UK food and drink manufacturers introduced over 8500 new products during 2011, around 500 more than in 2010, showing that despite bleak economic forecasts, innovation remains strong.
Date:
Thu, 22 Dec 2011
Source:
Food & Drink Federation
Food & Drink Federation:
website
The latest Business Confidence Survey from the Food and Drink Federation (Quarter 3 2011) found that the sector is continuing to grow as companies make investments in R&D, facilities and skills, signalling that it is on course to achieve its recently announced growth prediction of 20% by 2020.
Domestic sales remain good and export sales are strengthening as companies move into new markets where demand for Western goods has increased. 80% of survey respondents said that UK sales were up or static and 96% expected them to either rise or remain the same during October – December 2011 (Q4). Exports reflected similar optimism with 72% reporting an increase or static situation for Quarter 3 and only 24% predicting a fall during the next three months. Exports totalled £8.8 billion during the first three quarters of 2011, a 12% increase on the same period last year when they exceeded the £10 billion mark for the first time.
Key food commodity prices have slightly decreased but this has rarely been reflected in prices to manufacturers and almost 70% of respondents reported an increase in their average costs during Quarter 3 with further rises anticipated for Quarter 4. This has not been purely due to commodity price rises but also recent increases in materials and fuel costs.
Despite the on-going economic uncertainty, food manufacturers are continuing to grow their businesses with R&D spend up for 36% respondents (just 8% stated a decrease) and 48% expecting to invest for the Oct-Dec period. Up-skilling employees remains important with 84% expecting to invest more or the same in training during Quarters 3 and 4.
In terms of business optimism, there was an 11% fall from Quarter 2 (down to 12% expressing ‘more optimism’) with concerns likely to relate to the economy and on-going European issues.
FDF Director of Competitiveness Angela Coleshill said: “Food and drink manufacturing is a strong growth area and we have just launched our vision to grow the sector by 20% by 2020. Whilst members are cautious about the overall economic picture, their confidence in their growth strategies holds firm and they are pressing ahead with new product launches, R&D, capital investment and training. We are fortunate to be part of a resilient industry that appears to be withstanding the storms faced by other manufacturing sectors.”
Useful links: