Food and drink businesses should be investing in their people and in new technology, as well as ‘constantly innovating’ their products and processes, according to the president of Northern Europe for Mondelēz International.
Glenn Caton said that leadership and investment were the only ways for UK companies to plug the productivity gap.
It comes a week after the governor of the Bank of England, Mark Carney, warned that uncertainty over Brexit has left many businesses reluctant to invest. Companies “have invested much less aggressively than usual in response to an otherwise very favourable environment,” he said, with signs of stronger growth in the wider manufacturing sector in July.
Carney concluded that Brexit was having a delayed impact on industry, more than a year after British voters opted to leave the European Union (EU).
Caton said: “If leaders cannot answer ‘yes’ to the following questions, productivity will not improve and there’s a risk that business performance will slide. Are we investing in the business to update and improve the equipment and technology we use? Are we constantly innovating our products and processes to improve what we do and how we do it? Are we investing sufficiently in our people to develop new knowledge, skills and provide new experiences?”
He cited the example of Cadbury’s Bournville factory in the UK, which last month was able to increase production thanks to a £75 million investment that followed the addition of four new production lines earlier in the year. As part of the move, production of Cadbury Dairy Milk Oreo and Cadbury Dairy Milk Tiffin will be brought in to the Bournville facility.
Caton said at the time that ‘it shows our investment has paid off’, but his latest calls will be little comfort to businesses who don’t have the resources to invest in their business and who rely on exports to the EU in order to survive. As Brexit negotiations drag on, there is little certainty over the UK’s future trading relationship with Europe, and Caton called on the UK’s government to step in with the required assistance.
“I am delighted that government is committed to developing infrastructure and supporting businesses in all parts of the UK,” he said, referring to a white paper dubbed ‘the Industrial Strategy’ which will aim to deliver an economy that works for the whole of the UK.
The current UK government is keen on addressing the economic disparity between London and the rest of the country – particularly northern areas. It has repeatedly reaffirmed its support for HS2, the £56 billion high-speed rail project, and has committed to retaining a seamless border between the Republic of Ireland and Northern Ireland after Brexit.
“There are three further key areas where government can help support modern British manufacturing,” Caton continued.
“It is vitally important that government works closely with business to maintain a thriving economy.
“As a global business, with global research and development for the world starting in Bournville, we need to retain and continue to attract the best talent in the world – diverse and highly skilled people. We want to give current and future colleagues the confidence that they can develop their careers with us.
“The third area is the need for a solution that makes frictionless movement of goods as close to a reality as possible as part of the Brexit negotiations. Businesses and consumers have been benefitting as goods move across borders without incurring tariffs and excessive regulations. We will need to be agile in the future so that whatever happens in the Brexit discussions we are able to adapt to the external circumstances and thrive, but anything that adds cost and complexity to business risks reducing competitiveness and higher prices for consumers.”
Based in Zürich, Caton has been Mondelēz’s regional head for Northern Europe since last September, and was previously vice-president of chocolate within the Mondelēz Northern Europe business unit. He has also held senior positions at Direct Wines and E & J Gallo, as well as a nine-year stint at consumer goods giant Procter & Gamble.
On a global basis, Mondelēz recently saw its revenue decrease by 5% in the second quarter and announced that CEO Irene Rosenfeld would make way. She will be replaced by the current head of McCain Foods, Dirk Van de Put.