Food and drink manufacturers remain confident despite mounting challenges
Eight in 10 (81%) leaders in the UK food and drink sector feel positive about the prospects of the industry over the coming year, but mounting pressures including the twin threats of higher energy costs and constraints on consumer spending will continue to test businesses’ resilience, accountancy and business advisory firm BDO LLP has warned.
BDO’s annual Food & Drink Report, which surveys manufacturers in the sector, reports a high degree of optimism among food and drink manufacturers.
Although down slightly on last year (78%), 70% of respondents are feeling positive about the future of their own business in the next 12 months. This is buoyed by the big jump in optimism for the sector overall which has increased from 69% in 2022 to 81%.
Over a third (40%) expect an increase in their gross profit margins over the coming year and, as the buoyant mood continues, a further quarter (24%) are planning acquisitive purchases. Almost a third (30%) say new product development will be a key driver for growth across the next 12 months, whilst 29% say expanding in non-European Union (EU) markets is a key focus.
Despite the confident outlook, BDO’s survey highlights the myriad of challenges businesses in the sector are facing.
Half (50%) of the respondents reported difficulties in recruiting the people they need, with engineering and project management or production-related roles the hardest to fill. Almost two fifths (39%) of those experiencing recruitment challenges believe skills shortages are worse now than before Brexit and COVID-19.
Digital transformation remains a key area of investment to boost productivity and gain competitive advantage. The majority of respondents state their executive teams recognised the importance of this, however 60% aired concern that they were falling behind on their digital transformation journeys as firms grapple with unswerving economic headwinds. In addition, 28% say they are taking on higher levels of debt to counteract inflation.
The Ukraine conflict continues to affect 65% of businesses in the survey. According to the BDO report, overly complicated import-export rules are cited as reasons for hampering trade. Almost two thirds (63%) are finding it hard to trade with Northern Ireland via the Trader Support Service, with a further 69% struggling to use preferential origin under the UK’s Free Trade Agreements.
Cindy Hrkalovic, head of food and drink at BDO, said: “After enduring Brexit, COVID-19, supply chain disruption and a cost-of-living crisis brought on by a war in Ukraine, food and drink businesses should be applauded for the resilience and adaptability they have demonstrated.
“However, the long-term nature of many of the threats facing UK food and drink companies suggests that leaders will need to stay flexible and think strategically about the future of their businesses. Sticking-plaster measures from businesses or government will not suffice in an environment where a return to normality – whatever that is – remains elusive.”
Food and drink is the biggest manufacturing industry in the UK with a turnover of £128bn and exports worth £25bn. The sector employs 456,000 people in the UK, with its supply chain employing a further 4.3m people.
Expanding engineering design consultancy gets a foothold in the Humber at The Deep Business Centre
A long-established engineering design consultancy is aiming to build partnerships and generate job opportunities after expanding to the Humber by opening a new office in Hull.
ENG-CAD Group is on the doorstep of the region’s onshore and offshore renewable, oil and gas sectors in its new location at The Deep Business Centre where it will also be targeting general industry.
Graham Manning, business development manager at ENG-CAD, said the company, based in Great Yarmouth, has worked in the Humber area in the past and now feels that the time is right to take a foothold on the estuary.
He said: “Having worked previously with a number of businesses in the Hull and Humber area we are aware of the massive opportunities that exist here given the huge amount of ‘all sector’ industry. We also see an appetite for growth and sense that there could be room for another company here to provide the range of technical engineering and survey services that we offer.”
ENG-CAD Group was launched 15 years ago by Managing Director David Tucker, an experienced engineer who established the business in the onshore and offshore industries and expanded into sectors including renewables, marine, nuclear, utilities and food.
Graham said: “Currently, we have ten core people in the business including structural engineers, design engineers, surveyors and draughtsmen and we also use local contractors where necessary and available, including many from the Humber, Yorkshire, and North East regions.
“We are dipping our toe in the water by opening an office at The Deep, where the beauty of this facility is that we can add more space very quickly and bring in additional people for our projects if needed.
“You only have to look out of the window here to get an idea of the enormous potential so we’re looking to collaborate with existing companies, contractors, suppliers, and skilled trades people where we see mutual benefit in working together, sourcing new opportunities and delivering projects.
“We recognise there is a lot of competition but also that there are a lot of business opportunities so it’s up to us to use our new location, our experience and the work we have done here in the past and to make more people aware of what we can do.”
Freya Cross, business and corporate manager at The Deep, said: “Over the years we have welcomed many clients from engineering and energy who have started on a small scale and made the most of our support to raise their profile and expand their activities.
