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    ‘ABF, Tilda among UK’s highest-grossing producers; Mixed Year for top food and drink suppliers’

    (Photo by Anthony Devlin/Getty Images)

    Associated British Foods (ABF) is the UK’s highest-grossing food and drink producer for the second successive year, says latest annual study by OC&C Strategy Consultants, which also states that it has been a mixed year for UK’s largest food and drink producers who saw a dip in revenue growth but largely weathered the storm of Covid-19 in 2020.

    According to the study’s findings, overall revenue growth in 2020 among the UK’s largest 150 food and drink producers fell to 1.1 per cent down from 1.9 per cent in 2019. However, profit margins among this year’s Top 150 remained robust, rising to 5.8  per cent up from 5.5 per cent in 2019. 

    Among other businesses that enjoyed a strong 12 months were the Eight Fifty Food Group, which rose from 18th to 16th in the rankings this year. Premier Foods, meanwhile, capitalised on consumers’ growing preference to stick with trusted brands, seeing margins increase by 16.4 per cent and rising to 21st in the Top 150. Warburtons, Tilda and Albert Bartlett also enjoyed strong years thanks to product expansion and prioritising innovation.

    The survey also points out how over 50 per cent of UK consumers are now making decisions entirely or partially influenced by sustainability. As a result, the Top 150 are placing greater emphasis on their Environmental, Social and Corporate Guidance (ESG) work in their external communications as three fifths (58 per cent) of the Top 150 included a mention of ESG in their yearly reports.

    'ABF, Tilda among UK's highest-grossing producers; Mixed Year for top food and drink suppliers'
    (Photo by Anthony Devlin/Getty Images)

    Larger brands were able to better manage Covid-related disruption and as a result were able to cash in on other industries, such as hospitality and events, that fell foul to Covid restrictions, states the study, adding that Birds Eye, Weetabix and Valeo Foods were among those who saw the most improved margins.

    Despite the volatile and challenging times, food and drink sector saw 13 deals completed in 2020, most notably being Bain Capital’s acquisition of Valeo Foods and Mondelez’s acquisition of Grenade. This is a trend that has continued into 2021, with 15 deals completed already, with a minimum of 9 more expected before the year is out.

    “The fortunes for the food and drink sector during 2020 can truly be classed as mixed. Scale allowed larger brands to better absorb the shockwaves of Covid, with smaller players and those more reliant on international sales struggling,” said Nilpesh Patel, partner at OC&C Strategy Consultants.

    “However, the industry has bounced back well in 2021 with M&A activity buoyant and the sector clearly benefitting from private equity interest. This is despite labour shortages, increasing input costs and rising global inflation painting an uncertain picture.”

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