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FOOD AND DRINKINDUSTRY REPORT 2020In partnership with:Our Industry at a GlanceSources: 1, 3, 6, 11, 12, 14: The Office for National Statistics. 2: Eurostat. 4: The British Soft Drinks Association. 5, 9: FDF Ambitions. 7, 8: Her Majesty’s Revenue & Customs. 10: The Department for Environment, Food & Rural Affairs.13: UK Commission for Employment and Skills. 15: FDF Business Confidence Survey.The UK food & drinkmanufacturing sectoremploys more than106,000EU workers……over1/4of our workforceThe UK is Ireland’slargest tradingpartner forfood & drink…37%of its food & drinkexports go tothe UK (€4.6bn)Food & drinkcontributes£31.1bnto the economyThe food & drinkindustry is the biggestmanufacturing sectorin the country……larger thanautomotive& aerospacecombinedIn 2018, totalfood & drinkexport figureswere worthmore than£23bnGrowexports ofbrandedfood andnonalcoholicdrink by athird……to reach£6bnby 2020FDFexportambitionOur top threeexport markets areIreland,theUSA&FranceThe food supply chainemploys4 million people& generates over£121 billionof added value for theeconomy each yearof our 7,29 0fesoodess & drink businare SMEs97%Our industry employs over450,000 peopleWe will need140,000new recruits by 2024to feed an expectedpopulation of 70m people& meet market demandsOur industry hasa turnover of£104bn,accounting for19% of total UKmanufacturingThe top 3 opportunitiesidentified for food and drinkmanufacturers in 2019 aredomestic demand,healthy food products& investment3rd 1st 2nd1.2.3.4. 5.6.7. 8.9.10.11. 12. 13. 14.15.FDF membersare selling14.3 billionfewer teaspoons ofsugars than they werein 2015FDF members are selling:1trillionfewer calories57.3 millionfewer kilogramsof sugars35.5 millionless kilogramsof total fat4.4 millionless kilogramsof saltthan they were in 2015Food and Drink Industry Report 2020 Page 4Exports SnapshotH1 2019FDF analysis of Her Majesty’s Revenue & Customs dataExecutive SummaryH1 2019 exports of food and drink increased by 5.1% (y-o-y)to £11.3bn. This has largely been driven by growth in the valueof exports to non-EU countries (+9.8%), with growth over fourtimes that of exports to the EU.The UK’s food and drink trade balance has declined, indicatingthat relative dependence on imports has increased by 0.8%since H1 2018.While year-on-year growth in the value of food and drink exportsexceeded 11% in Q1, the second quarter of the year saw adecline on the same period in 2018 (-0.6%). Evidence frommembers suggests that the figures we reported in Q1 weresignificantly inflated by the impacts of stockpiling.In line with this, a large proportion of members have reportedthat they predict exports in the wider UK economy to declineover the remainder of 2019.Exports to the UK’s top trading partner, Ireland, have fallen invalue on H1 2018, for the first time since H1 2015. The two keydrivers of this decline were weaker exports of cereals & floursand meat-based products. On the other hand, growth to theUK’s remaining top five markets (France, USA, Netherlands, andGermany) has been positive.Other key markets that have seen negative growth includeSpain, Hong Kong and the UAE, where the value of a varietyof exported products has fallen, including: sauces, ice-cream,meat products, and confectionary.All of the UK’s highest value exported products have grown inH1 2019, with whisky, salmon, wine, gin, and pork increasing byover 10% on the same period last year. Salmon, beef and ginhave also all seen volume growth above 10%.£12bn£10bn£8bn£6bn£4bn£2bn£0bnH1 UK FOOD AND DRINK EXPORTS OVER 10 YEARSNon-EUEU27H1 2009 H1 2010 H1 2011 H1 2012 H1 2013 H1 2014 H1 2015 H1 2016 H1 2017 H1 2018 H1 2019KEY INDICATORSH1 2018 H1 2019 Change All food & drink£10.7bn£11.3bn5.1%EU£6.8bn£6.9bn2.3%Non-EUEU share£4.0bn63.0%£4.4bn61.4%9.8%-1.6ppNon-EU share36.9%38.6%1.6ppTrade balance-£12.2bn-£12.3bn-0.8% TOP 10 PRODUCTS H1 2019ChangeValueValue (%)Volume (%)Whisky£2.2bn£220.5m10.9%9.2%Salmon£400.1m£87.8m28.1%24.7%Chocolate£357.2m£15.9m4.7%3.7%Wine£349.3m£46.3m15.3%-11.4%Cheese£348.3m£19.5m5.9%5.8%Gin£333.5m£49.2m17.3%16.1%Beef£276.4m£7.8m2.9%13.5%Pork£256.3m£35.8m16.2%9.6%Breakfast cereals£242.1m£0.5m0.2%3.9%Beer£239.1m£2.8m1.2%3.9% TOP 20 MARKETSIrelandFranceUnited StatesNetherlandsGermanySpainBelgiumChinaItalyAustraliaPolandHong KongSingaporeDenmarkSwedenCanadaUnited Arab EmiratesJapanTaiwanSouth Korea£2.0bn -1.9%£1.1bn 6.5%£1.1bn 11.0%£851.6m 6.2%£730.4m 2.5%£444.3m -4.2%£379.5m 9.2%£344.4m 16.2%£290.3m 2.1%£203.3m -0.3%£202.9m 8.4%£193.7m -10.6%£192.5m 3.1%£170.9m 1.5%£161.3m 11.8%£154.7m 9.2%£151.8m -11.1%£150.8m 23.6%£128.0m 24.4%£106.3m 14.9%£4.6bn£4.9bn£5.5bn£5.4bn£5.6bn£5.7bn£5.3bn£5.7bn£6.3bn£6.8bn£6.9bn£2.0bn£2.4bn£3.0bn£3.1bn£3.5bn£3.4bn£3.4bn£3.7bn£3.9bn£4.0bn£4.4bnFood and Drink Industry Report 2020 Page 5Developing MarketsJapanWith a large middle class and one of the oldest populations inthe world, packaged foods have been identified as a key growthopportunity for businesses exporting to Japan3. UK food and drinkexports have grown by 85%4 over the last decade to Japan,with a wide range of products being sold. In 2018, whisky (£128m,+30%), coffee (£17m, -2%) and wine (£9m, -3%) were the UK’s topthree exported products5 to Japan. From the UK’s top 20 exportedproducts, cheese (+302%) and animal fats (+145%) recorded thefastest growth6.An EU-Japan preferential trade deal has applied since Feb 2019,reducing Japanese tariffs and expanding opportunities to trade.However, if the UK leaves the EU with no deal, UK food anddrink manufacturers will lose this access, until UK Government isable to secure a new agreement. As part of the Food and DrinkManufacturing Sector Deal, FDF is working with Government toput in place additional food and drink specialists in Japan tosupport companies and drive increased export growth.1 Food and Drink Federation, Exports Snapshot 2018, March 20192 Grant Thornton, FDF Economic contribution and growth opportunities, June 20173 Government of Canada, Market Overview – Japan, Global Analysis Report4,5,6 Her Majesty’s Revenue & CustomsSantander Data sources: All from public domain including, Food & Drink Federation(FDF), Food & Drink Exporters Association (FDEA) and Her Majesty’s Revenue &Customs (HMRC).UK food and drink exportshit £22.6bn1 in 2018, playing acritical role in the success andeconomic contribution of thesector. Santander and FDF workin close partnership to help UKbusinesses seeking to exportquality UK food and drink.Export Target MarketsFor over two years, the FDF has been workingwith its members, UK Government and partnersacross the food and drink supply chain todevelop a Food and Drink ManufacturingSector Deal. Producers identified five keygrowth markets as top targets for UK industrybased on analysis produced by Grant Thornton– China, India, the Gulf (with a focus on theUnited Arab Emirates), USA and Japan2. Theyhave been highlighted as markets that offersignificant opportunities for export growth butthat businesses typically struggle to enter due tomarket complexity, cost and unfamiliarity.Santander’s insightsWe believe that Japan presents an excitingopportunity for businesses in this industry.Exports in 2018 totalled £275m whichrepresented an increase of 15%. During the firstsix months of 2019, export trade was £151m witha significant 23.6% increase year on year (YOY).Japan is the world’s third largest economy, meaningthis market demands high quality and differentiatingproducts, which the UK is well positioned to satisfy.We have strong partnerships within a network inJapan, which we’re able to leverage to assist UKbusinesses with their international trade ambitions.As part of this, we’re proud to have a bankingpartnership with Mitsubishi UFJ Financial Group,Inc. (MUFG).Thanks to our strong relationship with MitsubishiShokuhin – one of Japan’s largest food and drinkdistributors – we were recently able to introducetwelve UK companies to this market. They wereable to showcase a range of superb qualityproducts, including those of Royal Warrant Holdingbusinesses and a variety of whisky and gin brands.We’ll continue to work and deepen relationships withthis high-profile distributor and match its categorydemands to UK manufacturers, thus creating uniqueand bespoke opportunities for UK companies.Looking forward, we’re exploring opportunitiesthat will be created with the 2020 Olympics inTokyo along with UK Regional Food initiatives.Export value (£)Fish & seafoodAnimal feedCoffee, tea & spicesMalt, starches & wheatSpirits£9.5m£17.5m£20.7m£34.0m£142.7mTop 5 UK food and drink exports to Japan 2018Source: Her Majesty’s Revenue and CustomsFood and Drink Industry Report 2020 Page 6Developing MarketsFood and drink revenue inthe US amounted to overUS$2000Bn in 2018where US$742bn of thisrepresented store sales.USAAs the world’s largest economy, with the third largestpopulation, the same language and similar consumerdynamics, the USA provides ample opportunities for UK foodand drink exporters. Exports to the USA have grown overthe past ten years by 147% from £0.9bn in 2008 to £2.2bnin 2018 driven by strong growth in a diverse range ofproducts7. More than half the sales value in 2018 came