Chapter 14: The food chain
Updated 20 February 2024
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Summary
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In 2021, the agri-food sector (excluding fishing) in the United Kingdom accounted for a total estimated Gross Value Added (GVA) of £127bn or 6.2% of national GVA, a increase of 13% since 2020. The non-residential catering sector increased by 32% between 2020 and 2021. All other sectors also saw an increase.
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Employment in the agri-food sector grew by 3.3% over the 12-month period to the fourth quarter of 2022 to just under 4.2 million. The largest percent change was seen in non-residential catering which rose by 7.9% (144,000 employees).
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Total factor productivity of the food chain decreased by 1.5% while there was a decrease of 1.1% in productivity in the wider economy. In the 10 years prior to 2020, the average annual growth rate of the food chain was 0.1% while the wider economy’s average annual growth rate was 0.2%.
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Consumer expenditure on food and alcoholic drinks (at constant prices) increased by 7% from 2021 to 2022 and was 20% higher than in 2012. Expenditure on food and drink eaten out increased by 29% from 2021 to 2022, whilst expenditure on household food and alcoholic drinks (off-licence only) decreased by 6.9% and 9.6% respectively.
Contribution of the agri-food sector to the national economy
Figure 14.1 Gross Value Added of the agri-food sector, 2021 (£ billion) (a)
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| Sector | Gross Value Added | Share of total |
|---|---|---|
| Agriculture (not including fishing) | £12.1bn | 9% |
| Food and Drink Manufacturing | £30.4bn | 24% |
| Food and Drink Wholesaling | £12.7bn | 10% |
| Food and Drink Retailing | £36.9bn | 29% |
| Food and Drink Non-Residential Catering | £35.2bn | 28% |
Notes:
- 2022 figures not yet available from the Annual Business Survey (ABS).
Source: Annual Business Survey (ONS), Aggregate Agricultural Accounts (Defra).
Download the full Food chain dataset
In 2021 the agri-food sector (excluding fishing) contributed £127bn to the economy, 6.2% of the national GVA. (For the overall GVA figure for the agri-food sector, refer to the Food Statistics Pocketbook which includes fishing, adding roughly an extra billion pounds to GVA each year). Within this, retailing accounted for the largest proportion at 29% followed by catering at 28%. Wholesaling accounted for 10% of the sector. Agriculture made the smallest contribution at 9.5%. The non-residential catering sector increased 32% between 2020 and 2021. All other sectors saw an increase.
In 2020, two of the four food sectors had a higher productivity than in 2019. Wholesale has increased by 0.9% while retail increased by 3.7%. In 2020, catering showed a decrease of 10% due to COVID-19 impacts.
In the 10 years prior to 2020, the average annual growth rate of the food chain was 0.1% while the wider economy’s average annual growth rate was 0.2%.
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
| Sector | 2020 | 2021 | 2022 |
|---|---|---|---|
| Agri-food sector’s contribution to total economy gross value added | 112,857 | 127,237 | .. |
| Agriculture (not including fishing) | 10,342 | 12,065 | 13,859 |
| Food and Drink Manufacturing | 28,177 | 30,428 | .. |
| Food and Drink Wholesaling | 12,625 | 12,672 | .. |
| Food and Drink Retailing | 34,961 | 36,870 | .. |
| Food and Drink Non-Residential Catering | 26,752 | 35,202 | .. |
| % of national gross value added (current prices) | 5.9% | 6.2% | .. |
Table 14.1b
| Sector | 2020 | 2021 | 2022 |
|---|---|---|---|
| Workforce in the food sector thousand persons | 3,969 | 4,035 | 4,168 |
| Agriculture (including fishing) | 430 | 425 | 428 |
| Food and Drink Manufacturing | 418 | 414 | 419 |
| Food and Drink Wholesaling | 219 | 199 | 207 |
| Food and Drink Retailing | 1,152 | 1,162 | 1,134 |
| Food and Drink Non-Residential Catering | 1,750 | 1,835 | 1,979 |
| % share of national workforce | 13.3% | 13.4% | 13.4% |
Table 14.1c
| Trade in food feed and drink in real terms at 2022 prices | 2020 | 2021 | 2022 |
|---|---|---|---|
| Imports of food, feed and drink | 58,234 | 55,184 | 58,136 |
| % of total UK imports | 9.3% | 9.2% | 8.7% |
| Exports of food, feed and drink | 23,474 | 22,116 | 24,935 |
| % of total UK exports | 6.1% | 5.5% | 5.8% |
| UK Food Production to Supply Ratio (‘Self-Sufficiency’) | |||
| % of all food | 60% | 61% | 60% |
| % of indigenous type food | 74% | 74% | 73% |
Table 14.1d
| Household final consumption expenditure on food and alcoholic drinks | 2020 | 2021 | 2022 |
|---|---|---|---|
| At current prices | 220,434 | 246,404 | 281,397 |
| Household food and non-alcoholic beverages | 120,091 | 122,642 | 126,737 |
| Food and drink eaten out | 73,496 | 98,248 | 131,368 |
| Alcoholic drinks (off-licence only) | 26,847 | 25,514 | 23,292 |
| At constant 2022 prices (£ million) | 246,797 | 268,704 | 281,397 |
| Household food and non-alcoholic beverages | 134,453 | 133,741 | 126,737 |
| Food and drink eaten out | 82,286 | 107,140 | 131,368 |
| Alcoholic drinks (off-licence only) | 30,058 | 27,832 | 23,292 |
| % of total household final consumption expenditure (current prices) | 18.2% | 18.7% | 18.9% |
| Household food and non-alcoholic beverages | 9.9% | 9.3% | 8.5% |
| Food and drink eaten out | 6.1% | 7.4% | 8.8% |
| Alcoholic drinks (off-licence only) | 2.2% | 1.9% | 1.6% |
Table 14.1e
| Consumer price index (2015 = 100) | 2020 | 2021 | 2022 |
|---|---|---|---|
| All items | 108.7 | 111.6 | 121.7 |
| Food and non-alcoholic beverages | 103.9 | 104.2 | 115.5 |
| Alcoholic beverages | 102.0 | 103.3 | 105.8 |
Notes for tables 14.1a to 14.1e:
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2022 figures are provisional and subject to revision
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.. means ‘not available’
Sources: Annual Business Survey (ONS), Aggregate Agricultural Accounts (Defra), Labour Force Survey GB (ONS), Overseas Trade Statistics (HMRC), Consumer Price Indices (ONS).
