FOOD AND DRINK INDUSTRY REPORT

FIND A SOLUTION AT Academic Writers Bay

FOOD AND DRINK
INDUSTRY REPORT 2020
In partnership with:
Our Industry at a Glance
Sources: 1, 3, 6, 11, 12, 14: The Offce for National Statistics. 2: Eurostat. 4: The British Soft Drinks Association. 5, 9: FDF Ambitions. 7, 8: Her Majesty’s Revenue & Customs. 10: The Department for Environment, Food & Rural Affairs.
13: UK Commission for Employment and Skills. 15: FDF Business Confdence Survey.
The UK food & drink
manufacturing sector
employs more than
106,000
EU workers…
…over1/4
of our workforce
The UK is Ireland’s
largest trading
partner for
food & drink…
37%
of its food & drink
exports go to
the UK (€4.6bn)
Food & drink
contributes
£31.1bn
to the economy
The food & drink
industry is the biggest
manufacturing sector
in the country…
…larger than
automotive
& aerospace
combined
In 2018, total
food & drink
export fgures
were worth
more than
£23bn
Grow
exports of
branded
food and
nonalcoholic
drink by a
third…
…to reach
£6bn
by 2020
FDF
export
ambition
Our top three
export markets are
Ireland,
theUSA
&France
The food supply chain
employs
4 million people
& generates over
£121 billion
of added value for the
economy each year
of our 7,290
food & dr
ink bus
inesses a
re SMEs
97%
Our industry employs over
450,000 people
We will need
140,000
new recruits by 2024
to feed an expected
population of 70m people
& meet market demands
Our industry has
a turnover of
£104bn,
accounting for
19% of total UK
manufacturing
The top 3 opportunities
identifed for food and drink
manufacturers in 2019 are
domestic demand,
healthy food products
& investment
3rd 1st 2nd
1.
2.
3.
4. 5.
6.
7. 8.
9.
10.
11. 12. 13. 14.
15.
FDF members
are selling
14.3 billion
fewer teaspoons of
sugars than they were
in 2015
FDF members are selling:
1
trillion
fewer calories
57.3 million
fewer kilograms
of sugars
35.5 million
less kilograms
of total fat
4.4 million
less kilograms
of salt
than they were in 2015
Food and Drink Industry Report 2020 Page 4
Exports Snapshot
H1 2019
FDF analysis of Her Majesty’s Revenue & Customs data
Executive Summary
H1 2019 exports of food and drink increased by 5.1% (y-o-y)
to £11.3bn. This has largely been driven by growth in the value
of exports to non-EU countries (+9.8%), with growth over four
times that of exports to the EU.
The UK’s food and drink trade balance has declined, indicating
that relative dependence on imports has increased by 0.8%
since H1 2018.
While year-on-year growth in the value of food and drink exports
exceeded 11% in Q1, the second quarter of the year saw a
decline on the same period in 2018 (-0.6%). Evidence from
members suggests that the fgures we reported in Q1 were
signifcantly inflated by the impacts of stockpiling.
In line with this, a large proportion of members have reported
that they predict exports in the wider UK economy to decline
over the remainder of 2019.
Exports to the UK’s top trading partner, Ireland, have fallen in
value on H1 2018, for the frst time since H1 2015. The two key
drivers of this decline were weaker exports of cereals & flours
and meat-based products. On the other hand, growth to the
UK’s remaining top fve markets (France, USA, Netherlands, and
Germany) has been positive.
Other key markets that have seen negative growth include
Spain, Hong Kong and the UAE, where the value of a variety
of exported products has fallen, including: sauces, ice-cream,
meat products, and confectionary.
All of the UK’s highest value exported products have grown in
H1 2019, with whisky, salmon, wine, gin, and pork increasing by
over 10% on the same period last year. Salmon, beef and gin
have also all seen volume growth above 10%.
