Charles Darwin once famously said “it is not the strongest of species who survive nor the most intelligent it is the one most adaptable to change” I am condiment Charles didn’t have a mind international trade or export against the backdrop of Brexit when he said those famous words but it is profound and relevant nonetheless.
I was with a brewery client who we are helping to export their craft beers the morning after the night before in June and we chatted about the implications over coffee on June 24th.
In Question of Sport traditions the query is posed…. What happened next?
Our sales grew instantly!
There are positive reasons for Craft beer brewers and English winemakers to raise their glasses to celebrate the Brexit decision as the weak pound made their exports more attractive and foreign imports more expensive as sterling reached its lowest level since 1985! We were perceived as cheaper overnight and the opportunity was there!
This lead to an instant short term boost for the price of beers and some quick wins and sales and so we strengthened this price advantage with marketing campaigns to customers with offers and as a result we had increases in sales from existing customers and orders from new clients in countries such as Estonia, Finland & France. Oh la la!
The Brexit decision will have “critical implications for the beverage sector, given the UK’s role as both a major importer (e.g. wine) and a major supplier (e.g. scotch) but for the local craft brewery we have treated Brexit as an opportunity!
UK-based craft brewers and spirits distillers could also see competition from overseas ease as foreign competitors are affected by the weak pound although the effects may not be as strong according to research by Rabobank.
Most barley and malt, which make up a small proportion of the cost price of beer, are sourced domestically so will not become more expensive owing to the weakened currency. Although raw material for packaging is often imported most added value is created in the UK and so it should be kick start for many prospective exporters in this sector.
However, despite what may seem to be the advantage of some wind in the sails there are still challenges of economic uncertainty and exporting is perceived by many companies still to be a challenge that they are not often willing to risk or take. Exporting is different not difficult is the UK governments manta and that remains true.
Research has shown that companies who chose to export become 34% more productive in their first year and despite the risks of resources, finance, culture and IP associated with exporting the rewards are still there. Taking head of Darwin’s wise words that change is inevitable for survival the risk of not doing so is demonstrated by the success of those who take advantage of opportunities but also by the number of extinct and endangered species that exist today!