As part of our ongoing series of special features, we asked our expert panel;

How Can the Welsh Food and Drink Industry Continue to Develop Post Brexit?

Our panel's thoughts can be found below, but if you would like to contribute to this feature, or any of our future features, please contact [email protected]

Food and Drink Wales Industry Board

Andy Richardson | Chairman of the Food and Drink Wales Industry Board

The Food and Drink Wales Industry Board is developing an ambitious plan for our sector, regardless of Brexit. But one of the immediate challenges facing the industry is the uncertainty of what lies ahead in the shadow of Brexit and how businesses can plan for this unknown juncture.

Two priorities are that individual businesses need to be able to secure their supply chains, both inwards and outwards, while as an industry as a whole, we need to be mindful of the skilled professionals that currently bolster the industry’s workforce.

We are currently consulting with the Welsh businesses about the future growth of the food and drink sector in Wales and crucially this includes working with the Welsh Retail Consortium, Welsh farming unions, and Welsh Government. In a time of flux and uncertainty, Welsh food and drink producers need to focus on adding value rather than creating low cost commodities that may not be able to compete with mass market offerings on a world market.

Welsh food and drink has a great story to tell and has a very strong identity and that’s what makes it stand out to consumers both in and outside of Wales. So, regardless of the uncertainty that surrounds Brexit, I believe that whatever happens, our excellent produce, provenance and incredible food and drink will always have the strongest story to tell.

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Coleg Cambria

Andy Woods | Deputy Director, Hospitality & Catering (Deeside/Yale)

The Hospitality industry is currently demonstrating significant growth across the sector, however it is estimated that a quarter of the current 3 million workers are EU citizens therefore the industry is facing a significant shortage of professionals. This could also been seen as an amazing opportunity, with no signs of consumer demand dropping the industry needs to evolve and face the problem head on. At Coleg Cambria we offer a range of hospitality programmes which have close links with industry professionals, if we can encourage more individuals into the industry they will find an abundance of career opportunities. The industry is currently so diverse and vibrant that with Brexit looming people could find themselves coming in to hospitality and having prosperous careers for years to come, the main challenge is encouraging people to go into the Food and drink sector and change many of the misconceptions about the Catering and Hospitality industry.

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Lime R&D

Matthew Jones | Founder and Managing Director of Lime R&D

The food and drink industry is a vital component of the Welsh economy, and one in which a significant number of jobs rely on. Uncertainty resulting from Brexit is affecting all industries – every day we hear more and more about the prospect of a no deal Brexit and what it could mean for Welsh Businesses.

No one knows what our trading position will be post Brexit. Will we have a free-trade relationship with the EU that can facilitate frictionless trade, or will tariffs and non-tariff barriers come into effect?

We all hope Westminster will be able to negotiate a fair deal that can maintain the frictionless trade that Welsh businesses currently enjoy; however, this is far from certain. On the flip side, will we be in a position to strike our own free trade relationships with other countries, and open up more export opportunities?

In order to continue to develop and thrive, the Welsh food and drink industry needs to continue to embrace and pioneer new innovations. We are lucky in Wales to have government funded programmes to encourage innovation, such as Food Innovation Wales. There are huge opportunities available such as those associated with the development of ‘free-from’ foods, reducing sugar and salt content and trying to increase shelf life. Wales is a pioneer when it comes to food innovation, and through continuing this trend I am confident the Welsh food and drink industry can continue to prosper with or without a no-deal Brexit.

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Fferm Cilgwenyn Bee Farm

Rhodri Owen – Owner Cilgwenyn Bee Farm

As we produce all of our own honey and with the quality of Welsh honey remaining very high Brexit is not seen as a particular direct threat as competition is not a concern (as an industry we import 90% of UK consumed honey) nor are any changes to farming subsidies as apiculture does not qualify in the UK.

However, we are building the first dedicated state of the art bee farm in Wales over the next 12 months and are afraid that indirectly it will change the construction industry with material costs and availability. After the build is complete we will be kitting out with specialist honey handling and laboratory equipment from Europe.

As yet we are uncertain how this will affect us but we are making contingency plans to scale down our goals, such as not installing label application machinery or even reducing the size of the building, which will affect long term growth. With processing ability reduced it will cut our general investment and decrease the number of bees we will be able to introduce across Wales and as a consequence the natural environment will miss out.

