Businesses in the UK food and drink sector reported a net confidence drop of 55% (to -51%) in quarter three of 2021, according to the latest confidence reports produced by the Food and Drink Federation (FDF) published today, Thursday, December 9.

This is the lowest confidence rate since quarter two in 2020 when -65.2% was reported, primarily due to the sector being in the thick of the Covid-19 pandemic beginning. It is also the biggest drop in confidence since the FDF began reporting on business confidence in 2018.

Severe supply chain disruption was the biggest cause for concern, particularly the transportation of goods, with 93% experiencing delayed or missed outbound deliveries and 75% reporting delayed or missed inbound deliveries.

The second-highest cause for concern among the companies surveyed, at 79%, was increased production costs.

Labour was another a major concern for UK food and drink businesses, with 68% saying that the shortage of HGV drivers and the shortage of process, plant and machine operatives were of particular worry.

Due to the ongoing Covid-19 situation and with it, economic challenges, companies are remaining pessimistic as they look ahead to the next quarter, with almost half expecting business confidence to decrease further.

Commenting on the results in the report, Ian Wright CBE, chief executive at the FDF said:

These results....demonstrate that confidence levels across our sector have been hit by continuing supply chain disruption.

"On top of this, the confection of increasing uncertainty about Omicron, the UK’s changing trading relationships, and the re-ignition of inflation, all threaten to undermine resilience across the sector. Many businesses now expect disruption and reduced service levels to continue right through 2022 and into 2023.”