UK Food and Drink – International Action Plan An

UK Food and Drink – International Action
Plan
An Export Action Plan for the UK food
and drink sector
One Year On progress report
WWW.GOV.UK/UKTI | WWW.GOV.UK/DEFRA
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The UK Food and Drink International Action Plan
The refreshed UK Food and Drink International Action Plan, launched in October 2013, set
out a significant increase in ambition and commitment from Government and industry to
grow UK food and drink exports. The Plan detailed how we will work together to increase
exports by £500m before October 2015, through increased efforts in supporting businesses,
promoting UK food and drink overseas, opening new markets and simplifying trade
procedures. This One Year On report takes stock of progress towards meeting these
ambitious targets, outlines the next steps towards increasing exports even further, and
introduces new and existing Government export support available to UK food and drink
businesses.
One Year On progress
Encouraging more companies to export and the £500 target
In the Action Plan, Government pledged to support 1,000 UK companies wishing to export
by October 2015. Since its launch, UKTI have already helped 2,500 companies with their
international growth plans. Over £305 million of business has been won, making a
significant contribution to the impressive year-on-year growth demonstrated by the UK food
and drink sector. Exports reached £18.9 billion in 2013, up £700 million from 2012 in
nominal terms.
Case study: Blazing a wild trail for cereal bars in new markets
Wild Trail’s story started in Berkshire, where customers at Gordon Leatherdale’s farm
shops asked him where they could find a healthier, more natural snack. At one of
Gordon’s shops there happened to be a large fruit farm alongside a farm growing acres
of oats, and this is where Wild Trail began; with the ingredients closest to home.
In 2012, Wild Trail started to receive enquiries from outside the UK, in particular
Scandinavia and the US. Gordon felt that the US was too big a market to tackle so early
on, but he did find a distributor in Scandinavia to work with. As these exports took off,
Gordon searched online for support, and came across UKTI. He was delighted to find out
that UKTI offered advice, guidance and funding to help British businesses that are
looking to expand overseas.
In October 2013, Gordon received a grant through UKTI from the European Regional
Development Fund. This grant allowed him to exhibit at Anuga, the world´s leading food
fair, in Cologne, Germany. “Being new to exporting, I didn’t know much about Anuga and
without the UKTI grant would not have gone at all,” says Gordon. “Once there, I was
blown away by the resources UKTI put into making this show a success for the British
delegates.”
“UKTI has a wealth of support to offer British businesses with their exports,” says
Gordon. “I’ve learned a lot from their online resources. If I get an enquiry from someone
in a new market, I know I can ask UKTI to check them out for me to make sure that they
are legitimate. I shall certainly continue to work with UKTI and make the most of
funding, advice and market information that they offer.”
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What support does Government provide?
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UKTI provides a range of expert advice and practical support to companies looking to
grow their business on the international stage. Some of the assistance provided by
UKTI includes an export assessment and support programme for small- to mediumsized enterprises (SMEs), helping experienced exporters expand into new markets,
support for eligible businesses to attend overseas tradeshows, trade missions and
market visit support.
UK Export Finance (UKEF) helps companies with their international sales by
providing export insurance and guarantees. 130 UK businesses, 92 of which were
SMEs, were supported this way in the 2013-14 financial year. UKEF supported
exports of cheese to Greece, blackcurrant seeds to China and beer fermenting tanks
to Kenya. In addition, UKEF provides impartial guidance to hundreds more exporting
companies.
Open to Export is a free website that creates a community of UK exporters and helps
them to enter new markets. Since its launch in 2012, it has gone from strength to
strength and averaged 25,000 unique hits per month during 2013. Food and drink is
the largest and most active community on the site, and Government is making the
most of this opportunity to engage and encourage potential and existing exporters,
Defra, UKTI and other Government departments provide digital content such as
webinars, and field experts to answer questions posed by companies.
