Manufacturers ‘must innovate to support growth’

RSM said that without strong organisational structures in place to deliver operational efficiencies, UK manufacturers could lag behind international competition following Brexit.

Head of manufacturing Mike Thornton told FoodManufacture.co.uk that food and drink manufacturers also faced a number of other potential challenges, including health concerns, changing consumer tastes and waste reduction measures.

His comments followed a survey of manufacturers – including food and drink manufacturers – which found that more than half (53%) planned to update key business systems in the next five years, with the majority looking to invest within the next three years.

‘Highlights a need to innovate’​

“There is growing pressure on food and drink manufacturers to reduce sugar content which highlights a need to innovate new or adapted products to offer a low sugar alternative,” ​said Thornton.

“Innovation also feeds into the waste reduction measures – whether it’s developing new methods to package products or finding new ways to use production waste. UK manufacturers will need to innovate to meet ever-changing criteria.” ​

Thornton said the potential surge of competition and uncertain trading conditions meant harnessing technology would be the answer to future success.

“Food and drink margins tend to be tight, so even small changes can have a huge impact,” ​he said. “This is particularly pertinent at a time when many UK food and drink manufacturers prepare for a potential surge in competition and uncertain trading conditions following Brexit. ​

Face increased competition​

RSM warned that manufacturers would face increased competition from low-cost, high-quality East Asian products, which the UK had been safeguarded from as part of the EU.

“Whether it’s through product advances, improved productivity or new technology, innovation could improve quality, open up new markets, reduce waste, increase margins and, ultimately, ensure food and drink manufacturers remain competitive on a global scale.”​

Ensuring technology is fit for purpose, using technology to improve decision making and integrating technology were cited as the biggest digital challenges. RSM said this highlighted the imminent need for investment.

However, only 11% of UK manufacturers asked had sufficient innovation processes in place to assist them with future growth.