New UK food sector survey – download your free report

Saturday, October 02, 2010 | Posted by: Fiona Cullinan
Categories: Thought Leadership | Tags: recession, research, survey, report, strategy, growth, UK, M&A, data, insight, competition, financing, food, Trefor Griffith, new products, beverage, new markets

Grant Thornton’s latest research report, Targeting growth: Challenges and opportunities for the UK Food and Beverage sector, reveals the state of play for UK businesses in this sector. Here are some of the key issues and findings…

The report, carried out in conjunction with MergerMarket, canvassed 50 CEOs and CFOs of UK companies on a number of key issues affecting the food sector, as well as future growth expectations.

Key issues explored in the survey

• What strategies did food and beverage companies put in place to combat the effects of the financial crisis?
• Is the relationship dynamic between food suppliers and the ‘Big Four’ supermarkets changing?
• Which consumer trends offer the biggest opportunities going forward?
• Do food and beverage companies feel they can fund their corporate strategy through traditional methods?
• Is M&A set to continue to be on the corporate agenda over the next 12 months?

Key findings of the report

• 22% say greater domestic competition is one of the biggest challenges facing their business, while 32% named reduced consumer spending or spending on premium goods.
• 46% of respondents are considering expansion into new markets in the next 12 months, compared with 66% who are considering new product launches.
• 69% expect M&A activity to increase in the next 12 months with 20% saying that they were planning to broker a merger or acquisition in that period. However, 36% feel they would encounter difficulties securing finance for M&A. (Download our free Financing your strategy report  for more help on this.)
• In terms of prospects, 52% said that the increasing emphasis on health and wellness presented a significant opportunity; 25% identified the fair trade and free range markets as providing significant opportunities, while 23% said the same about green consumer and local produce.

It appears that the UK food and beverage sector has emerged from the recession in advance of others, and while it is still faced with numerous challenges, it is well positioned to take advantage of future opportunities.

Trefor Griffith, Corporate Finance Director at Grant Thornton, says:

“Food and beverage producers had to digest sharp increases in input prices in 2007 and 2008, leaving the survivors in good shape to bear the recession. Most producers are already targeting growth, while 43% of our respondents are still cutting costs.

“It is remarkable that not a single respondent to the food sector survey highlighted competition from foreign firms as a significant challenge and less than half of them said that the weakness of Sterling was bad for business. Successful British exports include ready meals to France, Indian sauces to Spain, cheeses to Japan and breakfast cereals to China.”

Download your free copy
A free copy of the report is now available online: Targeting growth: Challenges and opportunities for the UK Food and Beverage sector, We’ll also be posting more in-depth findings from the report shortly, so do sign up for our blog updatesand never miss a post.

Grant Thornton’s Food and Beverage team expertise
Here at Grant Thornton, our Food and Beverage team has continued to remain active in the sector, providing industry-specific, reliable and candid solutions to entrepreneurial private businesses and working alongside key investors, bankers and legal advisers.

If you would like to discuss the findings of the report in more detail, or would like to learn more about Grant Thornton’s Food and Beverage team, email your contact details and location to us at foodandbeverage@gtuk.com and a food sector specialist near to you will be in touch.

You might also like:

* Financing your strategy report – free download available.

Also, watch our video voxpops with CEOs and other experts on what needs to be done to improve the UK financing environment?

* M&A insight – who’s buying and in what sectors?

* Weaknesses and opportunities in UK retail