Drinks manufacturers that either export their products or are looking to do so will be aware of the importance of choosing the right market for their goods. While the sector has seen challenging conditions in recent years, there are opportunities available to those firms that know which regions are seeing growth.
The state of the market
Figures from the Food and Drink Federation (FDF) show that exports of food and non-alcoholic drinks remained stable in 2012 compared with the previous year, staying at £12.1 billion in total. Exports rose by 0.3 per cent to £18.7 billion when alcoholic beverages are included.
In comparison, exports of all UK products fell by 4.5 per cent last year, indicating that the food and drink export market is showing a certain level of resilience compared with other goods. While exports of soft drinks fell by 7.3 per cent in 2012, total sales stood at £345 million – suggesting that this can still be a profitable sector for the right firm.
Growth markets
With the exception of a handful of countries, the eurozone is no longer a prime growth market for British drinks exporters. Instead, opportunities seem to be congregating in the Middle East and Asia.
According to the FDF’s report, Sweden, Canada, the United Arab Emirates, Saudi Arabia, Australia, China and Japan all moved up its table of the top food and drink export markets in 2012, while the likes of Poland, Norway and Portugal saw big falls in their rankings.
Soft drink exports to the UAE and Saudi Arabia in particular rose by 121 and 106 per cent respectively last year, while Sweden’s appetite for British-made fruit juice increased by 67 per cent. Elsewhere, soft drinks exports to South Africa jumped by soft drinks, contributing to an overall 15.5 per cent increase in food and beverage exports to the whole of Africa.
Capitalising on growth markets
It seems, then, that UK drinks firms could feasibly capitalise on these growth markets. However, this will require extensive research and testing to ensure products are suitable for the local populace, not to mention potential changes to manufacturing processes depending on local regulations (you could, for example, need to invest in new equipment for filling bottles).
Businesses should keep a close eye on local trends to see if any of them tie in with their own offerings. Non-alcoholic malt drinks, for example, are becoming increasingly popular in the Middle East, possibly due to the fact that cultural and religious norms mean alcohol consumption is still low in the region, but consumers there are seeking a more western lifestyle.
Similarly, energy drinks have flourished in the same market, but sports drinks not so much. However, Euromonitor has identified a growth in sales of sportswear in the Middle East, pointing to a potential upward trend in physical activity – which may therefore increase the potential for sports drinks to become a major player in the market.
Whatever approach you choose to take when it comes to expanding your drinks export operations, thorough groundwork is very much the key to success. Identifying trends before they even happen will mean you can stay ahead of the competition and establish yourself in key growth markets just in time to reap the rewards of fast growth.