TMFDI/1998: Technology and employment in the food and drink industries

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Technology and employment in the food and drink industries

Report for discussion at the, Technology and Employment in the Food and Drink Industries

Geneva, 18 - 22 May 1998

International Labour Office Geneva

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Foreword

This report has been prepared by the International Labour Office as the basis for discussions at the Tripartite Meeting on Technology and Employment in the Food and Drink Industries. It examines recent developments in the food and drink industries and new technology that has been adopted in these industries with a view to illustrating their impact on employment and working conditions.

Background to the Meeting

The Meeting is part of the ILO's Sectoral Activities Programme, the purpose of which is to facilitate the exchange of information between constituents on labour and social developments relevant to particular economic sectors, complemented by practically oriented research on topical sectoral issues. This objective has traditionally been pursued by the holding of international tripartite sectoral meetings for the exchange of views and experience with a view to: fostering a broader understanding of sector-specific issues and problems; promoting an international tripartite consensus on sectoral concerns and providing guidance for national and international policies and measures to deal with the related issues and problems; promoting the harmonization of all ILO activities of a sectoral character and acting as the focal point between the Office and its constituents; and providing technical advice, practical assistance and concrete support to ILO constituents in order to facilitate the application of international labour standards in the various economic sectors.

At its 267th Session (November 1996), the Governing Body of the ILO decided that a tripartite meeting on technology and employment in the food and drink industries would be included in the programme of sectoral meetings for 1998-99. At its 268th Session (March 1997), the Governing Body further decided that the governments of the following 20 countries should be invited to be represented at the Meeting: Burundi, Chile, China, Egypt, France, Ghana, India, Italy, Japan, Lebanon, Mexico, Morocco, Nicaragua, Nigeria, Portugal, Thailand, Turkey, United Kingdom, United States and Uruguay. A number of countries were included in a reserve list from which further invitees would be drawn in the event that a government in the first list did not accept the invitation. The Governing Body decided that the 20 Employer and 20 Worker participants in the Meeting would be appointed on the basis of nominations made by the respective groups of the Governing Body. They will not necessarily come from the above list of countries.

Background to the report

The food industry presents many facets, from the traditional labour-intensive activities often found in developing countries to the capital-intensive industrial processes common in the industrialized world. It includes slaughtering, preparing and preserving meat; milling grains and manufacturing bakery products; canning and preserving fish products, fruits and vegetables; manufacturing vegetable and animal oils and fats and animal feeds; and processing sugar, coffee, tea, etc. In addition to first-stage processing, the food industry today is increasingly engaged in the manufacturing of higher-stage processed products such as convenient and ready-to-eat frozen foods. The drink industry covers such activities as distilling and blending spirits; and processing malt, malt liquors, wine, soft drinks, fruit juice, milk, mineral water and so on.

The ILO's Sectoral Activities Programme covers the food and drink industries in countries at all stages of development. Inevitably, however, most of the data readily available on the topic of the Meeting come from industrialized countries. Because of this necessity, and not by choice, the report underemphasizes the experience of FD industries in developing countries, although it does demonstrate that it is in these countries that FD output and employment are growing most rapidly. While some information on developing countries has been included, it mostly concerns large enterprises.

The report was prepared by Shizue Tomoda, Food and Drink Industries Specialist. It incorporates excerpts from case-studies prepared by J.A. Burns with Marian Garcia, Todd Cherkasky, Anselmo García, Andrés Hernandez and Leonard Mertens, Judit Kiss, Naoki Kuriyama and Veena Nabar. Information has also been provided by employers' and workers' organizations affiliated with the International Organization of Employers (IOE) and the International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Workers' Associations (IUF). The rest has been collected from a variety of sources by the author with the assistance of ILO offices and also through the author's own research work. All help is gratefully acknowledged.

The report is published under the authority of the International Labour Office. It is hoped that the information and analysis provided herein will serve as a useful basis for discussion during the Meeting.

Contents

Foreword

1. Recent trends in the food and drink industries

Production

Volume
Value
Value added
Geographical distribution of production

Consumption

Product trends

Trade
Structure of the food and drink industries
Investment

2. Recent technological changes in the food and drink industries

Microelectronics and computer technology
Fish and poultry processing
Food technology
Other technologies relevant to the food and drink industries

3. Impacts of new technology on employment

Employment trends

Industrialized countries
Developing countries

Changes in labour productivity
Employment flexibility and women workers
Changing work organization and new skill requirements

4. Impact of new technology and structural change on working conditions

Hours of work and earnings
Occupational safety and health

5. Coping with the effects of technological and structural change

Technological change and industrial relations

Adjustment measures
Training for new skill requirements and better work environment

6. Environmental issues

New technology and the environment
Environmental regulations and their impact on the FD industries
Employment implications of environmental issues

7. Summary and points for discussion

Summary

Recent trends
Technological change
Impact of new technology on employment
Impact of new technology on working conditions
Coping with the effects of change
Environmental issues

Suggested points for discussion

Technology and productivity
Employment flexibility and new work organization
Working conditions
Environmental management
Role of the ILO

Tables

1.1 Index numbers for the industrial production of food products (ISIC 311), 1985-95

1.2 Index numbers for the industrial production of beverages (ISIC 313), 1985-95

1.3 Output in food products as a percentage of total manufacturing output, 1985-95

1.4 Output in beverages as a percentage of total manufacturing output, 1985-95

1.5 Total manufacturing value added (MVA), total value added in the FD industries (FDVA) and the proportion of FDVA as a percentage of MVA in the G7 member countries in 1980 and 1994

1.6 Total manufacturing value added (MVA), total value added in the FD industries (FDVA) and the proportion of FDVA as a percentage of MVA in some ASEAN countries in 1980 and 1994

