The food and drink sector has continued to defy the uncertain political and economic climate, according to a new report published today by Make UK, the manufacturers’ organisation, and Santander.
The sector overall in the UK is worth 15.9 per cent of total manufacturing Gross Value Added (GVA) with sales in 2018 of £85.6bn, the report showed.
This represents a sharp increase of 7.6 per cent in just two years from 2016.
The sector is now a major employer across the UK with some 440,000 employees, up 5.3 per cent since 2016 and now at the highest level for 15 years.
It is the biggest industry sector in Yorkshire – at 19.7 per cent food and drink is almost a fifth of the local economy.
A large element of this growth is coming overseas with sales abroad up by just under one quarter in the last two years alone.
The EU remains the biggest total market accounting for just under two thirds, 61 per cent, of exports worth £13.9bn, with Ireland the largest single destination, 21.4 per cent worth £4.2bn, closely followed by the Netherlands, France, the US and Germany.
However, the rest of the world is seeing significant growth with sales to Asia and Oceania up by 295 per cent in the last 20 years and in the same period by 260 per cent to the US.
June Smith, region director for Make UK in the North, said: “The food and drink sector continues to benefit from the British public’s desire to eat, drink and be merry.
“Despite the economic and political uncertainty the sector seems to be shielded from the difficulties experienced elsewhere and is driving hard for growth in the UK and overseas.
“It is now a key contributor not just to manufacturing but a significant employer in many regions of the UK.
“Despite growth in the rest of the world however, the EU remains the dominant market for exports of food and drink.
“As such, it is vital that frictionless trade and fast and easy access continues in any post Brexit agreement if the remarkable growth pattern of the sector is to be maintained.”
Globally, the UK is the fourth largest food importer in the world and the second largest drink importer.
This highlights that notwithstanding the sector’s positive export growth, the UK is a net importer of food and drink by quite some margin with a total import value of £46bn compared to exports worth £23bn in 2018.
The report highlights the rapid rise of online shopping for and delivery of food and drink to the home in the UK which far outstrips the trend anywhere else in Europe.
While supermarkets still account for the vast majority of purchases, 93 per cent, online shopping now accounts for over 7 per cent of the total.
Andrew Williams, head of food and drink at Santander UK, said: “Today’s data gives food for thought on the importance of this sector to the UK economy which, despite uncertainties in the UK and internationally, has remained resilient.”