Administrations of food and drink manufacturers have experienced a “massive spike” in the first half of 2023, with the number of failures in the sector on track to more than double year on year, according to figures published this morning.
More food and drink businesses have collapsed in the first six months of the year than in the whole of 2022, a report by advisory firm Kroll revealed.
The sector recorded 56 administrations to the end of June, compared with 53 in 2022.
Kroll put the increase down to the rising cost of borrowing, supply chain issues, inflationary pressures and falling consumer spending.
Meatless Farm was one the year’s most high-profile food and drink manufacturing failures, with fellow vegan producer Plant & Bean also collapsing in June.
Other administrations in the sector so far in 2023 include Mara Seaweed, Mamamade, Farmison, Miso Tasty, Black Sheep Brewery, Waas Bakery, Loscoe Chilled Foods, British Honey Co, Big Prawn, Love Hemp and Cook & Lucas.
Across all industries, administrations increased from 429 in the first half of 2022 to 618 this year, with food and drink sitting behind construction, manufacturing and retail in terms of the most affected sectors.
Kroll MD Benjamin Wiles said: “We always see more administrations in the construction, retail and the hospitality sectors. They’re all affected by cost inflation, supply chain issues as well as wage and labour challenges.
“But what’s been interesting so far this year is to see the massive spike in the food and drink manufacturing sector. Many of these companies are highly leveraged due to the impact of Covid and are also affected by cost inflation and energy costs.
“When you factor in higher borrowing costs and a lack of working capital, it’s proving tricky for businesses in this sector.”