Total exports of food and drink in 2016 grew by 10.5 per cent 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 per cent to £5.2bn, the 16th 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 per cent, driven by large increases to France up 32.2 per cent, Ireland up 24.6 per cent and Germany up 98.9 per cent.
The US is now the second largest export market for the UK and the largest outside Europe, with exports increasing by 13 per cent to £2.2bn in 2016. This now means the UK’s two largest export markets, Ireland and the US 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 per cent 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 per cent 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 per cent 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 per cent 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.”
For a more informative snapshot of the latest figures please click here: FDF Exports 2016.
Scotch Whisky leads the way
Reacting to the FDF report’s findings, Rosemary Gallagher, Scotch Whisky Association head of communications, said: “Scotch Whisky continues to lead the way for UK food and drink in overseas markets, making up around 20 per cent of the sector’s total exports last year. Demand for Scotch Whisky from across the globe has made a welcome return to growth after a slight decline in recent years. Last year, Scotch exports were up four per cent in value to just over £4bn from slightly under £3.9bn in 2015, and up 4.8 per cent by volume to 1.2bn bottles from 1.1bn bottles in 2015. Blended Scotch Whisky continues to be the biggest category but it is also good news that Single Malt Scotch Whisky exports have exceeded £1bn for the first time, up almost 12 per cent from £916m in 2015.
“We expect demand to continue to increase and this confidence is reflected in unprecedented investment in the industry, with more than a dozen new Scotch Whisky distilleries opening in the last few years and up to 40 further projects at various stages of planning and development. But we need support from government as we deal with the challenges and opportunities of Brexit. Ahead of the UK Budget in March, an open and ambitious trade policy combined with a competitive and fair domestic tax environment are key priorities for the sector.”