KBS - Food Manufacturing - Market Insight

MARKET INSIGHT

As the country’s biggest manufacturing industry, food and beverage production has reached a critical juncture as it comes face-to-face with a host of challenges. Rising energy and raw material prices mean greater costs; labour shortages have been exacerbated by Brexit; sustainability measures have led to different production methods; advancing technology means automation must be embraced; supply chains have encountered disruption; and political changes have sparked corporate tax increases. However, although food production costs surged by 9.2% in the year up to March 2024, there are still significant opportunities for growth to be exploited in a sector that employs nearly 450,000 people in the UK.

Revenue Total value (£) and annual change from 2011 - 2029. Includes 5 - year outlook.

150

12%

Forecasted

120

8%

90

4%

60

0%

30

-4%

0

-8%

2028

2012

2014

2016

2018

2020

2022

2024

2026

SOURCE: IBISWorld

The growing consumer demand for sustainable and ethically produced food; technological developments from robotics and AI; new trade deals for exportation outside the EU; and rising interest from investors within the sector are all ensuring that companies which take a proactive approach to the industry will thrive and become attractive acquisition targets. As of September 2024, 507 M&A transactions involving UK targets had taken place in the past three years within the food manufacturing and distribution sector.