fromwhisky exports at £1.1bn, followed by gin and salmon8.7,8 Her Majesty’s Revenue & CustomsSantander Data sources: All from public domain including, Food & Drink Federation (FDF),Food & Drink Exporters Association (FDEA) and Her Majesty’s Revenue & Customs (HMRC).Export value (£)Cereals & flourSauces, extracts & ice-creamBeerFish & seafoodSpirits£77.2m£89.4m£106.8m£187.8m£1.4bnTop 5 UK food and drink exports to the USA 2018Data Source: Her Majesty’s Revenue and CustomsFood and drink exporters targeting the USA can benefitfrom the support of an active Department for InternationalTrade (DIT) presence focussed on food and drink, whichprovides excellent support for UK exporters. Exporting to theUSA can be challenging due to the high number of marketaccess barriers – both technical barriers to trade (TBT) andsanitary and phytosanitary (SPS) barriers – as well as differingstandards for quality checks or ingredients. This can make it acomplex and challenging market for food and drink exportersand justifies industry’s request for further resources to supportand promote UK food and drink exports.Santander’s insightsThe USA is also the largest export destination for the foodand drink sector outside the EU. During the first six months of2019, export trade amounted to £1.1bn which represents a 11%increase YOY, and therefore remains a great opportunity for UKmanufacturers.Food and drink revenue in the USA amounted to over US$2000bn in2018 where US$742bn of this represented store sales. As such, themarket for the food and drink industry is forecast to grow at an averageof 11% per annum to 2023. (ref Statistica)We know that the supply chain for food and drink (F&D) imports to theUSA is complex and sometimes daunting for many exporters. There’s aneed to build relationships and make arrangements with many partners inthis chain and in most cases an importer, broker, agent and distributor areall required in order to get the product to market. Therefore we’re workingdirectly with five main distributors in the USA, who are very experiencedin importing UK brands. These partners are supporting UK companiesby easing some of the difficulties that come with finding suitable contactswithin this chain and simplifying the overall supply chain process.These distributors share market intelligence regarding product demand,trends and category gaps, which we then match to UK companies.These UK manufacturers can then build relationships with the distributorswho will manage their brands and sales in this significant market.We recently took ten UK companies to the Summer Fancy Foodtrade show in New York. Many of these companies had already beenintroduced to appropriate distributors ahead of the visit, and the showwas used to further explore opportunities and agree initial orders.We’re continuing to work with our cohort of distributors which serviceWholesale, Retail, Foodservice and e-commerce channels in the Statesin order to develop opportunities (in relation to category demand) forF&D companies in the UK.Food and Drink Industry Report 2020 Page 7Developing MarketsChinaStrong economic growth and increasing urbanisation in China are drivingrapid growth in the middle class and with it the purchasing power of its1.4bn consumers. While current rapid UK export growth to Chinais dominated by commodity sales, there is also a significantopportunity to grow sales of premium products, with an emphasison provenance, quality, health and sustainability. The top five productsexported to China in 2018 were pork (£77m, +11%), whisky (£77m, +25%)and salmon (£73m, +4%)9.Chinese imports offood and drink wereworth aroundin 2018,where theysourced goodsfrom 93 countries.£54bnExport value (£)Cereals & flourMeatSpiritsDairy & eggsFish & seafood£69.5m£79.8m£81.9m£82.0m£138.0mTop 5 UK food and drink exports to China 2018Data Source: Her Majesty’s Revenue and CustomsExporting to China, is not without its challenges, not least because ofregional cultural variations which require a sophisticated approach to identifyand develop export opportunities. As a result, many successful exportersbegin with a highly targeted strategy focusing on major cities. To supportUK food and drink, the Agriculture and Horticulture Development Board(AHDB) and Department for Environment, Food and Rural Affairs (Defra) cofund a dedicated food and drink specialist. This provides a strong foodand drink focus in market and has helped open new market accessopportunities, increasing the volume and value of UK exports. FDF isworking with the government to replicate this model for branded food anddrink, to better