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1.1 : Gross Value Added of the UK agri-food sector, 2016 provisional
|Agriculture and Fishing||£9.0bn|
|Food and Drink Manufacturing||£28.8bn|
|Food and Drink Wholesaling||£12.0bn|
|Food and Drink Retailing||£29.8bn|
The agri-food sector contributed £112.0 billion or 6.4% to national Gross Value Added in 2016.
The GVA of the food sector (excluding agriculture and fishing) increased 1.0% in 2016, following a 4.6% increase in 2015. Wholesaling GVA increased by 9.4%, whilst manufacturing increased by 3.5% and catering rose by 0.9%. Retailing GVA fell by 4.1%.
Longer term, the food sector (excluding agriculture and fishing) increased by 76.0% between 2000 and 2016 while the whole economy increased by 78.9%. The food sector has less scope for growth as there is a limit to consumer intake capacity and therefore it relies largely on quality improvements.
In 2015 there was a net decrease of about 120 in the number of active enterprises in the food sector.1
1.2 : Trends in the total factor productivity of the UK food sector
Total factor productivity 2 of the UK food chain beyond the farmgate has risen by 0.3% between 2014 and 2015. Productivity in the wider economy has increased in 2015 by 1.0%.
The TFP of the UK food sector is an indicator of the efficiency and competitiveness of the food industry within the UK. An increase in TFP indicates the industry is improving its competitiveness. In 2015, productivity in catering saw the highest increase of 1.6 per cent, while food wholesaling 3 saw the largest decrease of 1.4 per cent. The calculation is based on reliable data on business sales and costs, employment by industry and on price indices all collected by the Office for National Statistics.
2 See Glossary for definition of Total Factor Productivity.
3 Wholesaling includes tobacco (SIC 46.35).
1.3 : Agri-food sector employees (GB), Q1 2017
|Q1 2017||million employees|
|Agriculture and Fishing||0.43|
|Food and Drink Manufacturing||0.39|
|Food and Drink Wholesaling||0.23|
|Food and Drink Retailing||1.12|
|Total food sector||3.41|
|Total agri-food sector||3.84|
The food sector4 in GB employed 3.4 million people in Q1 2017 (3.8 million if agriculture and fishing are included along with self-employed farmers), a 1.3% decrease on a year earlier. It covered 11.6% of GB employment in Q1 2017 (13.1% if agriculture and fishing are included along with self-employed farmers).
Non-residential catering accounted for 49% of the post-farm gate food chain in Q1 2017. Employment in this sector increased 1.6% on a year earlier, equating to around 26,000 jobs. Retailing accounted for around one third of food chain jobs (excluding agriculture) in Q1 2017 and decreased by 3.6% from a year earlier, or around 40,000 jobs.
In Q1 2017, one half of food sector jobs were part time. Women accounted for 57% of employees in food retailing and 53% in non-residential catering.
4 ‘Food’ includes non-alcoholic drinks. ‘Drink’ is alcoholic drinks
1.4 : UK food and drink manufacturing by product type
|Product||Number of SMEs in 2016|
|Meat and meat products||785|
|Fish and crustaceans||255|
|Fruit and vegetables||375|
|Oils and fats||35|
|Grain and starch products||105|
|Other food products||1,160|
|Prepared animal feeds||315|
|Product||GVA of sector in 2016 £ billion|
|Meat and meat products||4.4|
|Fish and crustaceans||0.7|
|Fruit and vegetables||1.8|
|Oils and fats||0.1|
|Grain and starch products||1.3|
|Other food products||6.0|
|Prepared animal feeds||1.8|
There were approximately 6,600 micro, small and medium sized enterprises (SMEs) in the food and drink sector with turnover of around £19 billion and 115,000 employees in 2016. In the food sector (excluding beverages) SMEs accounted for 96% of businesses, 27% of employment and 19% of turnover. Around a third of the SMEs are manufacturers of bakery products.
