The exports of the Spanish food and beverage industry reached a value of 47.62 billion euros in 2023. According to Datacomex, foreign sales last year consolidated the best figure in its historical series and confirm the sector as a major commercial driver for Spain, highlights FIAB.
However, maintaining the trend from the previous year, exports have been affected again due to the global inflationary situation and market instability caused by the difficult geopolitical situation, a scenario that has led to a very marked change in trend.
“If in the years before the pandemic, the food and beverage industry was experiencing growth in its value around 6%, in 2023 this figure was 3.4% compared to 2022, evidencing the difficulties of the current conjuncture and global context, which also reflects a decrease of 6.6% in the volume of exports,” explains the Federation. Nevertheless, Spain remains one of the main exporters of the food and beverage industry worldwide and ranks fifth among the main exporters in the European Union, only behind the Netherlands, Germany, France, and Italy, according to data from FoodDrinkEurope.
“The remarkable performance that the food and beverage industry continues to maintain abroad, considering market instability, is noteworthy. Internationalization remains a very robust pillar for the Spanish industry, making food and beverages one of the most resilient and determining branches of commercial activity for Spain’s socioeconomic development,” evaluated FIAB’s general director, Mauricio García de Quevedo.
Positive trade balance despite market instability and climate change
Since 2018, the sector has been facing the effects of a very volatile context marked by the slowdown of some economies, the rise of protectionist policies derived from the trade war between the United States and China, and the effects of Brexit. These factors, among others, which directly affect the main destination countries for Spanish industry exports, were decisive in the change in trend that the sector began to experience in sales. A situation that would worsen due to the impact caused by the COVID-19 pandemic and the consequences of current international conflicts, leaving an inflationary situation due to the rise in production costs, energy, and transportation, primarily.
This scenario is compounded by the prolonged drought situation that Spain has been experiencing for months. Episodes of hydrological drought in extensive areas of Spain have affected the production of certain foods and beverages during 2023, resulting at the same time in a decrease in the volume of exports.
However, exports continue to surpass imports, which allows for the continued discussion of a positive trade balance worth 13.697 billion euros, accumulating sixteen years of surplus in the trade balance. In fact, according to data from the Ministry of Economy, Trade, and Business, the food and beverage sector is one of the most dynamic and records the highest commercial surplus of the entire balance.
Main destinations for Spanish food and beverages
Regarding the destination of Spanish food and beverage products, in 2023 the European Union continued to be the main trading partner for sector exports, accounting for 58% of the total. France (7.207 billion euros), Portugal (5.572 billion euros), Italy (5.507 billion euros), and Germany (2.984 billion euros) occupy the top four positions in the ranking, accumulating growth compared to the previous year, which, in the case of Germany, reached up to 16%.
The United States, with a value of 2.747 billion euros, is the fifth destination country and the first non-EU trading partner. Exports to this market decreased by -6.4%, a setback partly explained by the strong performance that sales had experienced in previous years, up to 21% in 2021 after the temporary suspension of tariffs (except for black table olives). The United States continues to consolidate itself as one of the most solid and promising markets for Spanish exporting companies, as in 2011 exports barely exceeded 800 million euros.
The United Kingdom ranks sixth with a value of 2.643 billion euros, increasing by 9.4%. The sector remains vigilant about the possible consequences of the new customs model that will be implemented throughout 2024, which introduces changes regarding health certification, physical and documentary controls, and will continue to work to ensure the smooth continuity of exports and relationships with a market of special relevance like the British one.
China enters the ranking in seventh place as the first Asian country. In 2023, exports reached 1.836 billion euros, experiencing a decrease of -23.6%. Since 2020, the Asian giant has seen declines due, among other factors, to the decrease in its imports of pork following the resolution of the country’s circumstantial situation due to swine fever, as well as the country’s economic recession or the increase in protectionist measures with obstacles to the importation of food and beverages.
Completing the ranking of the top destinations are the Netherlands (1.496 billion euros), Japan (1.138 billion euros), Poland (1.104 billion euros), and Belgium (1.047 billion euros).
As for the most exported products, meat and meat products (12.032 billion euros) top the list; prepared and preserved fruits and vegetables (5.866 billion euros); olive oil (4.148 billion euros); wine (2.966 billion euros); bakery and pasta products (2.043 billion euros); cocoa, confectionery, and chocolate products (1.918 billion euros); dairy products (1.766 billion euros); crustaceans, mollusks, and aquatic invertebrates – seafood (1.683 billion euros); preparations and preserves of fish and seafood (1.393 billion euros); and animal feed (1.281 billion euros).
Challenges for the sector
“Internationalization is a priority area for the food and beverage industry. It is necessary to redouble efforts through public-private collaboration to recover the dynamics that the sector was showing before the pandemic,” points out the general director of FIAB.
Among the main challenges in this area, FIAB highlights as a priority the dialogue to minimize the effects of the conflict in Ukraine and the Red Sea, which translates into a generalized increase in costs for internationalization.
On the other hand, the sector points out the intensification of commercial relations and international promotion activities, especially in new or less traditional markets. In this regard, it is vital to promote the final approval of agreements such as the one with Chile, continue negotiations for the conclusion of the agreement with Mercosur, continue to promote agreements with Australia, India, or Thailand, or make progress in resuming negotiations with the Philippines or Malaysia.
In order to protect traditional markets with great potential for the sector, FIAB insists on negotiations with the United States for the definitive cessation of its tariffs, as well as on boosting commercial relations with the Asian axis, especially China.
Source: Financial Food