The UK’s food & drink manufacturers are often the unsung heroes of the economy. By some distance, food & drink is Britain’s biggest manufacturing sector; bigger than automotive and aerospace put together. Indeed, food & drink manufacturers account for almost a quarter of all UK manufacturing turnover, contributing £37 billion to the UK economy and employing more than 486,500 people.
We’re home to more than 12,000 UK food & drink manufacturers, from household names like Warburtons and McVitie’s to countless micro businesses producing artisan specialities. And the number of food & drink manufacturers grows on a daily basis, inspired by new food trends, emerging technologies, homegrown produce, global cuisines and more.
They are at the forefront of innovation, launching thousands of new products every year. And they remain an exporting powerhouse, despite the complexities that producers face when selling their products overseas.
An opportunity to invest
Like so many manufacturing sectors, food & drink has an opportunity to invest in automation, digitisation and sustainability. A recent report by the Food & Drink Federation found that manufacturers could unlock up to £14 billion of extra value by boosting productivity to the levels seen in other advanced manufacturing sectors.
But food & drink firms are sometimes reticent to borrow and invest in their operations, often because listings in larger retailers are typically relatively short term, particularly for new businesses and products. That creates uncertainty and can make it more difficult to plan and commit to long term investments.
Still, the sector has proved to be a fantastic incubator for an incredible diversity of entrepreneurs. SMEs account for 99% of businesses in food & drink manufacturing, and there are some great examples of firms producing distinctive products and scaling up on their own terms.
A recipe for success
Like Cavan Bakery, which has expanded from three locations to 15 shops across South London and Surrey after Lloyds supported its investment in a purpose-built site and new machinery to improve productivity and efficiency.
The new bakery meant Cavan could double production, providing a platform to accelerate its growth.
Then there’s Riddim, a finalist in Birmingham Black Business Show’s Launchpad Competition (which I helped judge!).
Founder Jared Spencer has worked for some really big brands in the food & drink industry, and now he has created a business producing a range of plant-based and allergen-friendly snacks inspired by the Caribbean, from popcorn to plantain chips.
It just goes to show that Britain’s food & drink sector has the recipe for success. Showcasing an incredible diversity of established brands and emerging entrepreneurs, who are creating new markets at home and abroad.
Against this backdrop, the sector should take confidence in its achievements and accelerate its ambitions to invest and automate.
Find out how Lloyds is helping SME manufacturers here.
Lloyds and Lloyds Bank are trading names of Lloyds Bank plc. Registered Office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales no. 2065. Telephone: 0207 626 1500. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under Registration Number 119278.
