Over four in ten food and drink manufacturers are planning to increase their investment over the next year as market confidence improves, states a report by a trade body, calling for the government to prioritise policies that support firms to boost investment.
According to latest ‘State of Industry’ report published by the Food and Drink Federation (FDF), some manufacturers are now in a better position after a tough few years, with 41 per cent planning to increase their investment over the next 12 months.
However, third-quarter survey still found a mixed picture on investment expectations, with not all businesses in a position to increase their capital spending and 18 per cent saying they expect their investment to fall over the next year.
The report also reveals that confidence in the sector has increased by 18 percentage points on the last quarter, creeping into positive territory for the first time since the second quarter of 2021. FDF noted that this is a sign that market conditions have stabilised, although it stated that the industry still faces significant challenges.
Labour vacancies across a wide range of roles in the sector have risen in the last quarter to 6.5 per cent from 4.8 per cent in the second quarter due to increased production ahead of Christmas resulting in more job openings that were difficult to fill. Manufacturers also report that average pay has increased by 5.2 per cent over the last year, and the National Living Wage will rise further next April.
Over the last few years, the industry has grappled with rising input costs, and some manufacturers have tried to absorb these costs to shield shoppers from the full impact of inflation. Manufacturers’ total production costs have increased by 14.2 per cent in the year to September, while selling price rises are standing at 10 per cent, with costs expected to rise further over the next year.
The report also found that over eight in ten (81 per cent) manufacturers are prioritising innovation, and the increase in the cost of living is changing shopping habits, with nearly 73 per cent of businesses saying they have noticed a shift in demand towards cheaper products.
Balwinder Dhoot, Director of Sustainability and Growth at the FDF, said, “With grocery volumes declining, manufacturers prioritising new product innovation is a way to maintain competitiveness and drive growth. The rise in confidence for the food and drink industry is a sign that market conditions have stabilised, however there are still huge challenges that face the sector.
“We need the government to prioritise policies that support investment if we are to build a sustainable and resilient food supply chain which supports growth and is vital for a strong economy. We saw some positive signals in the Autumn Statement and welcomed the announcement on full expensing, but any benefits will be more than undone by planned regulation that will hit our sector in the coming year.”
Leading buying group Confex has added three new members, further strengthening its buying power and geographical reach.
As reported today (8), Ahmed Foods, A C Georgiades and Regency Service and Solutions have joined Confex. Their combined turnover adds an impressive £56.2 million to Confex's turnover, which further bolsters its strength and buying power as a group.
Tom Gittins, CEO, Confex said, “In addition, these three new members add yet more diversity to the group, which we all benefit from. By combining our insight, knowledge and expertise, it’s no wonder that Confex is outperforming other buying groups in the sector.”
A C Georgiades are a national soft drink wholesaler and distributor located in Morpeth, Northumberland and Stevenage, Hertfordshire. Selling to a wide range of wholesalers, cash and carries, groups and chains.
Chris Georgiades, managing director, “There are really exciting times ahead for us as Confex members. Our aim is to add more variety to our portfolio and to be able to communicate with the wider wholesale industry, so joining Confex was an incredibly easy decision.”
Regency Services and Solution managing director Jarrod Normie said: “As a business, we are really excited to join the Confex family. As we take the business to the next level, joining a buying group is a logical step forward and so far, Confex has delivered a stand-out service.”
Bradford-based Ahmed Foods is a leading supplier of vast range of chilled, frozen, ambient and fresh produce for the hospitality and restaurant trade in the north of England.
Tanweer Ahmed, director, said, “Ahmed Foods Bradford is proud to join the Confex buying group,” said . “We look forward to working closely with the central team who have been extremely attentive. We plan to both expand our current range and strengthen our supply partnerships with the support of the group.”
Eye watering increases to employer NI contributions in this year’s UK Budget, alongside a 77p increase to the National Living Wage (NLW), could add around £2,400 to the cost of employing a full-time member of staff, Scottish Grocers Federation stated today (8).
