On a global level, the food and drink industry holds significant importance for society as a whole. It is a large, dynamic, and enterprising sector. However, it is also highly regulated, fragmented, and susceptible to supply shocks such as war, weather changes, energy prices, or pests.
Regulation and Focus on Food Security
The World Bank dedicates a substantial part of its work to fostering food security, recognizing the critical role of the food and drink industry. Similarly, the Food and Agriculture Organisation of the United Nations focuses on ensuring food security.
EU: Jobs, Value Added, and Trade
The food and drink industry holds a prominent position in the European Union (EU). According to the EU Commission, it is the EU's largest manufacturing sector in terms of jobs and value added. Moreover, it plays a significant role in the EU's trade with non-EU countries. EU food and drink exports have witnessed remarkable growth, doubling in a decade to reach over EUR 90 billion by 2021. This has contributed to a positive trade balance of almost EUR 30 billion.
EU Industry Overview
The EU food and drink industry serves as a major employer, employing 4.5 million people. It generates an impressive turnover of EUR 1.1 trillion and contributes EUR 222 billion in value added, making it one of the largest manufacturing industries in the EU. In terms of consumption, a little over one-fifth of household spending in 2021 was allocated to food and drinks. Additionally, small and medium-sized companies make up just over 40% of the total turnover and employ close to 60% of the sector's workforce.
Food and Drinks Industry in the UK
In the United Kingdom, the food and drinks industry holds the distinction of being the country's largest manufacturing sector. With a combined turnover of GBP 105 billion, it accounts for about 20% of total UK manufacturing sales. The sector also employs approximately 430,000 people.
Food and Beverage Manufacturing in the US
The United States boasts a thriving food and beverage manufacturing sector. In 2019, this sector employed 1.7 million people across 36,000 processing plants owned by 31,000 companies. The largest sectors within the US food and drinks industry include meat processing, followed by dairy, beverages, grains and oilseeds, fruits and vegetables, and bakery and tortilla products. In terms of household expenditure, spending on food accounted for nearly 12% in 2020.
Growing Food and Drinks Market in Asia
Asia and Southeast Asia are witnessing a remarkable growth in their food and drinks market. This region holds enormous potential and is experiencing rapid expansion.
Impact of COVID-19 on the Industry
The COVID-19 pandemic has had a significant impact on various segments of the food and drink industry. Markets such as nutraceuticals and dietary supplements have experienced a boost due to the pandemic. The global nutraceuticals and supplements market had steadily grown over the past decade, reaching almost USD 353 billion in 2019. During the spread of the SARS-CoV-2 virus, the demand for multivitamins surged. In the US, sales of multivitamins increased by 51.2% in March 2020. Similarly, vitamin sales alone in the UK rose by 63%, and in France, sales grew by approximately 40-60% during the same period.
The increased global sales of supplements can be attributed to the rising interest in using them as possible prophylactic treatments for COVID-19, aiming to boost immune function.
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