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Survival trumps food and drink businesses’ sustainability plans

By Gwen Ridler

- Last updated on GMT

Staying afloat in a sea of inflationary pressures has taken the attention away from sustainability plans
Staying afloat in a sea of inflationary pressures has taken the attention away from sustainability plans

Related tags Net zero Sustainability

Business survival has trumped sustainability plans for food and drink firms as they continue to be negatively impacted by inflation, according to consultancy Johnston Carmichael’s annual Food & Drink report.

A survey of more than 100 business across the UK found more than two-thirds (70%) of food and drink companies have had their sustainability plans negatively impacted by rising inflation.

Firms also listed rising energy and raw material costs, and the Scottish Government’s planned Deposit Return Scheme among the top challenges facing their business currently.

One respondent, brewery company Fierce Beer, explained that rising costs have had a serious impact on their own net zero plans in recent months.

Net zero put on hold

“The reality is that our plans to achieve net zero have effectively been put on hold in recent months because of the current economic climate,” founder and managing director Dave Grant. “We’re facing rising costs in raw and packaging materials, utilities, and wages because of rising inflation, and our main focus has to be on the ongoing success of our business.

“It is really unfortunate, but until the wider situation shows signs of improvement, we simply can’t afford to spend significant time and money on progressing sustainability projects, however important they may be.”

Another drinks firm asked about the issue in the report said they didn’t have a sustainability plan and that right now, their plan was to “stay in business.”

However, despite the challenges faced by the industry, 59% of businesses replied that they were optimistic or very optimistic about their firm’s future growth.

Shelving plans

Adam Hardie, head of Food & Drink at Johnston Carmichael, said: “The journey to net zero is very important for the industry, but it’s clear that for many the issue of rising inflation has negatively impacted these aims, and some have even felt they have had to shelve those plans for the time being.

“Despite this, it’s reassuring to see there’s still a real positivity around this resilient sector as it looks to the future. There’s an overriding belief that although there might be tough months ahead, better times are around the corner and that’s encouraging to hear.”

A total of 76.7% of firms said inflation had also impacted supply chain relationships with their customers and suppliers, while more than half of those questioned said they’d seen their largest price increases in raw materials – followed by energy costs and labour.

About 40% of companies also revealed they had significantly invested in innovation or new product development across the last 12 months in a bid to future-proof the company.

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