£12bn
£10bn
£8bn
£6bn
£4bn
£2bn
£0bn
H1 UK FOOD AND DRINK EXPORTS OVER 10 YEARS
Non-EU
EU27
H1 2009 H1 2010 H1 2011 H1 2012 H1 2013 H1 2014 H1 2015 H1 2016 H1 2017 H1 2018 H1 2019
KEY INDICATORS
H1 2018 H1 2019 Change
All food & drink
£10.7bn
£11.3bn
5.1%
EU
£6.8bn
£6.9bn
2.3%
Non-EU
EU share
£4.0bn
63.0%
£4.4bn
61.4%
9.8%
-1.6pp
Non-EU share
36.9%
38.6%
1.6pp
Trade balance
-£12.2bn
-£12.3bn
-0.8%
TOP 10 PRODUCTS
H1 2019
Change
Value
Value (%)
Volume (%)
Whisky
£2.2bn
£220.5m
10.9%
9.2%
Salmon
£400.1m
£87.8m
28.1%
24.7%
Chocolate
£357.2m
£15.9m
4.7%
3.7%
Wine
£349.3m
£46.3m
15.3%
-11.4%
Cheese
£348.3m
£19.5m
5.9%
5.8%
Gin
£333.5m
£49.2m
17.3%
16.1%
Beef
£276.4m
£7.8m
2.9%
13.5%
Pork
£256.3m
£35.8m
16.2%
9.6%
Breakfast cereals
£242.1m
£0.5m
0.2%
3.9%
Beer
£239.1m
£2.8m
1.2%
3.9%
TOP 20 MARKETS
Ireland
France
United States
Netherlands
Germany
Spain
Belgium
China
Italy
Australia
Poland
Hong Kong
Singapore
Denmark
Sweden
Canada
United Arab Emirates
Japan
Taiwan
South Korea
£2.0bn -1.9%
£1.1bn 6.5%
£1.1bn 11.0%
£851.6m 6.2%
£730.4m 2.5%
£444.3m -4.2%
£379.5m 9.2%
£344.4m 16.2%
£290.3m 2.1%
£203.3m -0.3%
£202.9m 8.4%
£193.7m -10.6%
£192.5m 3.1%
£170.9m 1.5%
£161.3m 11.8%
£154.7m 9.2%
£151.8m -11.1%
£150.8m 23.6%
£128.0m 24.4%
£106.3m 14.9%
£4.6bn
£4.9bn
£5.5bn
£5.4bn
£5.6bn
£5.7bn
£5.3bn
£5.7bn
£6.3bn
£6.8bn
£6.9bn
£2.0bn
£2.4bn
£3.0bn
£3.1bn
£3.5bn
£3.4bn
£3.4bn
£3.7bn
£3.9bn
£4.0bn
£4.4bn
Food and Drink Industry Report 2020 Page 5
Developing Markets
Japan
With a large middle class and one of the oldest populations in
the world, packaged foods have been identifed as a key growth
opportunity for businesses exporting to Japan3. UK food and drink
exports have grown by 85%4 over the last decade to Japan,
with a wide range of products being sold. In 2018, whisky (£128m,
+30%), coffee (£17m, -2%) and wine (£9m, -3%) were the UK’s top
three exported products5 to Japan. From the UK’s top 20 exported
products, cheese (+302%) and animal fats (+145%) recorded the
fastest growth6.
An EU-Japan preferential trade deal has applied since Feb 2019,
reducing Japanese tariffs and expanding opportunities to trade.
However, if the UK leaves the EU with no deal, UK food and
drink manufacturers will lose this access, until UK Government is
able to secure a new agreement. As part of the Food and Drink
Manufacturing Sector Deal, FDF is working with Government to
put in place additional food and drink specialists in Japan to
support companies and drive increased export growth.
