UK: Food industry investment remains level as confidence grows - FDF
UK food and drink executives have reported positive levels of optimism during the first six months of 2012, the latest business confidence survey from the UK's Food and Drink Federation revealed.
Despite an uncertain economic outlook, UK food manufacturers' business optimism has "remained high" in the first half of 2012, the FDF said.
As a consequence, food businesses have continued to invest in research and development, product launches and human resources, the food industry body suggested.
According to Steve Barnes, FDF economic and commercial services director, capital expenditure remained on a par with last year's levels, having recovered year-on-year since the onset of the economic downturn in 2009.
"In terms of CapEx investment, this was virtually unchanged at GBP1.1bn versus 2011 for the first six months of 2012," Barnes told just-food today (25 September).
Barnes said that investment in R&D continued to be necessary in the context of the highly competitive UK market.
"The UK market has become increasingly competitive in recent years and with stiff competition from international manufacturers, innovation is a vital route to secure growth," he commented.
Meanwhile, companies are also investing in improved efficiency to drive down overheads, Barnes suggested.
"Anecdotally, we know through our work with members on our Five-fold Environmental Ambition, that a number of them are investing heavily in new sustainable measures and technology. A key motivation behind this is to reduce their environmental impact via such means as committing to reduce waste. However, in addition to making their businesses more sustainable, these companies are also reporting improved efficiency and overall reduced costs."
UK food and drink businesses have also committed to doubling the number of apprentices working in the industry and Barnes said that investment meant that the sector is "progressing well" in this aim.
However, the FDF conceded that while overall sentiment remains positive, some smaller companies are struggling to invest in their businesses.
"This level of investment in both facilities and staff is not the case throughout the whole industry. We know that some of our smaller members have struggled to invest due to lack of cash flow and bank financing and are purely focused on maintaining good relations with customers," Barnes commented.
Another cloud on the horizon for UK food manufacturers is the likelihood of rising commodity costs, the confidence survey found. Ingredient prices "remain high", the FDF warned, and according to data provided by the federation, food commodity prices rose 2.6% between the first- and second-quarters of 2012.
Sectors: Baby food, Bakery, Canned food, Cereal, Chilled foods, Commodities & ingredients, Condiments, dressings & sauces, Confectionery, Dairy, Dried foods, Fresh produce, Frozen, Health & wellness, Ice cream, Meat & poultry, Mergers & acquisitions, Natural & organic, NPD & innovation, Private label, Seafood, Snacks, Sustainability & the environment, World foods
Companies: Food and Drink Federation
UK ministers and food industry leaders are keen to expand the reach of the Responsibility Deal in 2013 to show its many doubters that voluntary pledges can help to deliver healthier diets for consumer...
Obesity is a global epidemic that is "bankrupting economies and short changing futures", we were told during a round table at the World Economic Forum in Davos this weekend....
A report published last week by the Institution of Mechanical Engineers suggesting that up to 50% of food produced globally is not consumed has attracted significant media attention. Ben Cooper report...
It is still not clear what the new hybrid nutrition labelling scheme is supposed to look like, according to the chair of the Food & Drink Federation's health and wellbeing group....
Public health minister Anna Soubry has told UK food industry leaders they must engage more companies in the Responsibility Deal on health or risk the government imposing regulation....
- What next for Nestle under new CEO Schneider?
- Unilever is "working harder" in tough environment
- Nestle catering for an ageing global population
- What post-Brexit trade with the EU could look like
- Hemp food sales in the US set for growth
- Unilever sees growth but spreads decline continues
- Job cuts imminent as General Mills restructures
- Campbell's Soup's sustainable growth strategy
- Arla Foods unveils strategy for growth up to 2020
- Lindt organic sales miss market expectations