The UK’s food and drink manufacturing industry is crucial to the national economy, contributing £37bn and employing nearly 500,000 people. According to the latest Food and Drink Federation (FDF) report, the sector has seen significant growth over the past decade, expanding by 17.9%. It now makes up 24.2% of the UK’s total manufacturing turnover, with widespread impact across regions, from Scotland to Northern Ireland.
While the sector’s contribution to regional economies is clear—accounting for nearly a third of manufacturing in Scotland, and a fifth in both the East Midlands and Northern Ireland—some challenges could hinder future growth. The FDF highlights a slowdown in food and drink exports, particularly to the EU, where trade has dropped more than 30% since Brexit, rising inflation and increased costs due to new packaging regulations. These factors have led to a decline in business confidence within the sector.
Despite these challenges, the FDF sees substantial growth potential, particularly with advances in automation, robotics, and product innovation. The sector is also poised to tap into a £14bn productivity opportunity by embracing digital technology and AI. However, the FDF warns that maintaining this momentum depends on overcoming barriers, including limited investment in innovation, a shortage of skilled workers, and bureaucratic hurdles.
The FDF urges the government to take action by prioritising food and drink manufacturing in national policy. Key recommendations include increasing R&D funding for the sector, simplifying tax credit systems for innovation, and addressing trade barriers, particularly with the EU. The FDF also calls for a more strategic approach to workforce development and the streamlining of regulations, particularly for the 12,000 small and medium-sized businesses that form the industry’s backbone.
