< Previous10 Food & Drink International www.fdiforum.net IMPORT AND EXPORT A mixed picture Continuing to deal with the fallout of Brexit, hope remains for a brighter future for UK food exports. Food & Drink International 11 www.fdiforum.net IMPORT AND EXPORT © stock.adobe.com/metamorworks T he value of food and drink exports has hit record levels in the UK, according to new figures for the first half of 2023 from the Food and Drink Federation (FDF). The sector has seen export sales rise to almost £12 billion, from £11.5 billion in 2022, with much of this growth driven by the EU, with the value of exports expanding by more than 7% to £6.9 billion. This seemingly positive picture of stabilising trade, however, is marred by the fact that while export value has risen, the same cannot be said for export volumes, which were down for most of the UK’s top 10 products. Negatively impacting volumes have been numerous supply chain challenges, such as labour shortages, increasing wages, and energy costs, which have led to higher food prices and lower international demand for British goods. Concurrently exports haven’t fared too well to non-EU markets, with a 1.2% drop in value compared to the first half of 2022, although strong growth has been noted in Singapore (+53.7%), China (+23.7%) and Taiwan (+17.2%). On the other side of the coin, the UK’s imports in the first half of 2023 increased by 6.8% in value, influenced by strong EU growth with double-digit jumps from the Netherlands, Ireland, Belgium, Spain and Germany. Similar to the export picture, non-EU imports fell slightly, but the FDF notes the implementation of a new risk-based approach in the Border Target Operating Model may provide a boost for some non-EU markets looking forwards. The FDF’s head of international trade, Dominic Goudie, added: “Trade in UK food and drink is beginning to stabilise after the challenges of Brexit, a global pandemic, and global weather events in recent years, that led to significant supply chain disruption, surging energy prices and volatile ingredient costs. The growth we have seen in the first half of the year demonstrates our industry’s resilience and future growth potential. While there are clear signs of recovery, as we start to see food and drink price inflation continue to fall, we need the government to work with the industry to help us stem the decline in the volumes of exports to the EU and further afield. We urge the government to take note of our Trade and Investment Strategy, which details how Ministers can put food and drink at the heart of global Britain’s new 12 Á12 Food & Drink International www.fdiforum.net IMPORT AND EXPORT independent trade policy. Defra bolstering its network of in-market trade attachés and the Food and Drink Export Council are positive steps that will support future growth.” The numbers come as the complexities of Brexit continue to be seen, for example with the implementation of border checks on EU food, animal and plant products entering the UK recently being delayed for the fifth time — years after the introduction of full controls on UK exports into the EU. The intention is to give government and EU exporters further time to prepare and curb a potential increase in food costs and a resultant rise in inflation. The first stage of the UK’s new checks is now expected to begin in January 2024, being pushed back from this October, with the full rollout taking place throughout next year. 31 January 2024 will see the introduction of health certification on imports of medium risk animal products, plants, plant products and high risk food (and feed) of non- animal origin from the EU. This will be followed by the introduction of documentary and risk-based identity and physical checks on medium risk animal products, plants, plant products and high risk food (and feed) of non- animal origin from the EU on 30 April 2024. Finally, on 31 October 2024, safety and security declarations for EU imports will come into force. Though the delay has been welcomed by some, others have lodged complaints that it extends an unfair dynamic in which UK exporters already have to undergo checks on all fresh food going to Europe, including sanitary and phytosanitary checks and are required to have health or veterinary certificates. Away from Europe, the UK government is continuing to expand on its post-Brexit export plans to forge new relationships with, and re-shift focus to, non-EU markets. Following moves earlier this year such as the UK joining the Comprehensive and Progressive Agreement for Trans- Pacific Partnership (CPTPP) trade agreement, the coming into force of deals with New Zealand and Australia, and a simplification of trading rules and tariff cuts on products from developing countries, the UK and Turkey have announced plans to begin talks on an updated free trade agreement (FTA). It would replace the existing UK-Turkey FTA, which was rolled over from when the UK left the European Union. It offers an opportunity to secure more