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Food and drink businesses increase by 47% during pandemic

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Food and drink businesses increase by 47% during pandemic

Food and drink businesses increase by 47% during pandemic

  • Boom in new food and drink businesses as people on furlough start their own business
  • Lockdown has caused many to re-evaluate their lifestyles and follow their passion

The number of new food and drink start-ups in the UK has jumped 47% in the past year to 30 June, rising from 3,996 to 5,885 as people on furlough start their own businesses, our new research finds.

Lockdown has caused many people to re-evaluate their careers and focus on what they are most passionate about. For many this has involved setting up new food and drink businesses, with those selling vegan products, ice cream or baked goods among the most popular start-ups over the past year.

A number of start-ups developed during lockdown have already turned into successful businesses. For example Italian-style relish maker Nakasero, which launched in February 2020 just before the pandemic hit, has won multiple awards and is now stocked in shops across the country. The business was set up by an ex-corporate finance executive who developed the business from her kitchen.

Daisy Divoka, Our Senior Associate says: “More people are becoming disillusioned with the nine to five and are leaving their careers behind to follow a passion for food.”

Despite the rise in the number of new businesses, getting past the initial stage of their development can be tricky. Only around one in three new businesses survive their first 12-24 months. Many firms need to prove their concept and business is viable and better still, making sales, before they are able to get funding.

“There are many great stories of people leaving their careers behind to launch successful companies. But people need to be aware of the challenges involved when setting up a business, including health and safety, labelling regulations or trademark protection to name a few, Daisy Adds. 

"In terms of funding there can be a big gap where they are unlikely to get investment until their business is up and running. One of the biggest gaps in funding is between the friends and family stage and the first round of venture capital funding."

The range of new food and drink start-ups being launched has changed significantly over the last decade, in line with changing consumer tastes.

Daisy adds: “We’re seeing a big change in demand for certain food and drink products. There is a sharp rise in the trend towards premiumisation, as well as more niche products and categories, including increasingly authentic ranges of international food.”

Number of new food and drink start-ups jumps 47% during the pandemic

Get in touch

If you'd like more information on this update, please contact Daisy Divoka.