support UK businesses seeking to export to China.9 Her Majesty’s Revenue & CustomsSantander Data sources: All from public domain including, Food & Drink Federation (FDF),Food & Drink Exporters Association (FDEA) and Her Majesty’s Revenue & Customs (HMRC).Santander’s insightsWe can see the opportunities for export to Chinaare clear from its pure scale and growth rates.Chinese imports of food and drink were wortharound £54bn in 2018, where they sourced goodsfrom 93 countries, again showing that there aregreat opportunities for UK Manufacturers in China.UK food and drink exports to China grew by 10% YOYin 2018 to £623m. During the first six months of 2019,export trade was seen at £344m representing a 16.2%increase YOY.As with many destinations globally, gaining traction withthe right partners in China is sometimes difficult and thisdissuades UK exporters from attempting to access thislucrative and growing market. In order to assist companieswho want to trade with China, we’ve partnered with twoUK based consolidators who specialise in exports tothis market. Together, we’ve created a streamlined andsimplified the process for UK companies.This consolidator model has many benefits for UKcompanies. The consolidator has the experience inmarket, established distributor and buyer contacts,facilities to assist product certification/licensing as wellas the efficiencies for export logistics. This provides asolution to many of the issues faced by UK companies,assisting the growth of exports to this market.The consolidators are sharing market intelligenceregarding product demand, trends and category gaps,which we then match to UK companies, providing awarm introduction for these demand-led opportunities.Food and Drink Industry Report 2020 Page 8Developing MarketsIndiaIndia is a key market for the UK food and drink industry,worth £163m10 in 2018 and one that FDF has prioritised inpartnership with both Santander and the UK India BusinessCouncil (UKIBC). FDF CEO Ian Wright has led a range ofin-market activities, including a Trade Mission to Delhiand Mumbai earlier this year. Delegates representing some ofthe UK’s biggest food and drink businesses and organisations,showcased UK food and drink at the India Food Forum.India is a key growth area, with UK exports growing by 265%over the last decade from £45m to £163m11. In 2018, UK spiritswere a significant source of growth to India, with their value risingby 34.9%; making spirits the fastest growing category amongthe UK’s top 10 food and drink exports to India.There are manyopportunities for UKcompanies to engagewith the vibrant£305bnIndian foodmarket,which isexpected toreach £500bn bythe end of 2020.However, high import tariffs mean UK food and drink has notyet been able to fulfil its export potential in India. To addressthis issue, UKIBC recently put in place a dedicated food anddrink specialist in India to enhance the essential support thatis available to UK businesses.Export value (£)Cereals & flourPrepared fruits, vegetables & nutsAnimal feedSauces, extracts & ice-creamSpirits£2.0m£2.4m£3.5m£4.2m£142.6mTop 5 UK food and drink exports to India 2018Data Source: Her Majesty’s Revenue and Customs10,11 Her Majesty’s Revenue & CustomsSantander Data sources: All from public domain including, Food & Drink Federation (FDF),Food & Drink Exporters Association (FDEA) and Her Majesty’s Revenue & Customs (HMRC).Santander’s insightsIndia is a country with 1.3bn consumers with increasingdiscretionary incomes and varying food patterns.Although currently not in the Top 20 destinations forUK food and drink exports, we’ve identified clearopportunities for UK companies to engage with thevibrant £305bn Indian food market, which is expected toreach £500bn by the end of 2020.Navigating trade with an emerging market is not easy, whichis why we’ve developed a network of partners in India to helpUK businesses that wish to explore and take advantage of thepotential that prevails. These include Yes Bank (our partnerbank) and Sannam S4 who are on hand to help UK companiesexplore, enter and expand in this dynamic market.In addition, we’re aligning plans with five key food anddrink distributors in India, covering the major cities andmain channels to market. The distributors are sharingmarket intelligence regarding product demand, trends andcategory gaps, which we then match to UK companies. UKmanufacturers then build relationships with the distributors whowill manage their brands and sales in this significant market.We’ll be leading a trade mission to India focused around amajor food show in Q3 2020. In addition, we