Automatic or the people? Trends in F&B manufacturing
As costs rise and household budgets get tighter, food and beverage producers are finding margins under pressure.
TheBusinessDesk.com’s food and beverage round table at Bowcliffe Hall, Bramham, sponsored by Isara Captial and Walker Morris solicitors, brought together leaders from several of the region’s top F&B producers to explore current and future trends in the sector.
Mike Rice, partner at Isara Capital, which specialises in investing in the UK and Western Europe’s food sector, said food security was a critical issue.
“The trend we see is an industry that recognises it’s got to start to change, and that’s going to have to come from significant and serious investment. For the long term, generational shift has got to happen.”
The first of two reports from the round table focuses on automation. While many firms look to invest in new technology and automation to remain competitive, it is not always easy in a sector where tradition plays a part not only in manufacturing but in brand image.
Ian Bryson, managing director of coffee roasters Lincoln & York, said recruitment of both skilled and unskilled staff was a major challenge at the moment, and as a result the firm was very keen to invest in automation.
“We’re likely to invest quite a lot in that over the next couple of years,” he said. “It takes away some of our need for people, but what we can do then is hire skilled people to run the machines. We will need even more skilled people to run these automated lines.”
James Crayton, partner at Walker Morris, said automation was a major trend in his work for the manufacturing sector, including F&B firms. “It’s not necessarily easy – it brings a lot of risks that people sometimes gloss over. You have technology providers working with the provider of the physical kit, you have construction elements of the project where you’ve got people in high-vis vests doing stuff alongside tech geeks who’ve got the software.
“Making that all work together is not always straightforward – when it works it is fantastic, but it is a challenge in some instances.”
Jason Bull, director at Eurostar Commodities, which primarily imports and distributes commodities and ingredients such as rice – especially sushi rice – semolina, maize and rice flour, identified allergen-free products as a major trend, and as a result had banned allergens from its factory. His firm had not only invested in a new gluten free factory, but during the pandemic had begun an online shop to sell directly to consumers.
Richard Bradbury, managing director at Theakston’s Brewery, took a different view. He pointed out that his firm had been brewing on the same site for nearly 200 years.
“Some of our equipment is over 100 years old. It still works. You don’t need to automate things that work. Our grist mill was bought second hand in 1919.
“We’re have an old side, a Victorian building. If we were to do something substantial we would probably have to move site which is not something we would choose to do. We think that site is integral to our brand, our heritage, and therefore we will do everything we can to stay on that site.”
Christian Townsley, co-founder and director of craft beer-maker North Brewery, agreed. While his firm had invested in automated equipment, he considered a blended approach critical to growth.
“I think that people making beer is important – consumers seeing that people are making the beer is really important to our brand.
“For us it’s about efficiency – our overheads in terms of staffing will not reduce. The efficiency that automation brings enables us to grow, which enables us to employ more people. It’s not about reducing our staffing at all, it’s about becoming more efficient and being a better business.”
Kirsty Henshaw, founder of healthy ready food brand Kirsty’s, invested in some automation when she opened her Harrogate production factory during the pandemic. “Ready meals are difficult. A lot of it has to be manual, and even the biggest factory in the country is still very manual. So we’re not doing anything too dissimilar to them.”
Outside of automating manufacturing, the attendees were interested in the use of automation in business decision making.
Paul McGann, founder and managing director of food marketing agency Cat Among the Pigeons, said AI had a big impact on marketing, especially in media buying and social media advertising. He highlighted a Nordic firm’s use of eye-tracking software to help gauge the impact of changes in packaging and products on sales. “The caveat is, though, it’s still guesstimated. It’s not quite there yet.”
Mike Rice, of Isara Capital, said technology could help track supply chains, and cited the example of an SME that had applied a blockchain-based open ledger to its production, enabling it to track every component of a sandwich.
“They win huge amounts of work because they can prove compliance, and go into places like the National Trust and other systems where you need health and safety to be a huge tick in the box. They’ve grown more than 100% in 18 months.
“The other part is that it’s helped them to reduce stock and working capital in the system, because if everyone knows what everyone’s holding further down the line you don’t order that little bit extra in case your supplier lets you down. You don’t order that little bit more in cast of plant failure. They’ve reduced food waste through their entire supply chain by doing this.”
This is the first of two reports from this round table. In the second report, attendees discuss ESG, sustainability and transparency in food and beverage production.