Chapter 14: The food chain
Updated 21 October 2022
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Summary
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In 2020 the agri-food sector in the United Kingdom accounted for a total estimated Gross Value Added (GVA) of £115bn or 6.0% of national GVA, a decrease from 6.1% in 2019. The retailing sector increased 14% between 2019 and 2020, while the non-residential catering sector decreased by 31%.
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Employment in the agri-food sector grew by 0.6% over the 12-month period to the fourth quarter of 2021 to just over 4 million. The largest percent change was seen in wholesaling which fell by 2.6% (6,000 employees).
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Total factor productivity of the food chain increased by 0.4% in 2019 while there was an increase of 0.6% in productivity in the wider economy. In the 10 years prior to 2019, the average annual growth rate of the food chain was 0.6% while the wider economy’s average annual growth rate was 0.3%.
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Excluding the effect of price rises (constant prices), consumers’ expenditure on food and alcoholic drinks increased by 10% in 2021 and was 10% higher than in 2011. Expenditure on food eaten out increased by 35% in 2021, whilst expenditure on household food decreased by 0.8%.
Contribution of the agri-food sector to the national economy
Figure 14.1 Gross Value Added of the agri-food sector, 2020 (£ billion)
Enquiries: David Lee on +44 (0)20 802 63006
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| Sector | Gross value added | % of total |
|---|---|---|
| Agriculture | £10.3 | 9% |
| Food Manufacturing | £28.8 | 25% |
| Food Wholesaling | £13.2 | 11% |
| Food Retailing | £36.2 | 31% |
| Food Non-Residential Catering | £26.5 | 23% |
Source: Annual Business Survey (ONS) and Aggregate Agricultural Accounts (Defra).
Download the full Food chain dataset.
In 2020 the agri-food sector contributed £115bn to the economy, 6.0% of the national GVA. Within this, retailing accounted for the largest proportion at 31% followed by manufacturing at 25%. Wholesaling accounted for 11% of the sector. Agriculture made the smallest contribution at 9.0%. The retailing sector increased 14% between 2019 and 2020, while the non-residential catering sector decreased by 31%.
In 2019 manufacturing and catering had a higher productivity than in 2018. Manufacturing increased by 1.8% while catering increased by 4.5%. Retail and wholesale both saw a decrease of 1.7%.
In the 10 years prior to 2019, the average annual growth rate of the food chain was 0.6% while the wider economy’s average annual growth rate was 0.3%. For more information please see the Total Factor Productivity of the United Kingdom Food Chain publication.
Table 14.1a to 14.1e - Agri-food sector contribution to the national economy (£ million unless otherwise specified)
Enquiries: David Lee on +44 (0)20 802 63006
Email: [email protected]
Table 14.1a
| 2019 | 2020 | 2021 | |
|---|---|---|---|
| Agri-food sector’s contribution to total economy gross value added | 123,662 | 114,996 | . . |
| Agriculture (not including fishing) | 10,331 | 10,308 | . . |
| Food Manufacturing | 30,272 | 28,769 | . . |
| Food Wholesaling | 12,921 | 13,224 | . . |
| Food Retailing | 31,884 | 36,206 | . . |
| Food Non-Residential Catering | 38,254 | 26,490 | . . |
| % of national gross value added (current prices) | 6.1% | 6.0% | . . |
Table 14.1b
| 2019 | 2020 | 2021 | |
|---|---|---|---|
| Workforce in the food sector thousand persons | 4,006 | 3,983 | 4,005 |
| Agriculture (including fishing) | 436 | 434 | 429 |
| Food Manufacturing | 420 | 420 | 427 |
| Food Wholesaling | 237 | 236 | 230 |
| Food Retailing | 1,106 | 1,151 | 1,164 |
| Food Non-Residential Catering | 1,808 | 1,742 | 1,756 |
| % of total workforce in employment | 13% | 13% | 13% |
Table 14.1c
| Trade in food feed and drink in real terms at 2019 prices | 2019 | 2020 | 2021 |
