Export strengths tip EU food and drink industry

By Kacey Culliney

- Last updated on GMT

Emerging markets eating up EU food and drinks
Emerging markets eating up EU food and drinks

Related tags International trade Eu

Europe’s food and drink industry has tipped its decade-long downward export balance; a shift defined by strong export figures underpinned by emerging market demands, according to FoodDrinkEurope.

The Brussels-based EU trade association, FoodDrinkEurope (FDE), published its key pan-European findings in its annual Data and Trends report for 2011.

Europe’s food and drink sector has “reversed the decade-long downward trend in its export balance”​, FDE said, due to increased growth rates for exports to emerging markets and a “slower demand-related recovery of imports to Europe.”

The region’s 2010 exports were valued at €65.3bn (up 21.5% from 2009) and imports €55.5bn (up 9.4% from 2009) – resulting in a near €10bn export balance.

“We hope that EU food and drink exports will continue to grow, particularly in new and emerging markets,”​ an FDE spokesperson told FoodNavigator.com.

There is likely to be continued and increased demand from emerging markets over the next year due to higher per capita incomes, she said.

Manufacturers should be focused on into new markets in the coming year, she added.

Emerging markets driving export growth are Brazil, Russia, India and China, the report showed, with food and drink exports to Russia valued at €6,604m and China €2,393m.

“Trade statistics reflect the increasing importance of the emerging economies,”​ FDE said.

However, traditional markets will continue to underpin EU export strength, it added, with North American countries the “most important traditional market for high-value added European food and drink products.”​ This region imported €710m worth of EU products in the first semester of 2011, up 11% from the year before.

Cheers to success…

All categories experienced double-digit growth for exports in 2010, FDE said, but drinks gobbled up the largest share of the EU’s export market – representing nearly one third of the overall export value. Within this, wine spirits pulled in €7,085bn and wines €6,736bn.

The dairy sector experienced the highest level of growth (27%) with €7,644bn worth of products exported.

Chocolate and confectionary recorded an export growth of 22% with €4,260bn sales and meat products displayed the same growth rates with exports valued at €7,915bn.

The EU continues to lead as the world’s largest food and drink exporter, FDE said, however Brazil, China, Thailand and Argentina are fast snapping up market share in the global export sector.

Innovative region?

“Research and development (R&D) has an important role to play in pushing the food industry forward and helping manufacturers to remain competitive,”​ FDE said.

Data within the report showed a stable level of investment in R&D across the sector “during the recent economic downturn.”

“On average, increasing the quality and range of goods and services and expanding market shares are the top three objectives of innovating food companies,”​ FDE added.

Most EU states have a stronger focus on driving innovation in processing rather than end products, the FDE detailed.

The report found that food and drink companies in Estonia, followed by Finland and Germany have the highest level of product innovation.

The ‘pillar’ of the EU economy

The European food and drinks sector registered a €956.2bn turnover in 2010; weighing in as the heaviest EU manufacturing sector in the 27 member-bloc, FDE said.

In terms of turnover, value added and employment, it is Europe’s largest manufacturing sector, FDE said, and it ranks second in terms of company numbers.

“The food and drink industry is a pillar of the EU economy,”​ the FDE added.

It is a “highly fragmented”​ sector, comprised of 274,000 companies with a strong SME presence (99.1%) the association detailed.

SMEs across the EU’s food and drink sector generate just under half of the overall turnover and account for around two thirds of the job count.

Germany, France, Italy, the UK and Spain are Europe’s largest food and drink producers, the report showed, with Nestlé, Heineken and Lactalis the top three ranked companies across Europe in terms of sales.

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