The BDO’s latest Food & Drink report 2021, paints a picture of how COVID-19 and Brexit have both had huge impacts on food and drink manufacturing. However, it is not all doom and gloom as the sector remains resilient, optimistic for the future, and continues to drive growth.
The key findings from the report;
• 85% (source BDO’s Food & Drink report 2021) of business leaders said they had been forced to reassess their business strategies as a result of COVID-19.
• 78%* of businesses are feeling positive or very positive about the prospects of their business, with 68%* expecting profitability to increase in the next 12 months.
• 98%* of respondents cited that they anticipated the same or increasing focus on production automation and digital transformation in the next 12 months.
• 52%* of companies surveyed said they had invested in new technology or assets to improve productivity and competitiveness.
Expansion into new UK markets
Respondents expect most of this growth to come from expansion into new UK markets and new product development. Growth is happening outside of the European Union (EU). Non-EU markets were already seen as beating the EU for expansion in 2018, and in this year’s survey, that expectation has grown, cited by 42%* of respondents. Sustainable manufacturing is also a key focus, particularly in reducing waste, plastic, and emissions. And half of those questioned said they were reviewing packaging and single-use plastics, which could be a response to changes in legislation.
Consumer spending changes
The report also states how the pandemic has also brought about changing consumer spending patterns, shifting to a more traditional model of regular, larger shopping trips to supermarkets, benefiting those businesses selling through the UK multiples. There has also been an acceleration in consumer uptake of home meal kits and home delivery has been in particular demand during the lockdown.
Commenting on the BDO Report, CPiO Andrew Watkinson, Managing Director commented, “ The results outlined in the business report echo the experiences of CPiO’s Sage manufacturing base. The sector is expanding but is still experiencing the knock on effects of COVID-19 with concern around extended supply chains and disruption strategies as manufacturers strive to find new, more direct routes to market. Our customers are using technologies such as Sage X3 and Sage 200 to improve productivity and give them faster insight into trends within their supply chains or customer base.”
A comprehensive business management solution, Sage X3 is ideal for product-centric organisations with complex business requirements that need scalability to meet local, national and global demands.
*Source: BDO’s Food & Drink Report 2021.