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Covid-19 threw many industries into upheaval over 2020 and 2021, but the food and drink sector has shown a canny ability to adapt when crisis strikes. Start-ups have inspired innovation in the sector, and young entrepreneurs kick-started hundreds of new food businesses.
In fact, a record number of new businesses were started in the food and drink sector in 2020, according to The Accountancy Partnership, and new research from the group predicts that these businesses will help drive the Covid recovery in the coming years by creating thousands of new jobs.
A quarter of out of home food entrepreneurs who started a business during the pandemic – more than 2,200 – said they will be hiring one or more employees as their business grows in the coming months and years, creating an influx in new employment opportunities, the report, Boom or Bust: Beginning a business in a pandemic, found.
“Out of home food has boomed during the pandemic as restaurants faced long periods of closure,” Lee Murphy, managing director of The Accountancy Partnership, told Speciality Food. “The majority of start-ups that have begun operating in this area during the pandemic have ambitious growth and hiring plans which will be critical to the wider sector’s post-Covid recovery. After a year of furlough and closures, it is exciting to know that a wave of new opportunities is on the horizon.”
Many of the new businesses setting up shop in the food and drink space were created out of necessity by those who had lost their jobs or were put on furlough for an extended period. But the report found that new business owners have big plans for their futures, with more than seven in 10 planning to continually grow their revenue and nearly half wanting their business to become their sole source of income.
“The key for these businesses now is to ensure that they have a similar level of demand as restaurants reopen,” Lee said. “Almost half (46%) of lockdown businesses were long-term dreams for their owners, and I am confident that the passionate people behind these new small food businesses will continue to make bigger and better contributions to the wider business economy in the coming years.”
Small businesses will be critical to the UK’s economic recovery post-pandemic. In fact, SMEs were found to create three times as many jobs as businesses with 250 employees or more between 2013 and 2017, according to ONS data.
While Generation Z is behind a number of the new food and drink start-ups – previous research by The Accountancy Partnership revealed that 2020 saw a 72% increase of 16-20-year-olds registering as sole traders – even established business owners were able to turn the challenges of the pandemic to their advantage. For instance, many farm shops saw a big increase in sales over 2020 that allowed them to expand their business, take the leap on a new shop, or pursue exciting refurbishment projects.
Despite the challenges of the past year, fine food businesses are responding to the changing behaviours of consumers with resourceful innovations and savvy business plans. As the economy reopens and consumer confidence returns, SMEs across the food and drink sector will undoubtedly be at the forefront of the Covid recovery.