Trends and Drivers of Change in the Beer Industry

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European Foundation for the Improvement of Living and Working Conditions

Trends and drivers of change in the food and beverage industry in Europe: Mapping report

Introduction Overview of the sector Trends and drivers of change Consequences of drivers of change SWOT analysis of the European food industry Bibliography

This report is available in electronic format only
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Introduction
Increased competition, food scares and new consumer trends are among the key challenges facing the food and beverage industry in Europe. While these challenges pose a threat to some companies they can be an expansion opportunity for others. In response to these new challenges, food companies are improving competitiveness by restructuring, and intensifying the fight for market share through product differentiation and/or the development of new food products. Such fundamental changes and new priorities in the food industry also greatly affect local communities and society as a whole when local unemployment rises because processing plants are closed or when new healthy food products are developed. Thus, food and beverage companies do not merely battle for market share in their own sector, they also operate in a larger socio-economic context in which their strategic choices affect the welfare of many Europeans. Figure 1: Change in the food and beverage industry Change in the food and beverage industry Political, economical and social consequences of change

Drivers of change

This mapping report is part of a study of the food industry that also features four case studies, two cluster studies and four scenarios. It gives a concise overview of the food industry and identifies the main trends and key drivers of change. The report should also enable readers to locate the case studies in relation to these drivers. The report focuses on trends and drivers of change in relation to food manufacturing (NACE DA15.1 – DA15.9). It is based on national and European publications from a range of sources including the European Commission, the European Federation of Food, Agriculture and Tourism Trade Union (EFFAT) and the Confederation of the Food and Drink industries of the EU (CIAA). The data used in the report are based on the Eurostat database and CIAA publications. Please note that in some cases data from individual EU Member States and data by sub-sectors were not available.

Overview of the sector
The food industry is dominant in the EU manufacturing sector and plays a central role in the European economy. Its contribution to the EU gross domestic product (GDP) was around 1.8% in 2001. (The manufacturing sector’s total share of EU GDP was 19.1%.) The food industry (NACE DA15) can be divided into nine sub-sectors: Meat products (DA15.1) Oils and fats (DA15.4) Animal feeds (DA15.7) Fish products (DA15.2) Dairy products (DA15.5) Various food products (DA15.8)

© European Foundation for the Improvement of Living and Working Conditions, 2006

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Trends and drivers of change in the food and beverage industry in Europe: Mapping report

Processed fruit and vegetables (DA15.3) Flour and starch products (DA15.6) Beverages (DA15.9) The various food products sub-sector includes bakery products, pastry, cakes, sugar, chocolate and coffee, and is the largest of the nine in terms of turnover, number of enterprises and employment. Position in the European manufacturing sector In 2004, the food industry had EUR 815 billion in turnover and four million workers, making it the largest employer in the manufacturing sector (CIAA 2005). Figure 2: The food industry’s share of turnover and employment in the manufacturing sector (2004) Share of annual turnover (2004)

Food and beverage industry 12% Automobile industry Chemical industry Other manufacturing industries

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