The value of UK food and drink exports grew by 10.5% in 2016 to a record of more than GBP20bn (US$24.8) as manufacturers “responded to rapid growth in demand for quality produce”, according to new figures from UK industry association the Food and Drink Federation (FDF).
Exports of branded food and non-alcoholic drink rose 11.5% to GBP5.2bn, which the FDF said was the 16th year of consecutive growth.
The UK’s top three export categories, excluding alcohol, 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 FDF said.
The US is now the second-largest export market for the UK and the biggest outside Europe, with exports increasing by 13% to GBP2.2bn in 2016, the FDF said. The UK’s two largest export markets, Ireland and the US, together buy more than a quarter of all UK food and drink exports.”
The FDF said sales to non-EU markets “continued to grow at a faster rate than to the EU” but 71.4% of food and drink exports 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 GBP439.5m,” the FDF said. “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 GBP84.7m,” the association added.
On the fall on the value of sterling since the Brexit vote in June, the FDF said while the decline had helped to boost UK export competitiveness, it has “also made essential imports more expensive”. The FDF said the UK’s food and drink trade deficit grew 5.7% to GBP22.4bn. The FDF said the impact of the weaker sterling on British exports is expected to be seen in the first half of 2017 as companies negotiate new sales agreements with overseas buyers.
FDF director-general Ian Wright 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 GBP6bn.”
“Competing nations such as France, Germany and Italy offer greater support for training, help with start-up costs and showcasing opportunities at international trade show platforms to build their band of exporters,” Wright said. “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.”
Last November, business consultants at Grant Thornton said the UK’s decision to leave the EU had increased overseas interest in food and drink companies in the country.