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Visionary Food Solutions Ltd

Gareth Hobbs | CCO

Having been involved in the Welsh food industry over the last decade, I’ve seen a very positive approach to the way our industry has dealt with the issues thrust upon it. There is a lot of trepidation from our manufacturers and producers around Brexit, what shape it takes and what the impact will be. It seems there is a strong likelihood of a ‘no deal’ Brexit which is a huge concern for our producers with the possibilities of tariffs and our supply chain being tied up in red tape, import duties and border controls as we move to WTO rules.

I would like to see the creation of an export services department that can make sure our industry deals with these issues in the most efficient manner. We seem to be very good at educating F&D businesses in Wales on how to operate for export, but a consolidated platform with a team to manage supply chain solutions for Welsh export would help across the board. This can be combined with a strong team of account managers to sell into and manage Retail and Foodservice solutions which would allow us to make sure we are not only operating to the highest standard across our portfolio of brands, but also as efficient as possible so we can mitigate tariffs.

I believe we need to stand strong as an industry to help our producers reinforce a stamp of ‘Welsh Quality’ as best in class allowing us to compete in the growing market places within export and the London space. We need to make sure our businesses are not reliant on being Welsh, but have a deep understanding of their market position and what is great about their brands to allow them to compete with the big branded houses and challenger market in SE England. The race for space in the Retail market has never been tougher and interface with buying teams has never been less than it is now.

We are lucky to have some truly incredible people and produce in our industry in Wales and support needs to be in the right places to make sure we make Brexit an opportunity. If our EU market place gets squeezed, along with focusing on new markets, we need to make sure we are making the most of the opportunities in the UK. Brands based in the EU will also be facing tariffs coming into the UK which will see retailers and food operators looking back into the UK for supply – we need to be exploring these opportunities now.

If I was managing a F&D business in Wales now I would be making sure my customer base was as diversified as possible, that I understand the opportunities of export and UK customer base and that I’ve got the best people in my business to develop its future in the face of a vastly changing climate.

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Henry Howard Finance Group

Mark Catton | CEO at Henry Howard Finance Group

As Henry Howard Finance speak to businesses within the food and drink industry across Wales we recognise some of the common challenges they face, as well as noticing different regional and industry variations.

Brexit, for example, and the uncertainty around how the UK economy will fare after leaving the EU has left many UK business owners feeling anxious.

Against this backdrop, traditional lenders have continued to apply strict lending criteria that have discouraged lots of businesses from pursuing growth plans. Most SMEs depend on access to funding at some point, so it’s reasonable for businesses to feel cautious when considering growth plans over the medium to long term.

A successful SME market is essential to the success of UK Plc and will be critical in bolstering a strong and competitive economy post-Brexit. Certainly, business owners and finance directors keen to explore new business opportunities in the months ahead must feel confident that they have access to the right financial support, so it’s important to us, Henry Howard Finance, as a funder that our clients feel they can call on our advice and experience. Their growth ambitions needn’t stall in light of these challenges.

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Marriott International

Andrea Lombardi | Food and Drink Associate

It is likely to forecast positive things coming out from Brexit and one of those could be to actually ensure that welsh food and drink industry will draw heavily on local products now more than before as sign of national identity. Instead according to Mr. Kevin Roberts’ statement, chairman of Meat Promotion Wales, published by Mr. Steffan BBC Wales Correspondent, any increase in sales of Welsh food in UK would not make up for the potential loss of easy access to EU market.

Therefore, where is the true? And how we may address this dilemma? It is understandable that Wales must deal with a difficult choice more than other part of UK as it is more heavily dependent on EU for its export than UK average, and however no one has a magic wand to predict the future. In fact, the statistics provided by Welsh Government show that Wales exports about 60% to EU countries and Germany was the top destination for Welsh food. It will be a great chance for Wales to focus on the quality of its local products so that to launch its economy.

Unique obstacle to overcome will be to understand which effects of post-Brexit on price and import mix of foods on UK supermarket shelves. Moreover, it is unclear if sterling will depreciate or not as Brexit proceeds. The food and drink industry in Wales is a strength for the local economy but what we need is that UK has a good deal with EU as soon as possible in order not to affect negatively the great work done so far.

