The future of UK grocery manufacturing will be a key topic of debate at next week’s IGD convention. Julian Hunt reports

Unilever’s decision to close its frozen foods factory in Grimsby, reported in our last issue, made sure it was another bad week for the UK’s grocery manufacturing industry. Throughout the year, we have carried news about more and more plant closures - a symptom of the huge structural change that is now under way in the industry as companies look to consolidate their production and boost efficiencies.
In May, another spate of plant closures prompted us to ask the senior executives on our suppliers’ reader panel: “Is anyone safe?” Almost 90% thought not. All in all, it’s been a gloomy period for the industry. And that has prompted IGD to include a timely session exploring the future of UK manufacturing in its annual convention next week.
A key talking point of that session will undoubtedly be the findings of a major survey, due to be released at the convention, that paints a much more upbeat assessment of the state of the industry and its future prospects. The online survey, sponsored by SAP, quizzed 225 executives from 165 grocery manufacturing companies, of all sizes and of both UK and foreign ownership.
Its key findings? Well, the headline figures that jump out are that almost three quarters of these executives felt that their company had increased UK production in the past five years and 77% felt that their company was committed to manufacturing in the UK for as long as possible.
At the same time, 56% said their company had increased its overseas production. But the implication from the survey is that this is as much to do with UK companies moving into new markets as it is do with production being shifted from these shores or conglomerates encouraging mobility in production across Europe.
Nevertheless, there is no denying the fact that people in the industry are concerned at the gradual shift of production to lower-cost facilities overseas. So how is manufacturing in the UK responding?
The new research provides a number of clues. For starters, it found that 91% of executives agreed their businesses were engaged in widespread cost-cutting to make them more competitive. At the same time, a similar number said they were investing in new technologies to keep them competitive. And 88% said they were focusing on best-practice manufacturing and management techniques - such as TQM and TPM - to ensure they remained in good health.
Grocery manufacturing companies are also making sure they do a better job at NPD, says IGD chief executive Joanne Denney-Finch. “It’s not about being more creative. It’s about sharpening up their techniques to get to market quicker and increasing their success rates.”
Denney-Finch says the survey shows the industry is optimistic that grocery manufacturing does have a future in this country - while being realistic about the fact it competes in a tough global market and that many companies may not survive.
“The survey is not as gloomy as you would expect. Whether that’s because those responding are with leading companies who have established themselves to do well in this changing environment is a difficult one to call,” says Denney-Finch. “But the bottom line is that people are much more robust and much more steadfast, and they are clearly being innovative and creative; putting everything under the microscope to ensure they win through.”
It’s all good stuff. But the survey also has a final, slightly chilling, statistic: 66% agreed their company was pragmatic and would manufacture wherever it could be most competitive. And that’s been happening a lot this year. Just ask the workers in Unilever’s Grimsby factory, or Terry’s plant in York, or the Gillette facility in Isleworth, or the Guinness brewery in Park Royal or the Manor Bakeries plant in Eastleigh...