UK food firms should be updating and improving their equipment, technology, products and processes to maintain their performance, according to Glenn Caton, president of northern Europe at Mondelēz International.
“Are we investing to update and improve the equipment and technology we use? Are we constantly innovating our products and processes to improve what we do? Are we investing sufficiently in our people to develop new knowledge, skills and provide new experiences?” Caton asked.
“If leaders cannot answer ‘yes’ to those questions, productivity will not improve and there’s a risk that business performance will slide.”
Productivity could be boosted by investment
Caton cited Mondelēz’s Cadbury site in Bournville, Birmingham, as an example of how productivity could be boosted by investment.
The facility – which has been producing Cadbury chocolate since 1879 – has benefited from £75M of investment, including four new manufacturing lines, over the past three years. It is part of a £200M investment plan across all of Mondelēz’s UK businesses.
Before the investment, it would cost three-times as much to produce a chocolate bar in the UK as it did at one of Mondelēz’s other factories in southern Germany, Caton explained.
“That investment is now beginning to pay off. As a result, we are welcoming the hugely successful chocolate/biscuit combo, Cadbury Dairy Milk Oreo, to Bournville alongside the return of an old favourite, Cadbury Dairy Milk Tiffin.”
There was also substantial investment in people “to broaden colleagues’ skills and capabilities in manufacturing, and develop their careers further”, Caton added.
Impact of Brexit
On the wider economic front, he reflected concerns from the governor of the Bank of England Mark Carney that the impact of Brexit on investment was beginning to bite.
However, he believed business leaders should take comfort from the recent Purchasing Managers’ Index survey and the quarterly update on UK productivity from the Office for National Statistics, which both showed the UK manufacturing sector to be growing.
Caton also called on the government to work closely with business, embrace global research and development, and make frictionless movement of goods as “close to a reality as possible” as part of the Brexit negotiations.
“We will need to be agile in the future, so that whatever happens in the Brexit discussions we are able to adapt to the external circumstances and thrive,” he said. “Anything that adds cost and complexity to business risks reducing competitiveness and higher prices.”