UK food manufacturers experience revenue decline in the first quarter of 2024

SME food manufacturers saw their revenue drop by 6% in the first quarter of the year, according to new figures.

The figures were uncovered in the latest Manufacturers’ Health Index, an assessment of SME manufacturers in the UK. It is compiled quarterly by inventory management software brand Unleashed, based on data from every purchase, sale and stock movement made by over 1,790 manufacturers over the last six years.

While food manufacturers suffered a decline in revenue, their counterparts – beverages – performed better at 63%. Out of all the categories analysed, drinks manufacturers had the highest increase in revenue.

The index also revealed that their year-on-year performance declined with revenue down by 9% compared to the same period last year. In contrast, beverages saw year-on-year revenue grow by 121% – the highest of any manufacturing category.

Across every manufacturing category analysed, firms only saw an average 2% year-on-year rise, reflecting the Bank of England’s assessment of weak growth in the manufacturing sector.

The index also revealed that those who’d invested in e-commerce were reporting strong returns.

Over a third of SME manufacturers now use B2B digital sales channels – contributing to an average 25% uplift in revenue, and a fifth more sales orders, across the territories in which Unleashed operates.

UK firms have diversified into B2C eCommerce too, with over two-thirds (68%) using or having used  a platform like Amazon, Shopify or WooCommerce to sell online.

Joe Llewellyn, GM of Cloud ERP at The Access Group, the parent company of Unleashed, said: “It’s disappointing to see the drop in revenue for the food industry in Q1 2024, but there are a number of factors why including the rising cost of living which is out of their hands.

“We know from speaking to SME manufacturers how important technology is in driving operational efficiencies and diversifying their sales channels, and these investments are starting to bear fruit.”

According to the research, the manufacturing industry as a whole has cut lead times down to an average of 20 days – having already hit a five-year low in Q4 2023.

Llewellyn added: “Inflation has battered the manufacturing industry – but the short lead times we see today are a small reprieve and a sign that they’re in control of one of their biggest costs, their inventory. This will help them to remain resilient and take advantage of more favourable economic conditions in the future.”

Category breakdown

Sales revenue: quarter-on-quarter change  (Q4 2023 – Q1 2024)

Sales revenue: year-on-year change  (Q1 2023 – Q1 2024)

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