1 Food and Drink Federation, Exports Snapshot 2018, March 2019
2 Grant Thornton, FDF Economic contribution and growth opportunities, June 2017
3 Government of Canada, Market Overview – Japan, Global Analysis Report
4,5,6 Her Majesty’s Revenue & Customs
Santander Data sources: All from public domain including, Food & Drink Federation
(FDF), Food & Drink Exporters Association (FDEA) and Her Majesty’s Revenue &
Customs (HMRC).
UK food and drink exports
hit £22.6bn1 in 2018, playing a
critical role in the success and
economic contribution of the
sector. Santander and FDF work
in close partnership to help UK
businesses seeking to export
quality UK food and drink.
Export Target Markets
For over two years, the FDF has been working
with its members, UK Government and partners
across the food and drink supply chain to
develop a Food and Drink Manufacturing
Sector Deal. Producers identifed fve key
growth markets as top targets for UK industry
based on analysis produced by Grant Thornton
– China, India, the Gulf (with a focus on the
United Arab Emirates), USA and Japan2. They
have been highlighted as markets that offer
signifcant opportunities for export growth but
that businesses typically struggle to enter due to
market complexity, cost and unfamiliarity.
Santander’s insights
We believe that Japan presents an exciting
opportunity for businesses in this industry.
Exports in 2018 totalled £275m which
represented an increase of 15%. During the frst
six months of 2019, export trade was £151m with
a signifcant 23.6% increase year on year (YOY).
Japan is the world’s third largest economy, meaning
this market demands high quality and differentiating
products, which the UK is well positioned to satisfy.
We have strong partnerships within a network in
Japan, which we’re able to leverage to assist UK
businesses with their international trade ambitions.
As part of this, we’re proud to have a banking
partnership with Mitsubishi UFJ Financial Group,
Inc. (MUFG).
Thanks to our strong relationship with Mitsubishi
Shokuhin – one of Japan’s largest food and drink
distributors – we were recently able to introduce
twelve UK companies to this market. They were
able to showcase a range of superb quality
products, including those of Royal Warrant Holding
businesses and a variety of whisky and gin brands.
We’ll continue to work and deepen relationships with
this high-profle distributor and match its category
demands to UK manufacturers, thus creating unique
and bespoke opportunities for UK companies.
Looking forward, we’re exploring opportunities
that will be created with the 2020 Olympics in
Tokyo along with UK Regional Food initiatives.
Export value (£)
Fish & seafood
Animal feed
Coffee, tea & spices
Malt, starches & wheat
Spirits
£9.5m
£17.5m
£20.7m
£34.0m
£142.7m
Top 5 UK food and drink exports to Japan 2018
Source: Her Majesty’s Revenue and Customs
Food and Drink Industry Report 2020 Page 6
Developing Markets
Food and drink revenue in
the US amounted to over
US$2000Bn in 2018
where US$742bn of this
represented store sales.
USA
As the world’s largest economy, with the third largest
population, the same language and similar consumer
dynamics, the USA provides ample opportunities for UK food
and drink exporters. Exports to the USA have grown over
the past ten years by 147% from £0.9bn in 2008 to £2.2bn
in 2018 driven by strong growth in a diverse range of
products7. More than half the sales value in 2018 came from
whisky exports at £1.1bn, followed by gin and salmon8.
7,8 Her Majesty’s Revenue & Customs
Santander Data sources: All from public domain including, Food & Drink Federation (FDF),
Food & Drink Exporters Association (FDEA) and Her Majesty’s Revenue & Customs (HMRC).
Export value (£)
Cereals & flour
Sauces, extracts & ice-cream
Beer
Fish & seafood
Spirits
£77.2m
£89.4m
£106.8m
£187.8m
£1.4bn
Top 5 UK food and drink exports to the USA 2018
Data Source: Her Majesty’s Revenue and Customs
Food and drink exporters targeting the USA can beneft
from the support of an active Department for International
Trade (DIT) presence focussed on food and drink, which
provides excellent support for UK exporters. Exporting to the
USA can be challenging due to the high number of market
access barriers – both technical barriers to trade (TBT) and
sanitary and phytosanitary (SPS) barriers – as well as differing
standards for quality checks or ingredients. This can make it a
complex and challenging market for food and drink exporters
and justifes industry’s request for further resources to support
and promote UK food and drink exports.
