Food and beverage to the United Kingdom

(Last updated: 16 Feb 2009)

Trends and opportunities

The market

The UK is a highly sophisticated and demand-led market where its consumers have the pick of the best possible food and beverage products from all over the globe. In 2007, the overall UK retail grocery market was worth £128.2 billion (U$266.6 billion) – an increase of four per cent from 2006. For the 12 months to the end of December 2008, however, food price inflation hit 11.9 per cent.

In 2008, expenditure on food and non-alcoholic drinks accounted for 9.7 per cent of total household spending in the UK in 2008, making it the sixth largest area of expenditure (the largest is housing, and
the second largest is transport).

Supermarket pricing pressure

Over the last few years in the UK food industry there has been a huge amount of consolidation, both in the structure of the industry and the behaviour of the major customers; the supermarkets.

Oversupply has strengthened the supermarkets’ position in the supply chain. Supermarket leaders Tesco and Sainsbury’s have adopted ‘factory gate pricing’, which is essentially a shortening of the distribution system – for high volume products, Tesco’s lorries collect direct from the manufacturer, cutting out the need for the wholesaler. So far the retailers have concentrated on frozen food and fresh produce, but the initiative is certain to impact on all sectors in the future.

The overcapacity in the industry has lead to a decline in the number of participating companies, through mergers or industry exit. Companies that have survived have tended to become more vertically integrated – becoming more involved in the whole growing, manufacturing and marketing process. This is particularly the case for the meat and dairy industries.

The UK grocery sector has similar product offerings to Australia, although packaging and presentation is more important. The key difference is that private label products take over 30 per cent of the sector value. Private label is differentiated into:

• High-end, gourmet ranges, such as Tesco’s ‘Finest’ range
• Mid range ‘brand-copier’ / ‘everyday’ type products including organic ranges
• Budget or ‘value’ ranges at rock bottom prices

The big four supermarket chains continued to tighten their grip on the grocery market, increasing the pricing pressure on manufacturers and suppliers. The expansion into the convenience stores channel by Sainsbury’s and Tesco, and the increasing dominance of market leader Tesco have led to further market consolidation and buying terms that have forced food suppliers to drive down their own margins in order to remain competitive. The trend will continue as supermarket chains expand their convenience store formats to tap into the increasing number of consumers who shop locally.

Research from Mintel in October 2008 reported that during the previous 12 months, 41 per cent of shoppers that it had surveyed said they had switched to cheaper goods, 34 per cent were buying fewer premium products and two-thirds were looking for promotions and deals more often than this time last year.

A nation of ‘foodies’

A shift from the ‘food is just fuel’ mentality continued to be driven by various factors. High-profile celebrity chefs and their TV shows piqued consumer interest in the food consumed. Retailers Marks & Spencer and Waitrose continued their successful TV advertising campaigns which highlighted their natural and indulgent food ranges, and also inspired consumer interest.  Both chains deepened their roots in consumers’ minds as the supermarket of choice for aspiring food connoisseurs, or ‘foodies’, and those who are motivated by environmental and sustainable business arguments.

Consumer trends

There were significant increases in 2007 and 2008 in the prices that UK consumers paid for food, petrol and utilities. The negative wealth effect produced by falling house prices in 2008 will lead to declines in overall consumption, particularly for goods and services with a high income elasticity of demand, ie., where demand is extremely responsive to changes in income. For example, many consumers will become more-value conscious when shopping for food, beer, wine and spirits.

In April 2008, it was estimated that the annual grocery shopping bill of the average UK family had risen by £750. As a result, the discretionary income of many households is being squeezed, leaving them with less money to spend on necessities. This problem is likely to be particularly acute for those on low and fixed incomes, such as pensioners, who spend a relatively high proportion of their income on such necessities as food and fuel. This trend has already helped to boost sales at discounters like Aldi and Lidl. On the other hand, chains whose appeal is more closely associated with quality, such as Marks & Spencer and Waitrose, have been suffering.

Premiumisation will prove more elusive in the packaged food market, as consumers increasingly seek out products that offer value for money. This is likely to provide drive increased demand for economy and private label products. It could be particularly damaging for evolving market segments such as organic and fair trade products, as hard-pressed consumers will be less willing to pay premium prices.

