Food production remains in growth

Food manufacturing remains one of the UK’s few success stories in the economic downturn, according to the latest survey.

The sector is one of the country’s few growth industries, with domestic and export sales remaining healthy and new product development and total investment increasing in 2011, according to the Business Confidence Survey 2011.

The survey looks at Food & Drink Federation (FDF) member company confidence in key areas including investment, sales, skills, and business optimism.

Volume output for 2011 started strongly, with 70% of respondents reporting sales increases. Actual sales remained more in line with expectations during Q3 and Q4 but still continued to grow.

Despite a weaker domestic picture, export sales for food and drink manufacturing grew strongly and are expected to reach around £12bn for the year when official figures are published later this month.

Exports are still seen as a key driver of industry growth and there are opportunities for competing in less-established markets against key producers such as France, Germany and Italy.

Rising costs, however, did impact on the sector, particularly the costs in fuel and materials, although food commodity prices eased somewhat towards the end of the year.

FDF’s director of competitiveness Angela Coleshill said: “Food and drink manufacturing has remained strong as the result of flexibility and forward-thinking by our sector companies, ranging from SMEs to the biggest global brands.

“Manufacturers have continued to invest in facilities, people and new product development to take advantage of emerging trends that were confirmed in 2011, including our strengthening export potential and significant consumer interest in healthier products.

“Our shared vision is for the UK food and drink industry to deliver sustainable growth of 20% by 2020 and we are pleased to see this reflected in the investment by our member companies and reports of a more optimistic outlook for 2012.”