New HM Customs and Excise data published by UK trade body the Food and Drink Federation has revealed a 5.2% year-on-year increase in exports of cereal and bakery products to £2.3bn ($3.2bn).
While some European countries – including Spain and Portugal - were responsible for much of the growth, consumers further afield have also shown a growing taste for UK cereal and bakery goods. Exports to Thailand increased almost threefold to £36.5m ($51m), and rose by almost £20m ($28m) in Saudi Arabia and Japan (see table below).
Wales-based cereal brand Lizi’s Granola said the Middle East and Asia are among its most successful export markets.
“We exhibited at Gulfoods and Anuga in 2015 and both helped our exports to increase 60% in the last year,” said the business. “By exporting to many countries, it reduces our risk so we are not entirely dependent on one country.”
The Middle East is also hugely important to PepsiCo-owned Quaker Oats, which said oats are particularly popular during Ramadan for their energy sustaining benefits.
Saudi Arabia is Quaker’s largest export market, taking around 16% of export tonnage, while sales to the United Arab Emirates rose 25% in 2015.
Wins and losses
The ten biggest swings in the value of UK exports in 2015:
- Thailand: 190.3%
- Portugal: 77.0%
- Saudi Arabia: 45.8%
- Japan: 42.8%
- Spain: 40.9%
- Norway: -38.9%
- Denmark: -15.4%
- Germany: -9.5%
- China: -8.1%
- Ireland: -3.1%
Over half the oats produced at Quaker’s mill in Cupar, Scotland, are exported, and the business is investing in the site as it looks to grow overseas sales further.
Quaker has installed a new alufoil line to increase capacity and produce strip sachets that can be hung over the bicycle handlebars of sales people in Nigeria.
Exports fundamental to growth
Fellow Scottish manufacturer Nairns, which supplies oat-based products including oatcakes, crackers and biscuits, sees exports as fundamental to its growth.
The business is tapping growing demand for free-from food with gluten-free products that are its fastest-growing export range globally.
Its biggest export customer is the US, largely as a result of interest in the gluten-free biscuits and crackers, and the company has set up subsidiary Nairn's Inc to help develop local expertise and import its products.
“We see great opportunities in the continued development of our export markets,” said Nairn’s marketing director Martyn Gray.
“The key for us is developing long-term partnerships with local importers who have detailed knowledge of their markets. We have set very challenging targets to grow the proportion of exports within our total business.”
Cereals and bakery outperformed the overall UK food and drinks export market, which fell by £0.6bn ($0.8bn) to £12.3bn ($17.2bn) in 2015. This was a result of a drop in oil prices and the strength of the pound against the depreciated Euro, said the FDF, which has made UK exports less competitive in key Eurozone markets.
MAP: UK Cereal and Bakery Exports 2015
Chocolate, salmon and cheese remained the largest export products, although value sales of all three declined.
Sweet biscuits and breakfast cereals were among the top 10 most exported products, with exports of sweet biscuits up 2.6% to £383.5m ($536.4m), and breakfast cereal exports up 1.8% to £368.6m ($515.5m)
“Growing exports is a top priority for Britain’s makers, bakers and bottlers, who have set an ambition to increase branded exports by a third by 2020,” said FDF director of competitiveness Angela Coleshill.
“For our industry to meet this stretching target, we need to make sure small and medium-sized food companies in particular are helped to compete in the fiercely competitive global marketplace.”
Case study: Premier Foods Mr Kipling brand
Premier Foods – owner of brands including Mr Kipling and manufacturer of Cadbury cakes under licence – sees exports as a major growth opportunity.
In the case of Mr Kipling, the manufacturer launched a push into the Australian market last year with retailers Coles and Woolworths. As with all Mr Kipling exports, the products are manufactured in the UK to established recipes, with packaging adapted to local markets.
While the brand has enjoyed success for some time at Christmas, last year’s activity was designed extend Mr Kipling as an all-year-round range through products including Angel Slices and Cherry Bakewells. This has proved a success, said the manufacturer, helping to more than double Mr Kipling sales in Australia in 2015.
Category insights from UK
Premier used bakery category insights from the UK – where Mr Kipling is the largest cake brand - and applied them to the Australian market. This included the launch of the snack pack format that has proved a success in the UK and was a new format for cakes in Australia.
Premier also took Mr Kipling into The Czech Republic, Slovakia and Poland at the end of last year, and plans to build on this with activity around seasonal events such as Easter and expansion into a fourth Central European country.
Exports currently represent about 4% of Premier Foods sales, but the company intends to grow this.
'Significant growth area'
“Exports are a significant growth area for the business and we have invested heavily in building up a dedicated International Business Unit, which is focused on driving sales of our brands, such as Mr Kipling, abroad,” Premier Foods international sales director Adam Buckley told BakeryAndSnacks.
He added that the strategy was working, with year-on-year double-digit export growth in the last quarter.