will be supportingWorld Food India later in 2020. This event is becoming oneof the world’s largest as India aggressively develops its FoodPark projects. This provides opportunities for UK companiesinvolved in food manufacturing, food brands and thesupply chain, including packaging, refrigeration, cold chain,processing, food machinery and foodservices.Food and Drink Industry Report 2020 Page 9Developing MarketsThe United Arab Emirates (UAE)The United Arab Emirates (UAE) has a population of 8.6m peoplein the UAE, of which 88% are foreign citizens12. FDF membershighlighted the UAE as one of the top three untappedmarkets they would like to target based on the country’sscale, sizeable middle class and appetite for qualitywestern products13. Packaged food sales are popular with localconsumers who enjoy the convenience and variety of productsand continue to grow in the UAE, reaching a value of US$4.7bnin 201614. The UK already sells a range of products to the UAE,with whisky (£148m, +13%), breakfast cereals (£31m, +4%) andchocolate (£15m, -19%) within the top five categories in 201815.Operationalrestaurants andcafes in the emirateof Dubai reached11,813 at theend of 2018.12 Government of Canada, Consumer Profile – United Arab Emirates, May 201913 Grant Thornton, FDF Economic contribution and growth opportunities, June 201714 Government of Canada, Market Overview – United Arab Emirates, Global Analysis Report15 Her Majesty’s Revenue & CustomsSantander Data sources: All from public domain including, Food & Drink Federation (FDF),Food & Drink Exporters Association (FDEA) and Her Majesty’s Revenue & Customs (HMRC).Export value (£)Cocoa & chocolateDairy & eggsSauces, extracts & ice-creamCereals & flourSpirits£15.4m£18.8m£37.9m£51.5m£163.5mTop 5 UK food and drink exports to the UAE 2018Data Source: Her Majesty’s Revenue and CustomsThe main barriers food and drink manufacturers report are thecomplexity and costs associated with investing in a market with whichthe company is unfamiliar and the need to identify a distributor. Aspart of the Food and Drink Manufacturing Sector Deal, FDF is workingwith Government to put in place additional specialists in the UAE andGulf region to better support UK exporters.Santander’s insightsSantander works closely with our in-country partner,British Centres for Business, to support connections withkey distributors and retailers in the Gulf region.The food and drink sector continues to expand in this vibrantmarket and this has been fuelled by increased tourism andleisure, as well as the UAE being a growing global hub.The market has had its challenges, and operators are lookingfor high quality, niche products to help them with differentiation.This is where we believe UK manufacturers can benefit fromthese dynamics and requirements.UK food and drink exports to the UAE totalled £360m in 2018,representing an increase of 2% YOY. Although Q1 2019slipped by 8% with exports of £75m, the opportunities in Dubaiare significant and this particularly applies to UK manufacturerswho are able to supply the food service sector.Food service customer numbers compare with Paris and London– Dubai, has more restaurants per million population than NewYork and operational restaurants and cafes in the emirate of Dubaireached 11,813 at the end of 2018. The region currently has 700hotels with over 110,000 rooms and plans to increase capacity toadd almost 20,000 rooms over the next twelve months.Following a successful trade mission at the end of 2018, we’rehelping UK manufacturers gain access to Emirates Flight Catering,Emirates Leisure & Retail Group, and Maritime & MercantileInternational (MMI). MMI supplies major franchises, hotel groupsand several airlines as well as controlling all alcohol into the UAE.Retail connectivity points include Lulu, Spinneys and Al Maya.We took another nine companies to the UAE in November 2019for bespoke meetings with key buyers in both retail and foodservice channels. EXPO 2020 provides further opportunity, withan expected 25 million visitors, and we’re in close contact withdistributors who are sourcing products for this major event next year.Food and Drink Industry Report 2020 Page 10Workforce PressuresThe UK economy as a whole is facing workforce pressures with newrecords being set in official statistics that demonstrate the tightness of thelabour market. The latest unemployment figures of less than 4% are thelowest seen since 1975. Furthermore, 76% of the adult population are inemployment (the joint highest on record) and yet there are still a 813,000vacancies waiting to be filled nationwide.The