Santander’s insights
The USA is also the largest export destination for the food
and drink sector outside the EU. During the frst six months of
2019, export trade amounted to £1.1bn which represents a 11%
increase YOY, and therefore remains a great opportunity for UK
manufacturers.
Food and drink revenue in the USA amounted to over US$2000bn in
2018 where US$742bn of this represented store sales. As such, the
market for the food and drink industry is forecast to grow at an average
of 11% per annum to 2023. (ref Statistica)
We know that the supply chain for food and drink (F&D) imports to the
USA is complex and sometimes daunting for many exporters. There’s a
need to build relationships and make arrangements with many partners in
this chain and in most cases an importer, broker, agent and distributor are
all required in order to get the product to market. Therefore we’re working
directly with fve main distributors in the USA, who are very experienced
in importing UK brands. These partners are supporting UK companies
by easing some of the diffculties that come with fnding suitable contacts
within this chain and simplifying the overall supply chain process.
These distributors share market intelligence regarding product demand,
trends and category gaps, which we then match to UK companies.
These UK manufacturers can then build relationships with the distributors
who will manage their brands and sales in this signifcant market.
We recently took ten UK companies to the Summer Fancy Food
trade show in New York. Many of these companies had already been
introduced to appropriate distributors ahead of the visit, and the show
was used to further explore opportunities and agree initial orders.
We’re continuing to work with our cohort of distributors which service
Wholesale, Retail, Foodservice and e-commerce channels in the States
in order to develop opportunities (in relation to category demand) for
F&D companies in the UK.
Food and Drink Industry Report 2020 Page 7
Developing Markets
China
Strong economic growth and increasing urbanisation in China are driving
rapid growth in the middle class and with it the purchasing power of its
1.4bn consumers. While current rapid UK export growth to China
is dominated by commodity sales, there is also a signifcant
opportunity to grow sales of premium products, with an emphasis
on provenance, quality, health and sustainability. The top fve products
exported to China in 2018 were pork (£77m, +11%), whisky (£77m, +25%)
and salmon (£73m, +4%)9.
Chinese imports of
food and drink were
worth around
in 2018,
where they
sourced goods
from 93 countries.
£54bn
Export value (£)
Cereals & flour
Meat
Spirits
Dairy & eggs
Fish & seafood
£69.5m
£79.8m
£81.9m
£82.0m
£138.0m
Top 5 UK food and drink exports to China 2018
Data Source: Her Majesty’s Revenue and Customs
Exporting to China, is not without its challenges, not least because of
regional cultural variations which require a sophisticated approach to identify
and develop export opportunities. As a result, many successful exporters
begin with a highly targeted strategy focusing on major cities. To support
UK food and drink, the Agriculture and Horticulture Development Board
(AHDB) and Department for Environment, Food and Rural Affairs (Defra) cofund a dedicated food and drink specialist. This provides a strong food
and drink focus in market and has helped open new market access
opportunities, increasing the volume and value of UK exports. FDF is
working with the government to replicate this model for branded food and
drink, to better support UK businesses seeking to export to China.
9 Her Majesty’s Revenue & Customs
Santander Data sources: All from public domain including, Food & Drink Federation (FDF),
Food & Drink Exporters Association (FDEA) and Her Majesty’s Revenue & Customs (HMRC).
Santander’s insights
We can see the opportunities for export to China
are clear from its pure scale and growth rates.
Chinese imports of food and drink were worth
around £54bn in 2018, where they sourced goods
from 93 countries, again showing that there are
great opportunities for UK Manufacturers in China.
UK food and drink exports to China grew by 10% YOY
in 2018 to £623m. During the frst six months of 2019,
export trade was seen at £344m representing a 16.2%
increase YOY.
