Economic outlook sharpens food workforce risks

Workforce pressures across the UK food and drink system have been building quietly for years. Businesses have absorbed higher costs, longer vacancies and growing skills gaps while keeping shelves stocked and service levels broadly intact.

That balancing act is becoming harder to sustain.

A new free IGD report, Food and drink workforce – a quiet crisis building?, highlights a system under growing strain - one where workforce risks are no longer confined to individual businesses but are beginning to threaten resilience across the supply chain.

Now that the Office for Budget Responsibility (OBR) has delivered its latest forecasts, the wider economic context provides little cause for optimism.

Why this matters now

Food and drink remains one of the UK’s largest employment systems, spanning agriculture, manufacturing, logistics, retail and hospitality. Yet labour availability is tightening in ways that are increasingly structural rather than cyclical.

While the wider labour market may loosen slightly in the near term as economic growth remains subdued, this should not be mistaken for a resolution of workforce challenges. For labour‑intensive sectors such as food and drink, underlying constraints on labour supply persist.

So far, the impact has largely been absorbed behind the scenes. But evidence suggests the system is edging closer to a point where pressures become more visible to consumers through:

• Reduced availability in some categories

• Declining service levels

• Rising operational strain

• Higher costs feeding through the system

What’s driving the pressure?

The underlying forces are well‑established - but their combined impact is intensifying:

• An ageing workforce
  More people are exiting the labour market than entering it, particularly in physically demanding and operational roles.

• Rising long‑term illness
  Higher levels of economic inactivity among working‑age adults continue to constrain labour supply across the economy.

• Migration constraints
  Access to labour the sector has historically relied on is more limited, with fewer short‑term release valves when demand spikes.

• Skills and readiness gaps
  Employers report persistent shortages in both technical and job‑ready skills, particularly in engineering, logistics and frontline operations.

• Changing expectations of work
  Younger workers are more selective about roles, progression and purpose - and food careers often remain poorly understood.

Why young adults are pivotal

One of the clearest findings in the report is the central role of young people in stabilising the future workforce.

Despite the scale and diversity of career opportunities across food and drink, engagement with younger cohorts remains weak. This is not a lack of interest in work itself, but a disconnect between:

• How the sector is perceived

• The reality of modern roles in technology, sustainability, data and engineering

• The pathways into long‑term careers

Without stronger attraction and development of early‑career talent, the risk is that the workforce shrinks by default - driven by constraint rather than strategic transformation.

Where the OBR forecasts come in

The Office for Budget Responsibility does not forecast individual sectors. But its labour market assumptions shape the policy and fiscal environment in which all sectors operate.

The newly published OBR forecasts confirm that labour supply growth remains weak over the medium term, shaped by population ageing, lower net migration and only modest productivity gains. This sharpens the challenge for labour‑intensive sectors such as food and drink, even where short‑term hiring conditions soften.

From resilience to risk

One of the most striking features of the current situation is how long the food system has managed to protect consumers from disruption.

That resilience has bought time - but it has also masked the scale of the challenge. As economic growth remains modest and labour supply tightens structurally, the ability of businesses to continue absorbing these pressures without visible impacts is diminishing.

Evidence now suggests the system is close to a point where workforce pressures could become harder to contain, with knock‑on effects for availability, service and cost across the supply chain.

The OBR’s latest forecasts do not mention food and drink explicitly, but they reinforce a picture of constrained labour supply and weak productivity momentum. They underline a reality the sector is already grappling with:

Workforce is no longer a background issue — it is becoming a defining economic risk shaped by long‑term labour supply constraints rather than short‑term cycles.

What next: strengthening the future workforce

The workforce pressures facing food and drink are structural and long term. Addressing these challenges will require sustained, collective action to strengthen the talent pipeline and improve access to skills across the system.

To support this, IGD is relaunching Feeding Britain’s Future in Summer 2026 - a united, sector‑wide movement bringing industry, educators and communities together to build a confident, skilled and future‑ready workforce.

What Feeding Britain’s Future is focused on

Feeding Britain’s Future will mobilise collective action across the sector to:

1. Attract young people into food and drink careers

2. Build confidence, employability and early‑career skills

3. Improve awareness of the breadth of roles across the food system

4. Support employers to access and develop and retain future talent

Where businesses can engage

Organisations can support this work by:

1. Reviewing the report and use it to inform your workforce and skills planning over the next 3–5 years

2. Engaging with IGD on collective action, particularly focused on young adults

3. Taking part in IGD’s Mmmake Your Mark campaign, helping inspire and motivate young people through showcasing the breadth of careers across the food system.

4. Supporting Feeding Britain’s Future through committing to one or more of the six interventions designed to attract young people to roles in the industry and develop their careers. Look out for more information on this in the coming weeks. The six interventions are:

   1. Schools’ programme

   2. Careers platforms

   3. Mmmake Your Mark

   4. University partnerships

   5. Work experience

   6. IGD’s learning programmes for new starters and early careers roles

The report sets out what businesses and government can do now, and why acting together matters if we are to avoid a slow burn workforce crisis. Only through a united, sector‑wide response can we build a resilient, future‑fit workforce capable of feeding Britain’s future.

If you’d like to discuss the findings or what involvement in Feeding Britain’s Future could look like for your organisation, please do get in touch.