The food industry suffered in 2023 from the impact of inflation, drought and wars in Ukraine and the Middle East. According to the Economic Report presented this Tuesday by the Spanish Federation of Food and Beverage Industries (FIAB), production in the sector fell by 2.6% last year.. However, this manufacturing industry continued to add workers: employment grew by 2%, maintaining a significant presence of women.
The balance prepared by FIAB indicates that the food industry generated production worth 162,459 million euros in 2023, 2.6% less than in 2022.. This is the first time that this figure has been reduced since 2013, with the exception of the decrease recorded in 2020 due to the pandemic.. “The impact of inflation, adverse climatic factors and the unstable global context have caused the sector's production to decline for the first time in many years,” acknowledged the general director of FIAB, Mauricio García de Quevedo, in the presentation of the report. , in which he recalled that the food industry transforms 70% of the food harvested in Spain, hence the impact of the drought is transferred to the rest of the value chain.
“We came from two previous years with very exceptional growth and far from the trend of previous years marked by, first, the recovery after the pandemic and, second, the extraordinary advance in industrial prices,” García de Quevedo clarified.. “In parallel, the difficult global situation has created a very tense scenario for the development of the sector, confirming in 2023 the signs of deceleration that had already been emerging in previous years,” he added.
Although the creation of added value by the food industry remained on the rise in 2023 with a growth of 8% compared to 2022 to 31,038 million euros, when discounting the effect of inflation, the increase is reduced to just 1 ,4%. The rise in prices has also had a dent in household consumption, which remained stable in global terms at around 66,371 million euros, but fell 1.2% in per capita spending to 1,410 euros per consumer.
Even so, the food sector remains one of the main drivers of Spanish industry: it represented 18.47% of the production of the manufacturing industry and 13.94% of the entire industrial sector.. During the presentation of the report, the general secretary of Agrarian Resources and Food Safety of the Ministry of Agriculture, Fernando Miranda, has recognized the role of this industry in the Spanish economy and especially in foreign trade.. “The agri-food industry deals with something as basic as food and makes use of the opportunities of international markets to have a very exporting aspect that allows it to create value,” he highlighted.
An export industry
A good part of the production of the food industry is sold outside the Spanish borders.. Specifically, in 2023, 65% of the companies in the sector were present in international markets. Although growth slowed compared to the 6% increase recorded in 2022, food exports grew by 3.4% in value terms last year to reach €47.62 billion.. However, in terms of volume, sales abroad decreased by 6.6%, a decrease that FIAB attributes to inflation. Even so, the sector recorded a surplus of 13,697 million euros in the trade balance and Spain remained the fifth largest exporter of food and beverages in Europe.
France, Portugal, Italy and Germany were the main destinations for Spanish food, since 61.8% of exports remained within the European Union. Outside the community club, the United States emerged as Spain's main trading partner, although sales to the other side of the Atlantic Ocean fell by 6.4% compared to 2022 in which the data were “extraordinary”. In all markets as a whole, meat, preserved vegetables, fish and seafood and olive oil topped the list of most exported products.
Given the weight of international trade in the food industry, FIAB highlights the impact on the sector of the wars in Ukraine and the Middle East, due to its effect on supply chains, maritime traffic and production costs. “We are subject to the geopolitical pressures that occur worldwide. “This means that the sector has to be dynamic,” recognized the secretary general of the Ministry of Agriculture, who has highlighted the need to work to achieve “open strategic autonomy.”
Business reduction
In contrast to the decline in production, employment increased by 2% in the food industry in 2023, which represented a growth rate lower than that recorded a year before but higher than the average for the manufacturing industry.. Specifically, the sector employed 463,900 people last year, of which 81.1% had a permanent contract and 38.2% were women.. The presence of female employment increases within the research and development area, where women represented 49.3% of the total number of workers.
Despite the increase in employment, the number of companies dedicated to the food industry decreased by 6.5% in 2023 to 28,335. The general director of FIAB has framed this contraction in a process of “concentration” of a sector in which small and medium-sized companies have traditionally had a lot of weight and continue to represent 96% of the total.. “One of the weaknesses is that we do not have great champions of the food industry like other countries in Europe and the world,” said García de Quevedo, recognizing that smaller companies suffer more from the impact of high production costs.
This atomization of the food industry has taken its toll on the sector when it comes to accessing aid from the Agri-Food Perte, as recalled this Tuesday by the finance director of FIAB, Karina Pereira.. Of the 510 million euros of the first call, only 183 million euros were spent. “It was a very complicated and difficult Perte for SMEs to access,” he stated, pointing to the excess of bureaucracy and the need to present projects associated with groups of companies.. FIAB demands greater flexibility from the Government regarding the second call for aid.