As with many destinations globally, gaining traction with
the right partners in China is sometimes diffcult and this
dissuades UK exporters from attempting to access this
lucrative and growing market. In order to assist companies
who want to trade with China, we’ve partnered with two
UK based consolidators who specialise in exports to
this market. Together, we’ve created a streamlined and
simplifed the process for UK companies.
This consolidator model has many benefts for UK
companies. The consolidator has the experience in
market, established distributor and buyer contacts,
facilities to assist product certifcation/licensing as well
as the effciencies for export logistics. This provides a
solution to many of the issues faced by UK companies,
assisting the growth of exports to this market.
The consolidators are sharing market intelligence
regarding product demand, trends and category gaps,
which we then match to UK companies, providing a
warm introduction for these demand-led opportunities.
Food and Drink Industry Report 2020 Page 8
Developing Markets
India
India is a key market for the UK food and drink industry,
worth £163m10 in 2018 and one that FDF has prioritised in
partnership with both Santander and the UK India Business
Council (UKIBC). FDF CEO Ian Wright has led a range of
in-market activities, including a Trade Mission to Delhi
and Mumbai earlier this year. Delegates representing some of
the UK’s biggest food and drink businesses and organisations,
showcased UK food and drink at the India Food Forum.
India is a key growth area, with UK exports growing by 265%
over the last decade from £45m to £163m11. In 2018, UK spirits
were a signifcant source of growth to India, with their value rising
by 34.9%; making spirits the fastest growing category among
the UK’s top 10 food and drink exports to India.
There are many
opportunities for UK
companies to engage
with the vibrant
£305bn
Indian food
market,
which is
expected to
reach £500bn by
the end of 2020.
However, high import tariffs mean UK food and drink has not
yet been able to fulfl its export potential in India. To address
this issue, UKIBC recently put in place a dedicated food and
drink specialist in India to enhance the essential support that
is available to UK businesses.
Export value (£)
Cereals & flour
Prepared fruits, vegetables & nuts
Animal feed
Sauces, extracts & ice-cream
Spirits
£2.0m
£2.4m
£3.5m
£4.2m
£142.6m
Top 5 UK food and drink exports to India 2018
Data Source: Her Majesty’s Revenue and Customs
10,11 Her Majesty’s Revenue & Customs
Santander Data sources: All from public domain including, Food & Drink Federation (FDF),
Food & Drink Exporters Association (FDEA) and Her Majesty’s Revenue & Customs (HMRC).
Santander’s insights
India is a country with 1.3bn consumers with increasing
discretionary incomes and varying food patterns.
Although currently not in the Top 20 destinations for
UK food and drink exports, we’ve identifed clear
opportunities for UK companies to engage with the
vibrant £305bn Indian food market, which is expected to
reach £500bn by the end of 2020.
Navigating trade with an emerging market is not easy, which
is why we’ve developed a network of partners in India to help
UK businesses that wish to explore and take advantage of the
potential that prevails. These include Yes Bank (our partner
bank) and Sannam S4 who are on hand to help UK companies
explore, enter and expand in this dynamic market.
In addition, we’re aligning plans with fve key food and
drink distributors in India, covering the major cities and
main channels to market. The distributors are sharing
market intelligence regarding product demand, trends and
category gaps, which we then match to UK companies. UK
manufacturers then build relationships with the distributors who
will manage their brands and sales in this signifcant market.
We’ll be leading a trade mission to India focused around a
major food show in Q3 2020. In addition, we will be supporting
World Food India later in 2020. This event is becoming one
of the world’s largest as India aggressively develops its Food
Park projects. This provides opportunities for UK companies
involved in food manufacturing, food brands and the
supply chain, including packaging, refrigeration, cold chain,
processing, food machinery and foodservices.