This trend has also resulted in a weakening of demand for meal solution products, such as ready-made meals, which many consumers increasingly perceive as poor value. On the other hand, it may boost demand for ingredients, as an increasing number of consumers begin to cook in an effort to save money. This has also led to resurgence in demand for dessert and cake mix products.

The demand for food service is also being hit, at least at the top end, as consumers become increasingly value-conscious. However, quick service outlets like McDonalds’ and KFC, which offer meals for as little as a couple of pounds, have benefited from this situation. There are still opportunities for growth in confectionary and premium packaged food, as consumers still appear willing to pamper themselves with little treats while foregoing larger treats, like restaurant meals.

Driven high up the political agenda by incessant media coverage and a wave of public concern regarding increased levels of obesity in the UK population (particularly among children), health and wellness remains an issue of concern for those in the packaged food industry. The UK has the highest obesity rate in Europe. Currently, around 10 per cent of children in the UK are obese, while at least 20 per cent are overweight. A report from the Foresight project entitled ‘Tackling Obesities: Future Choices’ predicts that by the 2025 around 40 per cent of the population will be classed as obese.

In the medium to long term, the UK market is likely to become increasingly polarised in this regard. On one side will be the increasingly health-conscious affluent households. On the other side will be poorer households that are less knowledgeable about the health implications of their food choices and who will continue to consume an energy-dense diet.

Many consumers have become concerned about the high fat, salt and sugar content of many packaged foods and non-alcoholic beverages. The government has also expressed its concern from a public health perspective, and these concerns have forced the industry to reformulate many products, ranging from crisps to ready-made meals, by lowering their fat, salt and sugar content.

Regardless, the trend towards health awareness presents packaged food and beverage manufacturers with a myriad of new product opportunities. There has been, for example, an increased demand for low-fat, low-salt and low-sugar alternatives to existing products, creating new opportunities for brand creation and growth. This trend has also led to dynamism in the functional and fortified segment, fuelling the rise of such products as probiotic drinking yoghurts and bread and milk fortified with omega oils.

The rise and dip of organic food

In recent time as many as one-third of Britons have claimed to eat organic and health foods, however, the combination of a slowdown in the organic food boom and a trend towards discount shopping have resulted in the decreased popularity of organic food.

Consumers are increasingly scrutinising purchases and how much they spend—making more considered decisions about the value for money that their purchases really provide. This means that products carrying a price-premium, especially those that offer so-called 'lifestyle' benefits, now face harsher assessments of their utility and whether or not they should make it into consumers’ shopping baskets.

Consumer spending on organic produce in the UK had fallen by 19 per cent in the three months to August 2008. However, Mintel predicts that sales will grow in 2009 by 7.5 per cent so opportunities still exist in this sector although the increasing pressure on ‘value’ within the UK means that organics do not command the premium prices that they once did. Opportunities include those for:

• Products that compete with mainstream products and provide the perception of ‘value for money’.
• Organic foods that can also market themselves with added USPs such as ‘super foods’ or ‘gluten free’ and thus provide additional health benefits and reasons for purchase – or those that have strong sustainability messaging, eg. new packaging formats.
• Organic products that can be sold by discount retailers.
• Organic baby food.

Consumer understanding and perception of food has shifted dramatically in recent years, and 2007 saw this improve the bottom line of those food manufacturers and retailers that predicted the trend for organic products, in particular.

Provenance and increased awareness of the differences between natural and highly processed food products resulted in a change in consumers’ approach to their diets. A shift from the ‘compensatory’ mentality that characterised the success of fad diets and low-fat ready meals was replaced by a more holistic approach to better health and wellbeing.

Packaged food

In 2007, the UK packaged food market grew moderately, almost equalling the previous year’s growth, despite continued pricing pressure on the industry from supermarket competition. Consumer demand for sweet and snack food products that offer convenience, such as confectionery, and sweet and savoury snacks, drove growth, alongside soups. In spite of rising living costs – in 2008 due to higher interest rates, council tax and transport costs putting a real squeeze on disposable income – consumers sought out occasional premium food products as affordable luxuries and a respite from belt tightening. This trend continues somewhat during the recession as consumers seek to ‘treat’ themselves rather than dine out, as the economic climate remains gloomy and unemployment rises.

