Published last week by CIAA (the Confederation of the food and drink industries of the EU) the report collates the latest available statistics on the industry, which provide a snapshot of its structure and economics and helps evaluate trade activities.
Data & Trends of the European Food and Drink Industry 2009, available here, places the industry’s 2008 turnover at €965bn, a 3 per cent increase on 2007. This positions it as the single largest manufacturing sector in Europe, making up almost 13 per cent of the overall manufacturing industry, with the automobile and chemical industries following with 11 and 10 per cent respectively.
The food and drink industry also leads the way in terms of employment, but labour productivity is lower than for manufacturing as a whole, reveals the report. The latest statistics available, for 2008, show that the industry employs 4.4m people, making it the leading employer in the EU at 13.5 per cent of the employment market.
CIAA highlights 2006 statistics on labour productivity, which indicate €7,500 investment per employee in food and drink manufacturing, compared to €11,500 in automobile and €14,000 in chemicals.
‘Insufficient’ R&D expenditure
When it comes to investment in research and development, the report again reverts to 2006 data, which places expenditure at 0.37 per cent of food and drink output. This is lower than other industries, but also lower than the food manufacturing sector in other developed countries outside Europe.
“The food and drink industry’s R&D expenditure (R&D investment as a percentage of output) in EU-15 [data is from 2006] has been the lowest when compared to a majority of developed countries. The R&D expenditure levels are higher and continue to increase in Japan, the USA, Australia and South Korea, while EU-15 has experienced a relative stagnation at 0.37 per cent in 2006, close to 2005 levels (0.38 per cent),” writes CIAA.
“Similarly, the level of R&D intensity from large food and drink companies (ratio of R&D investment on a company’s net sales) within the EU is much lower when compared to non-EU companies. This gap is narrowing since 2007, mainly due to a relative decrease in intensity outside the EU.”
Limited but stable growth
In terms of industry growth, the report identifies “relatively limited but stable annual growth” over the last ten years, both in terms of production (1.8 per cent) and value added (1.1 per cent).
European food and drink exports in 2008 accounted for 18 per cent of the global export market, although this is well below the 25 per cent recorded a decade earlier. Total industry exports in 2008 came in at €58.2bn, while imports accounted for €57.1bn.
CIAA says the European food and drink sector includes over 310,000 companies, with 99 per cent of the food and drink business population made up of SMEs.
These companies generate 48.7 per cent of food and drink turnover and employ 63 per cent of the sector’s workforce, it said. Large companies account for just 0.9 per cent of all food and drink enterprises but they provide 51.3 per cent of the turnover, 52.8 per cent of the value added and contribute to 37 per cent of the sector’s employment.