A snapshot of the food and drink sector in the East Midlands has revealed the impact that the current economic climate is having on firms working in the region in the industry.
The food and drink sector is one of four priority sectors of the East Midlands – contributing 17.5% GDP (gross income) to the region. It is around twice as important in the East Midlands economy as it is nationally.
Now a survey carried out by The Food and Drink Forum – one of the region’s largest organisations offering business support to the sector – has revealed how the sector is being affected.
The majority of food manufacturing firms questioned at the Food and Drink Forum’s annual general meeting said that the economic situation was impacting on business in some way – both positively and negatively.
Cash flow difficulties, volatility in markets, reduced orders from customers, and the public cutting back on spending were some of the problems listed by companies.
But for others, the economic climate had given them new opportunities to innovate, vie with competitors and to shine, as well as the opportunity to discover new markets for their products.
The majority of those questioned reported that things were going well, despite the recession that the country has experienced, and none were undertaking or threatening redundancies.
“The Food and Drink Forum AGM and networking supper offered the perfect opportunity for us to ask as many East Midlands food manufacturers as possible how things were going and it proved to be a very interesting and valuable experience,” said Food and Drink Forum managing director Fiona Anderson. “The majority of firms questioned said that the current economic climate was affecting business – although for some it was business as usual. The effects varied enormously from negative ones such as losing orders and difficulties accessing finance to very positive ones like doors being opened to new markets and the opportunity to invest in new innovations.
“Overall the findings revealed that the majority of firms are coping well, and that they are planning for a robust future with investment in new product development, capital expenditure on plant, skills training and development.”
Other key findings of the survey were:
• Those who had approached banks for finance reported more stringent terms and increased demands for security.
• There had been lower demand for products from some sectors, such as pubs.
• A handheld snack producer reported that fewer corporate events had impacted on business.
• Companies had introduced stricter terms for payment for their customers.
The firms questioned ranged from a home-run business operated by two people up to a company with a £5.5m turnover.
More than 150 delegates attended the annual general meeting and networking supper of the Food and Drink Forum at Kelham Hall, near Newark. They included food and drink business owners, employees of companies associated with the sector, as well as others linked to the industry in the region.
The Food and Drink Forum, which is based in the Business Centre at Southglade Food Park, Nottingham, was launched in 1998 as a not-for-profit membership-led organisation to stimulate and support the sustainable growth and development of the food and drink industry in the East Midlands.
“The Food and Drink Forum’s links with firms working in the food and drink sector in the East Midlands gives us a unique insight into the challenges the sector faces, its needs, and trends in the industry,” said Fiona Anderson. “This snapshot has provided us with valuable information about how firms in the sector are faring and ways that we can help them develop in the future.”
For more information visit www.foodanddrinkforum.co.uk or call 0115 9758810.