FDBusiness.com

According to Euromonitor, confectionery, ready meals and sweet and savoury snacks are expected to be the most-affected packaged food sectors in the UK in forecast volume growth terms from Brexit. Within this, volume sales of chilled lunch kits, gum and chocolate are most influenced.

Euromonitor’s macro model projects a 2.0% fall in GDP growth over five years stemming from a Brexit. The impact on the consumer goods industry will be nuanced, depending on exposure to EU markets for inputs and sales, and the outcome of the exit negotiations. Although consumer spending is likely to be dampened, spending might not be the main challenge for the consumer goods industry. The foremost issues could be operational and strategic – for instance to absorb or to pass on price increases? Relocate or re-focus resources, or not?

Euromonitor’s Industry Forecast Model predicts that the impact of Brexit will be stronger on soft drinks than packaged foods. Overall the sector should see cumulative growth of 1.4 percentage points less in a Brexit scenario between 2015 and 2020. This corresponds with ‘lost’ sales of 475 million litres over this period.

The impact of Brexit on the hot drink sector is likely to be broad-based but not deep. In volume terms in a Brexit scenario we expect period growth of the sector to be 9.8% to 2020, compared to 10.5% without Brexit.