Key Facts and Figures 

England’s Northwest covers the counties of Greater Manchester , Merseyside , Lancashire , Cheshire andCumbria .  It has a £98 billion economy with a population of 6.8 million and 230,000 firms.  The 2006 Northwest RES has identified Food and Drink as a priority growth sector for the region.  The RES prioritises actions to address the regional productivity gap of £13bn in ways which are sustainable and economically and socially inclusive. 

The Food and Drink sector covers all stages of food production from consumers back to the farm. It overlaps with tourism and health and relies on key supporting industries such as business and professional services, advanced engineering, chemicals, environmental technologies, paper and packaging, and logistics. Food and Drink is a key component of the rural economy.

(Source: - Promar North West Food and Drink Cluster Study, DEFRA Regional Analysis of the Economic Position of the Agri-Food Sector – 2002 Figures, Office of National Statistics).

The North West has more Food & Drink manufacturing units than any other English region.  This represents a significant direct contribution to the economic life of the region but the importance of food and drink goes beyond pure economic output.  Increasingly other factors play an important role.  The food supply chain is complex.  Multi-sectoral collaboration is needed for effective knowledge transfer and information management and to ensure that the region has adequate capacity and capability to recognise and exploit new opportunities. 

The North West has a significant presence of global organisations and high profile brands such as Kelloggs , Nestle , Heinz , Princes Foods , Premier Foods , Halewood International , Interbrew and Diageo as well as a multitude of corporate and retailer branded products.  Like many other industries the larger manufacturers represent a disproportionately large percentage of the sector GVA and employment.  These businesses are often leaders in professional standards and require an operational environment that meets their current and future business requirements and exceeds that offered by competitive regions both in the UK and overseas.  All business engagement must therefore be targeted and appropriate for the individual company’s needs.

The importance of Small and Medium-Sized Enterprises (SMEs) in all parts of the food sector must not be underestimated.  Even in food processing 1150 of the 1250 companies in the Northwest employ less than 100 staff.  In the other sub-sectors, especially food service, speciality food and agriculture, the percentage of SMEs is even higher.  Those SMEs which use innovation to develop new products and processes will lead to significant growth within the sector and some will become the large companies of the future.  It is important that new companies are created especially in the knowledge based parts of the food sector.  The encouragement of entrepreneurism and the provision of support for business start-ups are essential.  The multicultural nature of the food sector provides particular opportunities for business start-ups in the BME communities and there are good examples in the food sector of businesses created and led by women.

The role of universities and colleges is vital not only in food processing and technology courses but also in wider innovative topics such as robotics, automation and environmental technologies where there is specific strength in the Northwest.  Skills development is coordinated through the regional food and drink Sector Skills and Productivity Alliance (SSPA), Improve (the national sector skills council for food), LANTRA (the national sector skills council for environmental and land-based sector), People 1st (the national sector skills council for hospitality) and the LSC .  The challenge is to develop the appropriate skills for the sector which are essential to support growth.

Food retail is dominated by the major multiples although the Northwest is also home to regional retailers such as Booths .  There has been recent expansion in convenience stores, eg associated with petrol stations, and in direct sales via the internet and at farmers’ markets.

Food service continues to grow and the UK is following a similar trend to the USA where food service is larger than food retail.  All aspects of food service are represented in the Northwest, eg restaurants, quick service restaurants, pubs, hotels and catering (business, healthcare, education and travel).  Several large contract caterers and leisure catering groups are present in the Northwest but the food service sector is still dominated by small companies and the supply chains are still fragmented.  There are strong links to the tourism sector as well as to healthcare.  In addition there are public procurement opportunities in for example healthcare and education.

Agriculture in the Northwest is dominated by the dairy (20% of the UK Dairy Herd) and red meat (13% of UK Lambs and 9% of UK Beef Herd) sub-sectors.  Horticulture in the Northwest is 3% of the UK total.

The Pion report (March 2005), identified the fact that agriculture’s contribution to the region’s economy is small and its traditional dominance of the rural economy is less strong.  The region’s rural economy generates around £21bn of GVA, with agriculture’s contribution being around 2 – 3%.  Far greater contributions to the rural economy are made from manufacturing and the service sector, which contribute 34% and 63% respectively.  Regional variations are notable with parts of the region accounting for considerable proportions of agriculture’s contribution to rural GVA.  In addition there is significant employment in activities that are ancillary to agriculture, such as auction marts, livestock feed merchants etc.  In these rural areas agriculture remains both a significant employer and contributor to the local economy and is likely to do so for the foreseeable future.

However, examining agriculture’s contribution in purely economic terms would be a mistake as it is either directly or indirectly responsible for the management of 80% of the region’s land area.  This provides a vital resource, not only for food production but for tourism and recreational pursuits that in themselves have become more important in many areas than primary agriculture.  In areas such as the Lake District, maintenance of the farmed landscape is a significant draw for the tourists visiting the area and therefore decline of agriculture may have an adverse impact on the more significant tourist sector.  Agriculture also plays an important role in maintaining the cultural heritage of many rural areas, which is particularly true of many upland areas, many of which are also areas of high landscape value.

The diverse nature of the products manufactured in the region goes beyond the regional supply chain.  Through a combination of historic linkages and modern transport modes the Northwest imports raw materials such as cereals from North America, unprocessed foods such as salad products and vegetables, and a range of processed foods.  This has created the ability to produce an extremely wide range of food products in the region.  The drink sub sector has a broad base and therefore has the ability to respond to new market opportunities.

In recent years there has been considerable investment through a range of regional and sub-regional partnerships in quality regional food activity.  The Northwest has some well established “hero” products and identities across all five sub-regions, eg Cumberland sausage, Lancashire cheese, Cheshire cheese, Eccles cakes.  This has helped support a number of farm businesses and on-farm processors to develop new markets for their products as well as build on the diversity of the region.  The Northwest also has a dedicated support centre for organics.

The food industry has a considerable affect on the environment.  The UK food industry accounts for: about 14% of UK business energy consumption and 7 million tonnes of carbon emissions per year; about 10% of all industrial use of the public water supply; about 10% of the commercial and industrial waste stream; and 25% of all HGV vehicle kilometres in the UK.  The agricultural sector also contributes 7% of the UK’s total Greenhouse Gas emissions (47% of the UK’s methane emissions and 67% of nitrous oxide) and farmers are on the front-line both in terms of adapting to climate change and in mitigating its effects.  With regard to water quality, over 60 % of nitrates, up to 40 % of phosphorus and the majority of silt in UK waters is due to agriculture.  In addition, 85% of ammonia emissions, which are becoming the main driver of air pollution impacts on remote UK ecosystems, come from farming.  (Source: Sustainable Farming and Food Strategy: Forward Look )  More detailed figures are needed for the Northwest but there will certainly be opportunities for the Northwest Food & Drink sector to reduce its environmental impact.