Case Study Of The Social Environment Of The Food And Drink Industry.

“The Food and drink Industry is very important to the economy of the UK. The UK is the world’s fifth largest grocery retail market and the largest in Europe, worth around US$156 billion in 2005” (uk trade and investment 2006 p30).

This sector is the largest manufacturing industry “accounting for 17% of the total manufacturing sector” (defra 1.11.2007) “This scale has made it a strategically important market for both manufacturers and retailers, generating investment from many overseas companies. Food and drink accounts for about 4 per cent of all UK exports and continues to rise strongly вЂ" approximately two-thirds of export trade is with EU countries. The food and drink industry is the UK’s largest manufacturing sector. With sales of Ð'Ј73.7 billion, it accounts for 14.2 per cent of all manufacturing gross value added. Almost 7,000 food and drink companies employ 417,000 people вЂ" 13.9 per cent of the manufacturing workforce. The quality and productivity of UK food manufacturers rival the world’s best”. (uk trade and investment 2006 p30,5.11.2007). From this we can see that the industry appears to be healthy and attractive to investors with the expectancy of exports to rise.

The industry has positively invested in its future as “The Industry spends around Ð'Ј80 million a year on R&D”. (uk trade and investment 2006 p30, 7.11.2007). Its product development is aided by close collaboration with the large supermarket chains that dominate food distribution. These are forecast to have a 91 per cent share of the grocery market by 2010. (uk trade and investment 2006 p30, 5.11.2007).

The UK’s cosmopolitan and generally affluent population drives one of the world’s most diverse and innovative food and drink markets. In 2005, consumers spent Ð'Ј153.82 billion on food, drink and catering services вЂ" 20.6 per cent of total household spending. UK consumers are increasingly health aware, encouraged by media coverage and government healthy eating campaigns. There is a strong trend towards organic food, which is becoming more widely available, and also rapid growth in low fat, healthy options, allergy related and nutritional products. There is also strong growth in indulgent foods: premium, exotic and authentic regional products. “Government funding for food science and innovation has been increased by a third to support strategic research and knowledge transfer focused on manufacturing efficiency and high quality, healthy food products”. (uk trade and investment 2006 p30,5.11.2007). This shows the importance of the Technological dimension of the industry to the future development of the industry.

Some two-thirds of households have only one or two people and the proportion is still growing. They have helped to make the UK Europe’s largest market for chilled and ambient ready meals: sales are around Ð'Ј2 billion and growing at approximately 10 per cent a year вЂ" nearly twice the overall market

rate. The growth of this sector has been changing the face of manufacturing, retailing, logistics and packaging. Britons are increasingly reluctant to cook for themselves, and sales of restaurant and takeaway food continue to grow. Spending on catering services grew 5.7 per cent to pass Ð'Ј75 billion in 2005 вЂ"

almost half of total food and drink expenditure. Here, too, the trend is towards healthier eating. (uk.invest.gov.uk, 5.11.2007)

An important social change in the industry has been the tendency to move towards a healthier lifestyle. This has been introduced and data made more available via the technology advances in the media. Concerns of heart disease, cancer, and obesity are readily available through our television, papers and online mediums.(Worthington and Britton 2006 p.46). The industry has taken advantage of this social trend and supermarkets such as the big “4” have offered ready made “healthy options” such as Sainsbury’s who have “used Jamie Oliver, the TV chef, to promote its products; Oliver has also began a well-publicised campaign to improve the nutrition value of school meals in the UK” . It is interesting to note that these shifts in social trends have not happened within the short term but also over a greater period of time.

Year 1979 1989 1999

Fats and oils (grams) 313 269 186

Fresh fruit and fruit products (grams) 738 919 1063

Tea (ml) 60 46 32

The above table (adapted from the National Food Survey 2000) shows grams/ml per person per week. The above date shows directional shifts towards a healthier pallet over a 20year period. As with all aspects of change there are winners and losers. Examples of the losers in this cultural shift are the potato crisps and frozen food suppliers as the consumer switches towards healthier snacks and fresh food. The crisps industry have adapted there products as a response to consumer demand to a more healthy life style (Worthington and Britton 2006 p.65). McDonald’ s announced in January 2006 that as a result of the change that its had to scale back on UK branches.

The following statement illustrates the social needs of the consumer being taken by the industry and put into practice “Yet it is only recently that organic produce has become a viable option for many consumers. Previously, producers were small businesses struggling to meet supply and consumers saw organic food as an expensive, luxury choice.” (uk.invest.gov.uk, 5.11.2007). As illustrated at first small sectors of the industry had discovered the niche and now its being exploited by big industries such as the supermarkets.

The Nation Survey Illustrates that of all the household groups most noticeably the OAP’s are consuming more meat, tea, fats/oils and sugar in general than other sectors of households. The consumption is decreasing each year and armed with information ascertained in this report and knowledge of our ever increasing age in population. I feel that there may be demand in future for fresh (not frozen) healthy “ready