FDBusiness.com

Confidence Takes a Knock as Brexit Jitters Take Their Toll on UK Food and Drink Industry

 Breaking News
  • British Brewers Decrease Their CO2 Emissions by 42% Total CO2 emissions from the UK’s brewing industry have fallen by 42% in the last decade (2008 to 2018) – a reduction of 202,952 tonnes – according to new research conducted by the British Beer & Pub Association (BBPA). The research also found that the energy used to brew a pint of beer in the [...]...
  • Small Irish Snack Manufacturer Secures Major Contract With Tesco Pinkfinch, a County Down-based fruit snacks supplier, has secured a major contract with Tesco Ireland, which will see an estimated 100,000 bags sold annually. From launching his business in his parent’s spare bedroom five years ago,  Pinkfinch founder Michael Heaslip (pictured) has grown his innovative product line across Ireland, the UK, Europe, and the Middle East,  with [...]...
  • UK Supermarkets are Struggling to Grow The latest grocery market share figures, published by Kantar, show year-on-year supermarket sales were flat during the 12 weeks to 11 August 2019 as the tough comparisons with 2018’s strong summer continue. The memory of last year still looms large for retailers and this summer’s comparatively poor weather, combined with low levels of like-for-like price [...]...
  • Tickets Still Available For 2019 Irish Food & Drink Business Awards Some tickets are still available for the 2019 Irish Food & Drink Business Awards presentation ceremony and gala dinner to be held at the Citywest Hotel in Dublin on the evening of Thursday, 5 September 2019. The winners of the 2019 Awards will be named at the event. The prestigious awards programme, which was first introduced [...]...
  • Nestlé UK Launches New On-trend Flavours Nestlé has introduced two new on-trend flavours to its much-loved Munchies brand in the UK and Ireland. Available in 101g sharing bags, new Munchies Chocolate Fudge Brownie and Munchies Cookie Dough are the first new Munchies products since 1996. The new flavours were created at Nestlé’s confectionery sites in York and Fawdon, Newcastle. Munchies Brand Manager [...]...

Confidence Takes a Knock as Brexit Jitters Take Their Toll on UK Food and Drink Industry

Confidence Takes a Knock as Brexit Jitters Take Their Toll on UK Food and Drink Industry
May 28
10:23 2018

UK food and drink manufacturers are feeling the pinch of Brexit uncertainty but are striding ahead with investment plans to boost productivity, automation and new product development, according to new research published by accountancy and business advisory firm BDO LLP. BDO’s Food and Drink Report 2018 found that 60% of manufacturers surveyed are generally positive about the future of the industry, with three quarters (76%) expecting revenue growth and 67% believing order levels will increase in the next year.

However, looking back over the last three years, confidence among UK food and drink manufacturers has fallen 20% and it is Brexit uncertainty which is posing the biggest threat to businesses for the year ahead.

EU labour reliance

According to the BDO report, concerns over skills gaps and labour are still a major concern to the industry and the UK’s relationship with the EU is only adding to the worry for business leaders. Less than a quarter (24%) of respondents believe the Government can negotiate a favourable post-Brexit environment for the industry and only 2% think Brexit will have a positive impact on their business in the next year.

Paul Davies, head of food and drink at BDO, explains: “Food and drink businesses are heavily reliant on overseas labour, with one in three workers being from the EU. The majority of firms we’ve spoken to believe that Brexit is likely to have a negative impact on attracting labour and skills in the future, and naturally that’s becoming a growing concern for them. It is crucial the government provides some clarity over our EU exit quickly and further supports an industry that is a huge driving force for our economy.”

Productivity and growth

Despite the challenges, firms still see a future worth investing in. For almost 90% of food and drink manufacturers, productivity is a major focus area. Two thirds (63%) are looking to make better use of staffing resources and half (54%) are aiming to improve materials utilisation and reduce waste.

This is also driving investment in automation. According to BDO’s report, the objective for almost 50% of all automation projects currently underway by manufacturers is to boost productivity.

3V Natural Foods, which owns the Rocks Drinks and Meridian Foods brands, is a good example. The group of companies has grown from £7 million to £29 million in the five years to 2017. Neil Butler, finance and operations director at 3V Natural Foods, credits their wide product ranges and ability to be flexible in production to that financial success. However, that has meant that operations are relatively labour intensive.

Neil Butler says: “If Brexit results in a restricted labour supply, this could result in upward cost pressure and so we are proactively seeking to increase automation in our processes over the next two to three years.”

Looking at where future growth opportunities will come from, more than half are turning to new product development to boost sales.

The two second biggest drivers of growth were refreshing existing product ranges and expansion into new domestic markets. Only 19% see expansion into new export markets outside the EU as a priority.

Paul Davies adds: “The focus on new product development highlights the value of innovation within the industry. The government has committed to boost spending on R&D incentives, however there is still a relatively low awareness around the range of activities that might qualify. I would urge that R&D tax reliefs should be high on the agenda for innovative food and drink businesses.”

About Author

mike

mike

Related Articles

Food & Drink Business Conference & Exhibition 2016

Upcoming Events

  • September 11, 2019Packaging Innovations & Luxury Packaging London 2019
  • October 1, 2019PPMA Total Show
  • October 17, 2019Future Food-Tech
  • November 18, 2019Plastics Caps and Closures Conference 2019
AEC v1.0.4

find food jobs

The Magazine

F&D Business Preferred Suppliers

New Subscriber

Subscribe Here



Advertisements