UK’s global chocolate exports buck trend, increasing slightly for 2020 despite pandemic conditions
The latest annual market report from the UK’s Food and Drink Federation has found that global exports of chocolate in 2020 bucked a broader downturn, recording 1.1% growth to £786 million, writes Neill Barston.
However, according to the study, co-authored with Santander, figures for last year, sales volumes for the key confectionery category were down 2.3% year-on-year, amid the combined factors of Brexit and Covid-19 that impacted heavily on the wider food and drink sector, that fell by 9.7% (to £21.3 billion) against 2019’s comparatively strong performance.
Despite sporadic re-opening of hospitality and travel sectors, overall sector exports declined in each quarter of 2020, though there were signs of slight improvement in Q4 of 2020 due to temporary easing of pandemic restrictions. This played its part alongside businesses stockpiling products in the EU before the end of the transition period, resulting in exports falling a lower rate of 1.7% for the last period of the year, with the organisation previously warning the challenging conditions with exporting to Europe in particular requiring additional support at government level.
Consequently, exports to both EU and non-EU markets reportedly fell by 8.0%, and 12.1% respectively. Most of the top 10 products exported by the UK also fell due to the pandemic, including the whisky (down 13% in volume, and cheese, 7.5% down. There were a couple of notable exceptions (pork and cereals), both experiencing upturns, with the top market being Ireland.
As recently reported by Confectionery Production, the sweets and snacks sector has been notably impacted along with a number of other segments due to companies grappling with significant additional costs of transactions, logistics and administration resulting from the end of the Brexit transition period. Results from January 2021 showed that confectionery export revenues were down 68%, to £13 million, compared to January 2020.
In spite of the situation, the FDF believed there were “significant growth opportunities remain for UK food and drink exporters, both in the EU and further afield”.
Underlining its assertion, the organisation cited growth in markets including the US, Canada, Australia and New Zealand. The UK’s application to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the third largest free-trade bloc in the world by GDP, also holds potential for UK exporters, if approved.
Furthermore, the FDF and Santander UK added that they welcomed recent initiatives from the UK Government to assist exporters, including the creation of four Trade and Investment Hubs by the Department of International Trade (DIT), with the trade organisation being a supporting partner for the national Open Doors campaign, helping UK farmers export to the world’s fastest growing markets.
According to the FDF, in its view, the government should adopt the export proposals produced and agreed by industry members of the Food and Drink Sector Council that were also backed in the recent report published by the Trade and Agriculture Commission. These include establishing a Food and Drink Export Council to drive UK-wide collaboration, and addressing the critical gap in specialist support for exporters of food and drink that exists in England.
Ian Wright CBE, Chief Executive, Food and Drink Federation, said: “The FDF continues to work in close partnership with the Government and other industry bodies to ensure our sector has the support that is needed to fulfil our untapped export potential. These initiatives are vital to help create new jobs and drive the quick return to growth that is essential to strengthen resilience across our industry.
“As the UK’s largest manufacturing sector, food and drink makes a unique economic and cultural contribution in every region of the UK. Now we look forward to the Government demonstrating its commitment to working in partnership with us to accelerate growth in our sector.”
Andrew Williams, Head of Food & Drink Sector, Santander Corporate & Commercial Banking, added: “While the food and drink industry didn’t escape the effects of the pandemic and Brexit last year, it certainly didn’t let them beat it. There is much scope for growth in 2021 and we are proud to support food and drink businesses throughout the UK in making the most of opportunities to expand at home and to export overseas, both to the EU and beyond.