effects of these tight labour market conditionsare reflected in the findings of our Q3 2019 Food &Drink Business Confidence Report. As an industry,food and drink manufacturing will need 140,000new recruits by 2024 to meet the expectations ofa predicted UK population of 69 million people.However, 42% of food and drink businesses expectthe supply of permanent workers to decreasein 2019, compared to just 6% who think it willincrease. Food and drink businesses are even moreconcerned about the availability of temporary labour,87% expecting this to decrease this year and noneexpecting it to increase.Over a quarter of food and drink manufacturing’smore than 450,000-person workforce are fromthe EU, working in roles at all skill levels. Workersfrom the EU make up 12% of the 4 million peopleworking across the entirety of the UK food chain.Therefore, working with government to secure anew immigration system that allows businesses fromacross the food chain to access the labour they needis a key priority for FDF.It is also crucial that food chain businesses and thegovernment redouble their efforts to upskill and trainthe UK workforce to meet the skills requirementsof the future. FDF is working to support domesticworkforce and skills requirements in partnershipwith government and other food supply chainorganisations through the Food and Drink SectorCouncil , who have published ‘Preparing for aChanging Workforce’ report.Food and Drink Industry Report 2020 Page 111 Made Smarter Review, Professor Juergen Maier, CEO Siemens UK2 International Federation of Robotics, February 2018 press releaseDeveloping AutomationThe UK has a strong R&D base for food and drink manufacturing in the UK ashighlighted by the ‘Made Smarter Review’1 which outlined a potential £55.8bnvalue to our industry through the adoption of known digital technology overthe next decade. However, food and drink manufacturing lags behind othermanufacturing sectors in terms of technology adoption and process engineering.65% of countries with an above-average numberof industrial robots per 10,000 employees are inthe European Union – with Germany and Swedentopping the list. The UK is the only G7 country thathas a robot density below the world average of 74units with 71 units, ranking 22nd. The InternationalFederation of Robotics concludes that the generalUK industry is highly in need of the necessaryinvestment to modernise and increase productivity.The low robot density rate is indicative of this fact2.Despite effective adoption by many large manufacturers,there are many businesses, including the long tail ofSME businesses, that are underinvesting in engineeringinnovation and the adoption of technology.Businesses often struggle to engage with theopportunities available even with known and well-usedtechnology and engineering innovation. This reticenceis often linked to a shortage of time, resource andexpertise to engage fully with this agenda.Consequently, food and drink manufacturers areunable to realise the increases in both productivityand margin that could be found by revising theircurrent operations, and understanding the potentialbenefits of capital spending on new equipment.In 2018, FDF began negotiations with the governmentfor a Sector Deal which included a proposal to deliverdirect support to businesses in two areas:1. A short term, low cost intervention for individualbusinesses (match funded by government) thatincludes direct advice and guidance to maximiseproductivity of existing equipment and processes.2. Opportunities for longer term, collaborative projectsthat access academic knowledge to identify solutionsto common manufacturing and engineering problemsat sub sector or even sector wide level.In early 2019 both industry and government agreedto put the Sector Deal negotiations on hold, due tothe political uncertainty and the stretched resourcesof both sides, and was approved by FDF’s President’sCommittee and Board. We continue to see significantbenefits to the sector for the adoption of technologyand support to businesses in this area. On this basis,our advocacy for industry and Government coinvestment and promotion of the opportunities remain apriority for FDF.Although there is no active movement around the sectordeal negotiation, FDF, stakeholders and partners arehopeful that negotiations will be resumed in the near future.Number of installed industrial robots per10,000 employees in manufacturing, 20167006005004003002001000 KoreaSingaporeGermanyJapanSwedenDenmarkUSItalyBelgiumTaiwanSpainNetherlandsCanadaAustriaFinlandSloveniaSlovakiaFranceSwitzerlandCzech