£14 billion growth potential exists through improvements in productivity
The UK food and drink manufacturing sector has the potential to grow by £14 billion, which can be realised by enhancing productivity.
According to Future Factory by Newton, more support is required to drive investment in technology, data and skills is needed to unlock this potential, food and drink manufacturing leaders heard at the inaugural Food and Drink Investment Summit.
A new report, Future Factory: Supercharging digital innovation in food and drink manufacturing, released by the Food and Drink Federation (FDF) in partnership with strategic delivery consultancy Newton, has found that while investment in food and drink manufacturing has more than doubled over the past 20 years, other industries have seen higher rates of growth. This is because the current business environment is creating needless obstacles for food and drink businesses, the consultancy argues.
To help overcome these obstacles and unlock the investment needed to futureproof food and drink manufacturing, the sector launched a new Food and Drink Technology Taskforce at the Investment Summit, attended by Secretary of State for Environment, Food and Rural Affairs, Rt Hon Steve Reed MP, and Minister for Industry, Sarah Jones MP.
Bringing together industry, technology providers, academics and financial organisations, the Taskforce will see the sector drive new initiatives to support uptake of technology across food and drink manufacturing, as well as working with government to create the conditions needed to support the industry’s growth.
Greater investment in automation, robotics, AI, digitisation and data analytics is a huge opportunity for the sector. Using this technology to drive greater productivity can help unlock the sector’s economic growth potential, securing its competitive edge both at home and internationally. Yet, while three quarters (75%) of food and drink business leaders see the benefits of these technologies, there are barriers to seeing the adoption of these through.
While advances in technology and adapting business models are helping industry overcome this complex challenge, government can play a key role in supporting this mission by ensuring good regulation within a stable and predictable regulatory environment. Creating the right environment for investment will pay dividends – every £1 invested in the food and drink manufacturing has generated £9 of value to the wider economy over the last 20 years. On average, between 2004 and 2023, for each £1 invested, the food and drink manufacturing generated £9 in value added – source: Future Factory, Newton
By cementing food and drink’s position as advanced manufacturing, the government’s Industrial Strategy can work in partnership with the new Taskforce, across the supply chain and with retailers to create the conditions in which investment can flourish, including creating a ‘Food and Drink Sandbox’ to pilot new initiatives.
Karen Betts, chief executive, The Food and Drink Federation, said of the range of challenges the sector is facing: “To ensure the UK’s food and drink manufacturing industry stays at the cutting edge of future technologies, can keep prices competitive, create more skilled jobs on higher wages, export more, guard against food insecurity and realise billions of pounds in productivity gains, we need to double down on investment and innovation.
“The new Food and Drink Technology Taskforce will see business lead the way in finding the solutions we need for our sector, while working in partnership with government to create the right conditions to boost growth and investment and ensure our sector, which is rooted in communities up and down the country, is at the heart of economic renewal.”
Junaid Mujaver, partner, Newton, said: “The rate and range of digital innovation in food and drink manufacturing across the country is incredible. The UK performs well when compared to other economies, and has the potential to become world leading by better adopting Digital and AI. This report captures the key areas of focus for businesses, the sector and the wider food system to unlock this potential. This is the start of a collaborative taskforce, to work with the Industry to drive productivity.”