Beverages

The factors affecting the UK drinks industry are mainly social, rather than regulatory. These include:

• more entertaining at home
• greater interest in healthy living
• interest in novel and innovative products
• tougher drink-driving laws
• the introduction of the smoking ban in cafes, restaurants, bars, pubs, etc
• increasing range of products available through supermarkets

The Institute for Grocery Distribution (IGD) and the Food and Drink Federation (FDF) both provide detailed analysis of consumption patterns in the UK, and the factors affecting sales.

Wine: Australia continues to lead wine sales in the UK representing 22 per cent of wine volume in 2006, ahead of France. Australia’s exports continue to grow strongly and is gaining popularity, particularly amongst women and the 20–35 age group. Whilst consumers are becoming more adventurous in terms of new varietals, labels and higher-priced wines, the global financial situation has seen an increase of wines on promotion, particularly in supermarkets, which is the main channel for off-trade sales in the UK. Fruit wines have limited popularity and local brands seem to sell best in the area of their production.

Beer: In 2007 beer sales declined by four per cent in current value and four per cent in volume. Industry forecasts that the decline in beer is expected to continue with an annual average fall of one per cent in volume. However there is still some opportunity within lower alcohol beers and premium bottled beers. The take-home or ‘off-trade’ from supermarkets is fast becoming the most dominant point of sale and the effects of the introduction of the smoking ban in 2007 plus the trend towards home entertaining and the continued strong growth in sales of plasma televisions and the like will foster more drinking at home, at the expense of the on-trade.

Spirits and pre-mixed alcoholic drinks: Spirits is a mature and conservative sector and it is hard to drive change. There has been little overall growth in value or volume. Clear spirits remain more popular than coloured, especially with younger drinkers with interest in ready-to-drink (RTD) products now declining and the attractiveness of these sweeter drinks to under-age drinkers has incurred increased regulation. Investment in new products and marketing is high, and the sector is highly competitive and fashion-driven.

Soft drinks: The UK suffered one of the wettest summers on record in 2007, which significantly impacted soft drinks volume sale as people stayed indoors. Despite the poor weather value sales remained positive with consumers willingness to trade up to more expensive variants an influential factor. Indeed UK consumers have become far more adventurous in the kinds of drinks they are consuming and are increasingly seeing them as a short cut or convenient delivery system to general health and wellbeing.

Soft drink consumption has slowed in grow terms in the last four years and in 2007-08 off-trade value rose at 2.5 and 1.1 per cent by volume. However, the market for soft drinks is likely to continue to grow over the medium term as consumers in an ageing population are more likely to reach for a soft drink as issues of health and wellness will continue to drive the market. Certainly the smoking ban will and a possible toughening of drink drive regulations will continue to make soft drinks less of the exception and more of the rule in the on-trade. In the off-trade more exotic health oriented concoctions are expected to continue to drive consumer demand through heightened expectation although the industry will have to guard against threats from the environmental lobby, which has already targeted bottled water as a wasteful industry in terms of packaging and resources.

Hot beverages: Hot drinks have lost market share to soft drinks, but the UK’s changeable weather also affects sales. Product innovations include herbal infusions, flavoured coffees, green, white and black premium teas and new packaging options. 

Opportunities

Opportunity areas include:

• Grocery products (branded and private label) with a unique point of difference – ‘free from’ products (eg. gluten free, dairy free, wheat free) or those with unusual flavours.
• Gourmet products with premium packaging – Australian specialities, luxury foods, special occasion foods.
• Fruit and vegetables – premium apple varieties, cherries, nectarines, plums, citrus, mangoes, pineapples and tropical fruits. Some opportunity for vegetables.
• Seafood – white fleshed reef and farmed fish, shellfish, crustaceans.
• Meat – premium beef, lamb and possibly game meat (note that meats are affected by quota).
• Organic food – fruits and vegetables, groceries, baby food and snacks.
• Beverages – wine, beers (premium or boutique bottle), spirits and liqueurs, hot drinks (herbal teas, caffeine-free beverages) and soft drinks (sports and energy drinks, adult dilutables and mixers).

Competitive environment

The UK is a highly competitive market, requiring high levels of investment in marketing and promotion to succeed. Australian-made products must compete with locally produced products that incur no import duty and low freight costs. Competition comes from within UK, mainland Europe, USA, Canada, and other Southern Hemisphere suppliers.

In 2007, the UK media, retailers and consumer were obsessed with 'food miles' – but by 2008 the debate had moved on and whilst 'food miles' and 'sustainability' are still popular taglines, 'Corporate Social Responsibility' (CSR) is now the far more broad issue that retailers are struggling with – both the major supermarket chains and smaller businesses. 

