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  • Views from the flipside

    Why does productivity matter in Food & Drink?

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Views from the flipside

cans460.jpgFood producers in the UK are delivering more all the time. Food exports by the UK have doubled in the past ten years, bucking a decline in total exports in the same period. And collectively the industry has reduced CO2 emissions by over a third since 1990, while delivering more of what customers want.

That’s a fantastic story, and it’s one that is underpinned by the investments the industry continues to make. Consider too:

  • UK food and drink productivity has increased by 11% over the last five years compared to an overall UK productivity increase of 0.5%
  • The industry self-funds three quarters of the sector’s research and development (£325m)
  • Food accounts for almost 16% of total manufacturing turnover (£81.8bn)

As well as creating wealth for the nation, food companies have a key strategic role to play in ensuring the nation’s future food
security against the combined effects of climate change, rising global demand and increasing pressure on finite resources. In the years ahead, it’s clear the industry needs to push on and up its game still further to carry the UK economy.

In part that’s because in July 2015 the government laid out an ambitious call to action for UK business to close the productivity gap with the global competition, and then to pull ahead. As the largest sector of UK manufacturing, food and drink has a big contribution to make.

Why does productivity matter in food and drink?

Given the size and scale of the industry, any food and drink productivity improvements will have a significant impact on the UK’s manufacturing performance and that of the wider economy. For that reason, exploring where and how productivity can be improved is not only good for the sector, but good for the UK.

A substantial boost in food and drink productivity growth will also lead to investment in leading edge innovation, improved technology and advances in food production to ensure sufficient, safe, affordable and nutritious food.

To drive continued growth, the UK must remain an attractive place for food and drink companies to invest. Since 2010, there has been a significant rise in R&D spending in the food and drink sector from both UK businesses and from overseas, and that needs to continue.

For individual business, that need to invest to boost productivity will come down to investments in people, in innovation through R&D and skills, and in cutting-edge technology, it’s crucial not to stand still in today’s marketplace, but to keep on pushing ahead.

Offering a finance solution to the growing number of businesses looking to invest in such technology is a crucial sales advantage for Processing and Packaging Machinery suppliers, helping them win more sales and reduce the need to discount.


This is an excerpt from our Processing and Packaging Machinery Sector paper, download How Finance can help Processing and Packaing Machinery Suppliers to learn more.

Discover how the LDF Partner Programme can help you reduce your cash conversion cycle, increase sales and protect margins.

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By Ian Cushion
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