Foodservice an opportunity for manufacturers

The UK foodservice market was predicted to grow from £47bn in 2015 to £56.5bn by 2019, according analyst Horizons.

Speaking at Eversheds’ 2016 Food and Beverage Conference yesterday (October 14), Black suggested the foodservice sector was sometimes neglected by manufacturers.

“If you’re looking at big volume foodservice, such as chains and institutions, that’s going to see much faster volume growth,” said Black.

“The logistics of foodservice are incredibly efficient, because it’s a much lower margin business compared with retail, but a lot higher cash return.”

Operating costs

Manufacturers also did not have to worry about the operating costs or the servicing costs that retailers commonly demanded. These included interesting and distinctive packaging to attract consumers, Black added.

“[It was these reasons] why a lot of the manufacturers – aside from seeing the volume growth of these services – will start to work out that it can be a much more worthwhile financial segment as well,” he explained.

But Black acknowledged manufactures’ ability to boost food sales could be torpedoed by a lack of labour to produce the products.

Immigration control – which will likely be introduced after Brexit – could be a major threat to manufacturers, since the sector was so reliant on migrant workers.

Weak pound

While a weak pound may boost demand for British food and drink products abroad, production of these goods will plummet if this labour was forced out of the UK.

“It should be said that such [migrant] labour is hard working, punctual and effective, unlike the indigenous human resource,” said Black.

“To us, what is clear is that the industry will need to clinically set out its needs and wants for [workers], whether from the UK, the EU or further afield.”

Shore called for a plan for government education and training policy so the sector had the workers it needed to be functional and competitive.