“As a city centre site on the bank of the Humber we are close to essential amenities and within easy reach of riverside energy companies and major industry in the local area and further inland. We are also well-versed in the ever-changing requirements of project work, and we look forward to supporting Graham and his colleagues as they expand in the Humber.”
Sheffield-based ITM Power plans to bid on new projects in America
Sheffield-based clean energy company ITM Power is to start bidding on projects in America, having standardised equipment to meet regulations on both sides of the Atlantic.
ITM intends to build on its strong relationships with various North America-based industry leaders, some of which have already been announced as collaborations to cement its technology leadership and future proof the supply chain.
Dennis Schulz, CEO ITM, said: “The US has the potential to become one of the largest markets for green hydrogen. The region’s green hydrogen journey has just started, which provides ITM with a tremendous opportunity to become a leading electrolyser provider as the market develops over the coming years.”
The US is widely recognised as having the potential to become one of the largest markets for electrolysers. Supported by the $370 billion Inflation Reduction Act (IRA), the US National Clean Hydrogen Strategy and Roadmap, released in June 2023, identified future demand scenarios, with strategic opportunities for the domestic production of 10 million metric tonnes (MMT) of clean hydrogen annually by 2030, 20 MMT annually by 2040, and 50 MMT annually by 2050. It complements the $9.5 billion investment for clean hydrogen through the Infrastructure Law. To put the US domestic production opportunity into context, the International Energy Agency (IEA) estimates that the current global use of grey hydrogen is 95 MMT per annum.
Government’s funding decision will not end stand-alone Greater Lincolnshire LEP
Lincolnshire’s local authorities and the Greater Lincolnshire LEP Board have agreed that the LEP will not integrate into a local authority by 24th March 2024, when direct core funding comes to an end.
The Government had wanted the work of the LEPs to be absorbed into a local authority, where funding will be sent instead, but the Greater Lincolnshire body will continue to operate in the medium term, with any future integration aligned with a potential devolution deal for Greater Lincolnshire.
Neal Juster, Chair of the Greater Lincolnshire LEP, said: “The Greater Lincolnshire LEP continues to serve us exceptionally well and we are proud of the role all partners have collectively played in working together to deliver economic development, infrastructure, and major programmes across our area in recent years.
“As a board and a team, we are committed to working with all partners to continue our work, and to develop next steps leading up to devolution, recognising the importance of a strong business voice and a successful economy for Greater Lincolnshire.”
Councillor Martin Hill, Leader of Lincolnshire County Council, said: “Across Greater Lincolnshire, we want to ensure that the voice of businesses in our area continues to be heard. The participation of the private sector has been critical to the success of LEPs, and we have a shared commitment to making sure that businesses play an active role in shaping economic policy going forward.
“Given our ambitions for devolution, we believe there is no reason to transfer responsibilities for economic development away from the LEP at this time.”
Councillor Rob Waltham MBE, Leader of North Lincolnshire Council, said: “We’ve worked closely with businesses through the LEP, supporting the creation of more, well paid jobs and backing their ambitious investment plans across the whole of Lincolnshire.
“This will continue with our equally ambitious commitment to securing a game-changing devolution deal which will make a positive difference to every family in the county – businesses will be an essential part of this.
“Businesses across our area have proved themselves to be instrumental in making a huge contribution to productivity for the whole of the country through providing fuel, food and energy for the UK and they will play an integral role in Lincolnshire’s ambitious future.”
‘Living Lab’ switch-on means new way to test offshore technology
An advanced 5G-equipped ‘living lab’ has been switched on at the Offshore Renewable Energy Catapult’s Operations and Maintenance Centre of Excellence in Grimsby.
The Greater Lincolnshire LEP has jointly funded the £2.8m Ports and Offshore Renewable Technology Accelerator Lincolnshire (5G PORTAL) with Innovate UK.
It will accelerate the development of a new generation of digital technologies essential to the huge expansion of offshore wind farms required to meet the UK target to deploy 50GW of offshore wind by 2030.
The ‘living lab’ will allow technology providers to develop, test and demonstrate their equipment in real world conditions, with access to reliable, high-speed communications, and aims to attract users from across the global offshore wind sector.
Graham Stuart, Minister for Energy Security and Net Zero, who’s also the MP for Beverley and Holdernness, said: “As a country, we need to embrace new ideas and technologies to make sure the global boom in offshore wind continues. The high-speed communications infrastructure will provide the perfect environment to test and develop the next generation of digital technologies, making our wind farms smarter, safer and greener.
