Exports snapshot
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case studies
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snapshot Q1 2020
Key Indicators
Executive summary
- In Q1 2020, food and drink exports fell by over £700m (-12.7%) compared to the
same
period in 2019. Sales to EU countries were the hardest hit, with the total
value
falling by 17.4%.
- This decrease was largely driven by 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 our top markets have declined, demand has been
more
resilient from others, including
Singapore, Canada and Norway, which have each seen sales growth of more than
10%.
- The UK's food and drink trade deficit also decreased compared with 2019,
indicating
decreased relative reliance on imports.
- Declines were reported among the UK's top ten products, with whisky, chocolate,
cheese,
salmon and gin seeing export value drops of over £20m in Q1. Pork, which saw an
increase in value,
and beef and vegetables, which saw volume increases, were exceptions to
this.Branded food and
drink exports have declined to the EU, but have seen an uptick towards non-EU
countries both in
value and volume, driven by China, the US and Australia.
- Exports of UK food and drink have a critical role to play in supporting the
sector during these
challenging times and driving the UK's wider economic recovery. FDF is working
with Government to
address critical gaps in sector-specific export support that is urgently
required.
- In this edition of the report, we feature insight from FDF Affiliate Members, Pentadel Project Management and Irwin Mitchell Solicitors on restructuring production
operations, and negotiating supply contracts.
Top 10 products
Top 20 markets
UK food and drink exports over the last 10 years
Click on the image to view larger
Non-EU branded exports up in Q1
- Despite the overall value of branded goods exports falling by 9.1%, sales to
non-EU
countries continued to grow, led by strong demand from the US, Australia and
China.
- The share of exports to the EU fell in Q1 2020 - both for branded and for all
food and drink.
Almost one third of branded UK food and drink exports now go to non-EU
countries, a 4.5pp increase
on Q1 2019.
- Of the UK's top 10 markets, sales to all EU partners decreased whereas there was
growth to
non-EU partners, highlighting continued growth opportunities in markets further
afield.
Growth in sales to US, Australia and China
- The US, Australia and China all demonstrated sustained demand for UK branded
food and
drink in Q1 2020. Together,
these countries are significant sources of demand - in 2019, they accounted for
almost 10% of all UK
branded exports,
and over 15% of overall food and drink exports. For more on opportunities
outside these markets, click here
- Branded exports to Australia increased by 3.5% in Q1 2020, driven by increased
sales of
cakes and baked goods (including tarts, pastries, wafers, pizzas and quiches),
which saw a 12%
increase on Q1 2019.
- Exports of drinks drove overall sales growth to the US. Namely, beer and soft
drinks which
performed well over the 3 months to March 2020 - these categories combined were
worth £42m.
- Despite experiencing a prolonged period of lockdown early in 2020, branded goods
exports
to China grew to £34m in Q1. This was largely due to an increase in sales of
gin, as well as bottled
water.
- As China enters its post-Covid-19-recovery, CBBC have begun running virtual trade missions, meet-the-buyer events and trade shows.
Q1 branded good exports over 10 years
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What government support is available for exporters affected by COVID-19?
Support for businesses trading internationally
The Department for International Trade (DIT) published advice for
exporters and
are running a
series of webinars. This includes support to address issues with customs
authorities to ensure the
smooth clearance of goods and to provide advice on intellectual property and
business continuity
concerns. DIT can also help find alternative suppliers.
How to access:
Contact DIT's dedicated business support team on 0300 456 3565 or by
emailing
COVID19@trade.gov.uk.
UK Export Finance (UKEF) Export Insurance
UKEF expanded its Export
Insurance Policy (EXIP) to cover sales to the EU, US,
Canada,
Norway, Switzerland, Iceland, Australia, Japan and New Zealand. They offer
insurance covering up to
95% of the value of an export contract, protecting against the risk of
non-payment where customers
become insolvent or their Government's actions make fulfilling a contract
impossible. UKEF works
with banks and insurance brokers to provide guarantees, loans and insurance to
protect exporters
facing delayed payments or transit restrictions:
- If your business is facing disruption due to late payments, UKEF can help ease
cash flow
constraints through its Export Working Capital Scheme.
- If you are concerned about getting paid, UKEF offers an export insurance policy
that can
help you recover the costs of fulfilling an order.
- UKEF can also support finance for overseas buyers through the Direct Lending Facility scheme, so
they can continue to buy your goods and services.
- UKEF has over £4bn of capacity to support UK firms exporting to China, as well
as
significant capacity across other markets.
How to access:
Find out more here and to find out if UKEF
covers your region, email customer.service@ukexportfinance.gov.uk
For access to more FDF guidance on support available for food and drink
manufacturers, visit our website.
More information
Download exports
snapshot Q1 2020
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studies
Last reviewed: 28 May 2020