Convenience staff across Scotland worked almost 500 million hours last year. Over 55,000 people are employed across the Scottish convenience sector, many of whom fall within the scope of the increase to National Insurance Contributions (NIC) and the NLW rise, meaning that together the changes could cost retailers tens of millions in additional outgoings. Despite the planned uplift in Employment Allowance relief from £5,000 to £10,500.
With a nearly a third of staff working between 17-30hr/wk (18 per cent less than 17hrs/wk), and many on or near the NLW, thousands of additional employees will require employer NI contributions. Where they didn’t need to pay much, if any, before.
A recent survey conducted by SGF, for its annual True Cost of Employment Report, shows that 74 per cent of retailers are now working more than 65hrs/wk, just to keep staff costs down.
SGF Head of Policy & Public Affairs, Luke McGarty, said: “Despite many retailers working longer and longer hours to keep staff costs down and many stores struggling to keep the lights on. Together with a plethora of new regulation directed at small local businesses, higher employment costs could now result in the Scottish sector paying tens of millions in additional outgoings.
“There is no doubt that local stores employing local staff will have to think twice before taking on anyone new or increasing staff hours. In some cases, it could be the final straw pushing retailers to reduce staff or even close the doors for good.
“Most local retailers simply won’t be able to absorb the extra cost and will either have to pass them onto customers, or reduce annual pay rises for hard working and long serving staff.
“We welcome the recognition of the additional support through the uplift in Employment Allowance, but for many that will only mitigate the damage. Small businesses and local shops are the lifeblood of the UK and Scottish Economies, providing a critical economic multiplier to boost local growth. Now is not the time to be penalising them for creating much needed local jobs."
The Scottish Government will publish its budget on 4th December, and SGF is calling on ministers to act cautiously on any proposals that could put small businesses under additional pressure.
The Institute for Grocery Distribution (IGD) has released the report, "A Net Zero Transition Plan for the UK Food System", providing a framework for the food sector to achieve 70 per cent emissions reductions in agriculture and to fully decarbonize heat, electricity and transport.
Commissioned by IGD and developed by consultants EY and WRAP, the first of its kind report provides an independent, evidence-based view for how the UK food system in its entirety, can reduce Greenhouse Gas emissions in line with a 1.5degree SBTi outcome and to meet the UK’s legally binding national target.
Currently, food and drink is the UK’s largest manufacturing industry – it provides 4.4 million jobs, contributes over £100bn to GDP, and generates 30 per cent of all UK territorial emissions much of this relating to agriculture with significant contributions from energy and logistics. The report aims to inform and support further pre-competitive collaboration across the various sectors of the food industry, under the common goal of emissions reduction. It outlines 19 steps that the Government can take to enable this, with a particular focus on strengthening policy for agriculture and energy.
In the short term, the report proposes immediate action by industry and government to support the domestic farming transition and on a set of standards for food imports. Together with action on energy efficiency and low-carbon power generation and significant reductions in food waste, the report shows that 2030 emissions reductions targets are very challenging but achievable.
Kirsty Saddler, Director of Health & Sustainability Programmes, IGD, said: “This UK Food System Transition Plan is a first of its kind approach at unifying wide-ranging perspectives within the food industry around the aim of accelerating progress in emissions reduction. The UK food industry is deeply connected to the climate crisis both as a contributor of emissions but also as an industry that is dependent upon a stable and healthy ecosystem to grow and provide food for the country. All organisations across the system can make better progress, faster, if we work together and with government.”
The framework offered reviews pathways on both the supply side and the demand side, showing the contribution that can be made by the population through diet change, using the NHS Eatwell Guide as a basis. This report also notes the critical role reductions in food waste, particularly by households, can make. Halving food waste in the UK by 2030, in line with UN Sustainable Development Goal 12.3 and the Courtauld Commitment 2030, is estimated to remove about 5 per cent of all food-related emissions.
