The Grocer | The Top 150 UK Food & Drink Supplier Rankings & Report 2024
Nov 2024
Originally posted by The Grocer on November 1, 2024.
Almost half of the UK’s 150 biggest food and drink manufacturers increased sales by 10% or more in 2023, yet margins are still being squeezed. This is according to the OC&C Top 150 UK Food & Drink Supplier Rankings & Report 2024, published in The Grocer.
In the piece, Alex Masters, Lincoln International’s Co-head of Consumer, Europe, is quoted commenting on what’s next for the recovery phase.
He highlights that most companies are not investing in new factories; instead, they are operating at a “maintenance capex level of investment.”
“It’s enough for a slight upgrade in productivity, maintaining your factories in good order and achieving some incremental efficiency savings. However, you’re not building new factories with this kind of money, and you’re not adding lines that give you extra capacity.”
Even if the amounts were to grow, Alex is skeptical about the scale of payback it can provide. “It’s not obvious where there are extra positions you could automate. If you go to a food factory now, you’ll see that the mixing, processing and cooking are all pretty automated. If you have workers, it’s just at the packing end.”
Alex concludes, “It’s been quite difficult for the past two or three years because of the volatility, the price increases and the margin contraction. But as the world returns to normal, buyers can see what a business is delivering rather than having accountants normalize earnings. It’s much easier for a buyer to be confident in actual numbers versus normalized ones.”
Summary
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Alex Masters, Lincoln International’s Co-head of Consumer, Europe comments on what’s next for the recovery phase in The Grocer.
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Alex Masters
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