|---|---|---|---|
| Imports of food, feed and drink | 50,926 | 48,507 | 45,852 |
| % of total UK imports | 8.9% | 9.8% | 9.2% |
| Exports of food, feed and drink | 24,946 | 21,429 | 20,240 |
| % of total UK exports | 6.6% | 6.9% | 6.0% |
| UK Food Production to Supply Ratio (‘Self-Sufficiency’) | |||
| % of all food | 62% | 60% | 61% |
| % of indigenous type food | 76% | 74% | 74% |
Table 14.1d
| Household final consumption expenditure on food and alcoholic drinks | 2019 | 2020 | 2021 |
|---|---|---|---|
| at current prices | 241,097 | 213,796 | 240,062 |
| Household food and non-alcoholic beverages | 109,843 | 118,948 | 117,973 |
| Food and non-alcoholic beverages eaten out | 67,343 | 41,036 | 57,342 |
| Alcoholic drinks | 63,911 | 53,812 | 64,747 |
| at constant 2010 prices (£ million) | 241,097 | 210,833 | 232,187 |
| Household food and non-alcoholic beverages | 109,843 | 118,093 | 116,758 |
| Food and non-alcoholic beverages eaten out | 67,343 | 40,251 | 54,162 |
| Alcoholic drinks | 63,911 | 52,489 | 61,267 |
| % of total household final consumption expenditure (current prices) | 17% | 17% | 18% |
| Household food and non-alcoholic beverages | 7.9% | 9.5% | 8.6% |
| Food and non-alcoholic beverages eaten out | 4.8% | 3.3% | 4.2% |
| Alcoholic drinks | 4.6% | 4.3% | 4.7% |
Table 14.1e
| 2019 | 2020 | 2021 | |
|---|---|---|---|
| Producer prices for agricultural products (2015 = 100) | 114.2 | 119.2 | 131.1 |
| Consumer price index (2015 = 100): | |||
| food and non-alcoholic beverages | 103.2 | 103.9 | 104.2 |
| alcoholic beverages | 101.0 | 102.0 | 103.3 |
| all items | 107.8 | 108.7 | 111.6 |
Sources: Annual Business Survey (ONS), Aggregate Agricultural Accounts (Defra), Labour Force Survey GB (ONS), Overseas Trade Statistics (HMRC), Consumer Price Indices (ONS).
Notes for tables 14.1a to 14.1e:
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2020 figures are provisional and subject to revision
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.. means ‘not available’
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Agri-food sector employees and self-employed farmers
Figure 14.2 Agri-food sector employees and self-employed farmers, 2021 (millions)
Enquiries: David Lee on +44 (0)20 802 63006
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| Sector | Number of employees | % of total |
|---|---|---|
| Agriculture | 0.4 | 11% |
| Food Manufacturing | 0.4 | 11% |
| Food Wholesaling | 0.2 | 6% |
| Food Retailing | 1.2 | 29% |
| Food Non-Residential Catering | 1.8 | 44% |
Source: Labour Market Trends (ONS), June Survey of Agriculture and Horticulture (Defra)
Download the full Food chain dataset.
In 2021, the agri-food sector employed 4 million people, or 13% of all employees in Great Britain. This proportion has been broadly the same since 2001. Agriculture accounts for less than half a million employees or 11% of the agri-food sector (figure 14.2).
In the twelve months to December 2021, employment in the agri-food sector increased by 0.6%. Employment fell in 2021 in wholesaling (2.6%) and agriculture (1.2%), but increased in manufacturing (1.7%), retailing (1.1%) and non-residential catering (0.8%). Employment across the whole economy rose by 0.6% over the same period.
Employment in the agri-food sector has risen 11% since 2000. Changes in each of the sectors since 2000 show that employment in agriculture and manufacturing fell by 23% and 11% respectively, while wholesaling, retailing and non-residential catering increased by 4.1%, 6.8% and 40% respectively.
Total Factor Productivity
In 2019 the productivity of the food chain increased by 0.4% while there was an increase of 0.6% in productivity in the wider economy. In the 10 years prior to 2019, the average annual growth rate of the food chain was 0.6% while the wider economy’s average annual growth rate was 0.3%.
In 2019, total factor productivity in food and drink manufacturing increased by 1.8% and showed an increase of only 0.3% over the last 10 years.
