This has been an historic week for government’s relationship with the food & drink industry. For the first time since the 1940s the government recognised that it needs a joined-up approach to policymaking for the sector. The Industrial Strategy White Paper spelled out the central economic and strategic importance of the industry to the UK’s economy.
Recognising that food & drink is a matter of national security, the creation of a Food and Drink Sector Council is a game-changer for the £112bn farm-to-fork supply chain.
A whole supply chain approach is essential, given the interdependence of these sectors. That is why several of us from farming, manufacturing, importing, retail, out-of-home, contract catering, logistics and packaging have been working closely with Defra and BEIS on a proposal for an ambitious sector deal for food & drink. The proposals we put forward are very much industry-led solutions, but require the full support of government to be delivered. We want to increase our productivity gains by focusing on exports, innovation and skills.
As the latest figures show, food & drink exports continue to grow to record levels. However, exports currently account for less than a 10th of companies’ overall UK turnover. ONS data shows that fewer than one in five UK food & drink manufacturers actively export. The figures are further skewed by the brilliant performance of Scotch whisky - such that my former employer Diageo, accounts for almost 10% of the value of food and drink exports. It’s a great track record but wWe need many more companies from across the sector to have the ambition to emulate it. Moreover, food & drink export support is also highly fragmented putting UK manufacturers, in particular SMEs, at a competitive disadvantage to international competitors.
While UK food & drink is a world leader in terms of innovation relating to reformulation and health, there is still much to be done with new technologies. In fact, the recent Digitalisation Review estimated that the food & drink industry could add an additional £55bn to the economy over the next decade through improved digitalisation alone.
We also have an ageing workforce and must attract 140,000 new recruits by 2024. Our priority is to develop an industry pledge around engineering apprenticeships. Engineering capability is vital to ensuring we are able to deliver essential innovation.
One of the first priorities for the Sector Council will be to build on the sector deal proposals from FDF and others. I imagine the new year will see an early series of negotiations towards the best possible deal for the food & drink industry, whilst establishing a deep-rooted partnership with government. The frankly scary uncertainties of Brexit loom ever larger. An industrial strategy with UK’s largest manufacturing sector at its heart will allow us to face some of those challenges with more confidence, more cohesion and more ambition. It can also exploit our industry’s long-term potential and contribute significantly to the UK’s future economic success
Ian Wright is director general of the FDF