Food and Drink Federation today (9) released a report highlighting the contribution and calling for government to help remove roadblocks in order to protect the UK’s food security and ensure the sector can continue to drive the economy.
A new report from the Food and Drink Federation (FDF) reveals that, according to the latest ONS data, the food and drink manufacturing sector grew 17.9 per cent over a decade.
The industry now contributes £37bn to the UK economy, accounting for almost a quarter (24.2 per cent) of total UK manufacturing turnover.
The Powering Communities report reveals that this significant economic contribution stretches across communities in every UK region and nation. For example, it makes up almost a third (30.8 per cent) of total manufacturing GVA in Scotland and a fifth in the East Midlands (20.6 per cent) and Northern Ireland (20.2 per cent).
The report also reveals the food and drink manufacturing sector’s role as a major employer, providing almost half a million (486,500) jobs in the UK’s 12,195 food and drink businesses. Employment in the sector is growing, with 41,000 new jobs across the UK since 2018.
The number of food and drink manufacturing businesses in the UK also rose 14% between 2019 and 2024.
Significant investments in robotics and automation, as well as R&D and innovation to create healthier products, have all helped to drive this growth. And, there is still more growth for the taking. At the end of last year, FDF revealed that there is an untapped £14bn productivity opportunity for the sector, which could be unlocked through investments in automation, digital technology and AI1.
However, according to the latest FDF State of Industry report, with the sector facing a host of impending challenges, maintaining this growth is by no means certain.
Food and drink business confidence declined to -47 per cent in Q4 20242 on account of growing inflationary pressures, barriers to trade, and upcoming Extended Producer Responsibility (EPR) fees for packaging.
To ensure the sector’s future health, FDF is urging government to take decisive action to address barriers to growth. These include low investment in innovation, falling food and drink export volumes and lack of access to highly skilled talent.
Jim Bligh, Director of Corporate Affairs, Communications and Packaging, FDF said, “Our industry is vital to ensuring we have a thriving food system here in the UK, providing high-quality, affordable food.
"And we are a major part of the UK’s wider manufacturing sector, offering good careers, driving investment, and promoting international trade.
"Food and drink manufacturing is uniquely placed to make a positive impact in every village, town and city in every constituency in the country.
“But with food and drink businesses under increasing pressure, we’ve reached a pivotal moment where government must act to safeguard this foundational sector’s future growth and the UK’s food security. We have set out more than 40 steps government can take to remove unnecessary roadblocks to growth for the benefit of every community in the UK.”
FDF is calling on the government for a fair share of the UK’s R&D spend for food and drink manufacturing to support industry investment in new product development and healthier options for consumers and the transition to net zero.
The federation has also urged the government to ringfence the £1.4bn annual cost of Extended Producer Responsibility (EPR) to ensure these fees are only used on improving the UK’s recycling infrastructure and not to fund local authority funding gaps.
"This money is for yoghurt pots, not potholes," states FDF.