Food and Drink Industry Report 2020 Page 9
Developing Markets
The United Arab Emirates (UAE)
The United Arab Emirates (UAE) has a population of 8.6m people
in the UAE, of which 88% are foreign citizens12. FDF members
highlighted the UAE as one of the top three untapped
markets they would like to target based on the country’s
scale, sizeable middle class and appetite for quality
western products13. Packaged food sales are popular with local
consumers who enjoy the convenience and variety of products
and continue to grow in the UAE, reaching a value of US$4.7bn
in 201614. The UK already sells a range of products to the UAE,
with whisky (£148m, +13%), breakfast cereals (£31m, +4%) and
chocolate (£15m, -19%) within the top fve categories in 201815.
Operational
restaurants and
cafes in the emirate
of Dubai reached
11,813 at the
end of 2018.
12 Government of Canada, Consumer Profle – United Arab Emirates, May 2019
13 Grant Thornton, FDF Economic contribution and growth opportunities, June 2017
14 Government of Canada, Market Overview – United Arab Emirates, Global Analysis Report
15 Her Majesty’s Revenue & Customs
Santander Data sources: All from public domain including, Food & Drink Federation (FDF),
Food & Drink Exporters Association (FDEA) and Her Majesty’s Revenue & Customs (HMRC).
Export value (£)
Cocoa & chocolate
Dairy & eggs
Sauces, extracts & ice-cream
Cereals & flour
Spirits
£15.4m
£18.8m
£37.9m
£51.5m
£163.5m
Top 5 UK food and drink exports to the UAE 2018
Data Source: Her Majesty’s Revenue and Customs
The main barriers food and drink manufacturers report are the
complexity and costs associated with investing in a market with which
the company is unfamiliar and the need to identify a distributor. As
part of the Food and Drink Manufacturing Sector Deal, FDF is working
with Government to put in place additional specialists in the UAE and
Gulf region to better support UK exporters.
Santander’s insights
Santander works closely with our in-country partner,
British Centres for Business, to support connections with
key distributors and retailers in the Gulf region.
The food and drink sector continues to expand in this vibrant
market and this has been fuelled by increased tourism and
leisure, as well as the UAE being a growing global hub.
The market has had its challenges, and operators are looking
for high quality, niche products to help them with differentiation.
This is where we believe UK manufacturers can beneft from
these dynamics and requirements.
UK food and drink exports to the UAE totalled £360m in 2018,
representing an increase of 2% YOY. Although Q1 2019
slipped by 8% with exports of £75m, the opportunities in Dubai
are signifcant and this particularly applies to UK manufacturers
who are able to supply the food service sector.
Food service customer numbers compare with Paris and London
– Dubai, has more restaurants per million population than New
York and operational restaurants and cafes in the emirate of Dubai
reached 11,813 at the end of 2018. The region currently has 700
hotels with over 110,000 rooms and plans to increase capacity to
add almost 20,000 rooms over the next twelve months.
Following a successful trade mission at the end of 2018, we’re
helping UK manufacturers gain access to Emirates Flight Catering,
Emirates Leisure & Retail Group, and Maritime & Mercantile
International (MMI). MMI supplies major franchises, hotel groups
and several airlines as well as controlling all alcohol into the UAE.
Retail connectivity points include Lulu, Spinneys and Al Maya.
We took another nine companies to the UAE in November 2019
for bespoke meetings with key buyers in both retail and food
service channels. EXPO 2020 provides further opportunity, with
an expected 25 million visitors, and we’re in close contact with
distributors who are sourcing products for this major event next year.
Food and Drink Industry Report 2020 Page 10
Workforce Pressures
The UK economy as a whole is facing workforce pressures with new
records being set in offcial statistics that demonstrate the tightness of the
labour market. The latest unemployment fgures of less than 4% are the
lowest seen since 1975. Furthermore, 76% of the adult population are in
employment (the joint highest on record) and yet there are still a 813,000
vacancies waiting to be flled nationwide.
