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FDF: Untapped export potential key to industry recovery

Published:  03 September, 2020

Despite business confidence falling to record lows across the food and drink industry in the second quarter of 2020, untapped overseas export markets remain a “golden opportunity” for recovery and growth for businesses, according to a new report. 

Launched today by the Food and Drink federation (FDF) in partnership with Santander UK, the report delves into the impacts Covid-19 has had on food and drink manufacturers and overall business confidence. 

The FDF data shows that net business confidence among food and drink manufacturers reached a record low of -65.2% in Q2 due to a combination of Covid-19, uncertainty over Brexit and closure of food service. 

However, despite the challenging environment, food and drink businesses highlighted increased export growth and access to new UK preferential trade agreements as a key opportunity for the rest of the year, according to the report.

“As the dust begins to settle, we can now see how the pandemic has had a seriously damaging impact on 2020 ‘s overseas sales of UK food and drink. These were worth over £23bn in 2019. While that figure is certain to fall for this year, there are still plenty of opportunities in foreign markets for UK food and drink manufacturers to seize on what remains of this year and as we look to 2021,” said Ian Wright CBE, CEO of the FDF.

As businesses turn toward economic recovery, ensuring a quick return to growth would be essential to “support resilience in our industry”, he added. 

“We will continue to work closely with government and industry partners, like Santander, to safeguard a sector recovery that will deliver a return to sustainable export growth right across the UK.”

The report highlights export opportunities in key key market regions, including the UAE and the wider Gulf region, China, and the USA and Canada. 

The FDF has identified seven steps for recovery designed to successfully restart all areas of the industry, as part of its work through the Food and Drink Sector Council. These include accelerating plans to increase UK exports.

The report also showed that the sector has seen a reduction in domestic turnover by 8.6% in Q1 compared with Q4 2019, and a further 4.0% decline in Q2.

Separately, research carried out by Santander into the impact of Covid-19 on SMEs found that 24% of food and drink businesses expect to return to normal operating levels by the end of 2020.