Think London | Production Industries

The UK food and drink sector is huge — with total spend topping $272 [1] billion a year

Booming output: London’s food and drink manufacturing output totals some $3.2 billion per year [2]. The capital has the highest manufacturing productivity of any UK region, 26% above the national average [3]. More than 40 manufacturers have set up their UK, European or global HQ here, including Tate & Lyle, Nestlè and Coca-Cola. Food processing is one of west London’s major manufacturing growth areas.
Insatiable appetite: Londoners spends $8 billion a year on eating out, 30% more than the UK average [4]. The capital is home to more than 12,000 (half the UK’s total) restaurants serving food from more than 60 countries [5].
Major investment opportunities: Spending on retail is the largest component of expenditure in London (accounting for just under one third of all consumer spending) and spending on food and non-alcoholic drink is the biggest expenditure item within this category (accounting for almost 30% of residents’ retail spend [6] ). Londoners spend over $16 billion in food retail outlets [7].
Increasing variety: The British consumer now has an unprecedented level of choice – over 40,000 different products sourced from all over the world. In London there is a range of different culinary choices – ethnic meals, for example, constitute 17% of sales and London offers at least 60 different cuisines from around the world [8].
Organic explosion: The UK organic food market is the third largest in the world. Sales, currently at almost $3 billion a year and growing at an estimated 9% annually — faster than any other area of food and drink. The sector now accounts for 10% of the total food market [9].
Fairtrade goes mainstream: Consumer demand for alternatively-sourced foods, or foods with an ethical/environmental dimension, is growing (and indeed the UK is among the biggest markets for such products across Europe). Fairtrade products hold a UK market share of 2.4% [10].
Booming drink sales: UK Alcoholic and Non-alcoholic Beverages Market were worth $97billion at retail selling prices in 2005 [11]. Sales of soft drinks in the UK grew to 13.8 billion litres in 2005 representing a 35% increase since 2000 [12] . The UK retail market for beer reached a volume of more than 5.8 billion litres.
Niche market growth: Niche markets such as gourmet and ethnic products are a key driver for the food supply chain supplying London. There are around 360 speciality food and drink producers in the capital. Demand in London for ethnically and culturally-specific food – such as Kosher and Halal – are much higher than elsewhere in Britain and is growing [13]. (reflecting London’s sheer size as well as its exceptional diversity).
Top talent: Food and drink manufacturing in London employs 31,000 people – almost half of which are in west London [14]. London’s universities offer graduate courses in numerous related disciplines including food safety management, organic food studies, manufacturing systems management and engineering and product design and development.
Sophisticated regulation: The UK’s main regulatory body is the Food Standards Agency. Two types of regulation govern UK-based food companies: horizontal laws cover all types of food production of processing while additional regulations cover particular produce groups. Find out more http://www.food.gov.uk

Think London has a proven track record in helping food and drink companies set up and grow in the capital. We can give you access to financial incentives and introduce you to key organisations including the London Development Agency, Made in London, London Manufacturing Advisory Services, and London Food Link.

[1] London Development Agency, 2005
[2] DTZ analysis of ONS ABI data, 2006
[3] DTI
[4] Spending Time — London’s Leisure Economy, GLA Economics, November 2003
[5] London Food Strategy, GLA / LDA
[6] Office for National Statistics, 2003. Family Expenditure Survey, 2002-3.
[7] Sustain: The alliance for better food and farmers, 2004. Capital Eats: An Analysis of London’s food economy.
[8] IBID
[9] IBID
[10] The Co-operative Bank. Ethical Consumer Index
[11] Venn Research, Inc UK Alcoholic and Non-Alcoholic Beverages Market, [2006-2010]
[12] Zenith International 2006 UK Soft Drinks report
[13] London Food Strategy, GLA / LDA
[14] GLA, Healthy and Sustainable Food for London The Mayor’s Food Strategy May 2006