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July 2022 - Industrial

More than half of food and drink manufacturers expect to see increase in orders in next 12 months: A survey of food and drink manufacturers has revealed that 53% are confident that they will see an improvement in the number of orders placed in the next year. This high level of optimism is encouraging as manufacturers still face a number of challenges ranging from the impact of Covid-19 and Brexit to current geopolitical instability and economic turbulence.

The survey polled 102 leaders at food and drink manufacturing companies in April 2022, revealing that almost eight in 10 (78%) are feeling positive about the outlook for their business over the next 12 months.

While 53% expect to see an increase in orders, a third said they believe investment in production will offer sales growth opportunities for their business (33%), with geographical expansion a close second (31%).

Nearly a third of respondents (31%) said they are planning to expand into non-European markets including the Middle East and North and South America, while three in 10 (29%) are expecting growth from within the UK. Twenty-eight percent (28%) said they are expecting growth from new markets within the EU, found the survey.

The Food and Drink Report 2022 'Resilience in the Face of Adversity' revealed that food and drink is the biggest manufacturing market in the UK with a turnover of £112billion in 2021.

Combatting inflation

When looking at how companies are planning to weather economic turbulence, the research revealed that 32% are seeking additional finance to counter inflation, with 30% looking to utilise new or existing overdrafts. More than a quarter of companies said they would raise prices (27%), whilst 26% were planning to make redundancies and 25% planning to look for cheaper suppliers. Other measures manufacturers were looking at included reducing profit expectations (23%) and taking on higher levels of debt (19%).

The research also found that 28% of the manufacturers polled believe that Covid-19 and its continued impact will be the greatest challenge for the sector, while 20% said that sustaining new product development would be a challenge. Other areas where respondents expected to face challenges included increased competition, cheap imports, cyber security and wage inflation (all between 16 - 18%).

Recruitment

Three in five manufacturers polled (61%) said they were facing challenges with recruiting the people they need for roles, while 64% said they have considered flexing reward packages to attract and retain workers.

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