The report delves into the impacts Covid-19 has had on food and drink manufacturers and overall business confidence. The industry has faced a variety of challenges from the closure of the hospitality and out-of-home sectors, to rising costs and a fall in exports.
The sector has also seen a reduction in domestic turnover by 8.6% in Q1 compared with Q4 2019, and a further 4.0% decline in Q2.
The FDF’s latest data shows that net business confidence among food and drink manufacturers reached a record low of -65.2% in Q2 due to Covid-19, uncertainty over Brexit and closure of food service.
Separately, Santander has carried out research into the impact of Covid-19 on SMEs. The results found that 24% of food and drink businesses expect to return to normal operating levels by the end of 2020.
Despite the challenging environment, food and drink businesses highlighted increased export growth and access to new UK preferential trade agreements as a key opportunity for the rest of the year.
The FDF has identified seven steps for recovery designed to successfully restart all areas of industry, as part of its work through the Food and Drink Sector Council. These include protecting the UK’s supply chain integrity and competitive position and accelerating plans to increase UK exports.
Ian Wright, FDF chief executive, said: “Manufacturers and hidden heroes working across the supply chain have ensured continued access to essential food and drink for UK consumers, diminishing the impacts of Covid-19 on industry.
“As the dust begins to settle, we can now see how the pandemic has had a seriously damaging impact on 2020 ‘s overseas sales of UK food and drink.
“These were worth over £23bn in 2019. While that figure is certain to fall for this year, there are still plenty of opportunities in foreign markets for UK food and drink manufacturers to seize in what remains of this year and as we look to 2021.
“As businesses turn toward economic recovery, ensuring a quick return to growth will be essential to support resilience in our industry. We will continue to work closely with Government and industry partners, like Santander, to safeguard a sector recovery that will deliver a return to sustainable export growth right across the UK.”