It's now not just about the distance travelled, but also about the rest of the supply chain and companies' (and their employees' and customers') actions and attitudes to their role in the process - from production through to consumption and disposal/waste management. 

The major retailers are increasingly scoring ‘green points’ off each other, aiming to position themselves as the ‘greenest’ retailer in various areas of business – and this provides new opportunities for companies that can help them achieve this status. CEOs to some of the top six multiple grocery retailers have publicly stated that they seek to ‘source locally, where possible’, which has implications for Australian product in the UK. 

Austrade is also aware of at least two situations where Australian exporters have been asked to make changes to their supply chain management to reduce the number of ’food miles’ associated with their product.  You may wish to consider having a company statement or policy available should any potential partners raise the issue of ‘carbon footprints’ or ‘food miles’ given the availability of similar product lines from within the UK or closer to its shores. 

Tariffs, regulations and customs

Food imports are highly regulated for hygiene and quality reasons and the following issues should be considered. It is worth getting confirmation from the authorities before shipping.

The way products are packaged, sold and or produced, whether they are fresh, frozen or chilled will dictate the tariff(s) that apply. UK is part of the harmonised trade system of the European Union (EU). Common Customs Tariff (CCT) is applicable to goods from non-EU countries, including Australia. Most duties are ad valorem (per cent), based on the GATT Valuation Code (approximate CIF value).

If you are shipping any goods to Europe, you should obtain a written customs duty ruling, known as Binding Tariff Information (BTI). Getting a BTI is free and will prevent any conflict over customs or excise duty. A BTI is valid for six years.

Generally there is no Value Added Tax (VAT) on food, but some ingredients and snacks and all alcoholic drinks will attract VAT at 15 per cent.

The beverages industry is self-regulating with codes of practice for the marketing of borderline drinks like alcopops. The Portman Group is the main voice of the industry.

HM Customs and Excise
Tariff Classification
2nd Floor South West
Alexander House
21 Victoria Avenue
Southend-on-Sea
Essex SS99 1AA
Tel: +44 (0)1702 366 077

Licenses

Agricultural products are protected by quota, managed by a licensing system. Import of specified products without a quota license is prohibited. Products include:

• cereals
• rice
• beef and veal
• sugar
• isoglucose
• oils and fats
• seeds
• milk and milk products
• wine
• processed fruit and vegetables
• sheep meat
• buffalo meat
• goat meat

More information can be obtained from the Rural Payments Agency.

For beverages:

• The UK Intervention Board issues quota licenses for wine imports as exporting wine to the UK without a quota license is prohibited.
• Dairy-based drinks need a special license, which AQIS can provide futher advice on.
• Dairy-based and some other drinks will require a health certificate (issued by AQIS), which must accompany the shipment.
• Some drinks will require an import license issued by the Rural Payments Agency – get your importer to check if this applies to you.

Food products of animal origin, including fish and honey, must be produced in an EU approved establishment. The Australian Quarantine and Inspection Service (AQIS) will carry out the inspection and approval process on behalf of the EU. The establishment number must be quoted on the health certificate.

Meat & Livestock Australia (MLA) can also provide advice to meat exporters. A health certificate must accompany food products from Australia.

Some foods will require an import license. Get your importer to check with the Rural Payments Agency in the UK. Most food products will also require an export certificate issued by AQIS before leaving Australia.

Legislation

EU and UK legislation covers almost every aspect of food production and sale including:

• ingredients
• label design and content
• jar or pack size
• additives
• need for a UK or EU address
• product descriptions and names
• products of animal origin
• products regarded as 'gluten free' or low gluten'
• novel foods
• packaging materials
• claims made for the product

Food packaging

UK consumers are very discerning when it comes to packaging and presentation of the product. It is best to work with a UK-based specialist and your importer/distributor to develop packaging or branding suitable for the market, and a distributor should be able to help. The wrong packaging or marketing will mean that the product won’t get listed with any larger stores, and that sales are likely to be restricted.

All food products imported into the UK must comply with the basic legal requirements of the relevant EU legislation with regards to composition, additives, labelling, packaging and waste. In addition to this, most major retailers require that food manufacturers meet certain standards in terms of their manufacturing facilities, systems and processes. The requirements for food packaging and presentation in the UK and Europe are very strict and a complex and specialist area.

