The Food & Drink Manufacturing sector has bounced back after a ‘tumultuous’ year, as consumer demand continues to drive growth in alternative markets, according to accountancy and business advisory firm, BDO LLP. The UK market saw a ‘prosperous’ return to form with M&A activity up by 20% in 2021 – only 10% lower than pre-pandemic levels. The BDO Food & Drink Manufacturing Review 2022 has revealed that deals increased in plant-based, free-from, low sugar and alcohol alternative subsectors during the last 12 months. This included the cross-border acquisition of vegan and free-from brand Gosh! by Portugal-based Sonae for £64 million. Roger Buckley, M&A partner at BDO, said: “The rise in M&A activity in 2021 can be attributed to a number of factors, including improving market sentiment, strategic positioning, pent-up demand following an uncertain year, and also rumoured changes to capital gains tax, driving deal completions. “Whilst plant-based, free-from and sustainable food and drink have been upward trending for the past few years, it’s clear that this subsector is now entering a new stage of growth with volumes of M&A transactions rocketing in 2021. “The issue of sustainability remains a priority for businesses, consumers and governments. Demand for British produce and environmentally friendly goods is on the rise and the emerging agritech subsector is at the forefront of delivering new technologies.” The M&A report reveals that agritech is ‘booming’, with new investment into the global market soaring in 2021, with a record $10.5 billion injected into the subsector, representing a 42% CAGR since 2010. The UK continues to lead the European region, with the 2021 AgriFoodTech Investment Report reporting $1.1bn of investment and 164 deals recorded in 2020. The Food & Drink Manufacturing Review 2022 also shows a dramatic increase in private equity investment in the market, representing 31% of the deal volume last year – up from 19% in 2018. Private equity outfought international acquirers with cross border deals declining from a high of 52% of transactions in 2020 to 45% last year. Buckley added: “Despite the promising turnaround of the market in 2021, the year ahead will throw up a significant amount of uncertainty and challenges, marked deeply by Russia’s invasion of Ukraine. “We expect rising input prices across energy, labour and materials to be one of the major issues of 2022. Global transport problems and labour shortages will also continue to be disruptive to the industry, despite the Home Office increasing the foreign worker visa to six months for seasonal workers. Full custom controls introduced for goods moving between the EU and UK is also causing headaches for food and drink importers. “However, challenges aside, we expect the M&A market to remain active, and investors to be increasingly attracted to this resilient industry, as producers and manufacturers continue to re-engage with M&A and re-focus on implementing their growth strategies.”

The Solar Trade Association has welcomed the Chancellor’s announcement that VAT on installing energy-saving materials in residential properties will be reduced to 0% for five years starting tomorrow. Chris Hewett, Solar Energy UK’s Chief Executive said: “Solar Energy UK is delighted to see VAT reduced on solar and other energy saving materials for residential use, after many years of calling for this. It is common sense for the Treasury to be encouraging greater uptake of all zero carbon technologies in the face of an energy security crisis and climate emergency. It will be seen as a real endorsement of solar, as well as improving the pay back for many consumers who may be on the fence.” Reducing the VAT rate on energy-saving materials and installation would help families cut their energy costs permanently and afford improvements towards decarbonising their homes, he said. The Spring Statement highlights: “To help households improve energy efficiency and keep energy costs down – as well as supporting the UK’s long-term Net Zero ambitions – the government is extending the VAT relief available for the installation of energy saving materials (ESMs). Taking advantage of Brexit freedoms, the government will include additional technologies and remove the complex eligibility conditions, reversing a Court of Justice of the European Union ruling that unnecessarily restricted the application of the relief. The government will also increase the relief further by introducing a time-limited zero rate for the installation of ESMs. A typical family having rooftop solar panels installed will save more than £1,000 in total on installation, and then £300 annually on their energy bills”.

The visit to Hull by Business Secretary and COP26 President Alok Sharma to launch the Oh Yes! Net Zero Campaign underlines the fact tat the Humber is at the epicentre of the green energy revolution, says ABP’s Regional Directpr Simon Bird. “The fact that such a senior figure in the effort to tackle climate change attended the launch helps to underline what many have known for a while: that the Humber is the place to be when looking for inspiration on how to decarbonise our economy,” he said. “I am delighted to say that ABP’s ports in the Humber are very much at the centre of this exciting trend. For some years now, ABP in the Humber have been getting our own house in order on environmental matters. We have created the two largest roof-mounted solar power facilities in the UK in the ports of Immingham and Hull and we are in the process of a major installation of EV charging points for cars across the port estate. New cranes and mobile plant are at the cutting edge of efficiency and low emissions. “The Humber is currently the epicentre of offshore wind activity for the whole World. The Siemens Gamesa wind blade manufacturing facility in Green Port Hull has gone from strength to strength since opening its doors in 2017 and is currently going through a major expansion. This expansion is to accommodate the larger blades that are needed as the industry increases in scale all the time. Meanwhile, across the water in the Port of Grimsby, companies like Orsted and RWE have made the port the biggest hub for the operations and maintenance of offshore wind farms anywhere on the planet. All of this work has brought in new and skilled jobs to the area and has shown how fantastically placed the Humber is to service this growing industry. “Alongside these efforts, a number of our other customers are involved in exciting projects to lead the way in decarbonisation. A great example of this is Zero Carbon Humber. The project is a partnership of many of ABP’s customers in the Humber, including British Steel, Drax, Equinor, PX Group, Centrica and Uniper who have come together with a shared vision to transform the Humber into the UK’s first net zero carbon cluster by 2040, which is 10 years earlier than the Government’s published goal. Given that the Humber is currently the largest carbon polluting region in the UK, the scale of the ambition is palpable. “The project will develop a shared trans-regional pipeline out to the North Sea for low carbon hydrogen and for capturing and storing carbon emissions. This will help to establish a carbon storage economy on a truly transformative scale, and potentially create up 49,000 jobs. “The Humber Freeport which I chair has also set itself the vision to be a leading player in decarbonisation. The new entity, once it is up and running, will actively support investment from businesses into the Humber that will seek to decarbonise and will be a major catalyst to drive investment across our region. “What is especially exciting, is that it is the Humber Ports that are the one thing all of these projects have in common. The ports, which in the past enabled industries that were highly polluting, are now a service enabler for some of the most pioneering work to reduce our environmental impact and create green jobs for the future.”