FDF State of Industry Survey

We invite all FDF members to respond to the FDF's State of Industry Survey for Q3 2024. Your input is essential to support our work on your behalf with the media, parliamentarians and the wider stakeholder network on the issues that are impacting you and your business.

If you have any queries, please get in touch.

Kind regards,

Dr Liliana Danila
Lead Economist
liliana.danila@fdf.org.uk

Business background

1. What is the size of your UK business?

2. What is the approximate UK turnover of your business?

3. Within which manufacturing sub-sector(s) does your business operate? Select all that apply. Animal feeds Bakery goods Confectionery Dairy Dried/ preserved fruit or vegetables Fruit and vegetables Fish and seafood Grains/ starches Seasonings and spices Hot beverages/ tea Ingredients Malt Meat Oils and fats Preserves/ chutneys/ sauces Pet food Ready meals Soft drinks

Other (please specify)

4. Where are your UK manufacturing sites located? Select all that apply. England Wales Scotland Northern Ireland No UK manufacturing site

Business Conﬁdence

5. Do you believe general business conditions in Q3 (Jul-Sep) compared to Q2 (Apr-Jun) have: Significantly deteriorated Deteriorated Remained the same Improved Significantly improved

6. Thinking about the change from Q3 (Jul-Sep) to Q4 (Oct-Dec), do you expect your company’s overall business situation to: Signiﬁcantly deteriorate Deteriorate Remain the same Improve Signiﬁcantly improve

Growth / investment

7. How do you expect your planned investment expenditure over the next 12 months to change compared to the previous 12 months:

R&D Increase signiﬁcantly Increase No change Decrease Decrease signiﬁcantly

Plant and machinery Increase signiﬁcantly Increase Stay the same Fall Signiﬁcantly fall

Skills and training (excluding the Apprenticeship Levy) Increase signiﬁcantly Increase Stay the same Fall Fall significatly

Buildings Increase signiﬁcantly Increase Stay the same Fall Fall signiﬁcantly

If possible, please provide examples of some ongoing investment projects

8. What factors are likely to limit your capital investment expenditure over the next 12 months? Changes to business environment reducing the projected net return of some projects Cost of ﬁnance Labour and skills shortages Uncertainty about demand Shortage of internal ﬁnance Reduced access to external ﬁnance Uncertainty about upcoming regulation Taxation Lack of awareness about government investment incentives (e.g. grants, tax relief) N/A Other

Please specify

9. What are the top three growth priorities for your business? Becoming more energy eﬀicient Adapting and/ or simplifying your supply chains Automation to address labour storages and / or to improve productivity Restructuring operations to maintain competitiveness Developing new products (including packaging) Developing new manufacturing processes Developing healthier products Digital transformation across your business Growing sales to foreign markets Growing sales to UK markets Other

Please specify

10. Government is currently considering high growth areas to support as part of its upcoming Industrial Strategy. What are the potential growth areas in food and drink manufacturing that your business sees as opportunity areas?

11. How has your volume of output (production) changed over the last 12 months to September, and how do you expect it to change over the next 12 months?

Output over the past 12 months Increase(d) signiﬁcantly Increase(d) No change Decrease(d) Decrease(d) signiﬁcantly

Expected output over the next 12 months Increase(d) signiﬁcantly Increase(d) No change Decrease(d) Decrease(d) signiﬁcantly

Workforce

12. How has pay (excluding bonuses) changed over the last 12 months to September and how do you expect it to change over the next 12 months?

Pay over the last 12 months No change 0.1 to 2% 2.1 to 4% 4.1 to 6% 6.1 to 8% 8.1% to 10% Over 10%

Expected pay over the next 12 months No change 0.1 to 2% 2.1 to 4% 4.1 to 6% 6.1 to 8% 8.1 to 10% Over 10%

Other comments

13. In April 2024, the National Living Wage (NLW) rose by 9.8% to £11.44, following a rise of 9.7% the previous year. The Low Pay Commission’s central estimate for the NLW from April 2025 is an increase of 5.8% to £12.10 – we will receive conﬁrmation from the government in the Autumn Budget. In our Q1 survey, members identiﬁed reduced pay diﬀerentials as the most challenging impact of raising wages for the lowest paid. To better understand the implications of reduced pay diﬀerentials and the need to maintain them, what have been the impacts on your business? (select all that applies). Less progression e.g. employees not incentivised to take on greater responsibility. Reduced morale among members of staﬀ. Productivity impacts due to diﬀiculty in ﬁlling certain roles (e.g. team leader) and night shifts (lack of premium pay). Changing organisational structures to remove roles above the entry level roles. Employees on other pay bands seeking pay rises above inﬂation to match their colleagues on NLW rates. Trade unions using NLW increases as a starting point for negotiations and reopening pay agreements.

Other impacts (please specify)

14. We are awaiting further detail from the government’s Make Work Pay, but there are plans to introduce basic rights from “day one” to parental leave, sick pay, and protection from unfair dismissal. Government is looking at when these rights should be introduced after a probation period. To help inform our policy work, what probation period are you currently using in your company? 3 months 6 months 9 months 12 months Other

Please specify

15. In Q3 (Jul-Sep), unﬁlled vacancies amounted to what percentage of your labour force? 0-5% 6-10% 11-15% 16-20% 21-25%

If possible, provide examples of some of the types of roles which are unﬁlled.

Cost pressures

16. Compared to February, UK gas prices are 7% higher today and markets expect another pickup of about 9% by March 2025. Which of the below characterises your company? We are on a ﬁxed energy contract expiring after March 2025, so we are not impacted by current market volatility. We are on a ﬁxed energy contract expiring before March 2025, but we anticipate a fall in our energy costs (as our present rates are higher than anticipated future rates). We are on a ﬁxed energy contract expiring before March 2025, and we anticipate a rise in our energy costs. We are on a variable energy contract, so we anticipate a rise in our energy costs. Don’t know.

If possible, provide some details.

17. On average, what changes have you experienced over the last 12 months to June, with regard to:

Total production costs -5.1 to -10% -0.1 to -5% No change 0.1 to 5% 5.1 to 10% 10.1 to 15%

Average selling price -5.1 to -10% -0.1 to -5% No change 0.1 to 5% 5.1 to 10% 10.1 to 15%

Other comments

18. On average, what kind of changes do you expect over the next 12 months with regard to:

Total production costs -5.1 to -10% -0.1 to -5% No change 0.1 to 5% 5.1 to 10% 10.1 to 15%

Average selling price -5.1 to -10% -0.1 to -5% No change 0.1 to 5% 5.1 to 10% 10.1 to 15%

Other comments

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