Floortje Hoette: “Our sector is extremely resilient, creative, and innovative”

The compounding challenges facing the food and drink sector are creating a crisis as major issues begin to overlay on top of each other. I don’t want to focus too much on the negatives but to understand the bigger picture, we need to acknowledge the major hurdles that face both established brands and small start-ups right now.

Challenging times In 2020 the Covid pandemic led to a total collapse of the hospitality and tourism industry, and of the trade with those industries, along with recurring interruptions in the global supply chain. Many businesses had to adapt and invest in new operational models, experienced staff left the sector and businesses incurred debts not covered by the grant or furlough system.

In 2021 Brexit began to disrupt operations with an increase in paperwork, admin, and the expenses associated with that, compounded by transport and border issues as well as cancellation of contracts. One of the major effects seen here in Kent particularly, has been the difficulty in securing seasonal labour to assist with picking and processing. These escalating costs were partly swallowed by producers, but had an impact on the consumer nonetheless, A 2022 study1 by LSE students showed that Brexit alone added £210 to a household food bill over two years from January 2020 to the end of 2021.

In 2022 we all felt the impact of energy price hikes in part due to the war in Ukraine, leading to an increase in production costs across the board. The Office for National Statistics 2 said in April that the food and drink sector suffered more from rising energy prices than any other sector, with only 3% saying they had not been affected by prices compared to 20% in other sectors.

For the past few years, businesses have been wary to pass these additional costs on to the customer. But with reserves depleted, operations streamlined and stripped back, there is no other option than putting prices up.

In an economy with a healthy consumer demand introducing a rise in price is challenging enough. But the UK is also dealing with weak demand due to the cost-of-living crisis. The ONS reported last week that retail sales in the UK were down by 1% in December 2022 3 contrary to expectation. The first weeks of 2023 have seen the closure of several food and drink businesses in Kent. Spiralling energy costs are generally mentioned as the tipping point….

Positive outlook for 2023 Despite the gloomy picture, we know the sector to be extremely resilient, creative, and innovative. The pandemic has benefitted the local food and drink sector in the sense that consumers are now much more tuned into local product, plant-based eating, and sustainable businesses. We are seeing a surge in new food businesses, and quite a few are making fermented, plant-based, or gluten-free products. The British food industry is one of the most innovative and forward thinking.

So how can we help to improve the outlook for this year and the future of the food and drink sector? We as consumers all need to think very carefully about what kind of food we want. Do we want food that has few food miles, is fresh and has been sustainably produced by businesses with high quality and welfare standards? If the answer is yes, then, we need to support British farmers and producers where we can and pay them a fair price. The British egg, dairy and fruit industries have all been in the news in the past months to say

that the price paid by supermarkets for their goods is not enough to cover their costs and keep their business running.

There is a perception of local food being ‘expensive’ but if we buy seasonal food, use and eat all of it and plan our meals, it’s surprising how far one joint of meat or some veggies can go. There has been a big drive in recent years to support British meat, the UK imports only 20% of its cheese and meat but over 50% of its vegetables. Perhaps we should be steering the customer towards British vegetables in the same way?

We also need acknowledgement from the government on the importance of the Agri-food sector to the UK economy. With stats like £240bn expenditure on food, drink, and catering in 2021 and 4.1m people employed in the sector4, we cannot ignore the importance to our economy and growth.

If we want British farmers to continue farming and produce food for our population, we have to push back against food prices being driven down. We have to put our money where our mouth is and buy seasonal, local or at least British, get our takeaways and coffees from independent outlets, and when we do eat out, make sure to choose a local independent restaurant or pub so that you know that the money you spend is going back into the local community and supply chain.

In a wider sense, we need to look at our entire food system. Where is it broken, how do we mend it, how do we create better access to healthy good quality food for all citizens?