Catherine David, Director of Behaviour Change and Business Programmes at WRAP, said:“I'm delighted that IGD, with WRAP's support, is launching this report today, which marks a significant step forward towards action on greenhouse gas emissions in the food and drink sector. At WRAP, we are passionate about evidence driven collaborative action which is brought together by our Courtauld Commitment 2030. We hope this report, uniting the whole of UK food and drink, will help catalyse a fresh and focused phase of collaborative action on the urgent issues that industry must tackle.”
Ministers are getting under pressure to impose taxes on packaged foods containing high content of salt and/or sugar.
In a plea addressed to the chancellor, Rachel Reeves, and the health secretary, Wes Streeting, representing 35 health groups, it is highlighted that taxing unhealthy foods such as cakes, sweets, biscuits, crisps and savoury snacks would generate billions of pounds for the Treasury and cut the number of people becoming ill as a result of a bad diet.
The signatories include groups representing the UK’s doctors, dentists and public health directors, health charities including Diabetes UK and the World Cancer Research Fund, and a senior figure in the chef Jamie Oliver’s organisation.
Anna Taylor, the executive of the Food Foundation, which also signed the letter, said, “The damage the food industry is doing to children’s health is the biggest threat to our nation’s wellbeing and future productivity and this needs to be reined in – urgently.
“The government must now get bolder, creating real incentives to force the industry to align with public health goals, further and faster.”
The health groups want ministers to start tightly regulating the food industry. They said relying on the industry to voluntarily clean up its act nutritionally, as the previous Conservative governments did during 2010-24, had not yielded meaningful change.
“Voluntary reformulation programmes for sugar, salt and calories are not proving effective enough, achieving only a 3.5 per cent reduction in sugar levels of key product categories, compared to the mandatory soft drinks industry levy (sugar tax), which has achieved a reduction in total sales of 34.4 per cent between 2015 and 2020,” the letter says.
Jamie O’Halloran, a senior research fellow at the IPPR, said: “Without bold regulatory changes, our food system will continue to fall short in promoting healthy lifestyles, particularly for those on the lowest incomes.
“Expanding levies to cover other high-sugar and ultra-processed products could be transformative, especially if the resulting revenue is used to support low-income households to make healthy food choices.”
A government spokesperson said: “Obesity is a significant health challenge, which affects 26 per cent of adults and costs the NHS £11.8bn per year.
“The budget took action to ensure the soft drinks industry levy maintains its incentive to encourage healthier soft drinks, and we will publish a 10-year health plan in spring 2025.”
This comes a week after Reeves announced in the budget that the Treasury was looking into whether the sugar tax, which came into effect in 2018, should be extended to other very sweet products, including milkshakes and highly sugared coffees as it is widely regarded as having been a success.
Earlier, a YouGov poll showed public support on such taxes as long as the revenue is ploughed into children’s health.
The representative survey of 4,943 British adults by YouGov, commissioned by food campaigners’ Recipe for Change initiative, also found that 74 per cent think food firms are not honest about the health impact of their products while 61 per cent worry about the amount of sugar and saturated fat in what they eat.
Only 13 per cent believe producers will make their food more nutritious without government intervention while 72 per cent worry about high levels of processing used in food production.
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The Fed mourns ex-President Margaret Adams, retail pioneer
The Fed mourns ex-President Margaret Adams, retail pioneer
Tireless work by the Federation of Independent Retailers (the Fed) Contact Centre has seen almost a quarter of a million pounds recovered from news wholesalers in 2024.
The latest figures show that £187,130 has been recovered in missing credits, missing vouchers and recharges, as well as money saved through waived deposits for news wholesale accounts.
A further £40,338 was recovered in restitution for instances of late supply or missing supply having an impact on home news deliverers, taking the overall total paid back to members this year to date to £227,468.
“Once again our Contact Centre has delivered for members," said The Fed’s National President, Mo Razzaq. "This is testament to the tireless work of the team, ensuring Fed members are not left out of pocket when things go wrong.
“The amount of money the team has recovered in 2024 is further proof that, for independent retailers, it really does pay to be a member of the Federation.”