Case study: UKTI support helps Dairy Crest grow cheese exports
All of Cathedral City’s cheddar is made at the company’s creamery in Davidstow,
Cornwall, with milk that comes from farms in Cornwall and Devon. Since Dairy Crest
bought the brand in 1994, Cathedral City has grown into a £280m business with export
sales of £8.5m across 40 countries.
Over the past two years Dairy Crest has worked with UKTI to promote Cathedral City in
new markets overseas, joining trade missions to Australia, Malaysia, Singapore, China
and South Korea. “It’s expensive to build a brand overseas, and UKTI helps to make sure
that our investment in pursuing such opportunities is profitable,” says Olivia Seccombe,
External Communications and Public Affairs Manager at Dairy Crest. “Working with them
is greatly beneficial. They provide advice and tips for success; help us access markets that
we would have struggled to get into alone; allow us to widen our business network; and
give us a greater understanding of the market.”
Promoting UK food and drink internationally
Food is GREAT
GREAT is a UK Government campaign to showcase Britain as a world-class destination for
business, investment, education and tourism. The business side of the campaign focuses on
different 'pillars' to promote areas of UK excellence, including Food and Drink. UK food and
drink companies have participated in GREAT Week trade missions to Vietnam, Hong Kong &
Macao, Malaysia and South Korea. UKTI are planning further GREAT Week missions to Japan
and Italy as part of the Milan Expo.
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Case study: Shetland Catch catch new business in South Korea
The waters around the Shetland Islands are filled with fish, and fish factory Shetland
Catch, based in Lerwick, Shetland is perfectly positioned to process the large hauls of
herring, mackerel, whiting and horse mackerel that are caught by local fisherman.
With 90 per cent of its goods going for export, Shetland Catch often researches new
markets overseas to sell its fish. The company has a long-standing relationship with
Scottish Development International (SDI) and UKTI and has turned to them for guidance
in recent years with questions about its exporting activities.
A range of support provided by SDI and UKTI, from seminars and organising visits from
supermarket buyers, to international trade missions and trade promotions, has enabled
Shetland Catch to sell more than £700,000 of fish to South Korea over the past 18
months. “Without UKTI and SDI’s help, we would not have found new business in South
Korea,” says John Angus, Sales Director for Shetland Catch. “Thanks to their efforts
showcasing British business, we have been able to expand our exports into a market that
previously wasn’t aware that there was such a thing as Scottish mackerel. SDI and UKTI
put in a lot of effort to understand our business so they can find the right ways to help us
market ourselves overseas.”
Ministerial activity & Business Ambassadors
UK Government Ministers are working hard to fly the flag for UK food and drink overseas
and, over the past twelve months, have been championing British Food & Drink at major
events in key global markets, including Anuga in Cologne, Food and Hotel China, the New
York Summer Fancy Foods show, Gulfood Trade Fair in Dubai and SIAL in Paris. Closer to
home, Defra and UKTI have used the Royal Highland Show, the Tour de France, the
Commonwealth Games and the Liverpool International Business Festival.
As part of Government’s drive to identify and create opportunities in new and emerging
markets, UKTI’s Trade Envoy David Heath visited Angola in June this year, and together with
James Townshend, the UK’s Business Ambassador for Agriculture, they are pursuing agritech opportunities in this important emerging market.
Unlocking market access barriers and simplifying paperwork
Opening new markets
The Action Plan outlined Defra’s intention to work in partnership with industry to negotiate
access to new priority markets for animal and animal products, and work to maintain access
to existing markets. New markets opened since the launch of the Plan include beef to
Singapore, beef, lamb and pork to the Dominican Republic, beef to Mongolia and dairy to
Madagascar and Mozambique. Since October 2013 Defra has negotiated over 100 new
market access agreements. This has helped to contribute to a 14% increase in exports of
animal and animal products to non-EU markets, from £645 million in the first half of 2013 to
£738 million in the same period this year.
