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EU exports evolve in face of burgeoning bioeconomy
29 Mar 2022Delivering food and drink via a robust supply chain, accessing global trade routes, and investing in research and development (R&D) lead food and drink investment and market evolution in the European Union.
The food and drink industry plays a pivotal role in the European market. The European Union (EU) food and drink industry is one of the largest manufacturing sectors in Europe and the largest exporter of food and drink products in the world, with €145 billion in exports, FoodDrinkEurope reveals in its Data & Trends, EU Food and Drink Industry 2021 report.
The industry buys some 70% of all EU agricultural produce and generates a value-added of €222 billion, the EU’s food industry confederation, FoodDrinkEurope details. The food and drink industry is also the largest manufacturing employer in over half of the EU’s member states, with over 4.5 million workers across Europe.
The bioeconomy is an increasingly important part of today’s food and drink industry. “Buying some 70% of all EU agricultural produce, the food and drink industry is an essential cog in the EU bioeconomy and a critical buyer and producer of raw and secondary materials for other segments of the bioeconomy,” says a spokesperson for FoodDrinkEurope. The EU bioeconomy is worth €2.2 trillion, with the food and drink industry contributing roughly one-half of that amount, the confederation notes.
Robust delivery via strong supply chains
The EU food supply chain is one of the largest economic sectors in Europe, with a total turnover of around €3.5 trillion and €701 billion in value-added. The EU food supply chain employs some 21 million people across Europe from farm to fork, amounting to one in every ten people employed in Europe today, FoodDrinkEurope says.
Trade supports EU food and drink manufacturing jobs, businesses of all sizes (small, medium-sized and large), and many linked up and downstream activities across supply chains. EU food and drink industry exports support about 1.6 million EU jobs and more in agri-food activities outside the EU. One in ten EU food and drink companies export directly outside the EU, of which 90% are small and medium-sized enterprises (SMEs), FoodDrinkEurope says.
Maximizing trade operations and routes
“International trade is key for the competitiveness of the European food and drink industry; for jobs and growth,” says the spokesperson.
The EU is the world’s largest exporter of food and drinks and a significant importer of agri-food products and ingredients, with products exported to nearly all countries around the globe, FoodDrinkEurope shares, generating a value of €145 billion in 2020. Globally speaking, the EU is a net exporter of food and drinks.
The leading sector in trade for the food and drink industry is ‘various food products’ with €32 billion in exports in 2020. This category includes chocolates and confectionery, prepared meals and dishes, and processed tea and coffee, among other food products. The second-largest sector in exports is the ‘drinks’ category, with €30 billion in exports in 2020. This category includes wines, spirits, beers, soft drinks, and water. In 2020, the sectors with the highest growth in exports compared to 2019 included animal feeds (+12%), oils and fats (+11%), and meat products (+9%).
The industry processes approximately 70% of the EU’s agricultural output. “At the same time, manufacturers rely on imports of some key ingredients from safe, secure and traceable supply chains that are not produced in the EU or at least not in sufficient quantities, and which play a complementary role in the production of many value-added products,” adds the spokesperson.
Many of the food and drink products exported are protected by geographical indications, which are a guarantee of quality and support jobs and growth in rural areas. “The success of these flagship European products, which support local communities, largely depends on smooth access to key markets around the world,” says the spokesperson. “Preserving this access is of critical importance to our sector and, in turn, to our ability to create jobs and growth in Europe.”
Obstacles to trade do exist in various forms and can vary across markets, FoodDrinkEurope says. This can be very challenging, particularly for SMEs, as it takes significant time and resources to navigate complex import/export requirements, divergent products and technical regulations. As a result, these lead to higher market entry costs. “This is why we count on the European Commission’s support to improve market access to third countries,” the spokesperson says.
Leading research and development (R&D) actions
Out of the world’s top 2,500 companies for research and development R&D investment, 60 operate in the food and drink industry. Together, these companies invested €9.5 billion in R&D in 2019, €1.9 billion of which was invested by eleven food and drink companies based in the EU, FoodDrinkEurope says.
Across the EU member states, R&D intensity in the food and drink industry ranged from 0.5% in Finland to 0.01% in Romania and Cyprus.