For more information on productivity please see the Total Factor Productivity of the United Kingdom Food Chain publication.
Total factor productivity of food wholesaling decreased by 1.7% in 2019, while in the last 10 years showed an average annual increase of 0.7%.
Productivity of the food retail sector decreased by 1.7% in 2019. In the last 10 years, productivity showed an average annual increase of 0.4%.
In 2019 non-residential catering (NRC) showed an increase in productivity of 4.5%.
Trade in food, feed and drink
In 2021, the value of food, feed and drink exports was £20.2bn, a decrease of 5.6% on 2020. In 2021 the value of food, feed and drink imports decreased by 5.5% to £45.9bn in real terms, resulting in the trade gap in food, feed and drink of £25.6bn in real terms, a decrease of 5.4% since 2020. See Chapter 13 for more detail on overseas trade.
Food production to supply ratio
Figure 14.3 Food production to supply ratio, 2021
Enquiries: David Lee on +44 (0)20 802 63006
Email: [email protected]
Source: Defra 2021
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Food Production to Supply Ratio (commonly referred to as the “Self Sufficiency Ratio”), is calculated as the farmgate value of raw food production divided by the value of raw food for human consumption, and is estimated to be 61% for all food in 2021 and 74% of indigenous type food. In 2020, this was 60% and 74% respectively. The overall farmgate value of United Kingdom food production was 5% higher when compared to 2020. For individual products, production to supply ratio uses volume. Table 14.2 contains production to supply ratios for selected crops.
Table 14.2 Food Production to Supply Ratio
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| 2019 | 2020 | 2021 | |
|---|---|---|---|
| Cereals | 96% | 88% | 86% |
| Wheat | 87% | 81% | 76% |
| Barley | 127% | 122% | 110% |
| Oats | 107% | 104% | 101% |
| Other crops | |||
| Oilseed rape | 86% | 73% | 52% |
| Linseed | 116% | 121% | 81% |
| Sugar beet | 63% | 63% | 66% |
| Fresh vegetables | 53% | 55% | 57% |
| Potatoes | 67% | 71% | 73% |
| Cabbages | 87% | 89% | 90% |
| Cauliflowers and broccoli | 55% | 61% | 64% |
| Carrots, turnips and swede | 99% | 96% | 95% |
| Mushrooms | 44% | 47% | 47% |
| Lettuce | 35% | 33% | 34% |
| Tomatoes | 13% | 15% | 17% |
| Fresh fruit | 16% | 16% | 15% |
| Apples | 39% | 39% | 37% |
| Pears | 19% | 19% | 16% |
| Plums | 17% | 19% | 9% |
| Strawberries | 71% | 69% | 64% |
| Raspberries | 38% | 37% | 30% |
| Meat and dairy | |||
| Beef and veal | 86% | 85% | 82% |
| Pigmeat | 66% | 71% | 70% |
| Mutton and lamb | 109% | 111% | 109% |
| Poultrymeat | 94% | 99% | 97% |
| Milk | 106% | 105% | 105% |
| Eggs | 93% | 89% | 92% |
Notes:
- 2021 figures are provisional.
- Average ratios for categories cereals, other crops, fresh vegetables and fresh fruit may include more items than the selected items listed in the table.
Source: Defra’s Agriculture in the UK for category averages (e.g. fresh vegetables) and potatoes and all meat and dairy products. Defra’s Horticulture Statistics for all other individual products.
Download the full Food chain dataset.
Distinction between competitiveness and food security
The food production to supply ratio provides a very broad indicator of the ability of United Kingdom agriculture to meet consumer demand - also described as competitiveness. The ratio is not an appropriate measure of “food security” since it fails to account for many dimensions of this complex issue.
A high food production to supply ratio fails to insulate a country against many possible disruptions to its supply chain.
Diversity enhances security. The United Kingdom sources foods from diverse stable countries, mainly European countries, and imports can make up for domestic supply shortages (see Figure 14.4).
A detailed analysis is given in the Defra publication ‘UK Food Security Report 2021’.