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Case study: JSR Genetics capitalise on a recently opened market in China
In December 2013 Defra’s previous Secretary of State accompanied the Prime Minister on a
trade mission to China to finalise a deal enabling the UK to export pig semen, following on
from successfully negotiating access for live pig exports in 2012.
Yorkshire-based pig breeding company JSR Genetics Ltd breeds pigs with different traits,
satisfying the varying needs of a range of consumer markets for pork. Pork products are
particularly popular in China and, with over a billion potential consumers, the company
hoped it could capitalise on its high quality and specialist products by exporting there.
In July 2009 the company commissioned an Overseas Market Introduction Service report
from UKTI and followed this up with country visits where they met Chinese pig farmers who
offered the potential for partnership. Subsequently JSR has signed two separate deals with
Chinese partners worth £1.3 million and £1 million to export pigs to China. The first
shipment of pigs left the UK in March 2011. Natalie Cliff, Marketing Manager at JSR, says,
“We are now well established and seeing increased turnover thanks to the Chinese market”.
Improvements to Export Certification
Defra and the Animal and Plant Health Agency (APHA) have worked together to overhaul
the Export Health Certification (EHC) process and create a faster, more efficient electronic
system available 24 hours a day. Exporters need these certificates to show their products
meet the conditions specified by destination countries outside of the EU.
Roll-out of a new interactive system started in February this year and was completed in July,
two months ahead of schedule. All certificates processed under the new solution are being
issued within 24 hours of application; this compares favourably to other EU countries and is
a great improvement from the previous system, which could take up to seven days. Figures
for the first half of 2014 indicate 100% of certificates were issued prior to the export date
notified by exporters, and feedback from industry continues to be extremely favourable.
Case study: Elmgrove Foods export “fifth quarter” delicacies across the world
Based in County Tyrone, Northern Ireland, Elmgrove Foods is an innovative company that
was established in 2008 to export fifth quarter (offal) food products from cattle, pigs and
sheep, such as pigs’ heads, lamb tripe and bull’s pizzle. These items would previously have
been incinerated or sent to landfill in the UK, but thanks to Elmgrove are now being
exported as delicacies to the Far East, Africa and Europe. Over the past six years Elmgrove
has expanded its portfolio to over ninety lines of beef, pork and lamb, and now employs 13
staff and generates a turnover of £25 million annually, 100% of which comes from exports.
Stuart Dobson, Managing Director, says “DEFRA and APHA are critical to the success of
Elmgrove Foods. DEFRA have worked hard recently to open new markets and more are in the
pipeline. This is giving British beef, lamb, pork and chicken the ability to obtain the possible
best returns, and it enables the UK to be more competitive on the world market.” On the
AHPA’s recent improvements to the EHC system, Stuart says “Recent developments in
applying online for EHCs has enabled the UK to become more efficient and, by reducing
coldstore costs, means our products can be priced more competitively for our customers.”
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Providing sector-specific support
The Action Plan outlined Government’s intention to provide specific support for the dairy,
alcoholic beverages, meat, seafood and branded product sectors. Defra has recently reestablished an Export Certification User Group partnership with the dairy industry to enable
partnership working on prioritising markets, addressing market access issues and tackling
long-term strategic risks. Defra and industry also hold similar meetings for the poultry and
red meat sectors. The British Beer & Pub Association (BBPA) and National Association of
Cidermakers worked with UKTI to publish a new strategy to grow beer and cider exports
through 2014 and 2015. All this is in addition to the support and guidance offered by UKTI,
which has spanned a diverse range of businesses from across the food and drink industry.
Attracting inward investment
Another Action Plan target is to promote opportunities for Foreign Direct Investment (FDI)
into the UK from international food and drink companies. By developing the UK as a
strategic hub for exports to key markets, the UK is increasingly attractive as a destination for
significant FDI from major food and drink companies. For example, Arla launched a £150
million ‘mega dairy’ in May 2014 at their Aylesbury site, and also this year Coca Cola opened
their £30 million automated storage and retrieval system at their Wakefield site, a location
which has received more than £100 million of investment since 2009.
