Paul Baker discusses the issues and challenges around exports, his predictions for export post-Brexit and advice on how to succeed as an exporter
Brexit plunged many food and drink companies into peril. British food exporters to the EU have faced uncertainty and chaos as the end of the transition period approached last year and unfortunately, that is likely to continue as we find our way as exporters under the new EU deal in 2021.
Add to that the impact of a global pandemic, along with the research and transportation of vaccines, and the end of 2020 became, quite frankly, the stuff of nightmares for UK-based importers and exporters – not to mention the freight companies who found themselves with drivers stranded at the ports.
We are heading into this year with an almighty hangover, too. The continuing pandemic is severely restricting business travel, aggravating the business activities of many exporters keen to develop new territories.
The impact of Brexit and the ramifications of the agreed deal (actually being debated in the Commons at the time of writing) are yet to be made clear. Businesses, and particularly exporters of food and drink, will need to whether yet another storm – potentially with tariffs and the price of food going up.
Brexit will not be the end of UK export though. We will have to adapt quickly and it would be foolish of me to act as though it’s not a concern, but it’s not all doom and gloom. We’ve seen this kind of pandemonium before. Many of you will recall the financial crash of 2008, which coincided with a toxic combination of rising commodity costs and a steep devaluation in the pound.
At that point in time, St Pierre Groupe was a private-label cake distributor, supplying major multiple retailers and wholesalers, with cakes manufactured in mainland Europe. We survived that storm but realized we needed to protect our business from future seismic shocks.
It was clear we had to mitigate these risks and exporting our brands was one solution. Admittedly, we didn’t know the first thing about exporting and our brands were in their infancy, but over the years we focused, invested, travelled and succeeded. Point being that extreme adversity made us reassess our strategy – and this led us to exporting.
It can be a daunting step, made even more daunting for businesses looking to increase their exports in the current climate. Despite having world-class food manufacturers, a lack of co-ordinated and meaningful support for potential UK food exporters has resulted in the slow advance of UK net exports.
In 2019, UK food imports exceeded the value of exports in every food and drink category (except ‘beverages’ which had a trade surplus of £1.81bn, largely due to exports of scotch whisky).
Over the past 12 years, we’ve always been surprised by the absence of UK food brands and manufacturers at international food shows and it becomes more apparent the further afield you travel – but it also demonstrates a clear opportunity for businesses prepared to explore the possibilities of exporting.
UK food export trade organizations exist and do a good job, but to succeed, companies need to go further. It’s not enough to ‘join a club’. Businesses must commit serious investment to developing their export business. Our experience is proof that British food companies can succeed abroad, develop new categories and become market leaders.
It’s certainly not easy and it requires dedicated resource and significant investment, but the impact of Covid-19 has offered up an unmissable opportunity because of its profound impact on consumer behavior.
As I write this, it’s fair to say that the tradition of buying your provisions at a supermarket is widely still ingrained – but fast forward ten years and that consumer behavior might look entirely different. Food companies who respond quickly can accommodate this change and move with it.
In the food industry, there’s an age-old reassurance of ‘people always have to eat – you’ll be alright’, but it’s no guarantee of survival. Savvy food businesses know this: people have to choose to eat your food, drink your drinks, dine with you. Even the major multiples are not insulated – look at the growth of Amazon during the pandemic – Amazon is the major multiple of 30 years ago. Businesses have to give real reasons for consumers, who are becoming more discerning, to choose their brands and products every time, wherever they are in the world.
In-market research is imperative and clearly the global pandemic is a serious barrier at present – but it’s not impossible. UK food businesses should be encouraged, incentivized and supported to export their products and brands.
The UK is respected abroad and British foods resonate in countries around the world. It’s easy to be put off by current barriers, but I would urge food businesses to look beyond their borders and work out how they could benefit from exporting. We need brave, pioneering industry leaders now, more than ever.
The other significant shift caused by the pandemic is changes to the way people eat, the times they eat and the sense of occasion around each meal time. Most of us are habitual in our choices, with an ‘at home’ menu that we recycle based on the day, the season and the guests around our table.
Covid altered our circumstances. It’s driven a huge shift in needs and behaviors when it comes to food. The opportunity for food companies is huge, but for the bakery sector, in particular, it’s phenomenal.
We have an audience who is more receptive to change than ever before, an audience actively seeking out new flavor experiences and an audience increasingly eating at home. A social change, leads to food change and food change equals opportunity. This is true wherever you are distributing products.
My advice would be to stick at it. When, not if, we come out of this, I genuinely believe that the extended lockdown will result in an explosion of activity at the other side. Economic, social, creative, cultural – you watch, 2023 the clouds will start to lift. We have to rebuild confidence to go back out into the world.
St Pierre Groupe
St Pierre Groupe is an international branded bakery business, and its portfolio includes three exciting bakery brands – St Pierre, Baker Street and Paul Hollywood – all of which have a wide variety of product ranges to offer. From tapping into key trends to offering its customers solutions through innovation and decades of bakery expertise.
For further information, please visit https://stpierregroupe.com