We need to wake up and smell the coffee if our food industry is to survive

What has been the most remarkable civilisation-enhancing breakthrough in your own lifetime? Smallpox was eradicated a few years after I was born, so it’s tempting to name that, along with all the other incredible medical advancements that have ensured that child mortality rates have plummeted. The internet and the democratisation of information are fairly mind-blowing, too.

Yet the one I always return to is milk. When I was a child in the 1970s, a daily ritual was sniffing the milk at breakfast because there was always a strong possibility that it had gone off. When was the last time you smelt rancid milk? I haven’t for years. That is because of the incremental but substantial improvements made in processing this highly volatile product.

You may think I’m being flippant, but I’m not. Food and drink is Britain’s biggest manufacturing sector, contributing £30 billion to the economy annually and employing more than 450,000 people. We do not make many trains, textiles or toys any more, but we make an awful lot of pigs-in-blankets, vegan bao buns and frangipane-topped mince pies.

In recent years the food industry has been cast as a bit of a bogeyman, a sector that peddles dangerous ultra-processed food, and it is certainly true that, in the quest for longer shelf lives and lower prices, some of the innovations in food manufacturing have worsened the nutritional content of what we eat. In criticising ultra-processed foods, however, we should not diminish how cutting-edge the British food industry has been.

Which is why I was saddened to hear of the proposed move by Jacobs Douwe Egberts in Banbury, Oxfordshire. The Dutch coffee group has proposed abandoning manufacturing at the site, moving production to the Netherlands and making Banbury merely a packing facility. It will no longer make coffee, merely put it into jars and pods. Unlikely as it sounds, north Oxfordshire was once a global centre for coffee production. This factory, founded in the 1960s by Bird’s, the custard company, used to produce 11 billion cups of coffee a year, under the Kenco, Maxwell House, Tassimo, Millicano and Mellow Birds brands. Don’t laugh. Mellow Birds was sophisticated enough back in the early 1980s to be advertised by Joanna Lumley having flirty “mellow moments”. The proposals put about 280 workers at risk of redundancy.

There will be plenty of people who will welcome the closure of a manufacturing facility that specialised in making powdered food, a 20th-century aberration. All those coffee snobs, the types who splash out £3.50 on flat whites in town and indulge in single-origin estate filter coffee at home, will not mourn the demise of soluble coffee, but it remains the most popular form of caffeine in the UK.

According to Mintel, the market research company, the British retail coffee market (as in the stuff we buy to drink at home) is worth £1.8 billion a year. Just over half of that, £903 million, is instant. It is a way bigger market than freshly ground or beans, which command sales of £296 million. The rest is pod coffee, such as Nespresso. Yes, instant has fallen in popularity in relative terms, but it is still a vast revenue stream for any manufacturer.

Jacobs Douwe Egberts says it is moving out of Banbury because the site is expensive to run, uncompetitive and “the industry is operating in a challenging economic environment and there is an overcapacity of freeze-dried coffee in our European factories”. No one should expect a company to maintain an unprofitable factory and it is understood that sky-high energy costs have been the main problem for Jacobs Douwe Egberts: freeze-drying coffee is very energy-intensive. We should ask, though, why they have shifted production to the Netherlands rather than the other way around.

In the grand scheme of things, 280 jobs being lost is not material to the nation’s economy, although it’s pretty devastating for the individuals, but with the loss of processing jobs also comes the loss of research and development roles. Banbury used to attract the very brightest and best chemical engineering graduates.

It is not the only food factory to shut in Britain risking the loss of R&D jobs. Bakkavor, a huge supermarket own-label supplier, making pizzas and puddings, shut a couple of factories this year. Unilever and Nestlé have closed facilities recently, too.

All of this has an impact on new product development. Christmas traditionally has been the time that supermarkets push food innovation. Over the years, they have pioneered turkey crowns, pigs-in-blankets and truffle-infused cheddar, things that would have baffled our grandparents but make many family dinners easier to cook or certainly more joyful.

But this innovation is rapidly slowing, according to Mintel. Its figures show that so far this year only 16 per cent of food and drink launches have been genuinely new products (rather than reformulations or new flavours), down from 21 per cent in 2019 and 40 per cent in 2009. “It’s probably the most barren time that I’ve ever noticed in food and drink,” Jonny Forsyth, director of food at Mintel, tells me. “During Covid, R&D teams couldn’t get together and collaborate.” Since then, with budgets slashed, innovation has been stuck in the doldrums.

Instant coffee is not an obvious crucible for food innovation, but the development of pod coffee was a revolution, while Millicano, which incorporated real freshly ground coffee into instant jars, required proper cutting-edge technology. It is not smallpox-curing vaccines, certainly, but it adds value to otherwise stable, no-growth products; it saves us time or improves our morning brew.

A post-Brexit Britain is meant to be a world leader in value-added manufacturing. That means instant coffee just as much as pharmaceuticals and every time that a factory closes, it is not only the manufacturing we lose but also the research and development that comes with it.

Harry Wallop is a consumer journalist and broadcaster. Follow him on Twitter: @hwallop