After more than a decade of continuous growth, the £104bn UK food and drink sector experienced a significant drop in exports in 2020 due to the impact of COVID-19.

However, there remains “significant headroom for growth for UK food and drink exports, both within the EU and further afield”, according to a report by the Food and Drink Federation (FDF) and Santander.

Ian Wright, chief executive, FDF, said that “food and drink exports are a UK success story”.

Although exports fell by nearly a tenth (9.7%) in 2020, valued at £21.3bn, the industry was the UK’s biggest manufacturing sector by turnover, accounting for almost 20% of total UK manufacturing and employing 440,000.

Appeal to government

The FDF is calling on government to implement longer-term export support, as recommended by the UK’s Trade and Agriculture Commission, the Food and Drink Sector Council, and the FDF, to endorse a ‘bounce-back plan’ for agri-food and drink exporters.

Despite what was evidently a challenging year, here we pick out five reasons to be optimistic for 2021 onwards, from the FDF’s survey.

Reasons to be cheerful

1. Decline in exports eased

The worst of the decline in exports was at the start of 2020, according to the FDF. An easing of restrictions and the need for businesses to move goods into the EU before the end of the transition period meant that exports only declined by 1.7% in Q4 2020.

Despite Brexit, the decline in the value of exports to the EU in 2020 was less at 8% than that to non-EU markets of -12.1%.

2. Not all products declined

Although most of the top 10 food and drink products exported by the UK were negatively impacted by COVID-19 and restrictions on movement, there were areas of growth. Branded products also demonstrated continued growth.

Chocolate exports were up by 1.15% by value, with Ireland the top market.

Ireland was also the top destination for other growth sectors of breakfast cereals (7.3% by value, 12.7% by volume) and soft drinks (1.9%, -6.4% respectively).

Pork exports increased by 8.6% in value and 6.2% in value with China the top export destination.

3. Not all countries declined either

While most countries saw a decline in food and drink imports from the UK, there were pockets of growth. Food and drink exports to Poland were up by 10.7% to £484m. Norway posted a 39.7% increase, albeit from a relatively lower base.

The UK hopes to conclude a new trade deal with Canada this year, and food and drink sales from the UK to Canada were up by 8.1% with beer, chocolate, gin and beef all increasing.

Santander notes opportunities for health and wellbeing products in Canada, with an increase in sales of plant-based products, ‘free from’ brands, and alcohol-free gins and beers.

4. Sweet taste of success in the US

Sugar beet exports to the US rocketed by a massive 14,486.9% after a tough year for US sugar production due to adverse weather conditions led to increased imports of refined beet sugar. This made sugar a new entrant in the top 10 products to the US, growing to £30m from less than £1m in 2019.

Soft drinks to the US were also up massively to 65.9% with a value of £78.8m.

However, the world’s largest economy and UK’s third biggest food and drink market saw overall exports down from £2.4bn to £1.9bn in 2020.

5. Eastern promise

With the UK eyeing up CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) membership in the next 12 months, food and drink exports to countries in this trading bloc totalled £1.8bn in 2020, or 8.5% of all UK exports. Growth had been trending upwards since 2015, peaking at £2bn in 2019.

Top products exported to countries in the CPTPP included whisky, gin and chocolate. In 2020, of the top 10 exported food and drink products, there were increases in chocolate, beer and gin categories.

UK exports to Australia and New Zealand have more than doubled in the last decade. The UK is currently negotiating trade agreements with both, which together imported £484m of food and drink from the UK in 2020.

Santander notes particular opportunities for imported products that are unique and have English, Scottish, Irish or Welsh heritage for example.