The North West has a rich heritage when it comes to food and drink. Whether it’s a long history of food innovation – with companies like Carr’s pioneering biscuit production – a strong manufacturing base with well-known food manufacturers like Kellanova and Warburtons making the region their home, or a growing culinary scene, with the North West becoming a vibrant destination for foodies, the region can quite rightly stake its claim as a food and drink heavyweight. After all, we do have the Lancashire Hotpot and Eccles Cakes!
What’s more, according to the latest government statistics, the region’s food and drink manufacturing industry is worth £4.4bn in economic value, supporting 57,000 jobs across the region. In terms of output, food and drink accounts for 14% of the region’s manufacturing production – the second largest sub-sector behind transport equipment.
Market challenges
Food and drink is central to economic growth within the region but, like many sectors, it’s not alone in facing significant challenges.
Increasing costs are continuing to place pressure on producers, with skills shortages high on the list for many businesses. According to BDO’s Food and Drink Report 2025: Buoyancy Baked In – The Rise of a Resilient Sector, three-quarters of respondents (75%) said their businesses lacked skilled people in key roles – up from 50% in 2023, with availability and access to finance, competition from cheap imports and the ongoing impact of the º£½ÇÊÓƵ leaving the EU making the top 10 list of threats facing food and drink businesses.
Against this backdrop, the food and drink sector could be forgiven for taking a negative approach to growth. However, it’s quite the opposite, with 95% of respondents surveyed as part of the food and drink report saying they feel positive about their prospects, up from 70% in 2023. That optimism is in part based on rising demand, with two-thirds having seen orders increase over the past year.
While challenges are inevitable, the industry has built up huge resilience in recent years. Yes, the rate of food and drink company insolvencies has almost doubled in the last five years, compared to the previous period, but those that remain have tightened up their finances, toughened their supply chains and adjusted their business models to withstand further pressures.
Yes, they will certainly face more obstacles in the months to come, with the º£½ÇÊÓƵ’s economic outlook remaining as uncertain as ever, government spending under pressure, and tariff wars continuing to threaten manufacturing. However, as the saying goes: ‘if you can’t stand the heat, then you should get out of the kitchen’. It’s quite clear that North West food and drink isn’t going anywhere any time soon.
- Graham Ellis is a partner at BDO LLP and head of manufacturing in the region
