Sales of artisan food have helped smaller and medium-sized manufacturers to grow profit margins to 6.8% of turnover over the past year, according to research by law firm EMW.
The reason for the rise is thought to be due to consumers becoming more willing to pay premium prices for products they believed were a high quality, the law firm said.
This has allowed smaller food manufacturers to charge higher prices than larger food and drink producers.
Ian Morris, chairman of EMW, told British Baker’s sister title Food Manufacture: "Food is one of the fastest-growing areas of luxury spending. More customers than ever are willing to pay higher prices for products perceived as offering something more than a mass-market brand does."
“That means they are happy to seek out more niche products, and buy from small businesses.”
Morris also explained that smaller manufacturers were better-positioned to take advantage of the increased prominence of locally-sourced produce.
“Having a ’locally-sourced’ label helps attract buyers who are conscious of the carbon footprint of their food, which is a growing priority, especially for younger consumers. The growth and profitability in the sector is, in turn, making those smaller food and drink producers attractive as takeover targets for larger rivals.”