SW Dairy Exporters Update

23rd September 2015

Hamish Renton

Best practice exporting

• If focusing on the right markets, exporting can be very valuable.

• Must take advantage of trade grants and maximize trade fairs.

• It is important to get advice on the right people to deal with and consider which products are best to trade.

• Enlist a trade adviser or business partner.

• Persevere in setting up meetings with buyers.

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Dairy Exports trade focus • Gul Foods show, record British exhibitors and largest ever pavillion.

• Successful FHC show in Shanghai – largest every UK contingent.

• National Dairy Exporters Forum established March 2013 (over 80 companies engaged).

• Close work with DEFRA and Industry to streamline Health Certificate process.

• Dedicated Dairy Exports specialist resource within UKTI helped over 100 companies – another 50 planned.

• Butter deficit heading towards a surplus in the coming years through combination of inward investment and trade support.

• Dairy powder exports volumes seen large increase.

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So, some solid success…..but more to be done in dairy.

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Trade figure caveats • 2015 figures only show 7 months data (Jan to July)

= 2014 v 2015 figures compare 12 months to 7 months

• Figures aren’t adjusted for currency fluctuations and over the cycle Sterling has been between 1:06 to 1.42 versus the €

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UK Dairy Exports – value (£)

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• Year on year growth in value terms last 3 years despite Sterling’s appreciation.

• C 70% increase in total exports and trebling of No EU28 exports in 5 year period.

• Trade outside the UK growing faster than within the EU28, but EU28 is key.

2015 = January - July

0

100

200

300

400

500

600

700

800

900

1000

2009 2010 2011 2012 2013 2014 2015

Value (£m)

Year

Exports to out of EU

Exports to EU

UK Dairy Exports – volume (t)

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• Volume has increased c20% over a 5 year period.

• UK more successful at growing value sales (value added products) rather than commodities.

• However, volumes exported outside the EU have doubled over the last 5 years

2015 = January - July

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

2009 2010 2011 2012 2013 2014 2015

Volume (Tonnes)

Year

Exports to out of EC (tonnes)

Exports to EC (tonnes)

Exports – 2014 Product Mix by value (£)

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• Milk and Cream includes powders (SMP, WMP) and Butter includes BMP.

• Over time UK product mix has become a more balanced portfolio.

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50

100

150

200

250

300

350

400

Milk & Cream Butter & Butter Milk Whey Cheese & Curd

Value £m

Product

Exports to outside of EC

Exports to within EC

Exports – 2015 Product Mix by value (£)

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2015 = January - July

0

50

100

150

200

250

Milk & Cream Butter & Butter Milk Whey Cheese & Curd

Value (£m)

Product

Exports to outside of EU

Exports to EU

Exports – Volumes within EU by Product (tonnes)

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100,000

200,000

300,000

400,000

500,000

600,000

Milk & Cream Butter & Butter Milk Whey Cheese & Curd

Export Volume (tonnes)

Jan-Jul 14

Jan-Jul 15

Exports – Volumes outside of EU by Product (tonnes)

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-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

Milk & Cream Butter & Butter Milk Whey Cheese & Curd

Export Volume (tonnes) Jan-Jul 14

Jan-Jul 15

2015 v 2014 Export Destinations volume (t)

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EC excluded from the graph (Jan-Jul 14 volume was 599,686t and Jan-Jul 15 was 621,518t- a 3.6% increase)

• Strong export growth of 9.6% seen in Asia and Oceania – Singapore, Australia, NZ, South Korea are

good markets for us e.g FHC, market tours.

• Consistent growth in North American markets of 38% (Fancy foods x 2, Expo x 2, Canada)

• 222% growth in Latin America & Caribbean

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5,000

10,000

15,000

20,000

25,000

30,000

Asia & Oceania Eastern Europe Latin America & Caribbean

Middle East & North Africa

North America Sub-Saharan Africa

Western Europe (Excl EC)

Jan-Jul 2014

Jan-Jul 2015

Top 10 EU Export Destinations (excl. IR)

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This Top 10 accounts for 99% of UK dairy export volume into the EU. Export volume increased 3.6% in total from 2014, mainly due to a 8.1% increase in volumes exported to Irish Republic. If Irish volumes are excluded, the export volume in the rest of the top has fallen 9% on last year.