More information on labelling and nutritional standards can be found from Food Standards Agency.

Industry standards

The manufacture, import and selling of food for humans is highly regulated in the UK. British consumers have been scared by food crises such as BSE and are now more aware of their rights and the legislation that protects them.

The Food Standards Agency is the UK Government department in charge of standards, regulations, quality, health and consumer protection. Standards required by UK retailers vary from self regulatory to legally enforced. These include:

• EUREPGAP
• Hazard Analysis Critical Control Point (HACCP)
• Produce marketing standards
• The British Retail Consortium (BRC) Global Standard, originally set up in relation to private label/own brand manufacturing, BRC certification now also being viewed as a global standard for branded food produce by some of the larger importers/retailers.
• GLOBALGAP

Marketing your products and services

Market entry

Creating interest in your product with retailers is only half the battle, what they will really need to know is:

• How are you going to get it here?
• Will you have enough stock in the UK?
• Who will look after the account?
• If I need to contact someone urgently regarding a product failure who is it?
• How do I get promotions organised?
• How do we manage our day to day business?

Some methods recommended for selling to UK retailers include:

• Appointing a distribution partner to handle importing and customer liaison.
• Managing the customer base from Australia and finding a fulfilment company to warehouse and ship to the customers.
• Setting up an office in the UK.
• Sending one of your Australian staff to the UK as a representative.
• Sharing distribution with another Australian company with a synergistic product range.
• Have your product manufactured in Europe, under licence (which can also benefit from reduction in duties/taxes).

Of these options, one of the most effective is probably appointing a distribution partner. 

A UK company will understand how to best present your products, comment on changes to your packaging, will understand how to place the product in the market and will have existing retailer and wholesaler relationships. These skills take time to acquire and demand long-term exposure to the market. UK based companies expect to have long-term relationships with their suppliers, working together to achieve sales targets. This means that Australian exporters should consider the UK as a long-term strategic market and be prepared to invest in sales and marketing in order to grow brand awareness and consumer acceptance.

Smaller distribution partners often specialise in a particular product sector and may service customers on a regional basis or may supply only certain types of retailer. This means that Australian producers may require more than one UK distribution partner in order to access the entire market or desired channels within the market.

UK food trends

Convenience and sharing

The impact of convenience has seen the emergence of trends such as more portioned, packed products and resealable tubs including ‘share tubs’. This trend has led to the widening of the retail distribution for many brands, as they have moved into formats that are suitable for impulse outlets such as forecourts and convenience retailers. In addition, the trend towards the ‘big night in’ benefited these categories because of their general suitability for parties and entertaining guests.

Super-premium/indulgence

The trend towards more indulgent products has led to a greater focus on quality in products. Products in gourmet food halls and delicatessens score highly in this category, where consumers are looking for treats, food gifts and opportunities to impress. The ‘super premium’ market takes premiumisation to the next level and will be differentiated from premium products not only by their higher price point but their superior values. 

Flavourful free-from/‘positive nutrition’

Even though awareness of food sensitivities is still limited within the medical profession, food manufacturers have been a great deal more proactive and, over the last five years, the UK 'free-from foods' market has expanded dramatically, growing by over 300 per cent according to market analysts, Mintel.

Datamonitor states that around 65 per cent of consumers in the UK are trying to eat more healthily and are ‘no longer focused solely on reducing food intake or on moderating their consumption of perceived ‘dietary evils’ such as fats/sugars/salts’, thus functional foods that may now provide a health benefit beyond basic nutrition are becoming a key part of everyday life. These foods are fuelling a movement toward ‘positive nutrition’ where foods perform a definable function as a contributor to one’s health.

Credit crunch appeal – quality and value

All food and drink brands are starting to take notice of the current economic situation and the wise ones are putting long-term strategies in place to not only survive the turbulent times ahead, but thrive during the recession. Whilst some producers believe that luxury foods are most likely to be hit first, others believe that consumers are making discerning choices which could be to the benefit of premium products. The positive comes from consumers trading up to a premium choice for what they eat in the home, rather than using more of their income on eating out; but as is always the case, the offer has got to be relevant.

Personal touch/branding

Brand owners are using the people (producers/farmers/creators) behind the brand to create a more personal and authentic image. Companies are increasingly choosing to personalise brands to make them appear more ‘real’ and less like a faceless multinational, which many consumers find it difficult to identify with.

