Food and drink businesses in the UK are showing signs of recovery and are gearing up to invest in their operations. The Food and Drink Federation (FDF) recently released its Q2 State of Industry Report, which provides insights into the confidence and trends within the country’s largest manufacturing sector.
According to the report, nearly nine out of ten food and drink manufacturers are planning to either maintain or increase their investment levels in the coming year. This is seen as a positive indicator that the sector is rebounding from the challenges it has faced in recent years, including policy uncertainties and external shocks that have led to a significant drop in investment since 2019.
The analysis also reveals that food and drink manufacturers are looking to make long-term investments in manufacturing and supply chains to ensure food security and create healthier and more sustainable products for consumers in the UK and globally. Advancing innovation and adopting new technologies are crucial for economic growth and safeguarding the country’s food security, with over one third of manufacturers planning to increase their research and development spending in the near future.
Despite the positive outlook, businesses in the food and drink sector are still concerned about policy and regulatory uncertainties, as well as non-tariff barriers that could impact their export competitiveness. Health certificates, administrative costs, and the need for improved relations with the EU are among the top priorities for the industry to address in order to drive growth, productivity, and job creation.
Balwinder Dhoot, director for sustainability and growth at the Food and Drink Federation, emphasized the importance of government support in establishing a stable business environment that removes unnecessary regulations and bureaucracy. He also highlighted the need for targeted support for smaller businesses, which make up the majority of the sector and are disproportionately affected by costs and pressures.
In addition, the report suggests that reforms to the Apprenticeship Levy could help address skill gaps and labor shortages in the industry. Many manufacturers are interested in using Levy funds for engineering conversion modules or business improvement techniques to support their growth and development.
Overall, the FDF believes that a well-crafted Industrial Strategy, in collaboration with the food and drink sector, will enable the industry to seize investment opportunities and address critical challenges related to food security, health, productivity, and sustainability. By working together with the government to create a supportive business environment, the UK can become a leading destination for investment and innovation in food and drink production.