Value of Food and Drink Industry to UK: Executive Summary
This report provides a summary of the impact of food and drink manufacturers on the UK economy. The
manufacturing element of the industry, linking the outputs of our farms to the retailers in the high street, is
not well understood and so the Food and Drink Federation (FDF) commissioned a report from the
Institute for Manufacturing (IfM) to clarify what the impacts of the industry were and to understand what could
be done to improve the economic and social impacts of the industry.
Food and drink is a significant and resilient element of the manufacturing sector
The food and drink industry is a core element of the UK manufacturing economy,
representing over 15% of
manufacturing turnover and employment. Through the recent recession it was the
sector that reduced its output
the least and has returned to pre-recession output levels the fastest.
Innovation is a key focus for the food and drink industry
The food and drink sector accounts for over 4% of the total R&D spend reported
in the annual R&D Scoreboard. Due to the highly competitive nature of the
industry, there are over 1,500 new products introduced each quarter.
This mix of product and process innovation is a core strength of the sector.
The sector provides above average pay and relatively long tenure in employment
The image of work in the food and drink industry is one of temporary and
relatively low paid employment.
Contrary to this common perception, the weekly earnings of employees in the
and drink industry are above
those of the economy as a whole and job tenure appears to be over nine years on
average for employees of food
and drink manufacturers with only 6% temporary workers.
Strong and positive response to environmental and health concerns
Since 1990 food and drink manufacturing in the UK has reduced its CO2 emissions
by at least 11%, showing a
strong commitment to reducing the environmental impact of food production. At
the same time, as there is a
growing awareness of health issues related to diet and nutrition, the UK has
become a leading source of new foods
with health propositions. In 2007 36% of new health product launches in the
European Union originated in
While exports have increased significantly, imports are rising faster
Over the past decade exports of both lightly and highly processed food products
have risen by approximately 15%,
showing a strong demand for UK products abroad. However, there is a growing
trade deficit for food and drink in
the UK, rising from £2.6 billion in 1995 to £9.9 billion in 2007. This impacts
on the UK's ability to increase its food
independence and is an ongoing concern in terms of the environmental impact of
The food and drink sector could contribute significantly to future sustainable
Due to its size, direct links to health outcomes and its impact on emissions
from production and logistics, the food
and drink sector should be a strategic focus of public and private action.
Helping the sector to improve its trade
balance, continue to invest in innovation and through supporting new low impact
production technologies should
be key public goals to retain a high value sector with significant social and
Last reviewed: 05 Jul 2010