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Wynne Jones IP

Rosie Le Breton | Trainee Trade Mark Attorney

The Welsh Food and Drink Industry is renowned worldwide thanks to its internationally recognised brands such as Caws Cenarth, Penderyn whiskey, Colliers cheese, Brains brewery, and Brecon Carreg water.

Up to this point a business’s enduring success in the EU has been supported by a stringent intellectual property portfolio, which has enabled brands to remain both competitive yet profitable overseas.

With the Welsh Government now discussing its strategy for the Welsh food and drink industry post-Brexit, it is absolutely imperative that they also consider the intellectual property implications for these brands when we leave the EU.

Information on how to Brexit-proof your IP should be made readily available by the Welsh Government to support continued growth across the industry.

Equally, certain Welsh brands will be synonymous with the area in which they are produced and may have protection from a geographical indication of origin (PGI) such as Welsh lamb. To ensure they can retain their protected status in both the EU and UK post-Brexit, food and drink producers should ensure their IP portfolios are thoroughly assessed in advance of Brexit, to ensure their products are safeguarded. They should also sign up to any new UK GI registers that are set up by the Government to ensure full coverage of their IP rights. Failure to do so could leave them susceptible to infringement.

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Umami Design for Food

Michelle Dalley | Sales & Marketing Director

The opportunity for Welsh food brands to sell their produce is vast. The key is to understand who your customer is, it can’t be “everyone”, that’s just too challenging.

By identifying your consumer, you can begin to build your brand voice, ensuring that every communication touch point is consistent across your social media, website, packaging and messaging. Surely that’s enough? The answer is simple – no, it’s not.

As a food brand you need to understand your route to market. In challenging economic times, change is often felt quickly in the retail sector. The media like to talk about the impact of uncertainty on supermarkets and this adds pressures to those purchasing teams to make safer choices. Time spent chasing supermarket listings is all-consuming and exciting. To win this game of roulette, the investment in time and money is often heavy, and the risk is high.

When working with food businesses, I recommend the Foodservice and Out of Home markets – hotels, restaurants, casual dining and cafes. This route to market can be more complex but by working with experts who understand this sector, you can spread your risk and distribution can become easier.

Of course, you still need to understand your consumer but if you combine this with a compelling reason why these venues and distributors should list your amazing product you are then answering all their questions. Create a plan that shows how you would help launch the product with supporting marketing materials and drive engagement ongoing.

Having a great product is not enough these days. You must have a clear marketing strategy with your customer at the centre. Focus, hard work, great communication and a determination to follow your plan are essential and don’t leave your Welsh rare breed eggs in one basket!

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Foodies

Andrew Whitty | Marketing and Media

No matter what your views on Brexit, there can be few within Wales who wouldn’t agree that a strong food and drink industry must be good for Wales. Today a rising star of the Welsh economy, food and farming is a priority sector for the Welsh government and is on target to grow to £7 billion by 2020.

Investment in food start-ups, Welsh food centres, UK promotion and export support are all a welcome part of the strategy to build the Welsh food brand worldwide. But despite this investment, businesses are understandably cautious about the impact of Brexit. In a recent survey by the National Farmers’ Union, 82% of food and drink companies said they were ‘very’ or ‘fairly positive’ about their business prospects, but this dropped to 51% once the UK was outside the EU.

Sadly despite more and more Welsh produce being seen on menus and on supermarket shelves, as consumers associate Welshness with ‘naturalness’ and ‘quality’ and want to support Welsh producers, Meat Promotion Wales says that increased home demand will not make up for the potential loss of access to EU markets. Concerns about a greater reliance on UK workers is also very real, plus the continuing trend towards ingredient price rises as a result of the weak pound are also worrying. The loss of the CAP subsidy for farmers could also lead to food inflation, and imports – like European wine – could become more expensive, both as a result of new tariffs and the weaker pound. On the flip side, British goods like craft beer could become more competitive as foreign competitors struggle with a weak pound.

In spite of recent assertions by Michael Gove that he is confident Welsh producers maintain easy access to Europe after Brexit, there is an urgent need to finalise trading arrangements and end the uncertainty. That said, as the food industry watches how Brexit negotiations unravel, we are reminded of a comment made by Eleanor Roosevelt: ‘If life were predictable it would cease to be life, and be without flavor.’ We can only hope that the world-class Welsh food and drink sector picks up the challenge thrown down by Brexit and, no matter what the outcome, continues to deliver outstanding, natural, quality flavours sustainably for many years to come.