Delivering Economic Growth
in the Food Chain
12th September 2012
Martin Collison
Member Food, Farming & Rural Enterprise Board (LEP sub group)
Collison
& Associates Limited
The Partnership
The Food Chain
The perception of the food chain is that it is old fashioned, has
poor career prospects and declining output unless you are a
celebrity chef or into niche foods
The Food Chain
Truth is, the food sector:
• Has been growing its GVA, exports and sales even during
the recession
• Share of economy has grown: 6.5% in (’07) to 7.0% (‘11)
• Is high tech
• Has excellent job prospects
• Most of the sector is still focused on selling food via big
retailers to the public
The Food Chain in Suffolk & Norfolk
The food chain is more important in Norfolk and Suffolk than
for the UK economy as a whole
New Anglia Food Chain has:
• 120,000 employees (16% of the workforce);
• A GVA of £4bn (15% of the economy);
• Over 9,000 businesses directly in the food chain (not
including catering and retail)
• The largest agriculture sector of any LEP area, with:
– 12% of the total agricultural output
– and 16% of the profits in England
Brands & Big Business
Over 9,000 companies, 45+ UK leaders, HQ or £50m+ turnover:
Adnams
BOCM Pauls
Favor Parker
Lakeside Food
group
Pinguin Foods UK
AFE Group Ltd
British Sugar
Foster
Refrigeration
Limagrain
Premier Foods
Anglia Maltings
Colmans (Unilever)
Greene King
Little Chef
Produce
Investments
Anglia Farmers
Cranswick
Gressingham Foods
Manns (Class UK)
Promens packaging
Atlas Fram
Country Foods Plc
Heinz Frozen and
Chilled
Mars UK
Robinsons Drinks
(Britvic)
Banham Poultry
Crown Chicken
J&H Bunn
Muntons Plc
Sam Cole Food
Group
Bayer Crop Science
Dow Chemicals
Kettle Foods (Lion
Capital)
Norfolk Food
Company
Sentry Farms
Ben Burgess
Duffields
Kerry Foods
Notcutts
Smithfield Foods
Ltd
Bernard Matthews
East of England
Coop
Kinnerton
Pasta Food Ltd
Tulip (BQP and
Dalehead)
Importance to the wider Economy
As well as farming, food processing, catering and retail, the
food chain impacts on many other parts of the economy,
including:
• 28% of road haulage is used in the food sector
• 29% of tourism spending is on food and drink
• 6% of UK exports by value
R&D
Norfolk & Suffolk is home to the largest concentration of agrifood R&D in the EU
–Brooms Barn
–CEEFAS
–John Innes Centre
–Institute of Food Research (IFR)
–The Sainsbury Laboratory
–The Genome Analysis Centre
–Morley Research (NIAB TAG)
–Universities and Colleges
–Bayer, Dow, Limagrain, Thompson and Morgan and others
Add in Cambs & Herts and arguably it has the largest
concentration of agri-food related R&D in the World
Careers
The sector offers good careers:
• Food processing employees stay nearly 10 years with each employer
• Technology is changing job roles, with manual work declining rapidly as
the demand for managerial, technical and automation skills increase
• Farm managers have average salaries in excess of £45k plus benefits
• Team leaders in fresh produce can command £30k by their mid 20s
• Tractor drivers £35k, machinery worth over £250k, multiple computers
• Agriculture in top 5 degree courses for employability (over 90% in 6mths)
• Agriculture employment rose 10,000 during 2010-11
Recent job adverts:
• £50-60,000 (Cambs) Senior Account Manager Food Sales
• £45,000 OTE (East Anglia) Area Sales Manager: Agricultural Equipment
• £35,000 + (Yorkshire / East Anglia) Crop Nutrition Agronomist
• £20-25,000 (Suffolk) graduate horticultural trainee
Food Sector Trajectory
Growth:
• GVA has grown 77% in UK agriculture since 2007
• UK food exports have grown for 7 consecutive years (‘04’11), now worth £18bn (up 70% since 2004) – but East of
England not particularly strong in this area
• New product development in the food sector was the
highest ever last year with 8,500 UK product launches
• R&D spending is increasing in the UK and globally as
business and governments respond to growing demand
• FAO has concluded $83bn needs to be invested annually in
developing countries to feed the World in 2050, with R&D
for yield the most important focus – an opportunity?
The Global Food Challenge
• Global population projected to grow 36% by 2050
• Land is being lost to urbanisation & due to climate change
– Resources are becoming more limited and expensive: globally 75%
freshwater is used for agriculture, under 2% in the UK
– Nutrients in short supply and expensive
• Climate and climate change
– UK will be affected, but other areas potentially at more risk
• Increasing wealth and changing diets
– Global middle class will treble over ‘00-’30 to 3bn, more consumers
with choice will demand more protein and added value foods –
export potential is large and growing
– Potential to export food products or knowledge and IP
Pressure to increase output in areas suited to production
Professor Sir John Beddington
alerted us to… the “Perfect Storm…”
Increased demand
45% by 2030 (IEA)
Energy
1. Increasing population
Climate
Change
2. Increasing urbanisation
3. The rightful goal to
alleviate poverty
4. Climate Change
Putting food
security into
context
Food
Water
Increased demand
50% by 2030
Increased demand
30% by 2030
(FAO)
(IFPRI)
Constraints on World Ag Production
40% too dry
21% too wet
21% too cold
6% too rough terrain
2% unsuitable soils
The Need to Respond
Despite our strength in the food chain, the sector is changing
rapidly in the UK & investment is increasing across the World
Doing nothing is not an option
Delivering Economic Growth
in the Food Chain
Given the actual and projected long term Global increase in
food demand we have to ride the wave
We need to build on our strengths:
1. Business base – diverse & entrepreneurial
2. Climate & soil advantages
3. Location on the edge of a Global concentration of wealth
(the EU’s golden triangle: London, Paris, Berlin)
4. Technical, scientific & NPD leadership on food production
5. Leadership on green issues, carbon, climate change, waste
reprocessing, agri-environment
Five Priorities
Creating the Environment
1. Promoting R&D, knowledge transfer and skills as strategic
imperatives, including:
–
–
Supporting Otley & Easton College merger
CCA, InCrops project and other collaborations
2. Creating a supportive investment environment: political,
planning and policy, which supports:
–
–
Development of modern infrastructure e.g. roads, broadband
An outward looking globally engaged food economy
3. Securing productive resources: water, energy & nutrients
–
–
Reservoirs
AD plants utilising agricultural, commercial and municipal waste
Five Priorities (cont.)
Delivering Investment
4. Transformational Projects – large scale collaborative
projects are needed to:
–
–
Create globally competitive supply chains e.g. abattoirs, grain
stores, farm coops for processing, food processing units
Address resource questions e.g. water, nutrients
5. Aligning commercial and public sector investment in
infrastructure, research, skills and facilities
–
–
Apprenticeships project proposal led by Atlas Fram & Anglia
Farmers
Big opportunities for collaborative research funds to be accessed
by more companies
The Time is Now
The Food Chain is:
• Dynamic, exciting & growing
• The largest business sector in the New Anglia area
• A sector in which New Anglia is World Class
• A sector with a large Global growth trajectory
• Less exposed to recession than many other sectors
Collectively we have to work together to make sure we can:
• Grow its contribution to the economy to respond to
growing global demand for food & associated technology
• Invest in skills, R&D and businesses to deliver growth
Thank you
Martin Collison
Centre for Contemporary Agriculture
www.contemporaryagriculture.com
martin@collisonassociates.co.uk
(07802) 480 848