A Steak in the Economy: Government warned not to overlook food start-up businesses

A new report, based on research of food businesses such as MeatLiquor, has given the Government and local councils a six-point plan to help support start-up companies

The Government is in danger of stifling and overlooking food and restaurant start-up businesses which could hold the key to economic growth, a new report has claimed.   

The report, entitled A Steak in the Economy, has found that food start-up businesses are flourishing despite the tough economic conditions - so much so that the report's authors have concluded that the next big UK start-up success story is just as likely to be a new Pret a Manger as it is a new Facebook. 

Encouraging entrepreneurs

The report was funded by innovation charity Nesta and carried out by newly-formed social enterprise Kitchenette.

The Kitchenette research focused on eight leading food ventures including MeatLiquor, The Clove Club and street food vendor Big Apple Hot Dogs - all the businesses were chosen because of their impact on the wider economy.

"This report makes fascinating reading," said restaurateur Iqbal Wahhab, chair of Kitchenette. "It is both exciting and heartening to hear that food start-ups are flourishing, despite the recession."

According to the report, the eating out sector contributes £25bn to annual GDP, 25 per cent more restaurants opened up in London in 2012 compared to the previous year and the hospitality industry created more jobs in 2011 than any other industry.

However the report's main conclusion is that the Government and local councils are restricting food businesses and are at risk of endangering the next big UK start-up.

"There is still much to be done in terms of encouraging young entrepreneurs – and cutting through the red tape that continues to hamper the launch of so many businesses – if the industry is to realise its enormous potential," Wahhab argued.

A Steak in the Economy - a six-point plan for the Government, councils and industry figures:

  • Boost food exports by appointing a British Food Envoy to represent British produce and brands abroad
  • Lift restrictions facing food markets and reserve at least 5 per cent of market pitches for start-up food entrepreneurs
  • Open underutilised kitchens and spaces in public and private sector buildings for pop-up restaurants
  • Put food entrepreneurship on the agenda in catering colleges
  • Develop a Food Strategy for local areas and incentivise property developers to support new food markets
  • Get capital flowing by simplifying the rules facing food businesses

Economic contribution

The full report, which contains a supportive foreword from Lord Young of Graffham, the Prime Minister's enterprise adviser, contains a set of quotes from operators extolling the benefits of food start-up businesses - from the ease at which they can be established to the impact they can have on growth.

Yianni Papoutis from MeatLiquor said starting out did not have to be expensive: “Banks just don’t lend money to small businesses nowadays, let alone food and beverage start-ups. I started with £5k and a burger van," he explained. 

Meanwhile, Daniel Willis from The Clove Club explained how crowdfunding was revolutionising food start-ups: "We were offered £125k for 25 per cent of the business from restaurateurs. We raised £250k for 25 per cent on Crowdcube," he revealed.

Stian Westlake, executive director of Nesta's policy and research unit, said: “Governments seem to have a strange blind spot when it comes to food. Food only crops up in policy debates when something goes wrong, be it a safety scare, a junk food panic, or an agricultural crisis.

“We’re thrilled to be backing this report, which casts a light on the economic contribution of good food, and in particular innovative food entrepreneurship."

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