What’s next?
More support for potential and existing exporters
In addition to the wide range of support already available, UKTI will be working hard to help
UK companies engage in digital opportunities to accelerate their global export potential. By
2020, the value of UK e-commerce is estimated to be £68 billion (from £10 billion in 2013).
Being at the vanguard of e-commerce, UK companies are well placed to take advantage of
digital opportunities that will allow them to access international markets. UKTI’s E-Exporting
Programme will help brands and retailers to take advantage of these opportunities, with
support including digital advisors available to meet companies, online communications
reviews to ensure businesses’ online presence is maximised, and a programme of bespoke
online and face-to-face events.
Defra and UKTI will also continue to work with the Open to Export website to ensure it
offers a range of relevant, practical and up-to-date guidance and advice for UK food and
drink businesses looking to start exporting or increase their international sales.
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Opening markets and removing barriers to trade
Defra will continue to pursue access for priority markets identified in the Action Plan,
including poultry and dairy products to Brazil and beef to Japan. One of the main categories
of trade barriers faced by the UK relate to the BSE crisis of the 1990s, and Defra is making
good progress to regain access for beef and lamb to China, markets that will be worth up to
an estimated £120 million per year, and the USA, worth up to an additional £60 million per
year. Additional focusses include extending the Chinese pork market to cover offal and pigs
trotters, a waste product here but a potentially valuable commodity overseas.
Government will also continue to work hard to secure greater access and better deals for UK
producers via its input to EU Free Trade Agreement negotiations, including those with the
United States, Canada, India and Japan.
New Protected Food Name proposals
Our commitment to secure more UK Protected Food Name registrations is ongoing and
Defra will continue to seek and encourage new applications to protect unique British food
and drink products. Evesham Asparagus, Dundee Cake and London Cure Smoked Salmon are
just some of the thirty plus UK applications currently in the pipeline.
Milan Expo 2015
The overarching theme of Milan Expo 2015 is ‘Feeding the Planet, Energy for Life.’ Milan
Expo invites countries to take part in a global conversation on the urgent issue of how to
feed the planet as population increases towards 9 billion by 2020.
The UK’s theme for participation is “Grown in Britain”. The UK’s Pavilion, designed by
Wolfgang Buttress, will mark the point where nature, creativity, science and technology
combine to tackle the challenge of feeding the planet, highlighting the role of the honeybee
as a pollinator of over a third of our crops. Running for six months between 1st May and
31st October 2015, the Expo organisers anticipate 20 million visitors to attend during this
period. 147 countries have signed up to participate so far including China, Brazil, USA and
UAE.
UKTI is leading on the delivering the UK’s presence at the Expo working with other
government departments, each of whom has contributed funding: BIS, DCMS, DECC, Defra,
the Department of Health and FCO. The Expo presents a global platform, and the UK will use
it to strengthen our trading relationships, attract inward investment and seize the
opportunity to contribute to jobs, growth and a more balanced UK economy.
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Where to go for export support
Exporting food and drink can appear complicated if you are starting out in international
trade, but there is plenty of information, help and support available. If you want to expand
your business abroad, need to deal with an international enquiry, or are simply curious
about exporting, the following websites are an excellent place to start.
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You can find details of UKTI events, trade fairs, missions and webinars, arrange a face
to face meeting with a UKTI international trade adviser, contact your local
International Trade Team and more at:
https://www.gov.uk/government/collections/uk-trade-and-investment-services-forexporters
You can join UKTI’s e-exporting programme here:
https://www.gov.uk/e-exporting
To become a member of the Open to Export community, ask questions on the
forum, watch webinars tailored to food and drink exports and more, visit:
http://opentoexport.com/
To get advice on how UK exporters can apply for loans, lines of credit, guarantees
and insurance policies, and find out how UK Export Finance can help you, go to:
https://www.gov.uk/government/organisations/uk-export-finance
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