RepublicAustraliaUKChinaPortugalHungaryNorwayNew Zealand World average: 74 robotsUK: 71 robots (22nd ranking)Food and Drink Industry Report 2020 Page 12Sustainable PackagingThe industry fully recognises that the production, use, and disposal ofplastics and other packaging is having a real and growing impact onthe global environment. This is particularly so when plastics packagingfinds its way into the environment, as litter for example, rather than beingdisposed of responsibly and kept in the circular economy.Although official UK packaging recycling rateshave increased from 31% in 1998 to 64% in 2017the UK food and drink manufacturing industryacknowledges that it shares a responsibility to domore to manage the negative impacts of packagingon the environment. We are committed to workingcollaboratively with our value chain partners and otherstakeholders including national and local Governmentsand consumers to deliver a truly circular economy forfood and drink packaging in the UK. We also requirethe UK governments to provide a cohesive policyframework and for consumers to recycle and disposeof their waste responsibly.The industry uses packaging primarily to protect itsproducts and to ensure they are delivered safely andin good condition from the point of production to thepoint of consumption. Packaging therefore helps toensure that food and drink gets used for its intendedpurpose and is not wasted. The environmental impactof wasting food is many times that of packaging.There are many factors which influence the use,choice and design of food and drink packaging.These include cost, technical considerations relatedto intended use, recyclability, suitability of materialsavailable, legal requirements and Government policy.This contributes to the challenge of identifying andimplementing meaningful change to packagingsystems given the need to avoid unintendedconsequences for say food safety or food waste.Recognising the importance and urgency of deliveringimproved environmental outcomes, the industry is fullycommitted to working with Governments and otherkey stakeholders on reforming the current packagingproducer responsibility system and on related matterscovered by the recent set of packaging consultations.It is vital that Government engages meaningfully withindustry in developing the second stage consultationproposals and that these recognise the specificitiesof food and drink packaging including the legalconstraints on using recycled content.Food and Drink Industry Report 2020 Page 13Feeding ChangeHealth and nutrition sits at the heart of our members’ work. At a time when onein three children are leaving primary school overweight or obese, industry’sground-breaking work to tackle this issue is more important than ever.Food and drink manufacturers have for many yearsbeen active participants in the fight against obesity –ahead of the Government’s Childhood Obesity Plan.The pace of this work is accelerating. It can be seenon every supermarket shelf whether by way of newproducts, reformulation – changing the recipes ofproducts – or by offering appropriate portion sizes, aswell as using marketing to drive consumers towardsthese products.FDF members’ voluntary action is deliveringsubstantial changes. As a result, large amounts ofcalories, salt, sugars and saturated fat have beenremoved from the average shopping basket.We recognise more needs to be done and ourcommitment remains strong, however, reformulationtakes time and companies need to be able to activelymarket reformulated products and new innovations toconsumers for them to be a success.Food and drink manufacturers are proud of thefood we make and our track record of anticipatingconsumer trends and meeting consumers’ needs.Companies make it easy for people to choose thefood that best suits their family by making it easyto make an informed decision about the foods theybuy. They do this through provision of clear nutritionlabelling and ingredient information on food packagingand supporting families to have a balanced approachto more indulgent foods, for example through the ‘BeTreatwise’ campaign.We know we have a responsibility to help peopleachieve a balanced diet. We will continue to play ourpart, but we cannot solve the nation’s health issuesalone and call on Government to ensure a genuinelyholistic obesity strategy is introduced and delivered, totarget actions where they are needed most.Compared to 4 years ago,the average shoppingbasket of FDF memberproducts is lower in:Caloriesby12%Sugarsby13%Total fatby12%Saturatedfat by10%Saltby14%Food and Drink Industry Report 2020 Page 14