EU Food and Beverage Industry: Key Insights on Processing, Production, and Farm to Fork Strategy

The European Union (EU) food supply chain includes the processing, distributing, and serving food and beverages in addition to primary agricultural production.According to Eurostat, 291,000 F&B processing businesses, or 14.1% of all manufacturing businesses, were present in the EU in 2020. Approximately 4.6 million individuals worked in the food and beverage industry (15.5% of all manufacturing employees). These businesses added €227 billion in value, which refers to the enhancement of a product or service before it is offered to the next stage in the supply chain, through production processes that increase its market value. This figure was approximately 30% more than the value added by agriculture, which stood at €174 billion at base prices..

Food and beverage processors provide a wide range of goods, from essential food items to upscale, occasionally expensive goods. According to the Prodcom list, non-processed cheese, such as Brie, Edam, Feta, and Gorgonzola, was the manufactured F&B product with the most significant value (€42.0 billion) in EU production in 2022. Prodcom by Eurostat is a statistical database that provides detailed information on the production of industrial goods in the EU. In particular, non-processed cheese is quite essential for dairy producers. Approximately €8.9 billion, €8.0 billion, and €7.2 billion of the non-processed cheese produced in the EU was made by businesses in Italy, Germany, and France.

Fresh bread and beer had the second and third most outstanding production values in 2022, with EU output valued at €33.8 billion and €32.0 billion, respectively. Cereal growers depend on these goods, especially those cultivating wheat, rye, and barley for beer. Germany produced both products more than any other EU member state, making it the top producer in the EU. It supplied about one-fifth (18.9%) of the beer and more than one-third (34.9%) of the fresh bread produced in the EU.

The value of EU production in 2022 exceeded €25 billion for three other product groups: soft drinks (€30.0 billion), cakes and pastries (€27.8 billion), and sausages (€26.6 billion).

Figure 1: EU Net Trade of Agricultural Products in 2023

Source: Eurostat

In 2022, EU exports to the United Kingdom (UK) totaled €47.1 billion, including goods from agriculture, fishery, and food and beverage industries. This was slightly more than one-fifth (21.2%) of the EU's overall exports of these goods. The US and China had the next-highest shares, at 13.0% and 6.8%, respectively. For food and beverage products (22.8 % of all EU exports in this product group), animals and animal products (20.4 %), crops and crop products (19.2 %), and vegetable or animal oils and fats (17.0%), the United States was the primary export destination for the EU.

In 2023, the share of agrifood exports to the UK increased to 22%, while the export share of the US and China declined to 12% and 6% over the same period.

In accordance with the EU's Farm to Fork Strategy, food and beverage (F&B) processors are urged to improve the accessibility and cost-effectiveness of wholesome, sustainable food by modifying the types and nutritional compounds of the food, improving supplier selection, or manufacturing techniques, as seen by Nestlé's pledge to reduce sugar, salt, and fat content by 5% by 2025. Other notable examples include Danone launching products fortified with probiotics and critical nutrients, like vitamins and minerals. Furthermore, there is a push to produce plant-based replacements for meat and dairy, spearheaded by entrepreneurs such as Beyond Meat and Oatly. Prioritizing suppliers using sustainable farming practices, such as organic farming and agroecology, is crucial for Unilever, which sources 100% of its agricultural raw materials sustainably.

The EU's F&B industry is a critical economic driver, contributing significantly to employment and value addition in the manufacturing sector. Key product categories, including non-processed cheese, fresh bread, and beer, demonstrate the sector's versatility and economic effect. The growing export proportion to the UK shows a stronger trading connection. Still, the decrease in exports to the US and China suggests altering dynamics in global trade alliances. The Farm to Fork Strategy's emphasis on sustainability and nutritional improvements is consistent with broader trends toward health-conscious consumption and environmental stewardship, positioning the EU's food and beverage sector for continuing growth and innovation.