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(source: SWRDA)

The sector is relatively greater in importance to the region in terms of employment than it is in Great Britain

South West Priority Sectors
	1997 Employment	Employ Change 91-97	1997 Location Quotient*	1997 Gross Value Added Output (£ millions)
Food & Drink	91,200	-25%	1.35	3,144
Leisure & Tourism	87,500	7%	1.22	2,439
Environmental Technologies	21,000	19%	0.97	656
Biotechnology	7,000	11%	0.61	217

Source: Annual Employment Survey 1997 & Annual Census of Employment 1991, ONS. * a location quotient >1 indicates that the concentration of employment in the sector in the South West is above the Great Britain average.

Small firms dominate the sector. 82% employ under 10 people compared to 76% in Great Britain. 94% have under 50 employees. This reliance on small firms increases the further south and west you go - 87% of establishments in Devon and 91% in Cornwall have fewer than 10 employees. Both the East Midlands and East of England regions have a smaller than average percentage of small firms (67% and 71% respectively). Large manufacturing plants in the region account for more than 50% of all employees in the sector.
Employment is split almost 50/50 between land-based and higher value added manufacturing/ processing in the region. However, some sub-regions are more reliant on land-based activities than others, notably Devon and Cornwall.
Farming employment fell (-43%) between 1991 and 1997 mainly due to the BSE crisis and falling prices. It is expected that the farming sector will continue to have difficulties in the foreseeable future, with a continuing trend to diversification into new products and services. There are opportunities in the South West to help farm businesses adapt to changing market conditions for agricultural produce and there are numerous agencies in the region already active in supporting this activity in the region (such as the National Farmers Union and MAFF).
The key to the future of the food and drink sector in the South West lies in the higher value added activities, especially food processing. Facilitating the growth of these types of activities will improve the competitiveness of the sector as a whole by simultaneously improving the base of processing firms and thereby generating demand for raw agricultural produce.
In contrast to the land-based sector, employment in food and drink manufacturing and processing has increased by 23% between 1991 and 1997. Clearly this is a growth sector within the South West food and drink industry.
The manufacturing base in the region has the benefit of some large company headquarters where innovation and new markets / products tend to originate. In order to remain competitive, all companies in the sector need to expand their customer base by, for example, pursuing new distribution methods (eg selling over the internet). Other opportunities exist for more specialist producers such as those in the organic sector.
The fishing industry has the largest number of small firms (at 767) as each fishing boat is regarded as a business. Other sectors with large numbers of small firms in the region are bread making (267), and agricultural service activities (127) (this includes most agricultural activities that are provided on a fee or contract basis).
Small firms in the region include lifestyle SMEs, many of which produce speciality food. These are typically a source of secondary income to the owners and many are unlikely to grow (or wish to grow) beyond their current size. However, some have the desire and potential to grow into major undertakings in the region and may require assistance in order to achieve this.
157 establishments in the sector which employ 50 or more people, significantly lower than the numbers found in the East of England and East Midlands regions. Almost all of these large firms are engaged in food/drink manufacturing or processing activity, rather than land-based activities. Cheesemaking is the only sub-sector to have a significant number of large establishments in the region, with 32 (or 20% of all large firms in the sector).
Some of the larger businesses in the region include:
- St. Merryn Food Group in St. Austell employ over 1,000 people in livestock processing
- Gerber Foods Soft Drinks Ltd, Bridgwater, over 500 employees. Largest chilled drink filling plant in the country
- Roach Foods, St. Austell (UK’s 2nd largest pork processor) over 700 employees
- Kraft Jacobs Suchard in Cheltenham with around 300 employees

NUMBER OF ESTABLISHMENTS 1997
	<10 employees	10-49 employees	50+ employees	Total
Production and preserving of meat	34	C	C	34*
Production and preserving poultry meat	C	C	C	C
Production: meat & poultry meat products	43	C	C	43*
Processing/preserving of fish	33	C	C	33*
Processing and preserving of potatoes	C	C	0	C
Manufacture of fruit and vegetable juice	C	C	C	C
Processing/preserving: fruit/veg nec	90	C	C	90*
Manufacture of crude oils and fats	C	C	0	C
Manufacture of refined oils and fats	C	0	0	C
Manufacture: margarine/similar fats	C	0	0	C
Operation of dairies and cheese making	62	27	32	121
Manufacture of ice cream	27	C	C	27*
Manufacture of grain mill products	C	C	C	C
Manufacture of starches/starch products	0	0	0	0
Manufacture of feeds for farm animals	39	C	C	39*
Manufacture of prepared pet foods	23	C	C	23*
Manufacture of bread etc	267	71	C	338*
Manufacture of rusks, biscuits etc	29	C	C	29*
Manufacture of sugar	C	0	0	C
Manufacture of cocoa; chocolate etc	22	C	C	22*
Manufacture of macaroni, noodles etc	0	C	C	C
Processing of tea and coffee	C	0	C	C
Manufacture of condiments and seasonings	C	C	C	C
Manufacture of homogenised food etc	C	0	0	C
Manufacture of other food products nec	62	C	C	62*
Manufacture of alcoholic beverages	C	C	0	C
Production of ethyl alcohol	0	0	0	0
Manufacture of wines	19	0	C	19*
Manufacture of cider/other fruit wines	22	C	C	22*
Manuf: other non-dist. fermen. beverages	C	0	0	C
Manufacture of beer	37	C	C	37*
Manufacture of malt	C	C	0	C
Production of mineral waters/soft drinks	C	C	C	24

