Food industry ‘key to economic growth’

The UK food industry can play a key role in the country’s economic growth, a new IGD report has claimed. 

IGD’s Economics Viewpoint report, entitled ‘Powering the Everyday Economy - the role of the food system’, explores the value of the UK food industry to support growth and resilience at a local and national level. The report emphasises that ”recognising the value of the whole food system is essential to a thriving UK.”

Food and drink remains the largest private sector employer in the country, accounting for one in eight jobs and 40 per cent of all UK retail sales. This is partly due to the diversity of job roles across the supply chain from farm to fork.

Food and consumer goods stores also signify 40 per cent of all UK retail activity, while food and drink is the largest manufacturing sector, annually worth £25 billion. As such, the British food industry is critical to powering both local economies and the country’s wider infrastructure, IGD says.

The report claims that, although unemployment is nudging up, the food industry is uniquely placed to get people into work. While raising base interest rates has slowed inflation, demand for goods is still low due to continued financial stress, with lower income households particularly experiencing food stress.

A significant 46 per cent of lower-income households have been identified as most likely to be cutting back on food and grocery shopping in the next few months, and IGD experts predict that the wage growth experienced by some industries may encourage workers to pay off debt rather than spend.

As a major producer that includes the sectors of manufacturing, agriculture, retail and transportation, the food system will ”need to work together, like never before, to resolve some of our biggest national challenges,” the report states.

It states that the industry can significantly impact on net-zero ambitions, and that this has become more relevant as the government has become less interventionalist.

Matt Stoughton-Harris, IGD’s economics and public policy manager, said: ”Recent months have seen delayed legislation across the waste and resources agenda, with businesses anxious to gain more certainty of the landscape in the run-up to the General Election.”

Among other measures, businesses are encouraged to turn to their workforce attraction and packaging policies to drive resilience, growth and make a positive dent in carbon emissions, and IGD noted it is already working closely with education and food industry leaders to bring careers opportunities to thousands of young people through employability programmes. It is also running a sustainable packaging programme. 

As the General Election approaches, IGD’s Economists expect to see food inflation slowly decline, with inflation sitting at 8-10 per cent by the end of this year.