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Agri-food sector employees and self-employed farmers
Figure 14.2 Agri-food sector employees and self-employed farmers, 2022 (millions)
Enquiries: David Lee on +44 (0)20 802 63006
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| Sector | Number of employees | Share of total |
|---|---|---|
| Agriculture | 0.4 | 10% |
| Food and Drink Manufacturing | 0.4 | 10% |
| Food and Drink Wholesaling | 0.2 | 5% |
| Food and Drink Retailing | 1.1 | 27% |
| Food and Drink Non-Residential Catering | 2.0 | 48% |
Source: Labour Force Survey GB (ONS), June Survey of Agriculture (Defra)
Download the full Food chain dataset
In 2022, the agri-food sector employed 4.2 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 10% of the agri-food sector.
In the twelve months to December 2022, employment in the agri-food sector increased by 3.3%. Employment fell in 2022 in retailing (2.4%), but increased in non-residential catering (7.9%), wholesaling (4.3%) and manufacturing (1.2%).
Employment across the whole GB economy rose by 3% over the same period (based on the total industries estimate from the same JOBS03 spreadsheet that covers SIC 2007 section A-T).
Employment in the agri-food sector has risen 16% since 2000. Changes in each of the sectors since 2000 show that employment in agriculture, manufacturing and wholesaling fell by 23%, 13% and 6.1% respectively, while retailing and non-residential catering increased by 4.1% and 57.3% respectively.
Total Factor Productivity
In 2020, the productivity of the food chain decreased by 1.5% while there was a decrease of 1.1% in productivity in the wider economy. In the 10 years prior to 2020, the average annual growth rate of the food chain was 0.1% while the wider economy’s average annual growth rate was 0.2%.
In 2020, total factor productivity in food and drink manufacturing decreased by 3.1% and decreased by 0.2% 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 increased by 0.9% in 2020, while in the last 10 years has shown an average annual increase of 0.6%.
Productivity of the food retail sector increased by 3.7% in 2020. In the last 10 years, productivity has shown an average annual increase of 0.6%.
In 2020 non-residential catering (NRC) showed a decrease in productivity of 10.1%.
Trade in food, feed and drink
In 2022, the value of food, feed and drink exports was £24.9bn, an increase of 12.7% on 2021. In 2022 the value of food, feed and drink imports increased by 5.3% to £58.1bn in real terms, resulting in the trade gap in food, feed and drink of £33.2bn in real terms, an increase of 0.4% since 2021. See Chapter 13 for more detail on overseas trade.
Food production to supply ratio
Figure 14.3 Food production to supply ratio, 1956-2022
Enquiries: David Lee on +44 (0)20 802 63006
Email: [email protected]
Source: Defra analysis of HMRC Overseas Trade Statistics
Text description of Figure 14.3: Figure 14.3 is a line chart showing how the food production to supply ratio for the UK has changed from 1956 to 2022.
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The 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 60% for all food in 2022 and 73% of indigenous type food. In 2021, this was 61% and 74% respectively. Table 14.2 contains production to supply ratios for selected crops and other primary agricultural products. For these individual products, the production to supply ratio is calculated using volumes rather than value.
