1. Cornwall’s Agri-food Industry Matt Lobley E-mail: m.lobley@exeter.ac.uk Web: www.centres.ex.ac.uk/crpr/

2. Defining the sector Primary production “Core agri-food industry” Food and drink manufacturing Food and drink wholesaling Specialist food and drink retailing Non-specialist predominantly food & drink retailing “Secondary food sectors” Food and beverage services Accommodation-“Food related”

3. Employment in the agri-food sector

4. Employment characteristics Agriculture responsible for about three times as much employment in Cornwall as in GB. Over one third of Cornwall’s manufacturing employment is in F&D processing compared 15% in GB’s manufacturing. 45% of the county’s wholesaling employment is food and drink related compared to 21% in GB as a whole.

5. Employment characteristics The agri-food sector is significant in terms of underpinning the employment base of Cornwall and the Isles of Scilly. However, the agri-food sector tends to have relatively low levels of labour productivity, so the food and drink share of the county’s economy, in value terms, will be significantly less.

6. GVA of agriculture & related sectors in Cornwall 2008 GVA £m 2008 Share of total Cornish GVA (GB equivalents) Agriculture*£1962.9% (0.6%) Fishing*£270.4% (0.0%) Food and Drink manufacturing.*£2223.3% (1.5%) F&D wholesale distribution. † £681.0% (0.9%) Retail - Specialist food † £610.9% (0.4%) Core agri-food industry£5748.5% (3.5%) Food and beverage services † £2203.3% (1.9%) Retail - non-specialists predominantly F&D † £2213.3% (2.3%) Secondary food industries£4416.5% (4.2%) Accommodation † £1852.7% (0.6%) All agri-food related industries£1,19917.8% (8.3%) All industries*£6,740100.0% (100.0%)

7. Labour productivity: Labour productivity: GVA per fte, 2007 to 2009 average GB SWCornwall £ per FTE All industries49,00041,00032,000 Core agri-food sectors: Agriculture16,000 13,000 Fishing49,00054,00051,000 Food and Drink manufacturing52,00045,00031,000 Food and drink Wholesale distribution51,00040,000 not available Retail of food in specialised stores (52.2)32,00025,000 Retail sale in non-specialised stores (52.1)32,00020,000 Hotels and catering26,00024,00025,000

8. The value of the Cornish food economy The turnover of the Cornish agri-food sector is currently around £1.4 billion. Major processing businesses in the county have a turnover of £592.5 million. The total value of farm produce at the farm gate is £293.6 million. The landing value of the Cornish seafood sector is estimated to be £27.7 million. Seafood processing and distribution is estimated to be £37 million. Estimated tourist spend on food and drink in Cornwall is £450.8 million (SW Tourism 2010).

9. Trends, opportunities & critical issues Decline in dairy herd halted. Continued increase in yields and concentration of production. Beef numbers at pre-FMD levels & sheep back to level of 30 years ago. Export opportunities. Fruit and veg experiencing increased competition. Suffering effects of poor weather over last 2 years. Beverages – some evidence of declining discretionary spend Confectionary – declining/static orders. Some growth of niche markets. Baked products – sales volume down. NPD important to offset this. Some growth of niche markets.

10. Trends, opportunities & critical issues Virtually all sectors/sub-sectors facing significant cost- price squeeze Cornish market increasingly crowded in some sectors Widespread plans to grow out of county sales, with implications for capital investment (ease & cost of borrowing), transport and distribution. Most sectors showing evidence of bad debt. Need for much more careful financial monitoring. Escalating energy costs stimulating search for alterative energy solutions. Could represent a significant greening of the Cornish agri-food sector