Just under a year ago it was reported that the trusty Mars Bar saved the UK from a no-deal Brexit public outcry. Apparently, Michael Gove, Secretary of State for Defra, personally intervened after he heard that two perishable ingredients, used to manufacture Mars Bars, would be in jeopardy in the event of no deal.
You might be amazed to learn that on further scrutiny the story turned out to be fake news, created as part of some broader internal political wrangling!
The anecdote does show however, how central the food and drink industry, the largest of all the UK’s manufacturing sectors, is to political and public debate and how susceptible it is to both short and long-term threats across several fronts.
Until now, many of these challenges have been ‘tomorrows problem’. Of concern but considering the damp squib of March, something which many companies have firmly placed on the back burner.
As the revised timescale now puts our eventual exit, slap bang in the middle of the build-up for Christmas pressure, no doubt discussions are starting to be had, Brexit plans are being taken out of drawers and dusted down and small margins are being added to purchasing plans as contingencies but in just over 60 days many of these will come into play for real.
Here are the two areas we at Lindum think are key issues for food and drink businesses, to be considering over the next 6-12 months.
Brexit – food and drink, the barometer for political planning
Not many industries would claim that they will be unaffected by Brexit. The food and drink sector will perhaps act as a barometer for the rest of Manufacturing UK, as few other sectors will be so swiftly or deeply affected by the immediate aftermath of October 31st.
Scanning views across the sector would suggest that many consider any potential Brexit scenario to offer an inferior option to the status quo of EU membership. The perishable nature of food and drink potentially make any changes in trading terms which lead to transport delays catastrophic.
There is evidence to suggest that UK food and drink will thrive in global markets, with exporters having growing success in Asia and Africa in recent years. Trade with America, Australia and New Zealand, will create increased competition as potentially cheaper imports enter the domestic market but these countries will also fill the seasonality gap left by EU suppliers.
We are seeing many companies beginning to stockpile ingredients and products and prepare for price volatilities. The current exchange rates, whilst giving a welcome boost to exports are already starting to impact on pricing and the sustainability of essential raw materials. The industry is lobbying for trade alignments as close as possible to the status quo, but the change in government direction and now the almost certain outcome of a no-deal is leading producers to plan for the worst. Planning and certainty are the two key areas Lindum Packaging can help the sector with here. Our Lean Integrated Packaging survey can help you prepare and optimise your packaging processes and give you the data you need to align your stock requirements and our Stock & Store service can help you plan for market fluctuation and ensure your packaging supply.
Sustainability – packaging leading the sector
The public, media and governmental spotlight is firmly on those sectors whose processes and products contribute most heavily to environmental issues. With food and drink brands facing the biggest regulatory headache. Lindum recognise this and have been championing a sector approach built around ‘Delivering Less’ for our customers – less waste and
In 2022 a new tax on single-use plastics, comes into force and will apply to all packaging that doesn’t include at least 30 per cent recycled content. The Packaging Producer Responsibility System, will see an increase in the industry’s contribution towards disposal and recycling of plastic products.
Given the global supply chain in packaging procurement this will cause potential price increases for both manufacturers and consumers.
Lindum want to support all sectors which ship products and use transit packaging, getting them match fit and providing market leading Innovative products, such as our CareWrap range and our Oxo-Bio degradable BioZ
Despite the current uncertain times, the food and drink sector is growing, innovating and investing all the time. Last year Britvic, Diageo and Muller all made new capital investments of more than £50, million, and many SME’s, particularly in the organic niche, have entered the sector.
With the increasingly robust direction coming from government and politics more broadly, there does, finally, appear to be consensus. What is clear however is that time spent in planning now, will help companies keep ahead of the competition as these issues start to kick in. Lindum are leaders in the transit packaging and we are here to help why not get in touch and see how we can make you both more sustainable and Brexit ready!