Friday, July 10, 2020

Pandemic hits UK food and drink exports

Food and drink exports fell by more than £700 million for Q1 2020 compared with the same period last year as the coronavirus pandemic impacted the industry.

According to analysis from the Food and Drink Federation (FDF), sales to the EU were hit the hardest, with total value falling by 17.4% compared to 2019.

This decrease was largely driven by the immediate impacts of COVID-19, including the closure of hospitality and travel sectors, which has meant a loss of sales into restaurants, cafés, bars and the out-of-home sector across Europe.

While sales to the majority of the UK’s top markets declined, demand has been more resilient from others nations, including Singapore, Canada and Norway, which each saw sales growth of more than 10%.

The performance of our top ten products has been mixed, with whisky, cheese, gin, wine, beer and breakfast cereals declining in value and volume. Conversely, salmon and pork saw over 10% value growth.

The first quarter of the year also saw a fall in the value of branded food and non-alcoholic drinks exports of 9.1%.

Sales to all EU nations among the UK’s top ten branded goods export markets decreased in Q1 2020; almost one third of branded exports are now going to non-EU countries, a 4.5pp increase on Q1 2019.

Demand for UK branded food & drink increased globally

Branded exports to Australia increased by 3.5% in Q1 2020, driven by a rise in sales of cakes and baked goods, including tarts, pastries, wafers, pizzas and quiches, which saw a 12% increase on Q1 2019.

Increased sales of beer and soft drinks helped drive growth to the US by 6.9%, while exports of gin, infant food and bottled water saw the value of exports to China rise to £34m in Q1.

“Manufacturers and the other hidden heroes working across the supply chain have ensured continued access to essential food and drink for UK shoppers during this crisis. But we can now see how COVID-19 has impacted valuable overseas sales of UK food and drink that were worth over £23 billion in 201,” said Dominic Goudie, Head of International Trade at the FDF.

“The closure of the hospitality sector in high-value export markets in the EU and further afield has been devastating for many exporters. However, we can also see that opportunities do remain in retail channels in many markets.

“Ensuring a quick return to growth will be essential to support resilience in our industry and also the UK’s economic recovery.

“We are working closely with Government and industry partners to set out a recovery plan that will deliver a return to sustainable export growth right across the UK.”

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