The food sector is facing huge challenges as businesses grapple with new trading arrangements and relationships posed by Brexit.
Access to existing markets, Customs and tariffs, the lower value of sterling, disruption to supply chains and access to labour – a major issue for the hospitality industry – are just some of the imponderables.
Food manufacturers and international food bodies are facing a series of emerging risks, which individually and cumulatively could have a major impact on operational efficiency, sales and market share.
Following Brexit, delays in delivering products and, at worst, an inability to meet orders, could have a significant reputational impact. This could range from a loss of credibility with one stakeholder to a loss of credibility with a large number of stakeholders – and, ultimately, loss of credibility in the market.
That means it is vital for businesses to spot, interpret and act on the opportunities presented by the new trading arrangements in the food and beverage sector.
As a communications consultancy with a specialist food division, as well as experience representing international trade organisations and producers, Liquid believes there are exciting opportunities for food bodies who are attuned to developments and understand the position on the ground in the UK. With its knowledge, insight and skills, Liquid can help.
The future will undeniably present challenges, so why is the food team at Liquid confident about the future for overseas food producers?
For one thing, the UK imports a huge amount of food. Although half of all food consumed in the UK in 2017 was supplied by the UK*, 30% originated in the EU, followed by Africa, North America, South America and Asia (each supplying 4%), the Rest of Europe (2%) and Australasia (1%).
Total UK consumer expenditure on food, drink and catering has continued to rise, up 6.1% in 2017 to £219 billion. We are a hungry island nation.
Significantly, the UK imports more food in all main categories with the exception of beverages (thanks in large measure to Scotch whisky). The biggest markets in which the UK imports food are: fruit and vegetables (£11.1 billion), meat (£6.7bn), cereals (£3.9bn), dairy and eggs (£3.2bn) and fish (£3.2bn).
What is more, the trade deficit in food, feed and drink increased in 2017 to a new record high of £24.2bn, up from £22.8bn in 2016. So there are huge opportunities for international food bodies and producers with the right products, the right prices and the right stories that appeal to consumers.
It is no surprise that consumer confidence is one of the first victims of economic uncertainty. Historically, however, the UK food sector remains resilient in the face of downturns in spending; in fact, expenditure on food as a proportion of household income may increase. Past experience suggests consumers are prepared to pay more for quality products as the trend for so-called premiumisation continues.
Unfortunately, the Liquid food team does not have a crystal ball but we are optimistic about the future. We have experience of working for international food clients such as Maple from Canada (representing 72% of global maple syrup production), Bord Bia, the Irish food board, and sweet potatoes from North Carolina, USA.
Like everyone else, we are watching political developments with keen interest and we are here to advise and support, and help the food sector prosper, whatever happens after March 29.
There is no magic recipe to make the uncertainties of Brexit more palatable and we must recognise there will be disruption. Financial resilience and agility will be key, together with flexibility and industry knowledge.
And that is where Liquid can help because we know what works, and what doesn’t work, with British food consumers, regardless of the final outcome of Brexit.
- To speak to Liquid about PR support during and after Brexit, please contact our head of food David Colcombe: firstname.lastname@example.org
*UK Department for Environment, Food & Rural Affairs, “Food statistics in your pocket.”