Consumers are demanding so much more transparency from products; they need to know exactly what they are eating and where it has come from. Authenticity of products is a key factor in the customer’s buying decision, the more information about the origin of the product, its manufacture and source are details which customers appreciate and indeed demand. The days of products with a simple list of ingredients are long gone.

In addition to the above key trends, UK consumers are interested in:

• Convenience – packaged, ready-to-eat
• Time and labour saving – prepared, ready-to-cook
• Innovation – unique products
• Quality – taste, appearance (of the product as well as packaging)
• ‘Clean labels’ – minimal reliance on additives, preservatives, artificial colours etc

UK consumers are very discerning when it comes to packaging and presentation of the product. It is best to work with a UK-based specialist to develop packaging or branding suitable for the market, and a distributor should be able to help. The wrong packaging or marketing will mean that the product won’t get listed with any larger stores, and that sales are likely to be restricted.

You will need to tailor your presentation for each retailer in order to be successful. Visit as many stores as possible to build up a picture of the retailer’s consumer base and consider how your product fits their needs and aspirations. Research the market and your potential competitors thoroughly before making contact with customers. When presenting your product to a UK retailer, either direct or via your UK distributor, you will need to consider the following:

• What the value to the retailer is of listing your product
• How your product ‘fits’ in the current product offering
• Who the target buyers are
• Projected level of sales
• What the retail price will be
• What margins the retailer and distributor expect
• How you are going to promote the product
• If you are you willing to change the product ingredients or packaging to suit the retailer
• If an exclusivity deal is appropriate
• If you are ready to provide product samples

When presenting to a retail or wholesale buyer, try to provide as much information as possible in brochure format. Although the majority of UK companies are online, a proper brochure and letter has an immediate impact. Try to provide:

• A history of your company and of the product range
• Detailed information about the product, its ingredients and packaging
• Information about your export experience or customers in Australia
• Recipes or meal ideas if the product has unusual ingredients
• Pricing in UK pounds or Australian dollars with a current exchange rate
• Landed costs are generally preferred buy buyers to ex-factory or FOB

There are some e-tailers and e-markets online, but like much of the food industry, these tend to be localised. 

Distribution channels

The main distribution channels for food in the UK are: retail, food service and food processing. The percentage breakdown varies from sector to sector.

Retail

The major supermarkets dominate food and drink retailing. Eighty-four per cent of food sales go through the following companies:

• Tesco
• Sainsbury's
• ASDA
• Morrisons
• Waitrose
• The Co-Operative

The growth in ‘discount retailing’ in the UK is a continuing trend with retailers such as Aldi, Lidl and Netto all reporting impressive growth during 2008. Not only has the discount sector itself grown, but mainstream supermarket retailers have augmented their value lines and increased the emphasis on price in response; in fact Tesco has also positioned itself as a lead ‘discounter’ with a new value line of branded items at low cost.

Aldi has a major store opening programme in the UK and looks set to increase its existing 300 stores substantially over the next five years. Lidl, currently with around 400 stores is also expanding its footprint and increasing the number of lines it carries. TNS released figures in August 2008 showed that Aldi’s sales had risen by 19.8 per cent in the 12 weeks to 10 August, while Lidl had seen 12.3 per cent growth.

Supermarkets tend to build a category using branded products, and then when it gains critical mass, supplement the brands with their own private label products. Private label now accounts for more than one of every three products sold in the United Kingdom. This impressive market share gains reflect a fundamental shift in shopper attitudes over the past 10 years, with most UK stores having both high-end gourmet and budget private label ranges. Private label can be a good option to consider, but the margins are often tight.

Supermarkets and independent stores buy both fresh and grocery products from specialist distribution companies, rather than direct from the producer. In order to save costs and streamline ordering, stores have been reducing the numbers of favoured suppliers. This move towards further consolidation in the industry further restricts distribution opportunities for smaller companies.