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10,000

20,000

30,000

40,000

50,000

60,000

Netherlands France Germany Belgium Spain Denmark Italy Sweden Greece

Export Volume (tonnes)

Jan-Jul 2014

Jan-Jul 2015

Top 10 EU Export Destinations

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Top Export Destinations Jan-Jul 2014 Export

Volume (tonnes)

Jan-Jul 2015 Export

Volume (tonnes) % Difference

Irish Republic 438,553 474,114 8.1

Netherlands 49,916 55,749 11.7

France 32,142 27,875 -13.3

Germany 19,997 19,547 -2.2

Belgium 27,723 16,855 -39.2

Spain 8,196 6,830 -16.7

Denmark 6,367 6,126 -3.8

Italy 7,474 5,715 -23.5

Sweden 2,220 1,853 -16.5

Greece 1,489 916 -38.5

TOTAL 594,077 615,581 3.6

Top 10 Non- EU Export Destinations

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N/A

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2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

China US Algeria South Africa UAE Cuba Hong Kong Libya Ivory Coast Saudi Arabia

Export Volume (tonnes) Jan-Jul 2014

Jan-Jul 2015

Top 10 Non- EU Export Destinations

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Top Export Destinations Jan-Jul 2014 Export

Volume (tonnes)

Jan-Jul 2015 Export

Volume (tonnes) % Difference

China 7,623 7,154 -6.2

US 3,334 4,496 34.8

Algeria 15,802 4,274 -73.0

South Africa 359 4,068 1,031.8

UAE 2,795 3,333 19.3

Cuba 100 3,140 3,040.0

Hong Kong 2,477 2,774 12.0

Libya 677 2,667 293.9

Ivory Coast 1,831 2,529 38.1

Saudi Arabia 1,082 2,466 127.9

TOTAL 36,081 36,901 2.3

Exports to North America

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• 72% majority of respondents plan to invest in and engage with new customers in

international markets over the next five years.

• Western Europe is the most popular market for exports, though food and drink companies

are increasingly looking elsewhere, perhaps partly down to the instability of the Eurozone.

• 49% of UK food and drink firms are now looking to North America for export opportunities. It

has overtaken the Far East/Asia as the second market of interest for exporters after Western

Europe.

• Dairy and cheese are largely accountable for this increased interest with £40m of cheese

exports going to the US last year.

TAP Funded Food & Drink Events – 2nd half of 2015/16

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Event Name Partner to deliver City Country Dates

ANUGA PS8 - Food & Drink Exporters Association (FDEA) Cologne Germany 10/10/15-

14/10/15

Host Milan 2015 Catering Equipment Suppliers Association Milan Italy 23/10/15-

27/10/15

Speciality Food Festival/Sweets Middle

East/Seafex PS8 - Food & Drink Exporters Association (FDEA) Dubai UAE

27/10/15-

29/10/15

Natural Products Scandinavia 2015 Birmingham Chamber of Commerce & Industry Malmo Sweden 01/11/15-

02/11/15

Brau Beviale 2015 Brewing Food & Beverage Industry Suppliers

Association Nuremberg Germany

10/11/15-

12/11-15

FHC - Food & Hotel China PS8 - Food & Drink Exporters Association (FDEA) Shanghai China 11/11/15-

13/11/15

Fi Europe 2015 (food ingredients) Birmingham Chamber of Commerce & Industry Paris France 01/12/15-

03/12/15

Winter Fancy Food PS8 - Food & Drink Exporters Association (FDEA) San Franciso USA 17/01/16-

19/01/16

ISM PS8 - Food & Drink Exporters Association (FDEA) Cologne Germany 31/01/16-

03/02/16

Biofach PS8 - Food & Drink Exporters Association (FDEA) Nuremberg Germany 10/02/16-

13/02/16

Gulfood Catering Equipment Suppliers Association Dubai UAE 21/02/16-

25/02/16

Gulfood PS8 - Food & Drink Exporters Association (FDEA) Dubai UAE 21/02/16-

25/02/16

Foodex PS8 - Food & Drink Exporters Association (FDEA) Tokyo Japan 08/03/16-

11/03/16