What can the F&B Industry do to prepare for Brexit?
Take action despite Brexit uncertainty
Despite the uncertainty of what Brexit will bring (when it actually happens!), I strongly believe that food and beverage producers need to manage risks and strategically plan to guarantee productions levels now.
The majority of my conversations with our food and drink clients over the last few months have been about how they should react to Brexit uncertainty. My position, even though we have passed the initial 29 March deadline, is that there is still a need to mitigate risks, plan appropriately, and guarantee production. It’s the only way to be fully prepared and in good shape as a business.
Despite there being a healthy supply of pallet spaces currently available in the UK and in European ports for long term or ‘finished product’ storage, I believe that Brexit will mean an eventual issue with raw material supply, commodity imports, and ‘short life’ product storage if producers don’t take action.
Raw material shortages
Whilst food producers continue to focus on expected issues around the supply of chilled and frozen raw materials, there is little consideration around raw material storage. Without the correct storage in place, there is likely to be serious production issues, and ultimately, the industry could fail.
Just before the 29 March deadline I started to hear producers discuss plans for projects that will be on-going. Now that there’s been an extension, we’ve been given the benefit of a little more time to consider and discuss options. Despite continued economic uncertainty, many more manufacturers should be considering how they can increase orders to ensure a good supply and improve their buying power with the correct temperature controlled facilities on site to provide ample storage or even allow production.
Partnering with the correct provider is key; a company that can provide short term storage for fresh ingredients and the ability to offer solutions that can freeze or up-temper fresh produce in time for production. This type of investment means raw materials are ready at the right temperature, 24/7; this is highly valuable whatever the post-Brexit landscape, as well as removing additional distribution costs and any third-party handling costs.
Use the Brexit extension to improve warehousing
We’ve also seen Brexit-related stockpiling driving up the cost of space available at food and beverage production sites, factories, and warehouses across the UK for a while now. Businesses are attempting to guard against the prospect of a no-deal outcome and put some security measures in place for whatever happens. My advice is again to take action now and look to “usership” rather than “ownership” to meet demand and prepare for change.
Significant political uncertainty means producers and food and drink retailers face even more ambiguity, despite the clock continuing to tick ahead of Brexit. When it comes to precautionary stockpiling, a lack of space, the need to meet demand quickly, and uncertainty around the long-term business requirements, are posing large and problematic constraints on the food and beverage industry.
This challenge becomes a larger issue in the context of information released by the Food and Drink Federation which states that temperature-controlled warehouses are in desperately short supply in the UK, meaning it may not even be possible for businesses to find the space required. Furthermore, it may not be suitable for businesses to invest in building concrete, permanent extensions due to invariable market confidence and uncertainty.
Rental is the way forward for key players in the industry if they want to be ready for any Brexit-related market changes without the need for capital funding – and there are plenty of options to consider. Portable coldstores come without any feasibility costs and if space is an issue, tailored buildings can also be specifically designed. Inflatable coldstores can be transported on a single pallet and installed in just 90 minutes, minimising disruption to businesses. They can also be sited on almost any hard-standing surface and are rigid enough to withstand extreme weather.
Most importantly, rental can allow a solution to be supplied in weeks, as opposed to months, or even years. This is great if, for example, a business has secured a new contract or does need to stockpile, meaning a quick factory extension is necessary in order to meet rising production demands.
Despite expressing a sense of urgency in this blog, my key aim is to encourage any and all of my clients to simply consider their options and plan for the potential pain-points that Brexit may bring. Being prepared is essential and again part of that is having the right partner on board. Get in touch if you feel a discussion about your business could be of benefit.