The UK’s food and drink industry is set for strong future growth off the back of global demand for the country’s manufactured produce, according to a study by Santander and manufacturing organisation EEF.
It is predicted that a focus on healthier foods and the use of new technologies will improve manufacturing processes and drive future opportunities in the UK.
Food and drink exports have risen steadily in recent years, with 2016 marking the first year that the value of exports of the food and drink sector exceeded £20 billion.
According to the study, UK products were exported to a record 217 international markets last year, five more than in 2015. Despite this, only 20% of UK food and drink manufacturers currently export, and there is an opportunity for food and drink manufacturers to ‘grow through exports’.
Europe is the biggest destination for the UK food and drink sector, with 60% of all exports travelling either across the Channel or Irish border. Meanwhile, exports to Asia and the Americas have seen the fastest growth since 1996, expanding by 155% and 154% respectively.
Senior economist at EEF George Nikolaidis praised the ‘remarkable resilience’ the UK export market has shown in recent years. “It has maintained its position as the largest manufacturing sector in the UK,” he said.
“The ability of food and drink manufacturers to grow and broaden their export base has been a key part of this success. In order to harness the range of challenges on the horizon, the sector will need to continue to explore new export opportunities, embrace product and process innovation, as well as ensure it adapts to evolving consumer trends.”
Along with exporting, the report identified four other drivers of future growth for the UK food and beverage industry: healthier food options, research and development, smart packaging and sustainability, and online shopping.
Nicola Thomas, head of food and drink, Santander Corporate and Commercial, said: “There are some risks but we believe that the consistent levels of demand mean that the sector is well positioned to maintain solid growth.
“There are a number of strong opportunities on offer, notably growing demand from emerging regions, as well as the productivity gains that improved innovation can bring, which if harnessed, will provide the sector with further growth in the medium and long term.”
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