**London**: A report reveals that 63% of UK manufacturers anticipate growth in 2025, primarily through technology investments and product expansion, despite economic uncertainty. The food and beverage sector particularly focuses on efficiency, AI integration, and managing changing consumer preferences as strategies to navigate rising costs.
Almost two-thirds (63%) of UK manufacturers believe that the opportunities for growth in 2025 outweigh the associated risks, marking a slight 1% increase from the previous year. This optimism comes despite only 37% of them expecting an improvement in the UK’s economic conditions.
The recent report indicates that 68% of manufacturers plan to tackle the pressing issue of rising costs by enhancing productivity, with 29% looking towards technology, cloud solutions, and artificial intelligence (AI) as their strategies for success by 2025.
Expanding product offerings and exploring new revenue streams are also being considered as viable strategies for cost mitigation. Nearly half (47%) of manufacturers view the expansion of their product portfolio as a key approach to growth in 2025, while 37% are considering exporting to new markets.
Focusing more specifically on the food and beverage sector in the UK and Ireland, a trends report by Aptean reveals similar sentiments among companies. These businesses are increasingly looking to technology investments to enhance efficiencies.
The report indicates that food and beverage companies are particularly concerned about keeping pace with rapidly changing consumer preferences, with 33% of them identifying this as a significant issue—surpassing worries about sustainability, cybersecurity, and inflation. Additionally, there is a rising apprehension about changing regulations and legislation, with 30% of firms categorizing this pressure as ‘significant’; this marks a notable increase of 16% compared to the previous year.
These concerns have led to a heightened interest in performance and efficiency analysis within the sector, with 65% of food and beverage companies recognising the swift acquisition and analysis of relevant data in these areas as a top strategic priority for 2025. Interestingly, while data analysis is the overall priority, smaller firms, those with revenues between £10-19 million, are particularly focused on using technology to enhance inventory management.
The report further reveals that 51% of food and beverage companies intend to invest in software to measure and improve overall equipment effectiveness within the next 12 to 24 months. Additionally, 41% are planning to invest in enterprise asset management solutions.
Aptean forecasts a growth in the utilisation of business intelligence (BI) tools among these firms to better gauge customer demand, with nearly half (46%) expressing plans to invest in BI software.
Moreover, keen interest in AI has surged within the food and beverage sector, with 54% of companies signalling that they are in the process of implementing AI solutions—more than double the rate from 12 months prior. The report states that 28% of respondents are already employing AI, a significant jump from just 6% at the end of 2023.
Firms within the sector have highlighted the automation of routine tasks (35%) and improved customer insights (33%) as primary benefits of AI implementation. However, only 23% recognised more accurate data analysis as an advantage, an area identified by Aptean as having potential for further exploration as companies strive to enhance their performance and operational efficiencies.
Amidst these initiatives to address rising costs through new product development and technological investments, findings from Make UK indicate that many manufacturers across various sectors may choose to pass increased costs onto consumers. Should prices be transferred, it could have substantial implications for inflation in the coming year, potentially leading to a decline in demand, particularly in areas where consumers are sensitive to price shifts. As the food and drink sector is the largest in UK manufacturing, a fall in demand could significantly impact the overall manufacturing output in Britain.
Manufacturers currently face the challenge of striking a delicate balance between managing financial pressures and capitalising on growth opportunities.
Source: Noah Wire Services
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