Market Update: April 2024

With the arrival of Spring, I've been reflecting on recent developments in the food and drink industry and here are just some of my thoughts and observations on recent times…

As Q1 unfolded, a sense of 'cautious optimism' prevails amidst considerations of deflation and the upcoming UK general election. Many stakeholders are proceeding carefully, resulting in a noticeable trend of postponed decision-making, I feel your pain job seekers!

The impending 2024 general election, dubbed by The Times as perhaps the most significant in recent memory, underscores a global trend with a reported 64 countries, along with the European Union, set to hold national elections. The outcomes of which are anticipated to shape trajectories for years to come.

This year remains pivotal for the food and consumer goods sector, with businesses striving for margin recovery amid economic stagnation and persistent pressure on household incomes. While inflation is receding, households continue to grapple with high-interest rates and taxes, leading to a shift from eating out to eating in and a preference for discounter, convenience, and online retail options.

“According to the IGD, inflation is declining faster than anticipated, with expectations of reaching the 2.0% target rate by Q2 2024”

Recent conversations with industry leaders reveal five dominant themes:

Sustainability: Emphasising Environmental, Social, and Governance (ESG) credentials is crucial for customer attraction, talent retention, and supplier partnerships. Doing business ethically is no longer a novelty but an expectation. We’ll continue to see new high-profile appointments relating to ESG and Sustainability in particular.

Innovation: Amidst capacity constraints, innovation drives growth through new product concepts and development, particularly in areas like low/non-alcoholic beverages, functional foods, and plant-based products. Expect to see continued investment in NPD & EPD.

Margin Recovery: With falling inflation, discussions with customers and suppliers about maintaining competitiveness while ensuring margin recovery are becoming more frequent. Scrutinising the entire supply chain is essential for maximising profitability.

Employer Value Proposition (EVP): Creating purposeful work environments is essential for attracting and retaining talent. Articulating organisational values and living by them is increasingly important in an ever more transparent world we operate within.

Hybrid vs. Office-based Work: Companies continue to grapple with finding the right balance between in-person collaboration and remote work. A mix of both seems to be emerging as the preferred approach, offering flexibility while fostering teamwork. In my humble opinion, it comes down to the culture you’re trying to create and develop, no right or wrong answers but perhaps what’s optimum in the context of the environment you want to craft.

In conclusion, while the industry remains cautiously optimistic, 2024 holds promise for transformative changes, with opportunities for growth and innovation on the horizon.

What's been your experience of 2024 so far?

If you are a business leader, where is your focus right now?