New research shows the economic contribution of wholesale distributors. Going for Growth: The Impact of Food and Drink Wholesale Distributors by the FWD reports the food and drink wholesale distribution sector is a crucial part of a value chain which connects large food and drink manufacturers with small independent shops and foodservice providers; the sector generated £33.6 billion of turnover in 2023/24, with £17.5 billion coming from sales to mainly small independent retailers and £13.4 billion to foodservice providers and caterers.
Food and drink wholesale distributors directly contributed £3.5 billion to national output in terms of gross value added in 2023/24.
Although a substantial contribution in its own right, this masks the key role that the sector plays in connecting manufacturers with retailers, foodservice providers and caterers.
James Bielby, Chief Executive, Federation of Wholesale Distributors, comments: “Wholesalers are the lifeblood of the nation – from supporting high street restaurants to supplying hospitals, schools and local retailers with food, the FWD membership is delivering for people across the length and breadth of the UK.
“This groundbreaking research, conducted for us by Capital Economics, provides a comprehensive economic impact of food and drink wholesale, demonstrating the value and importance of the sector in improving consumer choice through its support for retailers and caterers. We are delighted to have partnered with Capital Economics again and our report looks closely at the downstream impacts of wholesale, the net positives our industry brings and demonstrates how our members reach all aspects of people’s lives. In this report we provide an up-to-date summary of the important economic contribution of food and drink wholesale to UK PLC, setting out both upstream and downstream impacts.
“Given its reach and contribution, our sector has and will play a pivotal role in driving economic growth in the coming years. We look forward to partnering with policymakers across the UK to grow our industry further while meeting the everyday challenges our members face in areas such as increased transport costs and labour shortages.”
Around 77,000 people are directly employed by food and drink wholesale distributors. The overall value chain that it supports employs a total of 1.5 million people. This accounts for 4.8 per cent of all the employees in the UK and is larger than sectors such as finance and telecommunications.
Based on the value of supplies being provided to retailers and foodservice providers, the FWD estimates that food and drink wholesale distributors support around 1.2 million jobs and £33 billion of value added in retail stores and foodservice businesses across a range of sectors.
Unlike many industries, the sector is not disproportionately concentrated in any particular region of the UK. There are over 5,000 jobs supported in nine out of the 12 regions and devolved nations.
Over a quarter of a million jobs are supported by spending on food and other businesses in the supply chain, associated with £18.6 billion of gross value added.
Considering the entire value chain, including impacts through the supply chain and activity in customers’ businesses supplied by the sector, FWD estimates that the food and drink wholesale distribution sector supports almost 1.5 million jobs across the UK, generating £57 billion of value added to the economy annually. This is more than Northern Ireland’s GDP in 2022, which was £56.7 billion.
Employees working for food and drink wholesalers spend £1.6 billion annually on goods and services from businesses across the country. This supports a further 17,800 jobs and £1.3 billion of gross value added. The food and drink wholesale distributor sector turned over approximately £34 billion in 2023/24.
The sector is a key cog in a large value chain which connects food and drink manufacturers and other suppliers with customers through retailers, caterers and foodservice providers.
Retail businesses account for 52% of food and drink wholesalers’ revenue, foodservice providers account for 29% and caterers account for 10%.
The sector has a number of challenges to navigate over the next five years including transportation costs, adoption of AI and progressing towards net zero.
Andy Evans, Deputy Chief Economist, Capital Economics, comments: “We are delighted to present this report on the economic contribution of the food and drink wholesale distribution sector in the United Kingdom.
“By connecting large food and drinks manufacturers with retailers and foodservice providers, the sector plays a key role in an important value chain serving communities in all regions of the country. The retail businesses it supplies are largely small independent stores, while the foodservice providers span across a wide range of activities including hospitality, travel, leisure and the public sector.
“Our report shows the full extent of the sector’s value to the United Kingdom economy, as well as identifying some of the challenges and opportunities it faces in the coming years such as increased transport costs, labour shortages and navigating the path to net zero.”
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