In terms of Gross Value Added (GVA) 5 beverages (including soft drinks and mineral water) is the largest manufacturing group with a value of £6.7 billion in 2016; contributing 23% to the total food and drink manufacturing GVA.
The ‘other food products’ category had a GVA of £6.0 billion. This includes items such as prepared meals, confectionery, condiments and seasonings.
5 For disclosure reasons some small contributions (less than 4% overall) to food and drink manufacturing GVA have been treated as zeros.
1.5 : UK grocery market shares 2015
|Retailer||% of market share|
|Marks and Spencer||4|
The combined market share of food and non-alcoholic drinks of the largest four food and drink retailers was 55% in 2015, down from 61% in 2014. Tesco commanded the largest market share at 19%, a decrease of 2 percentage points on 2014. The three largest discounters (Aldi, Iceland and Lidl) had a combined market share of 13%, up from 12% in 2014. Internet food shopping, which includes the largest supermarkets, increased to 6.1% of sales of food and non-alcoholic drinks, up from 5.5% in 2014.
Data comes from the Living Costs and Food Survey which is fully representative of UK household food shopping.
Alternative market share estimates from the Kantar Worldpanel 6 are more up to date although not restricted to foods and not as representative.
6 Kantar Worldpanel is a market research company, providing up to date statistics on sales by the grocery sector. Market shares also include sales of non-food.
1.6 : UK Consumer expenditure on food, drink and catering
Total consumer expenditure on food, drink7 and catering has continued to rise, by 0.7% in 2016 to £203 billion. Expenditure on food (including non-alcoholic drinks) increased by 3.0% to £96 billon. Spend on alcoholic drinks stayed the same and catering decreased 2.4%.
Spend on food shopping has increased 22% since 2008. In 2016 it accounted for 47% of spend in the sector. Spend on catering accounted for 27% of sector spend in 2016 and has increased by 17% since 2008.
Spend on all alcoholic drinks accounted for 25% of sector spend in 2016. It has increased by 25% since 2008. Spend reduced between 2007 and 2009, but has increased yearly thereafter.
Source: Consumer Trends, (ONS).
7 Food’ includes non-alcoholic drinks. ‘Drink’ is alcoholic drinks
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Economic Definition of food and agri-food sector
The UK food sector is defined as food manufacturing, food wholesaling, food retailing and non- residential catering. In terms of the standard industrial classification (SIC 2007) it is defined as:
|Food Manufacturing:||10 + 11|
|Food Wholesaling:||46.3 (excluding 46.35) + 46.17|
|Food Retailing:||47.2 (excluding 47.26) + 47.11 + 47.81|
The deductions are to remove non-food items as far as possible. The agri-food sector is the food sector plus agriculture and fishing. Agriculture and fishing are shown in several charts for comparison.
Net capital expenditure
This is calculated by adding to the value of new building work, acquisitions less disposals of land and existing buildings, vehicles and plant and machinery.
Gross Value Added (GVA)
GVA is the difference between output and intermediate consumption for any given sector / industry. This is the difference between the value of goods and services produced and the cost of raw materials and other inputs which are used up in production.
Total Factor Productivity (TFP)
Productivity measures the efficiency at which inputs are converted into outputs. Total Factor Productivity provides a comprehensive picture of growth.
The most commonly used threshold to determine relative low income is having an income which is less than 60% of the median in that year. Absolute low income is considered to be having an income which is less than 60% of the median in that year, adjusted by inflation.
The income a household needs to attain a given standard of living will depend on its size and composition. Equivalisation is a means of adjusting a household’s income for size and composition so that the incomes of all households are on a comparable basis.
Small and Medium Enterprises (SMEs)
Outside of these statistics, the definition of a SME can depend upon several factors, including turnover. For these statistics, a ‘small’ business is a private sector business with fewer than 50 employees. A ‘medium’ business is a private sector business with between 50 and 249 employees. A ‘micro’ business is a private sector business with between 1 and 10 employees, which, for the purpose of these statistics is incorporated within the ‘small’ category.