ambitious tariff reductions benefitting both UK exporters and importers. The first half of 2023 saw food and drink exports to Turkey grow by almost a third to £115 million, with major increases in sales of UK eggs, gin, chocolate and whisky. Turkey, meanwhile, is a key supplier of fruit, nuts and fish to UK manufacturers, and is the nation’s eighth largest non-EU source of imported food and drink. The UK has also kickstarted negotiations on a modern FTA with Switzerland, in which it will seek to cut remaining tariffs on UK exports like red meat, chocolate and baked goods, which are presently high. Switzerland imports over £5.5bn a year of agri-goods under product lines where tariffs still apply for the UK. Negotiations are additionally underway for a deal with the Gulf Cooperation Council (GCC) states, and talks with India are continuing with hopes that a major FTA could be complete by the end of 2023. From a contrast between export value and volume, to struggles ironing out Brexit checks, and the positive potential of new trade deals, current developments in the UK come together to show a mixed picture for food and drink imports and exports.Food & Drink International 13 www.fdiforum.net IMPORT AND EXPORT © stock.adobe.com/ Виталий Сова14 Food & Drink International www.fdiforum.net ENVIRONMENTAL SPOTLIGHT In recent years, food business has been under intense pressure to decrease its carbon and plastic footprints, produce climate-neutral foods and support biodiversity. Food and Drink International explores. Dealing withFood & Drink International 15 www.fdiforum.net ENVIRONMENTAL SPOTLIGHT © stock.adobe.com/Dusan Kostic D ecarbonisation is a huge task to take on, and sometimes means business owners and operatives who are otherwise scientific laypeople must get to grips with complex matters of ecological impact. But this challenge is all in the interest of providing a more secure and sustainable future, for anyone and everyone who buys food or beverage products off a store shelf. More than that, customers now expect that all care has been taken to make their food as eco-friendly as possible. Whether taking immediate action, like reducing plastic where possible on short notice, or agreeing to climate pledges that hold your business accountable, decisions like these can be the difference between keeping and losing the loyalties of the general public. Though dealing with such severe scrutiny from a multitude of directions may be stressful, it doesn’t have to restrict you from starting with a handful, or even one, meaningful change. Many of the environmental trends for this year provide excellent guidelines. Hopefully, this article will illustrate that whatever your type or scale of business, there are options that suit your position now, as well as your plans for growth going forward. Plastic footprints, and how businesses are preparing for and actioning reduction, continue to be a key sticking point in the grocery retail and consumer goods sectors. The intense focus on this is far from unfounded, as both of these industries produce extreme volumes of plastic waste on a daily basis. An investigation undertaken by the Guardian in 2018 found that supermarkets were producing over 800,000 tonnes of plastic packaging a year. As far as five-year plans go, things are definitely improving. A significant leaning towards providing loose fruit and veg produce – trusting in the natural protection of hardier items or careful use of pallets and boxes – is leading the way towards a plastic-free future. It’s a popular choice with 16 Á16 Food & Drink International www.fdiforum.net ENVIRONMENTAL SPOTLIGHT consumers, especially the majority who are wise to plastic’s negative impact, and leading brands and the Big 4 supermarkets are racing to keep ahead of demand. For one, Asda is currently testing an extended range of loose products at its trial store in Leeds. With the Waste and Resources Action Program (WRAP) pushing for 50% loose produce in the UK by 2030, this test run is an experiment in hopes more of the same could be rolled out in Asda stores all across the country. Plastic-neutral schemes such as RePurpose Global partnerships, or a vast array of green promise agreements, are a handy symbol for your brand as proof you’re committed to doing the work. Sustainability and ethics programs such as Fairtrade, RSPO and the mainstay of offering organic foods are only attracting more attention as time goes on, especially as demand for eco-labelled products continues to grow and shape the future of food and drink business. The aforementioned protections for environmental health are household names at this point, but what about adding something more off-the-wall to your business strategy? Providing climate-neutral foods has holistic potential for reducing your business’s overall carbon footprint, as it means reducing or offsetting the greenhouse gas emissions linked to how your food is produced, distributed and consumed. Your initiatives towards climate neutrality