Europe’s cost-of-living crisis is not simply a story about consumers paying more. It is also about how value is distributed across the businesses that produce, process, and sell the goods we consume.
Reporting on European farmers’ struggles with low revenues highlights a fundamental tension: the prices consumers pay do not necessarily translate into sustainable returns for those producing their food.
An Al Jazeera analysis of France, Italy, Spain and Portugal illustrates the wider economic squeeze. Consumer prices have risen substantially over the longer term, while the relationship between wages and living costs remains a concern for households. The pandemic, the energy-price shock following the Ukraine-Russia war, and continuing geopolitical uncertainty have added further pressure on households and businesses across Europe and the UK.
Yet the cost-of-living debate is only part of the picture. What happens when the cost of producing food and drink rises, but the prices received by producers fail to keep pace?
In France, farmers have protested over rising agricultural costs, competition from imports and the conditions under which they are expected to produce. These disputes reflect wider concerns about the economic sustainability of farming and the pressures facing rural communities.
In Italy, agricultural producers have raised concerns about the gap between the prices they receive and those paid by final consumers. In July 2026, Il Sole 24 Ore reported on Coldiretti’s comparison between the €0.19 per kilogram received by a farmer for durum wheat at harvest and the €2 per kilogram paid for pasta by the final consumer. Coldiretti has argued that prices paid to farmers are insufficient to cover production costs.
These figures relate to different products at different stages of the supply chain. They do not establish how the final retail price is distributed, but they illustrate an important question:
Where is value created, and where is it captured?
For small producers, this is not an abstract economic discussion. It is about whether a business can remain viable, whether the next generation can afford to continue it, and whether distinctive regional products can survive in markets increasingly shaped by cost pressures, economies of scale and competition.
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Small producers do not all want the same things, even when they face similar commercial pressures. Some want access to new markets; others want greater control over their products, customers, or distribution. Collective structures can offer advantages, but they can also create tensions when the interests of a group do not align with those of individual businesses.
This raises a question beyond whether governments should intervene or consumers should pay more for local products:
What practical business models could help Europe’s small food and drink producers retain more value, reach new customers and internationalise without losing the independence and identity that make them distinctive?
Rethinking internationalisation after Brexit: lessons from the UK
Internationalisation is often treated as something each business must manage independently. Entering a new market can require investment in market research, export administration, logistics, distribution and customer acquisition, often before sufficient demand has been established.
For smaller businesses, these commitments can be difficult to absorb amid geopolitical uncertainty and economic volatility. Expanding production or entering a new market without sufficient evidence of demand can increase financial exposure rather than reduce it.
For UK SMEs, Brexit has added further complexity to trade with the European Union, despite the multiple international trade agreements secured by the UK. Customs formalities, administrative requirements and regulatory considerations add to the challenges of rising input costs and competition in domestic and overseas markets.
Yet UK data also points to developments worth examining. According to figures attributed to the Food and Drink Federation (FDF) and the Office for National Statistics (ONS), the number of active UK food and drink manufacturers stands at approximately 12,195, with microbusinesses accounting for a substantial proportion. Many operate with just one to four employees.
There are also signs of cautious optimism about future international demand. Recent business activity indicators suggest that approximately 34% of UK exporters expect foreign demand to increase over the next 12 months, compared with 13% who anticipate a decline. While these expectations do not guarantee growth, they raise an important question: how can smaller businesses turn international ambitions into commercially viable opportunities?
For microbusinesses, internationalisation requires an approach that reflects their scale, resources and risk exposure. Limited financial capacity makes upfront investment particularly consequential, while existing business support platforms offer opportunities to explore more collaborative routes to market.
We have long valued independent craftsmanship and the diversity that smaller producers bring to their regions and markets. Their independence is part of what makes the sector distinctive. The challenge is to help these businesses access new commercial opportunities without assuming that growth must mean becoming bigger, less specialised or more dependent on external partners.
What if internationalisation did not require small producers to grow bigger, but to think differently about how they grow?
Our experience with small, independent and boutique producers in the food and drink sector has shown us that collaboration can create opportunities for innovation and growth, but only when the model reflects the commercial realities of the businesses involved.
Collective structures are not automatically the answer. They can become restrictive when businesses with different production capacities, cost structures and commercial objectives are expected to operate under the same arrangements.
For an independent producer, the ability to decide what to produce, in what quantities, at what cost and for which market is fundamental to the business. An arrangement that improves efficiency for some participants may not be viable for others.
The question, therefore, is not simply whether small producers should collaborate, but which activities are worth coordinating, which decisions should remain with individual businesses, and how the two can coexist.
Decide what to share — and what to keep independent
Rather than treating collaboration as a fixed structure, we approach it as a strategic choice shaped by the businesses involved and the market opportunity they want to pursue.
A practical approach involves four stages.
1. Identify demand before investing
We combine existing data with market research, trade data, consumer insights and competitor analysis to identify markets where there is credible demand for complementary products. We then assess achievable prices, costs and margins before businesses commit resources.
2. Identify the right partners
Businesses with complementary products, compatible quality standards and suitable production schedules may be able to access new markets more effectively together. The aim is to identify where coordination offers a genuine commercial advantage while allowing each producer to retain its own brand, ownership and commercial identity.
