Germany, the Netherlands, Italy and Belgium have, for some time, made up the remainder of the top eight most popular European destination markets for UK food and drink manufacturers. And if our latest research is anything to go by, success in these markets isn’t going to fall by the wayside any time soon. But “soon” is the operative word in this case. While these countries currently offer UK manufacturers that all-important comfort zone in these tough economic times, the future isn’t looking all that bright for their economies, either.
With July’s German trade data sparking fears of a recession and doom and gloom sentiment elsewhere in Europe, relying solely on these markets is not wise. The Eurozone may well be the easy option for the time being, but it is unlikely to provide a route to long-term success. UK food and drink exporters must look further afield. Longer-term, economic growth in emerging markets such as Eastern Europe, south east Asia, India and the Gulf States will change the face of the world.
While the IMF has recently cut its GDP growth forecasts for Russia, the country will still see economic gains of 6%-7% a year to 2010. Compare that with 1%-1.5% GDP growth in the Eurozone as a whole. Emerging markets really do offer the brightest future. As global economic powers continue to shift inexorably, avoiding the emerging markets now means risking losing them in the future.
With India’s retail market forecast to grow 20%-30% per year for the next five years, it is essential to get involved and harness the power of this growth, either through export, joint venture or some other such arrangement. Ignoring these markets in favour of the safe markets of Europe simply means these economic powerhouses will bring the fight to you. And they will win.
Chris Brockman is head of research & consultancy at Food from Britain.