“This will also level up the country by sustaining 200 skilled jobs, supporting more than 120 businesses and creating 20 new enterprises. Thanks to the 5G PORTAL, Grimsby is becoming world famous as the driving force behind the digital revolution in offshore wind.”
The 5G PORTAL is delivered by a consortium led by ORE Catapult, bringing together the expertise of Microsoft, XceCo, Associated British Ports (ABP), Accelleran, JET Connectivity, Boldyn Networks and Satellite Applications Catapult.
Andrew Macdonald, Director of Offshore Wind Development and Operations at ORE Catapult, said: “The 5G PORTAL opens the door to an exciting new future for offshore renewable energy in the Humber with our expert partners. It will provide a real-world test and demonstration zone for robotics, AI, remote sensors, wearable technology, zero emission vessels and smart ports, driving forward the digital evolution of our next generation wind farms.
“Innovators can make the most of this unique resource as they bring new products and services to market, both in the UK and across the world. We believe it will attract investment from the global offshore wind market that will be felt regionally and nationally as offshore wind rapidly expands and opens up significant export opportunities.”
To create the 5G PORTAL, two 5G technology development and demonstration zones linked by a fibre network were created: Grimsby Port is at one end and the Lynn and Inner Dowsing wind farm is at the other.
Government launches wet wipes plastics ban consultation
A consultation on banning wet wipes containing plastic across the UK has been launched today under plans to tackle plastic pollution and clean up our waterways.
Said to be a key measure in the UK Government’s Plan for Water, the ban forms part of the government’s ongoing work to ensure there is more investment, stronger regulation and tougher enforcement across the water system, helping tackle plastic and microplastic pollution and improve water quality.
Wet wipes containing plastic break down into microplastics over time, which can be harmful to the environment and human health. Banning wet wipes containing plastic would help alleviate this issue, as well as reducing the volume of microplastics entering wastewater treatment plants when wrongly flushed.
Alternatives to wet wipes containing plastic are already available, with a number of major brands removing plastic from wet wipes. Boots, Tesco and Aldi are amongst major retailers who have stopped selling wet wipes containing plastic. The ban would build on this action from retailers to make only plastic-free wet wipes available to consumers.
The plans have been set out in a joint consultation with the devolved administrations which has been launched today to seek views on banning the manufacture, supply and sale of plastic-containing wet wipes across the UK.
It recognises public calls for action to tackle plastic pollution in waterways, and widespread public support for the proposed ban. A 2021 Call for Evidence in England found that 96% of respondents supported a ban on wet wipes containing plastic.
Environment Secretary Thérèse Coffey said: “Wet wipes containing plastic are unnecessary and are polluting our environment.
“Today’s plan shows we will continue to tackle plastic pollution in our waterways, building on banning microbeads in personal care products to taking billions of plastic bags out of circulation.”
Firms encouraged to apply for Artificial Intelligence funding
Artificial intelligence projects in areas as diverse as fashion, farming and fire-fighting are being backed with a further £37 million, says Science and Technology Secretary Michelle Donelan.
Research teams and businesses of all sizes in high-growth industries – from transport to agriculture and construction to creative industries – are encouraged to apply for a share of £32 million, which is now open for bids. The funding will help grow their AI initiatives in a safe and responsible way and boost the wider sector, support their workforces and help the UK towards the Prime Minister’s priority of growing the economy.
A further £5 million has been awarded to feasibility studies for 100 projects involving small businesses across the UK, helping to sow the seeds of an idea that could flourish into game-changing technology, part of a push from government to grasp the positive effects of AI to boost productivity and growth. This funding will support AI tools being used right across the economy, from managing the power supplies to EV chargepoints and reducing delays on the railways, to using AI to reduce the waste produced by the construction industry, and monitoring the health of dairy cattle.
Michelle Donelan said: “When it is deployed safely and responsibly, AI can and will transform what is possible in the world of work, unlocking gains in productivity and efficiency that could never have been imagined before.
“That is why we are backing 100 small teams with the seed of an idea – from using AI to boost clothing recycling to driving housebuilding – to drive them forward. At the same time our £32 million competition will support teams of all sizes to kick their ideas on to the next level, further helping us shape how this vital technology of the future can work for us and grow our economy.
“It is also why we are bringing world leaders and tech experts together in just a few weeks’ time for the AI Safety Summit, to build cooperation around the risks and opportunities of this incredibly promising technology and how we manage it safely.”
Leeds advisers supports Yorkshire entrepreneur as Assisi Pet Care acquired
Yorkshire-based entrepreneur Peter Mangion, founder and CEO of Assisi Pet Care Group, a producer of pet foods and treats, has partnered with Wind Point Partners, a Chicago-based private equity firm which has approximately $6 billion in assets under management.
