The value of food exports from the UK grew by 8.5% in 2014, reaching a new best-ever figure of £9.5 billion. This growth is being driven both by traditional sectors such as Scotch whisky and fish, and emerging areas such as organic fruit and vegetables, meat and drinks including craft beer.
This success comes at a time when many British companies are looking to increase revenue in their domestic market through exporting into Europe or Asia, where emerging middle classes can afford to pay more for high quality local produce. The next five years looks set to be very exciting for food exporters with international trade negotiations such as TTIP (and many more) currently on the table offering huge potential new export markets like USA and Canada.
When researching what products to sell abroad it is important to look for products with high demand, limited local supply and the opportunity to deliver premium quality in a sustainable way.
1. Premium produce can command a higher price
Selling in a foreign market gives UK manufacturers the opportunity of selling their products at a premium due to perceived benefits such as lower transport costs or less regulations. This means that even if prices are slightly more expensive than other similar products from other countries they can still win sales due to customers willing to pay for perceived advantages.
2. It pays off fast
Selling into new markets enables companies to boost turnover quickly without needing huge investments in fixed assets such as machinery, vehicles or premises requiring repayment through increased sales volume rather than return on capital.
3. Access to new consumers
B2B Companies that export get direct access to customers in different locations and cultures, meaning that they can develop their product range and diversify the way they do business to unlock additional potential. It also allows them to take advantage of this growth by recruiting more employees and expanding production facilities if necessary.
4. New skills and knowledge
Selling overseas allows companies to learn new skills and gain expertise from international colleagues or agencies which can then be used back home when required. For example, a UK food company who exports into Europe is likely to find that they need to comply with EU directives such as hygiene standards, whilst a company selling into Asia will have an opportunity develop specialist knowledge about import controls in the region.
5. Fresh market intelligence
Export markets are also great source of information in terms of understanding new trends in consumers' wants and needs, how the country's economy is developing and what is happening in the wider retail sector which can be fed back into UK operations to inform future domestic strategy.
6. International expansion & diversification
Selling internationally enables companies to enter new geographical areas which they may not have had access too before, for example by selling at a trade show where international buyers visit from all over the world compared to selling locally through existing contacts or advertising domestically. This provides opportunities for businesses who wish to diversify their product range or move into other sectors such as luxury food products which command a high price but need significant working capital compared to selling low value bulk products for a quick return.
7. Protection from economic downturns
For many small and medium enterprises trading internationally can provide a much needed cash injection when the domestic market is in decline by generating revenue when other business opportunities are scarce. In addition, international markets may have less competition so companies have the potential to expand their market share within these overseas territories before others spot the same opportunity.
8. Flexible working hours
The nature of exporting allows UK manufacturers more flexibility over when they work, allowing them to meet customer or supplier needs which could make up for reduced sales during short periods of bad weather (such as cheese producers who require milk) or seasonal peaks (for example soft fruit growers). This can also allow companies to better accommodate part-time staff or reduce childcare costs for parents by enabling them to work from home.
9. Opening up new markets
Exporting provides UK manufacturers with the opportunity of entry into new markets which they can sell into through an established distribution channel such as a UK importer or through their own export department and sales team, and this can lead to further future business opportunities in that country such as establishing their own production facilities there if necessary.
10. Improving cash flow
Selling internationally usually means having payments tied up in foreign currencies which is an additional risk on top of normal credit periods so it's important to get all payments tied up early on so that you aren't left waiting for funds before making payments for imports, wages, bills or other business expenditure. This can be done through selling via your own UK Company or through an international distribution partner depending on the specific market you are selling into.
The B2B food export industry is a great way to diversify your company and hedge against the risk of economic downturns. If you're interested in learning more about this, feel free to reach out! We'd love to help answer any questions or provide additional insights on how exporting can work for you.
And there you go! I hope these were the answers to your question. If not feel free to leave another comment below and I'll try my best to answer it for you.