Johnston Carmichael 2024 survey – Food & Drink sector

Johnston Carmichael is a leading independent firm of chartered accountants and business advisers, with 11 offices throughout the UK and 1000 sharp minds offering a wide range of core and specialist services to clients, across many sectors.

One of our core sectors is food and drink and each year we run a survey to determine the views of businesses across the UK.  Our 2024/25 report can be found here.

Automation & Innovation in food and drink

The viability of automation in the sector remains firmly a question of financial affordability and return on investment. Our survey showed that  just under 50% feel solutions are becoming more affordable and mainstream but a third do not. There is a general sentiment that capital, where available, has been deployed elsewhere over the last year. Many respondents noted that this will be a critical area in the future and I suspect two factors will drive activity here, being increased labour costs and the pace of development and commercial deployment of AI.

Equally the awareness of the main tax reliefs associated with this type of activity has remained stable at approximately two thirds. We might have expected to see an increase in awareness of Research & Development reliefs in particular given the increased scrutiny HMRC has given these over the past 12 months. Many businesses, perhaps most notably in the brewing sector, have faced HMRC enquiries into claims that were not sufficiently robust. Although many businesses have, after no shortage of effort, reached agreement with HMRC over valid claims, we hope to see a general improvement in 2025 with a balance being struck where eligible claims are made and accepted in a timely manner as the relief still remains very effective in the right circumstances.

Sustainability

We saw from our survey that 36% of businesses have sustainability at front of mind when thinking about their innovation strategy. It is clear that all stakeholders are mindful of the impact on the environment, as well as building sustainable businesses for the future, and that ultimately consumers will want to buy products from businesses that are taking this seriously.

Government policy and regulation will only move in one direction as is evident with commitments to the Deposit Return Scheme and Extended Producer Responsibility. We also hope to see greater clarity in respect of Environmental, Social & Governance (ESG) reporting with a framework that all businesses, regardless of size, can engage with and derive benefit from rather than being perceived as another red tape barrier.

Other popular trends cover health issues and  consumer demands that are often health-centric, however the survey comments reaffirm the need for financial prudence and commercial sustainability.

One thing is for sure, and that is that change will be constant and all businesses need to keep a watchful eye on the horizon, remain resilient, but be ready to adapt and seize new opportunities.

Our review of 2025

And what does all of this mean for the food and drink businesses across Manchester? We will be conducting another survey which covers the 2025 year towards the end of this year. Please keep an eye on our website and social media for more details as we’d love to hear your views.

Authored by:

Stewart Pennington – Partner, Business Advisory

Queries to:

Lynsey Rutherford – Senior Manager, Business Advisory

[email protected]