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Food & Drink Manufacturers Continue to Invest in Innovation
by scotlandfoodanddrink.org - 06/06/2011
"Despite upward cost pressures, FDF report that UK food and drink manufacturers are increasing their investment on innovation, research and development, in order to deliver value and benefits for consumers and to enable the sector to grow."
The latest Food and Drink Federation business confidence survey (quarter one: Jan-March 2011) has shown a positive picture of the level of innovation taking place in the industry. The number of respondents who increased their investment spend in Q1 rose substantially compared to Q4 of 2010 with over 40% of companies launching new products.
The net increase of combined investment in up-skilling, capital expenditure and R&D was almost three times higher in Q1 2011 than in Q4 2010, and levels of investment have recovered considerably since this time last year, rising quarter on quarter since Q3 2009, throughout difficult trading conditions.
In order for the UK to stay at the forefront of innovation it is vital the industry has a workforce with the right skills to keep the sector globally competitive. In Q1 a greater number of respondents increased their investment in upskilling employees as well as employing more staff compared to levels seen at the end of 2010.
Volatile raw material prices are continuing to put pressure on manufacturers, with nearly 90% of respondents experiencing increasing cost of commodities such as wheat, corn and cocoa, and 75% of respondents expecting to see further increases over the next 3 months of 2011. In addition, the price of all input costs rose in Q1, including packaging and energy, translating to over 80% of respondents confirming average cost increases and forcing nearly two-thirds of members surveyed having to raise product prices.
The general level of business optimism was similar to the level recorded in the previous survey’s Q4 figures, with 28% of respondents reporting concern for 2011.
FDF’s Director of HR and Competitiveness Angela Coleshill says: “Food and drink is the country’s biggest manufacturing sector in terms of turnover, Gross Value Added (GVA) and employment, but whilst our sector is continuing to grow, its future sustainability is highly dependant on the skills of its current workforce and its ability to attract the right talent for the future.
“It is reassuring to see companies have an appetite for investment in skills so the UK can continue its strong track record in innovation and is recognised by the Government as offering opportunities for growth”.
The FDF business confidence survey publishes every quarter, looking at performance at the past three months and expectations for the coming quarter.
This survey reflects Jan – March 2011 and a forward look up to June 2011.
More Details: http://www.scotlandfoodanddrink.org/news/article-info/2209/food-and-drink-manufacturers-continue-to-invest-in-innovation.aspx