A United Kingdom

Posted on February 20, 2018

Our Mother Country is still closely tied to her progeny down under, both culturally and in terms of consumer behaviour. For homegrown Aussie businesses wanting to travel north, the UK is an attractive and well-charted place to start. And, as the fifth-largest economy in the world separates from the EU, the chances to strengthen trade relations (and in a sense reunite) are also increasing.

The FMCG Market is Growing

The UK economy is growing steadily – as is the FMCG sector.

  • Real GDP grew by 1.5% in 2017, with 1.2% growth predicted for 2018
  • Consumer expenditure per capita was £18,899 (AUD$33,334) in 2017
  • The retail value of packaged food went up 1% in 2017
  • Other industries (such as fresh food) continue to grow gradually, which can be attributed in part to the increase in cooking programmes focused on fresh food
  • Growth in fresh and packaged food consumption is driven in large part by the UK’s increasing interest in organic and health food products – and demand for on-the-go meals, pasta, rice and noodles.

Real Opportunities For Healthy and On-the-Go Foods

As a small land mass with high population density, the UK must draw significantly on extrinsic sources to sustain itself; and in doing so, it seeks the highest quality.

  • More than half the UK’s diet comes from abroad (from the EU and beyond)
  • Distribution is relatively easy for this reason
  • Health foods have performed well over the last 5 years, posting a growth of over 13%
  • This shift is influenced by many factors, including:
  • 25% of UK households are affected by food sensitivity
  • 10% of UK population is cutting down on gluten
  • 39% of parents are now buying ‘free-from’ products
  • 48% of parents feel there are not enough products available for children
  • Within this health food segment free-from, including gluten-free, have been the strongest performers, as UK consumer awareness grows and people learn about healthy eating.

Trade With the UK Is Already Straightforward (and May Even Get Cheaper with Brexit)

In a market segment notorious for its price-crunching and ‘race to the bottom,’ how do you successfully export supermarket goods to the UK? Australian companies, as with others operating from outside the EU, incur varying levels of import tariffs depending on the product. That being said, as Brexit progresses, a free trade agreement between the UK and Australia is a real possibility, which would enable Australians to more easily export directly to the UK.

For businesses considering expansion, the UK is a known quantity; a relatively easy trade partner; and with a growing market, it offers quickly expanding opportunities for products in the health and convenience food categories. Together with this, Brexit looks set to improve trade conditions in the near-to-medium term.

For more detailed information on getting started in the UK market, get in touch!