UK and Irish manufacturers are facing an energy and cost environment that won't resolve on its own. Here's what the data says, and what forward-thinking businesses are doing about it.
The challenge isn't new, but the urgency is!
UK and Irish manufacturers were already dealing with structural cost pressures before energy prices became headline news. Rising labour costs, thin retail margins, and a persistent productivity gap with international competitors had been building for years. What's changed is the scale of the problem.
The ongoing geopolitical instability; including Middle East conflict pushing Brent crude to $95–$120 per barrel has compounded an already elevated cost environment. Global electricity demand grew by 4.3% in 2024, nearly double the previous decade's annual average. And for food and drink producers in particular, the FDF forecasts a further 4.8% cost increase over the next twelve months.
"The businesses best placed to absorb today's cost pressures are not those waiting for conditions to improve, they're the ones that invested in operational efficiency before the crisis deepened."
What the data actually shows
The digital transformation response isn't theoretical. Independent research from McKinsey, Capgemini, Aptean, and the IEA consistently points to the same outcomes for manufacturers and food producers that have made the investment:
The technologies delivering results today
The report identifies six core technology areas generating measurable returns in manufacturing and food production environments right now:
- Integrated ERPUnified operations across production, inventory, energy, and finance. Up to 30% reduction in operational costs.
- IoT & Smart MonitoringReal-time energy use per machine, line, or facility. Documented rapid payback on monitoring and controls.
- Predictive MaintenanceAI-driven scheduling based on live machine performance data, replacing inefficient calendar-based servicing.
- Digital TwinsVirtual process simulation before physical changes. Up to 20% reduction in unexpected downtime.
- Automated WorkflowsEliminating manual data entry and approval processes, freeing skilled staff for higher-value work.
- Cloud & Data IntegrationConnecting legacy-siloed systems into a single data environment for real-time management visibility.
Why food & drink businesses feel it most acutely
Food and drink manufacturing is among the most energy-intensive industrial sectors. Pasteurisation, refrigeration, baking, and carbonation demand continuous power and for many SME producers, energy accounts for 10–20% of total production cost. That proportion has grown materially as prices have risen.
The pressure is compounded by tight regulatory requirements: temperature logs, traceability records, batch documentation. In businesses still relying on manual systems or disconnected software, compliance is resource-intensive and error-prone. Digital systems address both problems simultaneously.
54% of UK food and drink manufacturers now identify automation as their single highest investment priority for 2025–2026. This is no longer a future aspiration, it's a current operational imperative.
A practical path forward: the five-phase roadmap
The report outlines a sequenced approach designed to generate near-term returns that fund subsequent phases, not a costly big-bang implementation.
The full report covers each phase in detail, including the evidence base behind each technology, the specific cost barriers and how to address them, and a case study from SA Equip — a multi-entity industrial equipment provider Target Integration helped unify onto a single Odoo ERP platform.
Download the Full Report
Get the complete 14-page industry report, including the full evidence base, technology investment breakdown, and a clear digital transformation roadmap for manufacturers and food & drink businesses.
