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Food and Drink Industry Report 2020

The Food and Drink Federation and Santander have launched a new report highlighting the growth opportunities and challenges for the food and drink sector for 2020.

The Food and Drink Industry Report 2020 looks in particular at exports and the developing markets of China, India Japan, UAE and USA, all of which have seen considerable year-on-year growth. Santander's export team provides analysis of the potential and challenges around each territory together with essential information for any company considering trading with these harder to reach markets.

The report highlights other important issues for the industry including increasing automation. The recent 'Made Smarter Review highlighted a potential £55.8bn value to the sector over the coming decade through digital technology adoption but pointed out that food and drink lags behind other manufacturing industries.

Sustainable packaging and diet and health are also highlighted in the report as areas where industry is committed to making a difference, working alongside or ahead of Government to drive change.

FDF Foreword

These are testing times for food and drink manufacturing businesses.

A heightened focus on the role of plastics in food packaging is likely to mean tougher regulation. Similarly, concerns about health and obesity rates already mean that UK manufacturers face significant challenges from government (and there is much more to come).

Finally, I fear our future trading relationship with the EU will continue to be overshadowed by uncertainty for a long time to come.

When the going gets tough, it's important above all to have good friends you can count on. FDF's purpose - our mission - is to be that good friend to food and drink businesses.

Santander is certainly a very good friend to FDF. Our partnership enables us to extend the reach and quality of our services to FDF members and Santander customers alike. Santander experts offer us wise counsel and access to their extensive network of contacts. We have learned a great deal from them and, I hope, the obverse is true too.

Though their expertise is wide-ranging, Santander offers a particular capability around exports. As you will see in this report, UK food and drink exports have been a singular success in recent years, achieving strong (in some cases double-digit) year-on-year growth. But we start from a relatively low base, in that only around one-in-five of our food and drink businesses are exporters. In some competitor markets, that proportion is much higher.

Encouraging more businesses to overcome their concerns about exporting is a high priority for FDF and for Santander. We are seeking to persuade the Government to invest (alongside us) in more specialist support to help companies take advantage of more export opportunities. We know that the world loves the provenance, impeccable quality and fabulous taste of UK food and drink, so now is the time to seize that opportunity.

It is a great pleasure to work with Santander and I commend this paper to you.

Ian Wright, CBE
Chief Executive, FDF

Santander Foreword

Santander is delighted to be associated with the FDF and its Industry Review paper. The report provides a crucial insight into the current sentiment felt by those operating in the sector.

We're at a delicate moment in the UK's economic cycle. With Brexit on the near horizon, the UK's food and drink industry will be a vital element of business and output in the UK, both domestically and internationally.

The food and drink industry is the UK's largest manufacturing sector, contributing £31.1bn to the economy annually and employing 450,000 people. It is a key part of the nation's £121 billion 'farm to fork' food chain.

Our industry is critical to national security and the prosperity of our wider economy and a well-earned global reputation for provenance, quality and innovation. The challenges we face in the next few years are unparalleled and the market environment in which we operate remains uncertain. We're aware that the challenges include a changing consumer landscape, pressures on margins, Brexit, sustainability, nutrition and the continual need to invest in technology and innovation.

However, this is a resilient and adaptable industry with huge opportunities available to our sector, so that 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.

This report focuses on five core areas – International trade, innovation, skills, packaging and regulatory changes – all which provide both challenges and opportunities.

Santander is fully committed to supporting food and drink manufacturers and has a dedicated sector team and specialist relationship teams working closely with professional organisations such as the FDF and DIT. We want to assist the industry to seize opportunities, maximise growth and boost 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.

Andrew Williams
Head of Food & Drink Sector
Santander

Full Report


Last reviewed: 13 Jan 2020