Economic contribution and growth opportunities

Industry-wide report by Grant Thornton highlighting key growth opportunities for the food and drink industry, the UK's largest manufacturing sector.

Foreword

The food and drink industry is the UK's largest manufacturing sector, contributing £28.2bn to the economy annually and employing 400,000 people. We are a key part of the nation's £110 billion 'farm to fork' food chain.

Our industry is critical to national security and the prosperity of our wider economy. We have a well-earned global reputation for provenance, quality and innovation.

The challenges we face in the next few years are unparalleled. The market environment in which we operate remains uncertain. We are a resilient and adaptable industry - we know there are huge opportunities available to our sector so we can sell more great British food and drink. Therefore, it is key that we identify how best to harness our own growth potential and improve productivity.

With this in mind, FDF commissioned Grant Thornton to undertake this independent research project identifying both the opportunities available to manufacturers and the barriers to growth. This was done through the collation of the latest quantitative data and by speaking at length with FDF members to add a qualitative perspective.

This research focuses on three core areas: innovation, trade and skills. All are framed against the backdrop of the UK leaving the European Union. The findings highlight the diversity of our industry, and in particular, how risks and opportunities can vary from business to business and across regions.

The findings also highlight the work we need to do to increase growth and how we can achieve this. The report makes a compelling case for Government to invest in the food and drink industry, identifying clear actions and areas of support. Our sector has long been a manufacturing success story but it is clear there is still much untapped growth potential.

In partnership with Government, the food and drink industry will seize upon these opportunities, maximising growth and boosting productivity. We believe the food and drink industry can be an engine for economic growth in the UK, while continuing to provide safe, innovative and nutritious food and drink to the nation.

Key findings

Skills

  • There is still great uncertainty regarding future access to EU workers, who are highly-valued and make up 32.5% of the industry's skilled and high-skilled workforce.
  • Despite misconceptions, there is an even mix of skills within the sector – less than 9% of roles are low-skilled.
  • 40,000 of the industry's ageing workforce are expected to retire in the next ten years. 140,000 new workers are required by 2024 to fill the looming skills gap.

Trade

  • Between 2006 and 2015 global food exports had a combined annual growth rate of 7%. During the same period UK food and drink exports grew by 4%.
  • EU nations Ireland, France, the Netherlands and Germany were noted as key trading partners and the EEA remains the market with the greatest perceived potential for the industry.
  • China, India and the UAE are seen as the top three markets that businesses surveyed would like to target.

Innovation

  • 89% of respondents are involved in new product development with many manufacturers engaged in long-term calorie reduction programmes.
  • Just 54% of manufacturers surveyed had accessed Government R&D tax credits, which are not seen as a whole industry innovation solution.
  • Nearly half of respondents (46%) are involved in an on-going collaboration with higher education or research initiatives.

The report's key recommendations for Government

  • Work with education providers across the UK to increase availability of food and drink manufacturing specific apprenticeship training.
  • Enhance the image of the food and drink industry and raise awareness of the range of career opportunities on offer.
  • Prioritise food and drink as the UK's largest manufacturing industry in relation to any new immigration policy.
  • Work with industry to reduce product sugar levels and take an holistic approach to calorie reformulation.
  • Further facilitate innovation through support for fundamental and applied research.
  • Encourage more food and drink manufacturers to export to help grow the UK's 2.2% share of the global food and drink export market.
  • Work in partnership with industry to scale-up its provision of specialist export support for food and drink and identify distributors in untapped markets.

More information


Last reviewed: 07 Jul 2017