2014 will be an uncertain year for small firms
Promar divisional director John Giles predicted that gross domestic product growth in Europe would remain relatively fragile compared with that of emerging markets such as India, China and Russia.
“While opportunities for well organised food producers remain fundamentally good, there will be an air of uncertainty and a degree of caution for many and margin squeeze will remain tight,” Giles said.
“There will be more emphasis on the so-called N-11 countries [next 11: Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, Turkey, South Korea, and Vietnam] as much as the BRICs [Brazil, Russia, India and China].”
Opportunities
Giles expected UK food exports to continue to grow from mature and emerging markets. He also highlighted opportunities in Asia.
At home, Giles expected major retailers to come under further pressure from discounters such as Aldi and Lidl, even as they seek to secure and strengthen relationships with primary producers.
Seabrook Crisps md Jonathan Bye agreed that life for small and medium-sized food firms (SMEs) would remain challenging. “Issues will remain for many SMEs in terms of accessing funding support as the resource and 'expertise' needed to wade through the bureaucratic process makes applications extremely difficult,” he said.
“The consumer will continue to have tight budgets to control and will be looking to balance quality and value,” he added. “The trend towards brands with heritage and provenance will continue … Innovation remains key to bring excitement and growth.”
Giles said: “We should be looking to learn as much about consumer developments and food trends from the rest of the world as we can, such as Asian street food.
Demand is high
“Food and drink ‘on demand’ trends will become more important but while we know many in the sector believe the potential demand for the market is high, a much smaller percentage feel the UK industry is well placed to capture the maximum opportunities this trend presents.”
Key future routes to market for ‘on-demand food’ would include eating at work, vending, transport venues and sports and leisure venues. He also predicted that the use of communications technology would increase and be a “key driver for change in this growing segment of the food market”.
“Social media and its use will reach new heights and continue to change the way we buy food and find out about it,” Giles said. “Companies that invest in data, benchmarking and understanding long-term global market trends and dynamics will prosper more.”
