UK food and drink manufacturers urge Government to support industry’s growth ambitions, as new report reveals sector’s £37bn contribution

A new report from the Food and Drink Federation (FDF) reveals that, according to the latest ONS data, the food and drink manufacturing sector grew 17.9% over a decade. The industry now contributes £37bn to the UK economy, accounting for almost a quarter (24.2%) of total UK manufacturing turnover. 

The Powering Communities report reveals that this significant economic contribution stretches across communities in every UK region and nation. For example, it makes up almost a third (30.8%) of total manufacturing GVA in Scotland and a fifth in the East Midlands (20.6%) and Northern Ireland (20.2%).  

The report also reveals the food and drink manufacturing sector’s role as a major employer, providing almost half a million (486,500) jobs in the UK’s 12,195 food and drink businesses. Employment in the sector is growing, with 41,000 new jobs across the UK since 2018. The number of food and drink manufacturing businesses in the UK also rose 14% between 2019 and 2024. 

Significant investments in robotics and automation, as well as R&D and innovation to create healthier products, have all helped to drive this growth. And, there is still more growth for the taking. At the end of last year, FDF revealed that there is an untapped £14bn productivity opportunity for the sector, which could be unlocked through investments in automation, digital technology and AI¹. 

However, according to the latest FDF State of Industry report, with the sector facing a host of impending challenges, maintaining this growth is by no means certain. Food and drink business confidence declined to -47% in Q4 2024² on account of growing inflationary pressures, barriers to trade, and upcoming Extended Producer Responsibility (EPR) fees for packaging.   

To ensure the sector’s future health, FDF is urging government to take decisive action to address barriers to growth. These include low investment in innovation, falling food and drink export volumes and lack of access to highly skilled talent. 

Jim Bligh, Director of Corporate Affairs, Communications and Packaging, FDF said: 

“Our industry is vital to ensuring we have a thriving food system here in the UK, providing high-quality, affordable food. And we are a major part of the UK’s wider manufacturing sector, offering good careers, driving investment, and promoting international trade. Food and drink manufacturing is uniquely placed to make a positive impact in every village, town and city in every constituency in the country. 

“But with food and drink businesses under increasing pressure, we’ve reached a pivotal moment where government must act to safeguard this foundational sector’s future growth and the UK’s food security. We’ve set out more than 40 steps government can take to remove unnecessary roadblocks to growth for the benefit of every community in the UK.”  

FDF has set out its Ingredients for Growth, offering the recipe for how government and industry can work together to make the UK the most competitive and dynamic food and drink sector in Europe. The report highlights more than 40 actions that government can take to secure a thriving, productive food and drink industry into the future, including six key asks from industry: 

1. Secure a fair share of the UK’s R&D spend for food and drink manufacturing, to support industry investment in new product development and healthier options for consumers and the transition to net zero. It’s critical that food and drink receives its fair share of government funding and support to unlock innovation in the UK’s largest manufacturing sector. 
2. Co-create a workforce and skills plan with Skills England to support our industry as we transition to a higher-skilled, higher-wage workforce. This would be an investment in communities in every place and region of the UK.  With vacancy rates more than double those seen in wider manufacturing³, investing in skills is vital to plug this gap and to create new opportunities for both young people and those mid-career, in a key part of the everyday economy.  
3. Simplify the R&D tax credits system to help more businesses that are struggling to invest in technology to improve productivity and to innovate healthier products. There’s significant scope to accelerate the adoption of technology across our sector’s 12,195 businesses, with a £14bn growth opportunity for the taking1.  
4. Ringfence the £1.4bn annual cost of Extended Producer Responsibility (EPR) to ensure these fees are only used on improving the UK’s recycling infrastructure and not to fund local authority funding gaps. This money is for yoghurt pots, not potholes. 
5. Prioritise a more strategic approach to EU trade relations to revive falling EU exports, which are down more than a third since Brexit⁴. The EU Border Target Operating Model and Single Trade Window are essential to this and to ensuring profitable trade with our largest trading partner. 
6. Simplify regulations and remove unnecessary red tape to help business, in particular our 12,000 SMEs, focus on growth and productivity. 

-Ends- 

Notes to Editors 

Download the Power Communities report. 

Download the Ingredients for Growth report. 

1. Source: Future Factory report, Newton 
2. Source: FDF State of Industry report Q4 2024 
3. Source: FDF State of Industry Report Q4 2024. Vacancy rates are at 3.6%, compared to 2.5% for wider manufacturing 
4. Source: FDF Q4 2024 Trade Snapshot