There is an opportunity to invest more in UK food and drink manufacturing before we achieve diminishing returns. The imperative is to create the right investment environment, direct investment in the right areas and enable innovation that drives productivity. This report further explores the obstacles being faced by manufacturers that need to be overcome. Spotlight: Can better automation unlock value? Across manufacturing sectors, robot density in the US and EU is substantially higher than in the UK. Using digital and AI technology to invest in the right areas to automate and optimise supply chain and commercial decisions can be a key enabler to help the UK food and drink sector unlock its economic growth and productivity potential.
Food and drink has only seen 27% of the investment that transport and engineering has over the last 20 years. Despite this, GVA in food and drink manufacturing has increased 149%, compared to 163% in transport and engineering in the same period (Chart: Investment and GVA by UK industry over time). The respective Compound Annual Growth Rate (CAGR) of GVA in each sector has been 2.0% in food and drink manufacturing vs. 2.5% in transport and engineering manufacturing.
When compared with transport and engineering, food and drink manufacturing has generated more value added per unit of investment over the last 20 years 6 . For every £1 invested, £9 has been returned in food and drink manufacturing, compared to £5 in transport and engineering (Chart: GVA to investment ratio by UK industry over time). As more investment is made, we expect it to have a diminishing return which is reflected in ( Chart: GVA to investment ratio by UK industry over time). Looking at a shorter time horizon over the last five years, food and drink manufacturing returned £7.40 to every £1 invested, vs. £3.80 in transport and engineering, demonstrating 1.95x greater return potential in food and drink manufacturing.
Investing in automation and so prioritising productivity and growth will secure the food and drink manufacturing
Food and drink generally across the world has lower robot density compared to other manufacturing sectors. This trend reflects the challenges with predictability and variation of demand in some areas of the sector, as well as the complex manufacturing environment given the high number of products and nature of handling food.
industry’s competitive edge, at home and internationally, cementing its role as a critical contributor to the UK economy.
Investment and GVA by UK industry over time
Investment and GVA in the last 20 years (axes in £m)
£80,000
£30,000
£60,000
£20,000
Worldwide robot installations in manufacturing by sector, 2022 10
Robots installed per 10,000 employees 9
£40,000
£10,000
100 120 140 160 180
£20,000
US
£-
£-
2004 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23
Food and drink manufacturing investment (£m)
Transport and engineering manufacturing investment (£m)
EU
Food and drink manufacturing GVA (£m)
Transport and engineering manufacturing GVA (£m)
0 20 40 60 80
GVA to investment ratio by UK industry over time 8
UK
£10 £12 £14
World Average: 151
£0 £2 £4 £6 £8
= 50 Robots
2004 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23
Food and drink
Transport and engineering
Food and drink last 20 years average
Transport and engineering last 20 years average
6. Gross fixed capital formation (GFCF) has been used as the investment variable. 7. Data sourced from: Business Investment by Industry and Asset, Office for National Statistics (2024)UK GDP (low-level aggregates), Office for National Statistics (2024) 8. Ratio of investment per employee and GVA per employee for each industry over the past 20 years. Data sourced from: Business Investment by Industry and Asset, Office for National Statistics (2024), UK GDP (low-level aggregates), Office for National Statistics (2024), JOBS03: Employee jobs by industry, Office for National Statistics (2024), JOBS04: Self-employment jobs by industry, Office for National Statistics (2024)
9. World Robotics: Industrial Robots, International Federation of Robotics (2022) 10. World Robotics: Industrial Robots, International Federation of Robotics (2022)
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