The effects of these tight labour market conditions
are reflected in the fndings of our Q3 2019 Food &
Drink Business Confdence Report. As an industry,
food and drink manufacturing will need 140,000
new recruits by 2024 to meet the expectations of
a predicted UK population of 69 million people.
However, 42% of food and drink businesses expect
the supply of permanent workers to decrease
in 2019, compared to just 6% who think it will
increase. Food and drink businesses are even more
concerned about the availability of temporary labour,
87% expecting this to decrease this year and none
expecting it to increase.
Over a quarter of food and drink manufacturing’s
more than 450,000-person workforce are from
the EU, working in roles at all skill levels. Workers
from the EU make up 12% of the 4 million people
working across the entirety of the UK food chain.
Therefore, working with government to secure a
new immigration system that allows businesses from
across the food chain to access the labour they need
is a key priority for FDF.
It is also crucial that food chain businesses and the
government redouble their efforts to upskill and train
the UK workforce to meet the skills requirements
of the future. FDF is working to support domestic
workforce and skills requirements in partnership
with government and other food supply chain
organisations through the Food and Drink Sector
Council , who have published ‘Preparing for a
Changing Workforce’ report.
Food and Drink Industry Report 2020 Page 11
1 Made Smarter Review, Professor Juergen Maier, CEO Siemens UK
2 International Federation of Robotics, February 2018 press release
Developing Automation
The UK has a strong R&D base for food and drink manufacturing in the UK as
highlighted by the ‘Made Smarter Review’1 which outlined a potential £55.8bn
value to our industry through the adoption of known digital technology over
the next decade. However, food and drink manufacturing lags behind other
manufacturing sectors in terms of technology adoption and process engineering.
65% of countries with an above-average number
of industrial robots per 10,000 employees are in
the European Union – with Germany and Sweden
topping the list. The UK is the only G7 country that
has a robot density below the world average of 74
units with 71 units, ranking 22nd. The International
Federation of Robotics concludes that the general
UK industry is highly in need of the necessary
investment to modernise and increase productivity.
The low robot density rate is indicative of this fact2.
Despite effective adoption by many large manufacturers,
there are many businesses, including the long tail of
SME businesses, that are underinvesting in engineering
innovation and the adoption of technology.
Businesses often struggle to engage with the
opportunities available even with known and well-used
technology and engineering innovation. This reticence
is often linked to a shortage of time, resource and
expertise to engage fully with this agenda.
Consequently, food and drink manufacturers are
unable to realise the increases in both productivity
and margin that could be found by revising their
current operations, and understanding the potential
benefts of capital spending on new equipment.
In 2018, FDF began negotiations with the government
for a Sector Deal which included a proposal to deliver
direct support to businesses in two areas:
1. A short term, low cost intervention for individual
businesses (match funded by government) that
includes direct advice and guidance to maximise
productivity of existing equipment and processes.
2. Opportunities for longer term, collaborative projects
that access academic knowledge to identify solutions
to common manufacturing and engineering problems
at sub sector or even sector wide level.
In early 2019 both industry and government agreed
to put the Sector Deal negotiations on hold, due to
the political uncertainty and the stretched resources
of both sides, and was approved by FDF’s President’s
Committee and Board. We continue to see signifcant
benefts to the sector for the adoption of technology
and support to businesses in this area. On this basis,
our advocacy for industry and Government coinvestment and promotion of the opportunities remain a
priority for FDF.
Although there is no active movement around the sector
deal negotiation, FDF, stakeholders and partners are
hopeful that negotiations will be resumed in the near future.
Number of installed industrial robots per
10,000 employees in manufacturing, 2016
700
600
500
400
300
200
100

Korea
Singapore
Germany
Japan
Sweden
Denmark
US
Italy
Belgium
Taiwan
Spain
Netherlands
Canada
Austria
Finland
Slovenia
Slovakia
France
Switzerland
Czech Republic
Australia
UK
China
Portugal
Hungary
Norway
New Zealand
World average: 74 robots
UK: 71 robots (22nd ranking)
Food and Drink Industry Report 2020 Page 12
Sustainable Packaging
The industry fully recognises that the production, use, and disposal of
plastics and other packaging is having a real and growing impact on
the global environment. This is particularly so when plastics packaging
fnds its way into the environment, as litter for example, rather than being
disposed of responsibly and kept in the circular economy.
