Brexit & Digitalisation: How the food and beverage industry should be looking towards the future

We’re getting closer to living in a post-’Full’ Brexit environment. One thing that has stopped Brexit from being 100% completed is the UK government’s decision to delay imposing post-Brexit border checks on imports from the EU for a fourth time.

The decision was made in light of the Russian invasion of Ukraine, spiralling energy costs and fragile global supply chains. They hope to finally implement the checks at the end of 2023 but realistically, it will most likely be delayed for a fifth time.

So, what does this mean for buyers and suppliers within the food and beverage industry? On the one hand, it leaves uncertainty about what’s next but on the other hand it gives those in the sector the short-term freedom to update their processes and work with new and current technologies that can assist them in making their work more efficient and streamline the process of finding new partners to work with, whether that be suppliers finding new buyers to stock their goods or vice versa.

As a result of the storm of Brexit, the Covid 19 pandemic and the ongoing conflict in Ukraine, one of the key issues facing supermarkets in particular is the increase in demand for their own or Private-Label (or ‘Own Brand’) products. In a recent interview with PLMA Live (Private Label Manufacturers Association), Richard Hyman, Partner at Thought Provoking Consulting, estimated that the private label share of shelf space/products on supermarket shelves could reach 60% in the not too distant future. This increase in demand for private label products is driven by an increase in the quality of products available, cost of living inflation, margins under pressure and a younger generation of shoppers not caring about the brand as long as the product is of high quality.

The obvious consequence of such an occurrence is that the pressure will be put on buyers within the major supermarket chains to discover new suppliers to provide new private label product options. Up to quite recently, and in some cases it is still happening, buyers are researching new potential private label suppliers on internet search engines. As one can imagine, this is time consuming, cumbersome and makes the job much more difficult especially if buyers are time restricted in presenting options to their bosses. For complete transparency, this is where Kwayga saw an opportunity in the marketplace – creating a trust ecosystem that quickly matches suppliers and buyers across the UK and the EU.

For a moment, let’s flip this scenario on its head and focus on the suppliers. These businesses can range from small businesses right through to billion pound turnover companies. In terms of the smaller businesses, the current scenario gives them the prime opportunity to capitalise and make themselves stand out in a very competitive marketplace. One of the key ways of doing this is making sure they get online and distinguishing their products through what makes them unique or attractive to potential buyers and the supermarket’s customers.  Work well with one supermarket and repeat this with others.

In the Republic of Ireland, the government has set aside funds for support schemes to help businesses get online particularly those within the SME sphere. This is especially true with food and agri businesses as those were the worst hit due to the UK being the most important export market for the likes of beef and dairy. As such, they are assisting businesses throughout their digital transformation to ensure they can be best placed to target customers overseas and be ‘Brexit ready.’ Likewise, the UK government is also supporting businesses in the same manner.

However, there is also a need to address the issues within the supply chain with a focus on the delays when it comes to custom checks, etc. It is welcome news that the UK is working to digitise trade documents, which to the government’s credit will reduce cost and time. However, this was announced in January of this year and there was no other mention of supporting technological solutions that may drastically improve the movement of goods at ports.  There are still many buyers and suppliers that are set up and willing to manage the additional administration to trade across the EU/UK trade border.  The key is in connecting them quickly through technology, to replace another trading relationship they may have lost.

Britain is a hub of innovation, and it would be best served for the government to set aside funding for start-ups that help address such concerns. This will help address their own needs in terms of imports, but it will also help their exporters as well and ensure that the post-Brexit trading solution is effective and keeps Britain’s food and agriculture products in a strong position moving forward.

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