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A Steak in the Economy

Why food entrepreneurship is so important to the UK economy – and how best to support it.

Why food entrepreneurship is so important to the UK economy – and how best to support it.

Key findings:

  • 1.5 million people in the UK work in restaurants and other food service businesses and in 2011 the sector contributed £25bn to the economy.
  • Despite much turbulence on UK high streets, 25% more restaurants opened in London in 2012 than 2011.
  • The economic contribution of restaurants and catering grew by 13% from 2010-2011, while the entire private sector’s contribution only grew by 4%, and the industry created 58,000 new jobs (more than any other sector).
  • The key to success has been the development of innovative business models, such as street food stalls, pop-up eateries and supper clubs. Food start-ups are also increasingly tapping into technological opportunities such as social media and crowdfunding.
  • With better stewardship, fewer restrictions and more encouragement, food businesses could see as many as 25,000 jobs created a year, and make an extra £500m annual contribution to GDP.

Eating out is enjoying something of an unlikely boom.

Against the terminal decline of the high street, 25% more restaurants opened in London in 2012 than in 2011, while the success of British food brands such as Pret a Manger and Neal's Yard Dairy are being exported to the US and beyond.

But food business founders take on a notoriously risky challenge in a country with steep property prices and tight credit conditions. The five-year survival rates in the hospitality industry are the lowest of any sector in the UK; there are lots of start-ups, but few survivors.

Yet despite the costs and risks, food entrepreneurship remains open to an incredibly diverse range of people. At the same time, we're starting to see signs of a revolution in this space. From setting up supper clubs in people's front rooms to pop-ups in empty shops, start-ups are developing new business models to keep costs down and boost their chances of success.

This report, produced in collaboration with food start-up incubator Kitchenette, looks at the rise of UK food start-ups - and why they're so important to the economy - and offers some ideas on how food entrepreneurs could be better supported.


Cynthia Shanmugalingam