Brexit fails to dampen mood as UK food and beverage exports break £20bn

Total exports of food and drink in 2016 grew by 10.5% to a record figure of more than £20bn, as UK manufacturers responded to rapid growth in demand for quality produce, the Food and Drink Federation (FDF) has said.

Exports of branded food and non-alcoholic drink led the way in 2016 with growth of 11.5% to £5.2bn, the 16^th year of consecutive growth.

Excluding alcohol, the UK’s three top three export categories remain chocolate, salmon and cheese, with exports of salmon up 16.4%, driven by large increases to France up 32.2%, Ireland up 24.6% and Germany up 98.9%.

The USA is now the second largest export market for the UK and the largest outside Europe, with exports increasing by 13% to £2.2bn in 2016. This now means the UK’s two largest export markets, Ireland and the USA together buy more than a quarter of all UK food and drink exports.

Sales to non-EU markets continued to grow at a faster rate than to the EU, however 71.4% of food and drink excluding alcohol was sold to EU Member States.

Demand was up in every single one of the UK’s top 20 markets in 2016, with China the fastest growing market, up 51.1% on 2015 to £439.5m. Highlighted as a priority export market in the joint Government-Industry International Action Plan for Food and Drink, China’s appetite for branded UK food and non-alcoholic drink has also risen by 50% in 2016 to £84.7m.

While the fall in the price of the pound had helped to boost UK export competitiveness, it has also made essential imports more expensive and the UK’s food and drink trade deficit grew 5.7% to -£22.4bn. The impact of weaker sterling on British exports is expected to be seen in H1 2017 as companies negotiate new sales agreements with overseas buyers.

Ian Wright, Director General, FDF said:

“British food and drink exports have hit a record high yet there is still massive untapped potential. More specialist support for new and existing exporters, with fiscal incentives and financial assistance, would get more of the country’s 6,500+ food and drink producers exporting. Our target is to grow branded exports by a third by 2020 to more than £6bn.

“Competing nations such as, France, Germany and Italy offer greater support for training, help with start-up costs and showcasing opportunities at international tradeshow platforms to build their band of exporters. Building on the International Action Plan, we are working with Government and the Food & Drink Exporters Association to help businesses in this sector compete abroad and meet rising demand for British produce.”

Elsa Fairbanks, Director at FDEA, said:

“We are pleased to see that the 2016 export figures reflect the positive experiences that the food and drink exporting community continues to share with us. 

“Hopefully even more UK food and drink producers will be inspired to look beyond their home market and take advantage of the huge interest in quality UK food and drink produces and the improved competitiveness of sterling.”