Innovation is the essential ingredient for strong industry according to new research carried out by the Institute for Manufacturing at Cambridge University.
For any who still doubt that innovation and R&D are priorities for investment in hard times, this new research from one of the UKs leading research centres into manufacturing trends, poses a clear warning that failing to think creatively around products and processes will leave them as industry laggards.
An ongoing demonstrable commitment to innovation and high-value production are key reasons why the UK’s food and drink industry has emerged from recession in better shape than many other manufacturing sectors according to the research which was commissioned by the Food and Drink Federation. From May 2008 to May 2009, the production index for food and drink fell by only 1.9 compared to 13.1 for manufacturing overall – a clear indication of the industry’s resilience.
Melanie Leech, FDF Director General, says: “As Government builds the strategy for economic recovery, this report provides a timely reminder of the important financial, strategic and social contribution of the UK’s biggest manufacturing sector.”
Focus points for innovation have centred on products, factories and people. The following statistics show how the food and drink industry have nurtured success in these areas.
•The UK food and drink industry invests more than £1.1bn a year on R&D – a comparable level with the automotive sector.
•It has launched 1,500 new products each quarter since the beginning of 2008.
•As well as NPD, industry has expended considerable resource in responding to consumer demands for products that are lower in salt, fat or energy.
•UK food products are also in demand overseas – 2009 saw the 5th consecutive rise in food exports, growing in value by 4.4% to £9.65bn in 2009, significantly outperforming other manufacturing sectors, which experienced an 11.8% slump in overseas sales.
The food sector has been one of the most resilient manufacturing sectors in terms of output during the recession and FDF members are confident about increasing their investment in UK production facilities in the next three to five years. Indeed, business expenditure by the food and drink industry also supports their increased commitment to investment. According to ONS time series figures, between Q1 2009 and Q1 2010, UK manufacturing business expenditure dropped by almost 25%. Within the same time frame, the food and drink industry increased their business investment by 7.2%, raising its percentage of total manufacturing business expenditure from 13% to 19%. The IfM report also shows that:
•65% of UK food and drink manufacturers have more than 75% of their production in the UK
•UK manufacturers also invest heavily in UK design and research work, with very similar percentages to UK production
•Nearly 40% of UK food and drink manufacturers plan to increase investment in production and research and design over 3-5 years
•94% of employees in the UK food and drink sector are full-time
•UK food and drink employees are paid well above the national average
•Average tenure within the food and drink industry is 9 years
•20% of employees are graduates
Case studies which show the application of innovation in these three key areas have supported this research. Companies contributing to these case studies include United Biscuits, Coca Cola Enterprises and Mûller Dairy.
Click here to read Julian Hunt from the FDF’s blog on this new report and its insight into the food manufacturing industry.