NUMBER OF ESTABLISHMENTS 1997
	<10 employees	10-49 employees	50+ employees	Total
Bournemouth / Dorset / Poole	294	40	C	334*
Cornwall	575	35	C	610*
Devon	567	60	34	661*
Gloucestershire	135	41	C	176*
Somerset	221	50	25	296
Bristol Sub-region (West of England SRP)	233	49	30	312
Wiltshire/Swindon	150	36	22	208
South West	2175	311	157	2,643
Eastern	940	276	181	1,397
East Midlands	1,458	388	204	2,050
Great Britain	16,193	3,299	1,799	21,291
Source: Census of Employment 1991Annual Employment Survey 1997 (NOMIS) © Crown Copyright Note: where "C" appears in the table the data cannot be disclosed, meaning that the actual figure is less than 21 establishments. Where "*" appears next to a total this indicates that the figure is the sum of the numbers shown in the table, and therefore excludes any confidential data

61 firms in the region employ more than 200 people. While these firms are undoubtedly important to the sector and the region, the main focus of Regional Development Agency activity is likely to be on retaining them and attracting new ones. Much of the RDA activity could therefore be more usefully focussed on the SME sector where it is better placed to make more of an impact on firms’ competitiveness.

Between 1991 and 1997 the percentage of small firms (less than 10 employees) increased from around 65% to 82%. 27% of those employed in the Food and Drink sector work in firms with less than 50 employees. This is greater than the proportion in Eastern region (22%) the East Midlands (25%) and also higher than for Great Britain as a whole 18%) .

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EMPLOYMENT SOUTH WEST REGION
	1991	1997	Change 1991-97	% change
Production and preserving of meat	2500	3000	+500	20%
Production and preserving poultry meat	1400	2000	+600	43%
Production: meat & poultry meat products	3200	2200	-1000	-31%
Processing/preserving of fish	500	600	+100	20%
Processing and preserving of potatoes	0	0	0	-
Manufacture of fruit and vegetable juice	300	1100	+800	267%
Processing/preserving: fruit/veg nec	2000	600	-1400	-70%
Manufacture of crude oils and fats	0	0	0	-
Manufacture of refined oils and fats	400	0	-400	-100%
Manufacture: margarine/similar fats	0	0	0	-
Operation of dairies and cheese making	5100	7400	+2300	45%
Manufacture of ice cream	200	1600	+1400	700%
Manufacture of grain mill products	700	500	-200	-29%
Manufacture of starches/starch products	0	0	0	-
Manufacture of bread etc	4300	5800	+1500	35%
Manufacture of rusks, biscuits etc	600	3400	+2800	467%
Manufacture of sugar	0	0	0	-
Manufacture of cocoa; chocolate etc	2800	3700	+900	32%
Manufacture of macaroni, noodles etc	0	100	+100	-
Processing of tea and coffee	300	400	+100	33%
Manufacture of condiments and seasonings	0	400	+400	-
Manufacture of homogenised food etc	300	0	-300	-100%
Manufacture of other food products nec	2600	3100	500	19%
Manufacture of alcoholic beverages	300	100	-200	-67%
Production of ethyl alcohol	0	0	0	-
Manufacture of wines	400	400	0	0%
Manufacture of cider/other fruit wines	1100	600	-500	-45%
Manuf: other non-dist. fermen. beverages	0	0	0	-
Manufacture of beer	2400	2000	-400	-17%
Manufacture of malt	0	0	0	-
Production of mineral waters/soft drinks	800	1000	+200	25%
PRODUCTION/PROCESSING SUB TOTAL	33,900	41,600	+7,700	+23%

ALL FOOD AND DRINK
Bournemouth/Dorset/Poole	12400	9400	-3000	-24%
Cornwall	18400	13400	-5000	-27%
Devon	30900	20500	-10400	-34%
Gloucestershire	9800	10600	+800	8%
Somerset	20500	14700	-5800	-28%
Bristol Sub-region (West of England SRP)	12600	11400	-1200	-10%
Wiltshire/Swindon	16500	11200	-5300	-32%
South West	121100	91200	-29900	-25%
East Midlands	95200	90200	-5000	-5%
Eastern	113000	97000	-16000	-14%
Great Britain	907200	824700	-82500	-9%
Source: Census of Employment 1991 Annual Employment Survey 1997 (NOMIS) © Crown Copyright

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Employment in the sector is spread across the region with the largest concentrations in Devon, Cornwall and Somerset. Gloucestershire is the only sub-region of the South West where employment in Food and Drink has increased between 1991 and 1997. Devon, Wiltshire/Swindon, Cornwall and Somerset have all seen a decline greater than the regional average over this period.
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