By Riad Beladi
The food trade between the United Kingdom and the United States is a lively exchange, involving a wide range of products and influenced by trade agreements, regulations, and consumer tastes. This trade relationship, rooted in history, continues to evolve with market conditions and regulatory changes.
Key Food Exports and Imports
The UK and USA trade a variety of food products, each country using its agricultural strengths to meet the demands of consumers on both sides of the Atlantic.
From the UK to the USA
- Alcoholic Beverages: British whisky and gin are popular exports to the USA. In 2022, the UK exported over £1.3 billion worth of whisky to the USA.
- Snack Foods: British chocolate, biscuits, and crisps are favourites in the USA. In 2021, snack food exports to the USA were valued at approximately £200 million.
- Dairy Products: UK cheeses, like cheddar and stilton, are well-liked in the USA. Cheese exports reached £94 million in 2022.
- Meat Products: The UK exports some meat products, including pork, to the American market. Pork exports were valued at £85 million in 2021.
From the USA to the UK
- Grains and Cereals: The USA exports wheat, corn, and other grains to the UK. In 2022, grain exports to the UK were valued at $500 million.
- Meat Products: Beef and poultry from the USA are sold in the UK, subject to strict regulations. The value of meat exports was around $450 million in 2022.
- Nuts and Fruits: Almonds, pistachios, and dried fruits from the USA are imported to the UK. Nut exports were valued at $300 million in 2021.
- Processed Foods: American processed foods, such as snacks and ready meals, are popular in the UK. Processed food exports reached $350 million in 2022.
Trade Agreements and Regulations
The food trade between the UK and the USA is shaped by trade agreements and regulatory standards.
Trade Agreements
After Brexit, the UK has been working on new trade agreements with the USA to replace those from when it was part of the EU. These agreements aim to reduce tariffs and make trade smoother. The Trade and Cooperation Agreement (TCA) is one effort to address trade barriers.
Regulatory Standards
Both countries have strict food safety standards. The UK’s Food Standards Agency (FSA) and the USA’s Food and Drug Administration (FDA) set high standards for food quality and safety. The UK’s stricter policies on genetically modified organisms (GMOs) compared to the USA can complicate some imports. Differences in animal welfare and environmental standards also affect trade, requiring alignment of regulations.
Challenges and Opportunities
Food trade between the UK and the USA faces challenges but also offers many opportunities.
Challenges
- Tariffs and Quotas: Changes in tariffs and quotas can affect trade costs and volumes. For instance, the UK’s tariffs on American beef and poultry can add up to 20% to the cost.
- Regulatory Differences: Different standards can create trade barriers, requiring businesses to navigate complex compliance issues.
- Brexit Impact: The UK’s exit from the EU has introduced new dynamics, requiring new bilateral agreements with the USA.
Opportunities
- Premium Products Market: There’s growing demand for premium, organic, and specialty food products in both countries. The organic food market in the UK was worth £2.79 billion in 2021, showing significant growth potential.
- Innovation and Collaboration: Collaboration in food technology and innovation can lead to new products and processes, enhancing trade. The food tech sector in the USA was valued at $250 billion in 2022.
Current Trends in Food Marketing
Several trends are shaping the future of food trade between the UK and the USA, reflecting changes in consumer behaviour and market dynamics.
E-commerce Growth
E-commerce has transformed food trade, enabling direct-to-consumer sales that bypass traditional retail channels. This trend makes it easier for food producers in the UK and the USA to access each other’s markets, offering greater convenience and choice for consumers. Online grocery sales in the UK grew by 76% in 2020 and continue to be a significant market segment.
Focus on Sustainability
Consumers in both the UK and the USA are increasingly focused on sustainability and ethical sourcing. This shift drives changes in food production, packaging, and marketing, with an emphasis on environmentally friendly practices and transparent supply chains. In 2021, 40% of UK consumers reported they are willing to pay more for sustainably sourced products.
Conclusion
The food trade between the UK and the USA is a vibrant and evolving sector, shaped by economic, regulatory, and consumer factors. Both countries benefit from a deepening trade relationship, leveraging their strengths to meet diverse market needs. As new trade agreements are made and regulatory challenges are addressed, the future of this transatlantic food trade looks dynamic and promising.