The deal was supported by a team of Leeds-based legal and financial advisers and provides a successful exit for Harwood Private Equity.
Headquartered in Melton Mowbray, the company’s products are sold in the UK and throughout Europe, with two natural treat production facilities located in Poland. Assisi is a key partner to leading customers across the grocery, e-commerce and pet specialty channels, offering a broad array of branded and private label products.
Assisi was founded in 2020 as a platform to acquire, integrate and grow leading pet food and treat companies with established reputations and strong potential.
Under Mr. Mangion’s leadership, Assisi has grown significantly through the implementation of organic growth initiatives and the completion of four acquisitions that expanded the company’s product capabilities and geographic reach. Assisi represents the second partnership between Wind Point and Mr. Mangion, who previously served as CEO of a Wind Point investment in the pest control industry.
A team of Leeds-based advisers has supported Assisi’s growth journey, advising through its four acquisitions. The team included Jonathan Simms, Hitesh Tailor, Tony Berry and Isabelle Hammond of Clarion who provided legal advice; Richard Firth and Daniel Swanwick of Park Place who provided corporate finance advice; and Russ Cahill of Tax Advisory Partnership who provided tax advice.
Mr. Mangion said: “Assisi has been on a tremendous journey since its inception in 2020, which is a testament to the strength and quality of our people, our customer and supplier relationships and the rich heritage of our brands and products. Wind Point and I have worked closely together for numerous years. Our shared focus on investing in our people and expanding our capabilities makes them the ideal partner for Assisi.”
Adam Jump, vice president at Wind Point, added: “Assisi is a rapidly growing platform with significant opportunity in the dynamic European pet care industry. Peter and the Assisi management team have built an outstanding business that sits at an exciting inflection point. We look forward to supporting the Assisi team as they continue to build a differentiated pet foods and treats platform.”
Wind Point is a long-time investor in the pet and animal nutrition industry, with select prior and current investments including targeted PetCare, FoodScience, Petmate and Pestell Nutrition.
Reed Smith LLP served as legal counsel to Wind Point and KPMG LLP provided transaction advisory services in connection with the transaction.
Just a week remains on Fosse Green Energy park consultation window
Just a week remains before the end of a consultation period over plans by a team led by Windel Energy to comment on plans Fosse Green Energy to create a solar and energy storage south west of Lincoln, in North Kesteven.
The proposed site straddes the A46, known as Fosse Way, and will be made up of solar photovoltaic (PV) panels, battery energy storage areas and associated infrastructure. The solar and energy storage park is expected to provide enough clean energy to power in the region of 110,000 homes.
So far, five events have been held, during which local communities were able to learn more about the project, ask questions directly to the project team and leave feedback. In total over 450 people attended these events and we received valuable feedback which will be considered in the design of Fosse Green Energy.
Once consultation closes, the project team will consider all the feedback submitted, alongside the findings from ongoing technical and environmental studies. A second stage of consultation is planned to be held in early 2024.
Mark Sandles, Development Director at Windel Energy said: “We are pleased to have met so many people at our events and to hear your views on Fosse Green Energy. We are committed to considering and listening to all comments and are looking for more feedback before consultation closes on 20 October. “We are particularly looking for feedback on the locations we have identified for the solar and energy storage park and grid connection corridors, and on suggestions for community projects we could support as part of our proposals.”New homes set for former Lloyds Bank building in Hull thanks to Levelling Up Funding
The former Lloyds Bank building on the junction of George Street and Bond Street will undergo a full refurbishment to create 46 residential properties thanks to support from Levelling Up Funding (LUF).
A total of £550,000 has been granted by Hull City Council from the government’s LUF towards the £7.4 million project.
Applicant Modernistiq (Hull) Ltd has plans for restoration of the full building, inside and out.
Plans have been approved to convert the former banking hall on the ground floor to 22 flats, whilst the upper floors have permission to be altered from offices to an additional 24 dwellings.
Part of the works will also include restoration of the original Bond Street elevation clock face and painting and cleaning to the building’s historic façade.
Once the makeover is complete, it will not only provide modern, high-quality city centre living, but also local jobs.
Cllr Paul Drake-Davis, the council’s portfolio holder for regeneration and housing, said: “This is an excellent project which will bring back into use a large, vacant building, whilst also providing new city centre residential opportunities.
“The Levelling Up Fund continues to contribute to Hull, bringing in private investment to help regenerate our city centre.”
