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Why food is big business in Britain

  • Article

The UK agribusiness sector has always innovated towards excellence. That innovation is now helping it to meet challenges from new lifestyle trends to difficult supply chains, says Allan Wilkinson, Head of Food and Agriculture at HSBC.

It’s a challenging world for the agribusiness sector today, but the UK still has a strong presence in the market. Consumer demands have changed, as people seek healthier lifestyles and planet-conscious options. Despite some slowing, the global population is still on an upward trend and feeding everyone in a sustainable way remains a difficult ambition. At the same time, technology and the race for net-zero is altering how food is farmed, prepared and packaged.

For those looking for an investment location, however, the UK remains a standout option. It’s the sixth biggest food economy in the world, with the most diverse range of foods and cuisines and some of the highest food standards globally. The competitive nature of the supermarket sector means that a typical outlet has around 40,000 items on the shelf and they are challenging and demanding customers that are pushing agribusiness firms for diversity and quality.

We’ve always been seen as an innovator and a trendsetter, even a trailblazer with some new products, and it’s no less the case today with veganism and vegetarianism. Companies here have responded to the push for a bigger range of products, both for consumption at home and in restaurants.

Allan Wilkinson | Head of Food and Agriculture at HSBC

Embracing lifestyle choices

But more than its historic place in the market, the UK is embracing the new challenges of the 21st century. Take the trend for lifestyle food choices as an example. We’ve always been seen as an innovator and a trendsetter, even a trailblazer with some new products, and it’s no less the case today with veganism and vegetarianism. Companies here have responded to the push for a bigger range of products, both for consumption at home and in restaurants, that meet the expectations of those who are fully embracing these lifestyles and the flexitarian trend too.

In the future, there’s likely to be an even stronger link between health and diet, potentially even linked to individual genetic makeup. Whatever the direction of trends, we’ll see a continued supply of new products, recipes and cuisines, because that innovation is already baked into to agribusiness in Britain. There’s a drive for brilliance that has led to brands sticking around for ten, 20, 30 or even 100 years.

Adapting to changing environments

That innovation and adaptability is also evident in UK company responses to the current macroeconomic environment. While still dealing with the trading consequences of Brexit, now we are facing a crisis in food and energy prices. Ongoing geopolitical issues have exacerbated the inflationary pressures that were already apparent at the end of last year, driving ever increasing demand for staples such as wheat and maize, for both human and animal consumption. A growing population, growing demand for animal protein in certain geographies, high energy prices, extreme weather events affecting crops and labor shortages are all combining to push food inflation up month on month.

Now we have a situation where the “bread basket of the world”, as Ukraine has been known for the last hundred years, can no longer supply crucial supplies of foodstuffs such as wheat and sunflower oil, potatoes and carrots, honey and nuts. Not all of these supplies usually make their way to Britain, but these shortages are pushing prices up worldwide.

The UK is about 60% self-sufficient in food, which makes the country reliant on a significant number of imports. These shocks to the supply chain have been difficult, but UK businesses are adapting by increasingly bolstering their own supply chains and sourcing products sustainably. Businesses today are working much more closely with partners up and down the chain, to be more attuned to demand, more assured of quality, and most importantly, more efficient.

The level of adoption of agritech in the UK is already starting, but it’s likely to be enormous compared to how much it’s used so far. Anything that controls, standardises and reduces waste is going to be embraced, along with automatic packing and stacking, and remote monitoring of crops to know the best time to harvest each plant.

Allan Wilkinson | Head of Food and Agriculture at HSBC

Finding technological solutions

A large part of that efficiency comes from smarter supply chains, which help the food that’s produced get to the right destination at the right time and helps reduce waste. For example, how do we stop food going to landfill? Can it be redirected to energy conversion, animal feed, or even in a new recipe for a food product? That’s the kind of innovation that we’re seeing right now, and it’s backed up by advances in agritech.

The level of adoption of agritech in the UK is already starting, but it’s likely to be enormous compared to how much it’s used so far. Anything that controls, standardises and reduces waste is going to be embraced, along with automatic packing and stacking, and remote monitoring of crops to know the best time to harvest each plant. We already have situations where the product is handled very little by humans from its harvesting from the field to the packaging for the supermarket – everything is done automatically.

For the consumer, future technologies will aid food choices, attesting to provenance and traceability along the supply chain and even letting you know exactly when it wwas picked and how fresh it still is. There will be new opportunities to get nutrition right in the crops we grow and new ways of growing it. There will also be tailored methods to manage diseases in plants and animals, just as we’re starting to see with genetic targeting in humans.

The right expertise

The UK has a rich tradition in the sciences, giving business here access to the right expertise. It also benefits from the pan-European approach to scientific discovery, with key collaborations across universities and companies that bring these technologies to commercial use.

There’s no doubt that agribusiness faces challenges, across the world. But here in Britain, agribusiness firms have access to the right people, the right spirit of innovation and adaptability, and a level of demand that spurs excellence in food production. These characteristics mean that businesses are willing to take on new opportunities, despite challenging circumstances, and have contributed to a thriving agribusiness sector in the UK.

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