NPD focus still a priority for UK food and drink sector

By Kacey Culliney

- Last updated on GMT

Related tags: New product launches, Investment

Innovation has driven growth in UK food and drinks sector, report
Innovation has driven growth in UK food and drinks sector, report
Investment in NPD and employee training remained strong in the UK food and drinks sector despite economic ill-winds, finds report.

The Business Confidence Survey​ commissioned by the UK trade body, the Food and Drink Federation (FDF), looked at the activities of its membership during the third quarter of 2011 and found around a third of respondents to the poll had increased investment in R&D facilities.

The survey also indicated that just under half of the survey participants intended to hike up investment between October and December, despite high material and fuel costs and lower business optimism.

Another key trend was the up-skilling of employees, with 84% of respondents expecting to invest more or the same amount of money in training programmes throughout Q3 and Q4.

Angela Coleshill, director of competitiveness at FDF, said that this was an indication that the sector is set to grow further.

“While members are cautious about the overall economic picture, their confidence in their growth strategies holds firm and they are pressing ahead with new product launches, R&D, capital investment and training,”​ she told FoodNavigator.com.

She said the survey showed that “up-skilling employees is essential for food and drink manufacturers if they are to grow and innovate now and in the future. They need the right technical skills to be able to meet future challenges and compete not only domestically but globally​.”

Steady markets

The export market will continue to be the biggest growth driver for manufacturers, the FDF director added.

The report found exports to be strengthening as companies moved into new markets where demand for Western goods is high.

Export sales were pegged at £8.8bn (€10.6bn) during the first three quarters of 2011, a 12% increase on the same period last year.

Coleshill said that “exports continue to be an important area for growth,”​ and FDF anticipates exports to grow for the seventh consecutive year and surpass £11bn for 2011.

The domestic market was found to be steady, with 80% of respondents stating UK sales as either up or static, with a vast majority optimistic that there would be an increase in sales during Q4 (October to December).

Sector set to grow 20% by 2020

The report affirms the FDF’s vision that the food and drinks sector will grow 20% by 2020.

Coleshill said: “We are fortunate to be part of a resilient industry that appears to be withstanding the storms faced by other manufacturing sectors… Food and drink manufacturing is a strong growth area.”

She noted that “innovation has been a vital activity to UK food and drink manufacturing this year,” ​and has been a key area driving growth throughout 2011.

This year saw 8,500 new product launches, 500 more than the previous year, with many leading the way in areas such as the rising demand for healthier products, she said.

There continues to be an appetite for new ‘healthier for you’ products, she said, and this trend is anticipated to grow in the future.

Other key growth drivers in the industry will be a growing global and UK population, changing dietary patterns in developing markets driving demand for value added products, as well as an ageing population creating demand for health and wellbeing products, she added.

Related topics: Market Trends

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