toward Western consumption patterns.

To support the recovery of UK exports post-Covid, the FDF, Food and Drink Exporters Association (FDEA), and the Agriculture and Horticulture Development Board (AHDB) have produced an export guide to help businesses successfully navigate the export process. The guide signposts a range of support for those exporters who have been impacted by the pandemic, as well as support for UK businesses post-Brexit.

Commenting on the current precarious position of UK food businesses, Dominic Goudie, Head of International Trade, FDF, said: “A fall in exports in the first half of 2020 demonstrates the huge challenge currently facing UK food and drink exporters. We also have serious concerns about our access to existing EU trade agreements, with more than £1.7 billion of UK exports at risk where continuity deals haven’t been agreed. However, there remain many opportunities overseas as we navigate our way through economic recovery, strengthen our resilience as an industry, and build relationships through new future trade agreements such as with Japan – the world’s biggest net importer of food and drink.

“Looking ahead, it is vital that we continue our work with Government and industry partners to deliver sustainable export growth over the next few months and beyond the end of the transition period in January 2021 to ensure our industry has the support it needs. Our export guide, made in collaboration with other industry bodies, aims to help navigate businesses through the export process with a range of practical support and advice.”

Linda Ellett, UK head of consumer markets at KPMG, explains that adaptation will be the key to grasping new opportunities. “While the world may be facing COVID-19 collectively, consumers across the world haven’t been behaving equally,” she said. “For consumer businesses, the real challenge is keeping a finger on the pulse of change, knowing how consumers feel and behave, whilst also adapting to the various opportunities and threats presented in various markets globally. 

“Business growth – or at least resilience – remains vital despite the challenging climate. KPMG’s recent consumer insights research clearly shows that trust in brands is a key factor shaping purchasing decision. No consumer business can afford to lose sight of that,” said Ellett.