Future of Food: Manufacturing Edition

Our ‘Future of Food’ article series seeks to reveal more about some of the major trends, developments and issues facing various industries on the food sector. In this article, we’re going to look at food in the manufacturing industry in particular, and the changes that are impacting on businesses operating in this challenging environment, as well as where the market is moving.

Market Trends

Food and drink is in fact the largest manufacturing industry in Britain. We might think of cars and other machinery as the UK’s major manufacturing offering, but it’s food that adds around £30bn each and every year to the economy, with revenues in excess of £100bn. And much of this is down to the fact that the country’s research and development facilities are amongst the world’s best, allowing food and drinks manufacturers to thrive through new, innovative production solutions and products.

Around 400,000 people in the UK are employed in this industry too, making it one of the largest sectors by employment. Strong growth is expected to 2020, driven by the diversification of products, as well as the simple requirement that the population is growing, and food manufacture must keep up.

However, Brexit is something that weighs particularly heavily on this sector. Almost a third of the food and drink manufacturing workforce is comprised of workers from the EU. While it has been suggested that EU workers will be allowed to stay whatever happens, it’s unclear what this entails specifically. This is compounded by the fact that the Food and Drink Federation believe that an additional 140,000 people will be needed in the industry by 2024 to keep up with demand.

There are serious concerns too that supply chain disruption could harm those food manufacturing businesses that source materials or ingredients from outside the UK. Brexit has in fact already been blamed in recent months for the downsizing of products as a result of poor exchange rates, which increase the cost of ingredients and other materials.

Ultimately, the sector promises good growth in the future, but this is contingent on a successful Brexit, which in this case is whatever brings the least possible disruption to employment and supply chain.

Automation

For many years, automation has been hyped as one of the major changes in the way that we work as a society. The idea is of course that machines will simply replace any kind of manual work, and will be able to go further than that; making decisions and conducting complex tasks. For a long time however, automated machinery hasn’t actually made an enormous difference to things like staffing levels, but that could be set to change. In the last couple of years we’ve seen dozens of reports from authorities ranging from the Big 4 accountancy firms, to central government, all advising that automation is on its way, and that it’ll have a huge impact on the way manufacturers work, and indeed employment.

Machines are undoubtedly getting smarter, and it isn’t going to be long before they’re able to more effectively carry out many tasks that would previously have thought to be only suitable for a person. Indeed, the food manufacturing industry has lagged behind other manufacturing industries when it comes to the use of robotics, so many of the technologies will already be available. In many cases it’s a matter of when the investment will come - not if.

This level of automation will likely bring major boosts in efficiency, cost, and potentially quality. In addition, food safety for the manufacturing industry is extremely important, and machinery can often remove some of the potential issues that come with people handling food. However, the decrease in employment opportunities may concern some.

Sustainability

Very few businesses aren’t concerned with the sustainability, and indeed the perceived sustainability, of their operations. Take a look at the website of virtually any large business, and there’ll be at least a page dedicated to sustainability, which covers everything from where they get their products and materials, to how they run their premises, and the initiatives that they support. Food manufacturers have a lot to think about when it comes to sustainability, as both the product and packaging can have huge impacts, as well as the manufacturing process.

Packaging is always a contentious subject, with vast quantities of it still non-recyclable, which means that it goes straight into landfill after use. It can be difficult for manufacturers to achieve a balance between minimal packaging, and the protection that plenty of packaging affords, but headway must be made. Crisp manufacturers for instance have managed to reduce packet size without overly reducing the air pocket that protects the product.

Card and paper from sustainably planted trees is an essential for most manufacturers; the market is competitive and some retailers and ultimately consumers will be picky. Using recycled materials where possible is generally a good rule for manufacturers both large and small. There are some innovative solutions being made in this area too, with plant-based materials that provide an alternative to plastics an option in some cases.

The sustainability of the product itself is also a big issue, with fewer people willing to purchase food that has been shipped or flown large distances before it arrives at their plate. Local sourcing is therefore very important indeed, and is something that can be a major marketing boast too.

Transparency

This one links in with sustainability, but it’s nonetheless very important as its own point. Consumers are increasingly concerned about the foods that they eat, and they expect to be able to quickly access all of the information that they need to know. This means that manufacturers need to ensure that they’re doing everything they can to ensure that labelling is clear, and contains all of the information that a customer might want to know.

Much of this is now of course mandated by law, but the more information that you can give consumers, the better. Modern consumers want to be able to make their own decisions, and this can only happen with the right information. To give an example, alcoholic beverages do not currently require calorific content, but some beers, including Budweiser’s Bud Light, have bucked the trend and are successfully displaying calorie content.

Niche Products

Food manufacturing has traditionally been the preserve of larger businesses that are able to afford the premises and machinery that it requires. However, there’s an increasing drive towards the availability of niche and more specialised food items, which smaller manufacturers are able to produce themselves. There are a few drivers for this.

The first is of course veganism, vegetarianism, and the general trend towards people trying to consume less animal product, whether meat or a by-product. Many smaller businesses are having success in this area. Heck for instance, is a mid-sized family run and independent business, that had good success with their farm-to-table meat products. Their shelf presence and social media attention increased considerably however, when they diversified into the vegetarian market. Their meat-free alternatives are stocked at major retailers and are going head-to-head with major manufacturers such as Quorn.

Specific dietary requirements are another area in which smaller businesses are taking the initiative. Health and fitness regimes for instance often call for specific nutritional content, and smaller manufacturers can almost tailor make food for this very purpose - something which would be a much more prevalent concept in the near future.

Summary

The food and drinks manufacturing industry is a very large one, and we’re seeing interesting developments driven by the desire for sustainability, as well as technological advancements. As we see more of a focus on local produce, combined with technical innovation, it’s likely that the end choice for consumers will be very different than it is today in just a few years, with more selection and diversification. However, Brexit weighs heavily on this industry, and it could yet prove to be a significant hurdle to growth.

Here at Virtual College, we encourage all employees within the industry to stay up-to-date with the latest developments and best practices. Our food and drink sector page includes articles on the subject, as well as links to further training options. Food hygiene training in the manufacturing industry is extremely important, and we’d recommend the level 2 food safety certificate for all employees working with food, and level 3 for supervisors and those involved with policy and process.