3. Optimise logistics and distribution
To support profitability and commercial sustainability, we explore options such as consolidated shipments, shared warehousing, smaller storage facilities, coordinated delivery schedules and common export support where practical. The aim is to reduce duplicated effort and improve the economics of serving overseas customers. Any expected savings must be weighed against the additional costs of coordination, storage and distribution.
4. Model risk and remain agile
Financial forecasts, scenario analysis and smaller market-entry tests help us assess break-even volumes, cash-flow requirements and exposure to changes in demand, currency, transport costs and regulation. The aim is to test assumptions, understand potential risks and scale up only when the evidence supports it.
Technology can support each stage, from market research to forecasting and shared data analysis. However, technology cannot replace reliable market evidence, sound commercial relationships or effective execution.
Nor should collaboration automatically mean joint selling or collective price-setting. Any arrangement needs an appropriate structure, with competition law, confidentiality, regulatory compliance and export responsibilities considered from the outset.
A different way to think about growth
The objective is not to make every producer bigger, nor to suggest that collaboration can remove the structural challenges facing the sector. It is to explore whether better coordination, stronger market intelligence and more flexible business models can help independent producers retain their identity while reaching beyond their domestic markets.
Internationalisation does not have to begin with a single business taking on every cost and every risk. It can begin by identifying where demand exists, assessing the commercial opportunity and determining whether selected activities could be undertaken more effectively with the right partners.
For us, this is where strategy, data and technology meet. By helping producers assess markets, model the financial implications of different routes to market and identify potential partners, NorthStar Consulting can help turn collaboration from a general ambition into a commercially informed decision.
Could the future of internationalisation lie not in making small producers bigger, but in helping them work together more intelligently?
Rather than attempting to replicate the infrastructure of larger companies, independent producers could investigate whether sharing selected resources and capabilities would make international market entry more achievable.
This would not eliminate the risks of exporting, nor would collaboration suit every producer or market. Its value would depend on the businesses involved, the markets targeted and the commercial arrangements established. But it offers an alternative worth investigating: one in which businesses retain their identities while coordinating some of the activities needed to reach customers abroad.
From a top-down approach to a bottom-up model
Our recent work on the hidden costs of running SMEs has highlighted the regulatory and administrative pressures that shape small-business decisions. Many policy responses focus on changing rules, providing support schemes or encouraging individual businesses to improve their productivity.
These interventions can be important. However, there may also be scope to explore solutions that emerge from the businesses themselves: approaches built around shared needs, complementary capabilities and demonstrated market demand.
A network of independent producers, supported by appropriate logistics and commercial partners, could investigate international opportunities collectively rather than committing to separate market-entry strategies from the outset.
Such a model would need to be commercially grounded. Collaboration for its own sake is not enough. It should begin with evidence of demand and a clear understanding of whether the proposed arrangement can improve the economics of reaching a market.
A practical approach could involve four stages.
1. Identify demand before investing
Use market research, trade data, consumer insights and competitor analysis to identify markets where there is credible demand for complementary products. Assess potential buyers, achievable prices, distribution requirements and margins before committing resources.
2. Coordinate independent producers
Identify businesses with complementary products, compatible quality standards and suitable production schedules. Each business would retain its own brand, ownership and commercial identity while exploring opportunities to share selected activities and access new markets.
3. Optimise logistics and distribution
Explore consolidated shipments, shared warehousing, coordinated delivery schedules and common export support where practical. The aim would be to reduce duplicated effort and improve the economics of serving overseas customers. Any expected savings would need to be tested against the additional costs of coordination, storage and distribution.
4. Model risk and remain agile
Use financial forecasts, scenario analysis and smaller market-entry tests to assess break-even volumes, cash-flow requirements and exposure to changes in demand, currency, transport costs and regulation. Scale up only when the evidence supports it.
Technology can support each stage. AI-assisted research, forecasting tools and shared data systems may help businesses evaluate opportunities and make better-informed decisions. However, technology cannot replace reliable market evidence, sound commercial relationships or effective execution.
Nor should collaboration automatically mean joint selling or collective price-setting. Any arrangement must be appropriately structured, with competition law, confidentiality, food regulations and export responsibilities considered from the outset.
The evidence we need
The question is not whether collaboration sounds attractive in principle. It is whether independent producers can use it to achieve commercially meaningful outcomes.
How has the number of small and independent food and drink businesses in the UK changed since 2019? How many have entered the market since 2022, and how many remain active? Have small-batch, specialist and craft producers expanded, contracted or changed their business models over this period? And what evidence exists that collaboration can improve their ability to reach international customers?
These questions require evidence across business formation and survival, sector performance, export participation and the economics of distribution. They also require care in defining the businesses being studied: a new company registration is not necessarily a new producer, and growth in the number of businesses does not automatically indicate growth in output, profitability or exports.
The answers could help establish whether there is a meaningful opportunity to develop collaborative networks of producers and logistics partners, ready to investigate international markets when demand and commercial conditions justify it.
The wider proposition is straightforward: internationalisation need not always begin with an individual business investing in every capability it needs. It could begin with a group of independent businesses identifying a shared opportunity, assessing the economics and deciding which resources, if any, make sense to coordinate.
The objective is not to make every producer bigger, nor to suggest that collaboration can resolve structural inequalities in food supply chains. It is to explore whether better coordination, stronger market intelligence and more flexible business models can help independent producers remain independent while reaching beyond their domestic markets.
Could the next stage of internationalisation be built not on making small producers bigger, but on helping them work together more intelligently?
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