Martin CollisonMember Food, Farming & Rural Enterprise Board (LEP sub group)

Delivering Economic Growth in the Food Chain

12th September 2012

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 BusinessOver 9,000 companies, 45+ UK leaders, HQ or £50m+ turnover:Adnams BOCM Pauls Favor Parker Lakeside Food

groupPinguin 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&DNorfolk & Suffolk is home to the largest concentration of agri-food 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

CareersThe 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 TrajectoryGrowth:• 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

Putting food security into context

Increased demand 45% by 2030 (IEA)

Energy

Water Increased demand

30% by 2030(IFPRI)

FoodIncreased demand

50% by 2030(FAO)

Climate Change

1. Increasing population

2. Increasing urbanisation

3. The rightful goal to alleviate poverty

4. Climate Change

Professor Sir John Beddington alerted us to… the “Perfect Storm…”

Constraints on World Ag Production

40% too dry 6% too rough terrain21% too wet 2% unsuitable soils21% too cold

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 Growthin 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 & entrepreneurial2. Climate & soil advantages3. 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 production5. Leadership on green issues, carbon, climate change, waste

reprocessing, agri-environment

Five PrioritiesCreating 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 CollisonCentre for Contemporary Agriculturewww.contemporaryagriculture.com

martin@collisonassociates.co.uk(07802) 480 848