The current economic situation is providing an even stronger argument for UK suppliers to export because the interest in their own-label products is so great
After several years of plenty, the UK is waking up to economic slowdown. It seems that the consumer spending boom of the past few years is coming to an end, without clear signs of sustained improvement in the foreseeable future. And the extent of the ripple effect of the US sub- prime loans crisis is still unknown.
UK manufacturing industries are, of course, deeply affected by all this. The share prices of many big players have fallen and decreasing margins, coupled with cheap imports, signal tough times ahead. But for food manufacturers, the problem does not end there. With the UK's top retailers waging a continuous battle for market share, and it being at least questionable whether the Competition Commission's inquiry proposals will increase suppliers' bargaining power, manufacturers must find alternative ways to grow their markets and prosper.
In The Grocer last month, Tim Kershaw, MD of food supply chain consultancy Libra Europe, suggested that companies without export markets would be in dire straits in the near future. While that may not be true for all, it is true for a good number.
The arguments for food and drink exporting have always been strong. Bigger markets mean bigger sales, higher profits can often be generated by expanding the geographical range of niche products and risk of market downturn can be spread over multiple markets. However, the current economic situation makes exporting even more appealing. The recent slight fall in the value of sterling has helped, but innovative UK trends such as the development of own-label products or high-quality 'healthy' and functional foods are also of huge interest to foreign markets around the world.
Britain has an excellent reputation for product innovation and quality, particularly in Europe and North America, which together receive 75% of British exports. Teams of buyers from the major European retailers make frequent visits to the UK to learn from the multiples. Life as a UK supplier to supermarkets may be tough, but it brings experience of business methods admired the world over.
So developed markets are hungry for British innovation. But they are not alone. Some of the world's most exciting emerging markets are now accessible to British suppliers. The booming markets of India, Russia and China are seeing developments in their supply chains that make it easier for British companies to enter their markets, providing new channels for UK suppliers. In India, for example, the number of gourmet speciality food shops in major cities is unprecedented. Designed to cater for the increasing numbers of wealthy consumers, these outlets are crying out for original, high-quality products from respected UK suppliers.
Recent figures indicate UK food and drink exports broke all records in the first half of 2007. Food from Britain is confident this figure will reach a record-breaking £11bn for the year. If that is the case, it will mean a 5% increase on last year's annual figures, underlining the strength of the UK's food and drink export industry.
At this time of UK economic uncertainty, and with such great potential opportunities abroad, more companies should at least consider exporting in their growth strategies. Food from Britain is here to help form that strategy. Check out www.foodfrombritain.com to find out more.n
Lady Sylvia Jay is the chairman of Food from Britain