The UK food and drink outlook is undergoing significant changes in 2023, which are reshaping capital expenditure (capex) programmes. While some project implementations have been delayed due to persistent challenges, overall investment in food and drink production remains robust. For suppliers of machinery and services, it is crucial to identify the right opportunities and establish timely contact with potential customers to keep pace with the fast-moving projects in this sector.
External pressures, including resource shortages, energy costs, and inflation, are driving a shift in the types of capex projects emerging in 2023. Energy-efficient initiatives are now prioritized over larger new-build schemes, and capacity constraints are impacting project implementation. As a result, many projects are scaled down, focusing on upgrades, optimization of existing space, or smaller extensions using internal resources.
To align with the evolving landscape, suppliers should pay attention to the following emerging trends in the food and drink industry:
At Protel, we currently monitor 380 active capex food and drink projects in the UK. These projects have a combined value of over £5.7 billion, with an average project value of £15 million (all these projects are available to subscribers – test our platform here).
A graph showing the upcoming capex implementation (total potential capex value) by Region is below:
To gain insights into potential customers, consider the following major investors in the industry:
While there has been a general slowdown in the food and drink outlook, larger projects are expected to resume progress in Q3 2023. Deadlines and timelines may be extended, but numerous project schemes are still advancing, albeit at smaller scales. Budget pressures have eased slightly due to reduced construction costs, although human resource capacity issues continue to cause bottlenecks. Longer delivery timelines for equipment and materials also contribute to longer implementation periods.
Energy costs play a significant role in capex decisions, driving a strong focus on energy efficiency and optimization. Projects with intense energy demands may be delayed or shelved. However, Q3 2023 is anticipated as a turning point, with larger capex schemes likely to gain momentum. Suppliers should remain updated on project selection and strive to establish long-term relationships with key stakeholders to secure favourable opportunities for supplying into these projects.
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