The UKFSR is the first comprehensive review of the UK’s food security to be published since the UK Food Security Assessment (UKFSA), which was first published in 2009 and updated in 2010.
In the decade since the UKFSA, the food security landscape has changed significantly. The UK’s departure from the European Union has brought along changes in areas as diverse as trade, farming, and access to fisheries, representing both challenges and opportunities in food security. Climate change and its impacts on farming and the food supply chain are now also better understood.
The COVID-19 pandemic and other concurrent events happening towards the end of 2020, such as the UK leaving the EU and increased food demand due to Christmas, have stress-tested the supply chain, highlighting both the vulnerabilities in this complex system and the resilience and flexibility of the UK’s food supply.
In addition, the pandemic has increased public awareness in a range of food security areas. This includes the complexities and dependencies of the UK’s food supply chain, notably the advantages and risks of just-in-time food supplies, as well as the issues surrounding household food insecurity as households struggled to afford food.
Origins of food consumed in the United Kingdom
Figure 14.4 includes the proportion of United Kingdom food consumption that is produced in the United Kingdom. This should not be confused with the Food Production to Supply Ratio given in Figure 14.3. Figure 14.4 looks purely at the breakdown of food that the United Kingdom actually consumes.
The Food Production to Supply Ratio (see figure 14.3) considers all United Kingdom food production, including food that the United Kingdom exports instead of consuming. A further, much smaller difference is that the United Kingdom food production used in the food production to supply ratio calculations has been adjusted to take account of the balance of trade in important inputs into agriculture.
Figure 14.4 Origins of food consumed in the United Kingdom, 2021.
Enquiries: David Lee on +44 (0)20 802 63006
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| Origin of destination | 2021 |
|---|---|
| UK exports | -10% |
| UK | 58% |
| EU | 23% |
| Rest of Europe | 3% |
| Africa | 5% |
| Asia | 4% |
| Australasia | 1% |
| North America | 3% |
| South America | 4% |
Source: HMRC and Defra 2020
Notes:
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Based on the farm-gate value of raw food.
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Consumption of UK origin consists of UK domestic production minus UK exports.
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UK exports are given as a percentage of total UK consumption.
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Membership of the EU increased between 2002 and 2013, from 15 to 28 countries.
Download the full Food chain dataset.
Supply includes domestic production plus imports and excludes exports of home production. In 2020, 54% of domestic consumption came from UK production (based on unprocessed value at farmgate), 28% from the EU and the remaining 18% from the rest of the world. 42 countries accounted for 90% of imported supply, and 27 for 80%. Some countries or regions are uniquely important to supply of particular products such as bananas from the Caribbean and Central America, reducing the security of this supply.
Consumers’ expenditure
Figure 14.5 Consumers’ expenditure on food, drink and eating out 2021
Enquiries: David Lee on +44 (0)20 802 63006
Email: [email protected]
Source: Consumer trends, ONS.
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Excluding the effect of price rises (constant prices), consumers’ expenditure on food and alcoholic drinks increased by 10% in 2021 to £232bn and was 10% higher than in 2011. Expenditure on food eaten out increased by 35% between 2020 and 2021 to £54bn, whilst expenditure on household food decreased by 1% to £232bn. Expenditure on alcoholic drinks increased by 17% to £61bn.
Consumer expenditure on food and alcoholic drinks (at current prices) increased by 12% to £240bn in 2021. Household food expenditure decreased by 0.8% to £118bn between 2020 and 2021, food eaten out increased by 40% to £57bn and expenditure on alcoholic drinks increased by 20% to £65bn.
Changes in consumers’ price indices
Figure 14.6 Changes in the food price index (in constant prices, food and non-alcoholic beverages) 2021
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Source: Consumer Price Index (ONS)
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Food and non-alcoholic beverage prices in real terms were fairly stable between 2000 and 2007, as measured by the Consumer Price Index (CPI), before rising by 12% between July 2007 and February 2009. Prices then returned to real terms stability until February 2014.
From a peak in February 2014, food prices fell steadily to October 2016 and, after improving in 2017, fell again to November 2018. Food and non-alcoholic beverage prices fluctuated in 2019 before falling sharply in the second half of 2020. Prices remained low in 2021.