As we look forward to the New Year, hopefully with renewed energy and confidence, we thought we would look at the real challenges facing the food processing sector in 2019. In other words, what is really keeping the industry awake at night.
We believe there are three key challenges, not entirely unrelated, and they are:
- The “B” word
Do you agree? Well let’s take a closer look at each.
We have discussed this issue before in these columns (Brexit and the Food Industry 29/11/2018) but it just won’t go away, and we are still, it seems, a long way away from getting any much-needed clarity. In fact, Brexit and it’s fall out is likely to dominate the political and economic landscape for years to come.
The issues and implications of EU legislation with regard to food, the impact on supply chains and freedom of movement still need to be fully understood and while these may seem to be somewhat dry and abstract topics perhaps, they need to be looked at through a different prism – people’s perception. For example, a vision of crops being left to rot in UK fields, because of an increased “perception among foreign workers that the UK is xenophobic and racist” and a resulting drop in the numbers coming to work in our industries.
The sector is characterised by just-in-time delivery of products with short shelf lives, and is heavily integrated with supply chains spread across the UK and the EU for sourcing raw materials, processing goods and selling them. Many manufacturers have factories in both the UK and the rest of the EU. Clearly then it is crucial that the sector is able to remain competitive when we leave the European Union and remember, of course, that Brexit is not just a concern for UK food producers but also for any food manufacturer (EU and non-EU) serving the UK market.
A headline on the BBC News website this recently asked, “Are we going to get a pudding tax?”
The piece goes on to report that public health experts have suggested it may be needed to tackle the high rates of sugar consumption. According to Government figures, by the age of 10, the average child has exceeded the recommended level of sugar intake for an 18-year-old.
The news prompted Public Health England chief nutritionist Dr Alison Tedstone to suggest there may be a case for introducing a sugar tax on puddings! Whatever next? Well perhaps it is just the start, as the industry needs to wrestle with issues such as less meat eating, a rise in veganism and changing dietary patterns.
This can be seen from recent research which states that a third of consumers are receptive to words like “fair trade”, “gluten free” and “natural” on product packaging, according to an article on www.foodprocessing.com. While the debate continues as to whether these are fads or whether they confer actual health benefits, one thing that we do know from increasing volumes of scientific data is that food allergies are on the rise across the globe (“the prevalence of food allergy in children increased by 50 percent between 1997 and 2011”).
Also consider the increasing pressure on food brands to reduce sugar in their products, not just because of the proposed “pudding tax”. A report by the UK government says obesity causes harm in all walks of life, from “bullying, low self-esteem and school absence” to “heart disease, type 2 diabetes and some cancers”.
This report is part of Government efforts to remove 20% of sugar from food by 2020. This effort focuses on the nine products that contribute most to children’s sugar intake, namely, cakes, biscuits, puddings, ice cream, confectionery, morning goods (croissants and muffins), yoghurts, breakfast cereals and sweet spreads, but the wider campaign will impact all areas of the food industry.
Factors like these combine to make consumers more discerning when choosing products, and lead to tighter restrictions on the industry. So the savvy food processors are already looking to get ahead of the game by already making decisions to reduce sugar and prioritise healthier ingredients.
The issue of skills and skills gaps is not something that is unique to the food processing industry, but given the potential of Brexit to reduce the talent pot further via ending freedom of movement for example, then it is an issue that has serious implications for the sector.
Retiring “Baby Boomers” are leaving gaps in many companies — not just because they’re leaving their jobs, but because they’re taking specialized skill sets and institutional knowledge with them. These skills gaps are occurring everywhere from the factory floor to the engineering and management levels.
One solution many companies have turned to is automation. But this solution is incomplete. You can only gain so much from automation and you still need the people with the necessary skills to programme the automatons. In fact, the industry needs to consider more imaginative ways of attracting talent and they may want to consider strategies such as looking at transferable skills. Employers usually want a candidate with sector experience – by its nature the engineering industry has always taken this specialist approach, but there is a crossover between sectors that employers could use to their advantage more frequently, particularly within advanced electronics, digital programming and ‘big data’ analysis. This approach has already seen success in other industries, such as automotive, which has thrived over the past few years.
The Way Forward
Well despite a challenging 2018 and the massive uncertainty created by Brexit, business confidence generally still seems to be high and that is also true of the sector. The challenges in food and beverage industry are massive and with increasing competition, new markets, changing consumer spending, increasing food prices, global appetite, and advanced technology, the changes in the sector in the next few years will continue at a pace and businesses must prepare themselves to meet those challenges and the exciting opportunities they bring.
For more information and advice on how we can help you with clean air products and food manufacturing air handling services contact us at HVDS on 01785 256976 or firstname.lastname@example.org.