Selling through the biggest supermarkets is often not the most desirable route for Australian producers, particularly smaller companies or new exporters. Large volumes, price commitments, promotional expenditure (listing fees, offers, etc.) and regulations can make this an unprofitable option. A better option is to access the independent and specialist retail sector in partnership with a UK distributor. This lets you build export sales more gradually, allowing management of supply and marketing issues. They may also provide a better level of margin, as smaller retailers usually sell to consumers at higher prices. Good examples of this type of retailer are:

• Selfridges
• Harvey Nichols
• Booths
• Planet Organic
• Holland and Barrett

Food service

Like the retail sector, food service is also experiencing consolidation, with some very big companies dominating. Despite this, small companies continue to hold niches, and it is possible to find both small and large customers.  Some larger companies active in food service include:

• White Star Line
• Compass Group
• Pret a Manger
• Thistle Hotels
• Scottish and Newcastle

Also like retail, few food service outlets will buy direct. There are a multitude of specialist wholesalers working in this sector. Some are very specialist, providing premium fish to London restaurants for instance, others bulk service.

Food processing

There are opportunities for supply of raw materials and ingredients to the UK processing and food manufacturing sector. This area is very driven by price, and competitors from mainland Europe and the USA may well have a cost advantage. If you are interested in this sector, it is worth contacting the processors and manufacturers direct, as they all have different buying processes and requirements. They may or may not buy direct, but they will usually be able to recommend a preferred supplier.

Links and industry contacts

Food and beverage-related resources

British Food and Drink Companies - www.britishcompanies.co.uk/food.htm
Food and Drink Federation - www.fdf.org.uk/industrystats.html
Food from Britain – www.foodfrombritain.com
Food Industry Associations - www.fdf.org.uk/links/linksfood.html
Institute of Food Research - www.ifr.bbsrc.ac.uk
Institute of Grocery Distribution – www.igd.com
International Food Exhibition – www.ife.co.uk
Sea Fish Industry Authority - www.seafish.co.uk

Beverages

British Soft Drinks Association - www.britishsoftdrinks.com/htm/index1.htm
Scottish Food and Drink Association - www.scottishfoodanddrink.com
Gin and Vodka Association - www.ginvodka.org
Scotch Whisky Association - www.scotch-whisky.org.uk

Government, business and trade resources for the United Kingdom

British Standards Institute – www.bsi-global.com
BusinessLink – www.businesslink.gov.uk
Department for Business, Enterprise and Regulatory Reform – www.berr.gov.uk
Department for Environment, Food and Rural Affairs – www.defra.gov.uk
Directgov  – www.direct.gov.uk
European Union Agriculture Department - http://europa.eu.int/comm/agriculture/index_en.htm
European Union Customs – http://europa.eu.int/comm/taxation_customs/customs/index_en.htm
European Union Portal – http://europa.eu.int/index-en.htm
Food Standards Agency  – www.foodstandards.gov.uk
HM Customs & Excise – www.hmrc.gov.uk/home.htm
Trading Standards – www.tradingstandards.gov.uk
UK Government Portal – www.ukonline.gov.uk
UK Statistics – www.statistics.gov.uk
UK Trade and Investment - www.uktradeinvest.gov.uk

Media

Organic Food e-zine – www.organicfood.co.uk
Fine Food Digest – www.finefoodworld.co.uk/default.asp?parentID=7&id=24
Fresh Info subscription e-zine – www.freshinfo.com
Fresh Produce Journal – www.fruitnet.com
Just Drinks e-zine – www.just-drinks.com
Just Food e-zine – www.just-food.com
Grocer subscription e-zine – www.grocertoday.co.uk  and www.thegrocer.co.uk

Australian resources

Australian Food Associations – www.ausfoodnews.com.au

Contact details

The Australian Trade Commission (Austrade) is the Australian Government’s trade and investment development agency, operating as a statutory agency within the Foreign Affairs and Trade portfolio.

Austrade assists Australian businesses contribute to national prosperity by succeeding in trade and investment, internationally, and promoting and supporting productive foreign investment into Australia.

Austrade:

• Delivers services that assist Australian businesses initiate, sustain and grow trade and outward investment.
• Promotes Australia as an inward investment destination and, with the States and Territories, supports the inflow of productive foreign direct investment.
• Administers the Export Market Development Grants scheme.
• Undertakes initiatives designed to improve community awareness of, and commitment to, international trade and investment.
• Provides advice to the Australian Government on its trade and investment development activities.
• Delivers consular, passport and other government services in designated overseas locations.

A list of Austrade offices (in alphabetical order of country) is available.

More information

For further information please contact Austrade on 13 28 78 or email info@austrade.gov.au