FDF survey highlights increased demand for healthier food products

food, drink, federation
FDF chief executive Ian Wright
18/05/2018 - 07:00
The results from the Food and Drink Federation (FDF) Q1 2018 Business Confidence Survey show that there is now an increased demand for healthier food products.

Manufacturers identified this heightened demand as a key opportunity during the rest of the year.

FDF chief executive Ian Wright said this provided food and drink businesses with hope during times of Brexit. 

With almost half reporting an increase in volume sales in the UK in Q1, businesses anticipate increased domestic demand for produce and planned investment in new product launches. 

The results also show that over half of manufacturers believe general business conditions have remained the same in Q1 2018, when compared to Q4 2017.

Wright said: “It is encouraging to see that business conditions for the food and drink industry have remained stable.

“It is not surprising that the industry is fearful over the uncertainty that surrounds a post-Brexit UK-EU relationship, and the results rightly reflect this as a barrier for business in the coming year."

The survey, published this week, polled a range of food and drink manufacturers from across the UK. 

More than 25% of participants said that conditions had deteriorated, while fewer than one in five have seen business conditions improve.

When looking to the wider economy, food and drink manufacturers were split over their expectations for UK economic growth for 2018.

Around two thirds expect a rise in input prices, with heightened ingredient costs ranked the top barrier to food and drink manufacturing success throughout the rest of the year.

This is in line with reported figures that show almost half of food and drink businesses have experienced increased packaging costs during Q1 2018.

When looking at the key impacts on food and drink businesses in Q1 2018, members found that the key impacts were:

- 77% increased packaging costs

- 72% increased ingredient costs

- 52% increased energy costs

- 65% increased average wages in their business

- 60% decreased product margins

- 49% increased volume sales to the UK

- 56% productivity gains

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