A new survey has found that the sector is overwhelmingly positive about the next 12 months in terms of growth in turnover, order books and jobs.
A majority (85%) of food and drink firms based in the southwest see being based in the region as a distinct advantage according to research from leading business and financial advisers Grant Thornton and Taste of the West, which represents around 1,000 food and drink businesses.
Some 60% of firms said they were feeling more optimistic than they were 12 months ago, with 75% expecting to increase turnover (both up on the figures in last year’s survey).
Likewise, 96% of survey respondents described their order books as being either ‘healthy’ or ‘acceptable’, while 37% expect to take on new staff in the coming 12 months, up from 25% last time.
With 38% of food and drink firms in the region saying they had been adversely affected by the winter floods, the price of raw materials (60%) and energy prices (30%) continue to be seen as the biggest long-term concerns.
A reduction in red tape, simplification of the tax system, improvements to transport infrastructure and a cut in VAT are all highlighted as being measures which the government should take to help the sector.
“VAT is killing many small, especially seasonal, businesses,” said one respondent. “To allow small businesses to survive, we must either raise the ceiling to £120,000 or reduce the percentage rate to enable us to stay in business.”
Meanwhile, the importance of provenance and local sourcing in the food and drink sector is borne out by the fact that two thirds of survey respondents view these as ‘absolutely vital’, and the remainder as ‘important’.
And while three-quarters of businesses surveyed see the UK as being their prime market, some 20% see international expansion as part of their strategy.
John Sheaves, chief executive of Taste of the West, said: “These results bear out the overwhelming message that I have picked up from our membership, which is that the sector is resilient, buoyant and positive about its prospects.
“I am particularly pleased to see that 20% are looking at international markets for growth, which demonstrates a clear shift in recent years to broaden and differentiate the market for food and drink products made in the southwest.”
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