The report, ‘How to respond to rising labour costs in 2025’, urged businesses to ramp up investment in AI and robotics to ensure a thriving and resilient food system.
Mounting labour costs, climate change, tariffs and an increasing population are putting immense pressure on the food system’s resilience. And as businesses struggle to absorb costs, food prices are likely to increase in response.
‘Falling shirt’
With the UK population expected to grow by 7 million in the next 20 years, the current approach to food production ‘falls short’ and will be unable to sustain demand.
However, the technology already exists and the industry has already proven that it is adapting – while the UK’s population has increased by 13 million since 1980, 200,000 less people now work in the food and drink manufacturing industry.
As IGD pointed out, food manufacturing has quietly become more labour-efficient with each worker now serving 167 people compared to just 91 in 1980 – an evolution that has largely gone unnoticed. But a more seismic shifts and long-term commitment is needed to transform the food system with technology.
‘Critical juncture’
Toby Pickard, retail futures senior partner, said: “The food industry is at a critical juncture. By leveraging technology and innovative solutions, we can transform the sector, ensuring sustainability and growth. It’s not just about reducing headcount; it’s about creating a resilient and efficient food system that can weather these challenges and emerge stronger.”
IGD described the push toward greater automation in the food manufacturing as a necessity, not just a luxury, for the future of the industry and highlighted the need for strategic resilience, innovation, and collaboration across the food system.
Meanwhile, the managing director at consumer and business analyst firm Mindmetre claims a lack of management skills is preventing food and drink manufacturers from investing in digitalisation.