could include reforestation projects, renewable energy investments or carbon capture technologies, just as a few examples. But even on the ground in factories or other business sites, you can begin with better energy efficiency or food waste reduction, such as by using a run-off product as an ingredient for other processes (think citrus peel for pectin in jams and preserves). You might even upcycle a waste product to create something new, for example by giving veg scraps new life as vegetable crisps. Stacking smaller changes in this manner can even accomplish a net-zero carbon footprint, contributing to climate mitigation while also enhancing your status as an environmentally responsible organisation at every processing stage. For anyone growing, producing or using farm foods, ‘regenerative agriculture’ has emerged as a powerful paradigm shift in how farming practices are handled. It seeks to sustainably yield crops and livestock but also aims to revitalise ecosystems, enhance soil health, and mitigate climate change. This transformative philosophy could reshape the way we produce food if adopted by enough manufacturers, fostering greater ecological resilience to nurture a more sustainable future. In the past, extensive monocropping, heavy pesticide and fertiliser use, and Food & Drink International 17 www.fdiforum.net ENVIRONMENTAL SPOTLIGHT unsustainable land management have led to unfortunate consequences like soil degradation and those pesky greenhouse gas emissions. But by encouraging healthy, organic soil and conserving water, while actively sequestering carbon in the earth, a more positive cycle can begin, our needs and successes in tune with those of our planet. Another concern that impacts farming, and much of the ensuing food production chain as a result, is biodiversity. Encouraging biodiversity on farms helps restore natural ecosystems, improves pollination, and reduces the need for chemical inputs. Techniques such as cover cropping and crop rotation can contribute to this more balanced and resilient ecosystem. It’s expected for the years to come that more food businesses will make pledges to sustainable sourcing, certified ingredients and agriculture that supports the productivity of our ecosystems. After all, these have a direct impact on food production and supply, and need looking after if we want our soil, weather and farms to continue taking care of us. Play a critical role in supporting biodiversity and make a positive impact by adopting sustainable practices. Choose suppliers who prioritise sustainable sourcing of raw materials, and ensure that your suppliers adhere to ethical and environmentally friendly practices. Encourage or support agricultural practices that enhance biodiversity, such as intercropping and agroforestry. These practices can provide our food while preserving wild habitats, as well as the more organised ones our crops need to grow. Your newfound levels of responsibility might then spill over into your wider business practices. Being eco-conscious can make transparency a point of pride, allowing you to market your brand as a way to support green causes. Consumers are ever wiser and more discerning – allow your business to support that, while supporting life on Earth. © stock.adobe.com/aryfahmed © stock.adobe.com/rufar18 Food & Drink International www.fdiforum.net LOGISTICS © stock.adobe.com/ID_AnuphonFood & Drink International 19 www.fdiforum.net LOGISTICS I n prior years, the food industry and consumers enjoyed a relatively stable landscape and confidence that products would be waiting on shelves. Though undeniably complex, and while facing some blips, global supply chains kept in steady motion, formed on predictable demand and sourcing. COVID-19 however sent a shockwave through food and drink supply chains, and recent environmental factors have also led to shortages in certain foods, fruits and vegetables on supermarket shelves. Global supply chain pressures are seeing shortages and delays in ingredients, pulling products off shelves, hitting large and small businesses alike. With an unreliable supply, there could be long term impacts on bottom lines and reputations. Future-proofing logistics and supply chains may be the only way to remain competitive in this environment. Using modern software across farmers, manufacturers, logistics and delivery partners allow enhanced tracking and tracing of ingredients at any moment, across a network, and enables detailed documentation of ingredients and processes to be delivered. Tools being utilised include Artificial Intelligence (AI), Internet of Logistics and the supply chain The food industry’s supply chains continue to grow in complexity. If just a single link falters, the entire chain is jeopardised. Operations, production schedules, logistics and customer experience can all be upended. After persistent uncertainty over the past few years, there is no longer room for the industry to be unprepared for delays, shortages, and disruptions. 20 ÁNext >