Table 14.2 Food Production to Supply Ratio
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| 2020 | 2021 | 2022 | |
|---|---|---|---|
| Cereals | 88% | 86% | 92% |
| Wheat | 86% | 89% | 95% |
| Barley | 122% | 110% | 112% |
| Oats | 104% | 101% | 121% |
| Other crops | |||
| Oilseed rape | 73% | 52% | 64% |
| Sugar beet | 63% | 63% | 57% |
| Fresh vegetables | 55% | 57% | 55% |
| Potatoes | 71% | 74% | 63% |
| Cabbages | 89% | 90% | 86% |
| Cauliflowers and broccoli | 61% | 64% | 55% |
| Carrots, turnips and swede | 96% | 95% | 99% |
| Mushrooms | 47% | 47% | 49% |
| Lettuce | 33% | 34% | 44% |
| Tomatoes | 15% | 17% | 16% |
| Fresh fruit | 16% | 15% | 17% |
| Apples | 39% | 37% | 40% |
| Pears | 19% | 16% | 14% |
| Plums | 19% | 9% | 14% |
| Strawberries | 69% | 64% | 67% |
| Raspberries | 37% | 30% | 38% |
| Meat and dairy | |||
| Beef and veal | 85% | 83% | 87% |
| Pigmeat | 71% | 71% | 69% |
| Mutton and lamb | 111% | 108% | 107% |
| Poultrymeat | 99% | 96% | 96% |
| Milk | 105% | 105% | 105% |
| Eggs | 89% | 92% | 90% |
Notes:
- 2022 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 was 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. The next edition will be published in 2024.
In the decade since the UKFSA, the food security landscape changed significantly. The UK’s departure from the European Union brought changes in the areas of trade, farming, and access to fisheries, resulting in 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 in the run up 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, 2022.
Enquiries: David Lee on +44 (0)20 802 63006
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| Origin of destination | 2022 |
|---|---|
| UK exports | -9% |
| UK | 58% |
| EU | 23% |
| Rest of Europe | 3% |
| Africa | 4% |
| Asia | 4% |
| Australasia | 1% |
| North America | 3% |
| South America | 4% |
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.
Source: Defra analysis of HMRC Overseas Trade Statistics
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Supply includes domestic production plus imports and excludes exports of home production. In 2022, 58% of domestic consumption came from UK production (based on unprocessed value at farmgate), 23% from the EU and the remaining 19% from the rest of the world. 33 countries accounted for 90% of imported supply, and 22 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 2000-2022 (constant prices)
Enquiries: David Lee on +44 (0)20 802 63006
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Source: Consumer trends, ONS
Text description of Figure 14.5: Figure 14.5 is a line chart that shows the amount of consumer spending in the UK on food and non-alcoholic drink, alcoholic drink (off-licence only) and for catering from 2002 to 2022.
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After taking into account the effects of price rises (constant prices) consumers’ expenditure on food and alcoholic drinks increased by 7% from £238bn in 2021 to £254bn in 2022 and was 20% higher than in 2012. Expenditure on food and drink eaten out increased by 29% from £93bn in 2021 to £120bn in 2022, whilst expenditure on household food and alcoholic drinks (off-licence only) decreased by 6.9% from £120bn to £112bn and 9.6% from £24bn to £22bn respectively.
Changes in consumers’ price indices
Figure 14.6 Changes in the food price index (in constant prices, food and non-alcoholic beverages) 2000-2022
Enquiries: David Lee on +44 (0)20 802 63006
Email: [email protected]
Source: Consumer Price Index (ONS)
Text description of Figure 14.6: Figure 14.6 shows the changes in the consumer price index for food and non-alcoholic beverages from 2000 to 2022.
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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.
This has been followed by a recent spike from the early part of 2022, due to food prices generally rising faster than other items. This was in part a consequence of the onset of the war in Ukraine leading to global food supply issues and rising energy costs.
Glossary
Standard Industry Classification codes (SIC codes)
These are numerical codes that categorise the industries that companies belong to based on their business activities.
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:
| Category | SIC codes |
|---|---|
| Food Manufacturing: | 10 + 11 |
| Food Wholesaling: | 46.3 (excluding 46.35) + 46.17 |
| Food Retailing: | 47.2 (excluding 47.26) + 47.11 + 47.81 |
| Non-residential Catering: | 56 |
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In SIC2007 the food manufacturing sector comprises of nine main categories including processing and preserving meat, dairy, fruit and vegetables, oils, bread, biscuits and cakes, and confectionery. Animal feed manufacturing is included, covering both farm animal feed and pet food. The drink manufacturing sector includes alcoholic beverages and soft drinks and mineral waters.
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Food and drink wholesaling consists of the buying, storage and reselling of food either manufactured or freshly produced. Wholesale of tobacco products (46.35) is not included, but SIC code 46.17 "Agents involved in the sale of food, beverages and tobacco" is included. This group includes wholesalers that trade on behalf of others on a fee or contract basis and also 46.3 which is "Wholesale of food, beverages and tobacco".
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Food and drink retailing is defined as the sale of food within both non-specialised stores (e.g. supermarkets), 47.11, and specialised stores such as butchers and bakers, 47.11 and 47.81. The sale of tobacco products is subtracted from the specialised stores using 47.26 and then subtracted from the non-specialised stores later on using a ratio for food and drink.
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Non-residential catering (NRC) consists of restaurants and bars involved in preparation and serving of food, alongside canteens and catering services. Hotels are not included.
The deductions are to remove non-food items as far as possible.
The agri-food sector is the food sector plus agriculture and fishing.
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.