(last updated July 2019)
What has been happening in the food manufacturing sector
The last two or three decades have seen significant changes in consumers' lifestyles and eating habits. There has been a strong trend towards convenience products that can be prepared with a minimum of time and effort. At the same time, consumers' tastes have become more sophisticated and adventurous. This has led to a huge increase in the range of ready-prepared meals and accompaniments available, whether frozen, dried, canned or chilled. In addition, lifestyle changes have meant that people are eating more snacks throughout the day, while travelling, at work, or during their leisure time.
Recent years have seen an increase in interest in regional and speciality foods and also in niche products such as low fat ranges, 'healthy living' products, ethnic foods, organic foods, vegetarian and vegan products and products catering for particular dietary requirements such as dairy or wheat free or low sodium. There has been a move away from 'junk food' which is widely regarded as contributing to the so-called obesity epidemic in the UK and a ban on the use of television advertising of 'junk food' to children was implemented in 2007. Stricter rules over labelling and advertising food and drink have also been implemented, restricting the claims that can be made for health benefits and requiring nutrition labelling on pre-packed foods.
The mid 2000s saw the emergence of the 'ethical consumer'. Concerns about the origin of foods and the impact of emissions caused by 'food miles' (the distance food travels when it is transported) led more and more consumers to consider how their food purchases affect the environment. This boosted demand for locally sourced and organic food products. Demand also increased for ethically produced, fairly traded products, which enable consumers to support producers and farmers in the developing world by ensuring they receive a fair deal for their produce. The downturn in the economy that began in the late 2000s and continued during the opening years of the 2010s resulted in many consumers reducing their expenditure by trading down to cheaper alternatives and while this had a significant impact on the amount spent on organic produce, demand for ethically produced foods held up reasonably well.
Another result of the economic downturn was something of a change in some consumers' shopping habits, with the large weekly 'shop' at an out-of-town superstore losing popularity in favour of spreading the grocery shopping over the course of the week, often using smaller High Street shops. People have become increasingly price-conscious when shopping for the 'basics' and this has benefited the discounters like Aldi and Lidl, who have won market share from the big supermarket chains. They in turn responded by engaging in fierce price wars to try to win back customers. There's some evidence to suggest that although shoppers are looking to save money on grocery staples, they're prepared to spend a bit more on 'treat' foods and this is likely to have benefited the artisan food producer.
The economy remained very weak for several years after the financial crisis in 2008 and it wasn't until 2013 that it started to improve. The recovery continued throughout 2014 and into the first half of 2015 before slowing again during the second half of the year and into 2016. The vote in June 2016 to leave the EU led to a great deal of economic uncertainty. The economy remained subdued during 2017 and 2018 although consumer spending held up despite a lack of confidence in the economic outlook. Food price inflation rose throughout the year, squeezing household budgets. Many food industry commentators think that food prices will go up more once the UK has left the EU and this may mean that consumers will turn away from expensive premium food products in favour of cheaper alternatives.
Following the vote to leave the EU the government announced in October 2016 the launch of the Food Innovation Network (FIN) to help entrepreneurs in the food and drink industry to develop new products, improve prospects for growth and find new partners. You can find out more about the support available on the FIN website.
The 2016 Budget announced the introduction of the Soft Drinks Industry Levy from April 2018. Drinks manufacturers who produce more than one million litres of liable drinks a year must register and pay the levy due every quarter. Many producers re-formulated their drinks to reduce the sugar content and to avoid the levy.
Food labelling and other regulations
New food labelling regulations were introduced at the end of 2014 affecting all food businesses, including manufacturers. Although many of the labelling requirements remain the same, there are also some important changes, including the need to emphasise any of 14 listed allergens on the label if they have been used as ingredients in a pre-packaged food. This can be done by listing them in bold or italics, or by highlighting or underlining them. You can read about the labelling provisions for allergens on the Food Standards Agency website.
In late 2014 the Food Hygiene Rating Scheme in Wales, under which food businesses are required by law to display their most recent food hygiene rating score, was extended to apply to businesses like food manufacturers.
New nutrition labelling provisions became mandatory from December 2016 and apply to the majority of pre-packaged food. Under these provisions, you must declare energy values and the amounts of fat, saturates, carbohydrate, sugars, protein and salt. You're exempt from the provisions if you are a manufacturer of small quantities of products which you supply directly to the final consumer or to local retail establishments directly supplying the final consumer.
You can read about the scope of the nutrition labelling provisions and the exemptions that apply to manufacturers supplying small quantities to the final consumer on the Gov.uk website.
At the beginning of 2019 the government proposed new, tougher allergen labelling rules to apply to all foods which are packed on the same premises at which they're sold.
Keeping up to date with developments
Joining a trade association is an excellent way of keeping up to date with developments in your industry.
There are many different associations and organisations that represent the food manufacturing industry, including:
- the Guild of Fine Food, who support and encourage artisan food and drink producers and the independent food retailers who sell their products
- the Institute of Grocery Distribution (IGD), which publishes a huge range of publications covering all aspects of the UK food and grocery industry
- the Food and Drink Federation (FDF), which represents food manufacturers of all sizes. The Food and Drink Federation Scotland looks after the interests of members in Scotland
- UK Food Exports, an independent guide for international buyers looking to source food and drink products from the UK
- AHDB Pork, AHDB Beef and Lamb, Meat Promotion Wales and Quality Meat Scotland. These all provide a range of services of interest to meat product manufacturers
- the Department for Environment, Food and Rural Affairs (DEFRA) can provide information and guidance for the food manufacturing industry, including details of initiatives to boost production of local and regional food
- the Food Standards Agency is an independent food safety watchdog set up by the government. It provides comprehensive guidance to the food manufacturing sector
- the British Frozen Food Federation
- the Chilled Food Association
- the Vegetarian Society
- the Vegan Society
- the Soil Association is the largest of the approved organic certification bodies and promotes sustainable organic farming and provides a wealth of information of interest to manufacturers of organic products
You will be able to obtain a lot of useful information if you go to a trade show for the food sector such as Foodex. You will be able to meet manufacturers, suppliers and importers and plan your future stock buying. The Exhibitions website contains details of forthcoming exhibitions.