A decline in employment, consumer confidence and international trade following Brexit is expected for the food industry, according to a report from industry experts.
Global insights platform Atheneum and online statistics portal Statista have partnered to establish perceptions and outlooks for several industries globally, utilising the former’s network of over 500,000 industry experts.
The food industry stood out globally against other industries, with experts particularly concerned about employment.
Of those surveyed, just 19% reported being ‘very satisfied’ with current employment levels in their respective countries and 16% predicted it would increase over the next six months, compared to 84.4% who said it will either stay the same or deteriorate.
Experts are particularly dissatisfied with their country’s current levels of international trade and over a third (39%) expect it to worsen over the next six months. Only 8% of respondents reported being ‘very satisfied’ with the state of international trade (less than one in 13 experts), and only 11% believe it will improve.
While global food industry experts say consumer confidence is currently strong in their respective countries, many feel it will be negatively impacted over the next six months. More than half (56%) said they are either ‘very satisfied’ or ‘satisfied’ with current consumer confidence, however, 27% said it would deteriorate.
Similarly, more than half (56%) said they are currently satisfied with their country’s economic stability, however, only 7.8% felt it would improve over the next six months whereas over a third (34%) felt it would deteriorate.
Neville Moon, Independent Food Consultant, said: “We are already seeing this deterioration as our industry relies on employment from Eastern European Countries who are now looking to settle in countries other than the UK.
“The increased labour costs will influence the purchase of sophisticated machinery to replace human labour, which will reduce overall employment.”
Similarly, Moon said consumer spending in food is likely to drop post-Brexit, particularly on luxury goods such as premium prepared meals and high-end chocolates, which will significantly impact employment due to the high degree of manual labour they require.
During the 2008 Financial Crisis these foods experienced the largest drop in sales, resulting in reduction in employment.
Economic uncertainty is the main factor affecting consumer confidence in the UK, with many concerned about food prices increasing due to the cost of imports and ingredients.
Moon said: “For those that voted to leave the EU there could be a bounce in consumer confidence as they feel that their spending is directly benefiting the UK rather than the EU economy. Conversely those that voted to remain may feel that they have to tighten the purse strings.
“This could lead to a polarisation in consumer confidence, particularly in the initial six months. There is some fear that the economy will suffer particularly in the short term and there will be a period of quiet in the food industry as consumers wait to see what happens in the months after Brexit.”
Concerns and uncertainty around the value of the pound mean the UK could see a period of significantly reduced spending in the immediate aftermath of Brexit, as consumers wait to see the impact leaving the EU will have.
During this period, it is vital the industry ensures food supply continues as smoothly as possible and acts upon new processes and procedures, in order to restore consumer confidence.