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Promising performance from food start-ups

05 | 07 | 13

Start-up food companies are performing well despite the tough economic climate in the UK. 

This is the verdict of a new report by social enterprise Kitchenette and innovation charity Nesta. It found the eating-out market is achieving strong results and outperforming many other sectors. What's more, it claimed the industry could play a leading role in Britain's economic recovery. Catering equipment firms will surely be delighted to hear this, as their own success is directly linked to that of the food sector.

The study was mainly focused on the performance of eight food businesses of varying sizes, including export company Neal's Yard Dairy, restaurant chain Meat Liquor and even street vendor Big Apple Hot Dogs. 

Bucking the trend

Accord to Kitchenette and Nesta, 2012 saw a 25 per cent increase in the number of new restaurants opening in London compared to the preceding year. This is clear proof that Brits are still keen to eat out even if the effects of the recession are pinching. 

The report also revealed the hospitality business created more jobs in 2011 than any other industrial sector. It predicted that with the appropriate support from local authorities, the industry could produce a further 25,000 new positions each year and add £500 million to the economy. 

Kitchenette chair Iqbal Wahhab commented: "This report makes fascinating reading. It is both exciting and heartening to hear that food start-ups are flourishing, despite the recession."

This is not the first good news the food industry has received this year, as the latest sales figures from the Coffer Peach Business Tracker - released in June - show restaurant sales were up 1.2 per cent in May 2013 compared to the year before.

Encouraging growth

While the findings of this report are positive, the organisations behind it warned more can be done to promote further growth in the sector. They claimed government and local council restrictions are holding back start up restaurants and cafes, and called for action to be taken to encourage the export market.

"There is still much to be done in terms of encouraging young entrepreneurs - and cutting through the red tape that continues to hamper the launch of so many businesses - if the industry is to realise its enormous potential," Mr Wahhab stated.

Six steps to success

To try and encourage more success in the food sector, Kitchenette and Nesta have created a six-point plan for how growth can be achieved. One of these recommendations is to remove restrictions on outdoor food markets and reserve at least five per cent of stalls at these events for start-up firms. They also claimed the rules food firms have to adhere to should be simplified and unnecessary red tape needs to be removed.

In terms of exports, the report called for a British food envoy to be appointed who will represent and promote home grown produce in foreign markets. It also said local councils should develop specialised plans to encourage food-based developments and relax planning laws. The organisations' final recommendation is for catering colleges to focus more on entrepreneurship. ADNFCR-16001031-ID-801608801-ADNFCR

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