Although offcial UK packaging recycling rates
have increased from 31% in 1998 to 64% in 2017
the UK food and drink manufacturing industry
acknowledges that it shares a responsibility to do
more to manage the negative impacts of packaging
on the environment. We are committed to working
collaboratively with our value chain partners and other
stakeholders including national and local Governments
and consumers to deliver a truly circular economy for
food and drink packaging in the UK. We also require
the UK governments to provide a cohesive policy
framework and for consumers to recycle and dispose
of their waste responsibly.
The industry uses packaging primarily to protect its
products and to ensure they are delivered safely and
in good condition from the point of production to the
point of consumption. Packaging therefore helps to
ensure that food and drink gets used for its intended
purpose and is not wasted. The environmental impact
of wasting food is many times that of packaging.
There are many factors which influence the use,
choice and design of food and drink packaging.
These include cost, technical considerations related
to intended use, recyclability, suitability of materials
available, legal requirements and Government policy.
This contributes to the challenge of identifying and
implementing meaningful change to packaging
systems given the need to avoid unintended
consequences for say food safety or food waste.
Recognising the importance and urgency of delivering
improved environmental outcomes, the industry is fully
committed to working with Governments and other
key stakeholders on reforming the current packaging
producer responsibility system and on related matters
covered by the recent set of packaging consultations.
It is vital that Government engages meaningfully with
industry in developing the second stage consultation
proposals and that these recognise the specifcities
of food and drink packaging including the legal
constraints on using recycled content.
Food and Drink Industry Report 2020 Page 13
Feeding Change
Health and nutrition sits at the heart of our members’ work. At a time when one
in three children are leaving primary school overweight or obese, industry’s
ground-breaking work to tackle this issue is more important than ever.
Food and drink manufacturers have for many years
been active participants in the fght against obesity –
ahead of the Government’s Childhood Obesity Plan.
The pace of this work is accelerating. It can be seen
on every supermarket shelf whether by way of new
products, reformulation – changing the recipes of
products – or by offering appropriate portion sizes, as
well as using marketing to drive consumers towards
these products.
FDF members’ voluntary action is delivering
substantial changes. As a result, large amounts of
calories, salt, sugars and saturated fat have been
removed from the average shopping basket.
We recognise more needs to be done and our
commitment remains strong, however, reformulation
takes time and companies need to be able to actively
market reformulated products and new innovations to
consumers for them to be a success.
Food and drink manufacturers are proud of the
food we make and our track record of anticipating
consumer trends and meeting consumers’ needs.
Companies make it easy for people to choose the
food that best suits their family by making it easy
to make an informed decision about the foods they
buy. They do this through provision of clear nutrition
labelling and ingredient information on food packaging
and supporting families to have a balanced approach
to more indulgent foods, for example through the ‘Be
Treatwise’ campaign.
We know we have a responsibility to help people
achieve a balanced diet. We will continue to play our
part, but we cannot solve the nation’s health issues
alone and call on Government to ensure a genuinely
holistic obesity strategy is introduced and delivered, to
target actions where they are needed most.
Compared to 4 years ago,
the average shopping
basket of FDF member
products is lower in:
Calories
by
12%
Sugars
by
13%
Total fat
by
12%
Saturated
fat by
10%
Salt
by
14%
Food and Drink Industry Report 2020 Page 14

YOU MAY ALSO READ ...  What is the after-tax yield?
Order from Academic Writers Bay
Best Custom Essay Writing Services

QUALITY: 100% ORIGINAL PAPERNO PLAGIARISM – CUSTOM PAPER