1.7 Distribution of world value added in the food and drink industries, 1980-93

1.8 Distribution of value added in the food and drink industries among developing regions, 1985 and 1992

1.9 Leading food producers among developing countries, 1985 and 1994

1.10 United States: Personal consumption expenditure on food and drink products in 1997 and 1993, and projected 2005

1.11 Index numbers of global food export and import value, by region, 1988-95

1.12 Australian exports and imports of food and drink products and their proportion of total manufacturing exports and imports, 1989-95

1.13 European Union: Exports and imports of food, drink and tobacco products to and from the countries outside the European Union, 1985-95

1.14 Value of Japanese exports and imports of foodstuffs and their proportion of total exports and imports, 1980-95

1.15 United States: Exports and imports of food and kindred products, by value and proportion of total manufacturing exports and imports, 1985-95

1.16 Hungary's foreign trade in food, beverages and tobacco products, 1993-95

1.17 Germany (former FRG): Gross capital investment per worker in the food industry and in manufacturing, 1988-92

1.18 Investment distribution in Hungarian food and drink industry investments, 1990-95

1.19 India: Capital intensity in the food-processing industry

1.20 United Kingdom: Net capital expenditure and gross value added per head in the food and drink industries as compared with the tobacco industry, 1986-93

1.21 United Kingdom: R & D expenditure in food and drink companies, 1995

1.22 United States: Total investment in new plants and equipment in the food industry (SIC Code 20), 1987-95

3.1 Employment in food products (ISIC 311), 1985-95

3.2 Employment in beverages (ISIC 313), 1985-95

3.3 Employment in food products as a percentage of employment in total manufacturing, 1985-95

3.4 Employment in beverages as a percentage of employment in total manufacturing, 1985-95

3.5 European Union: Employment in the FD branches in 1995 and changes since 1988

3.6 Germany: Employment trends in the food and drink industries, 1985-95

3.7 United Kingdom: Employment in the food industry, 1980 and 1992 (Census of production groups: SIC 1980)

3.8 Employment in Hungarian food and drink industries, 1992-95

3.9 United States: Total employment and the proportion of production workers in the food, beverages and tobacco industries, by subsector, 1991-95

3.10 India: Employment in the food and drink industries by branch

3.11 Nigeria: Employment and number of establishments in the food and drink industries, 1992-96

3.12 Germany: Per capita productivity index in the food industry and total manufacturing, by category of workers, 1988-93

3.13 Hungary: Productivity index in the food and drink industries, by branch, 1994-95

3.14 Malaysia: Fixed assets and added value per employee in the food industry and manufacturing, 1985-92

3.15 United Kingdom: Production, employment and output per worker in total manufacturing and in the food, drink and tobacco industries, 1989-96

3.16 United States: Index numbers of hourly output, by sector, 1988-95

3.17 Japan: Number of employees and the proportion of part-time workers in food-processing industries, by sex and size of establishment, 1992-96

3.18 United Kingdom: Employment in the food, drink and tobacco industries, by sex, category of worker and percentage change, 1993-96

3.19 Belgium: Employment in the food and drink industries, by sex and category of worker, 1991-95

3.20 United States: Employment trends in the food industry, 1990-96

4.1 Wages per worker in food products as a percentage of wagesper worker in total manufacturing, 1986-95

4.2 Wages per worker in beverages as a percentage of wages per worker in total manufacturing, 1985-95

4.3 Women's average weekly hours of work as a percentage of men's in total manufacturing and in the food and drink industries, 1985-95

4.4 Women's average hourly earnings as a percentage of men's in total manufacturing and in the food and drink industries, 1985-95

4.5 Australia: Average per capita annual earnings in the food and drink industries and in total manufacturing, 1989-93

4.6 France: Average hourly wages in the cooperative sector of the meat and poultry industries, by category of worker, 1991-94

4.7 Germany: Annual hours of work per worker in the food and drink industries and in total manufacturing, 1988-93

4.8 Germany (former FRG): Gross value added per worker and gross hourly wages in the food and drink industries and in total manufacturing, 1988-93

4.9 Monthly average per capita net earnings in the Hungarian food, drink and tobacco industries, by branch, 1992-95

4.10 Monthly average earnings of manual and non-manual workers in the Hungarian food, drink and tobacco industries, by branch, 1995

4.11 Monthly earnings per worker in the Indian food-processing industry

4.12 Japan: Average monthly hours of work and earnings in the food-processing industries, by sex and size of establishment, 1992-96

4.13 Great Britain: Average weekly hours of work in the food, drink and tobacco industries and in total manufacturing, 1988-95

4.14 Great Britain: Average hourly earnings in the food, drink and tobacco industries and in total manufacturing, 1988-95

4.15 Great Britain: Average annual earnings per head in the food, drink and tobacco industries, 1988-93

4.16 United States: Average weekly hours of work and earnings of production or non-supervisory workers in the food, beverages and tobacco industries by subsector, 1991-95

4.17 Belgium: Number of cases of occupational accidents and diseases reported and cost of compensation in the food and drink industries, 1990-93

4.18 France: Occupational accidents in selected sectors, 1993-94

4.19 Germany: Number of cases of occupational diseases reported in the food, drink and catering sectors, 1990-96

4.20 United Kingdom: Number of cases of injury to FDT and manufacturing workers, 1992-95

4.21 United States: Incidence rates of occupational injury and illness, by industry, 1985-94

List of recurring abbreviations

	AFBTE	Association of Food, Beverage and Tobacco Employers
	BCTWIU	Bakery, Confectionery and Tobacco Workers' International Union
	BOD	Biochemical oxygen demand
	BSE	Bovine spongiform encephalopathy
	BST	Bovine somatotrophin
	CAD	Computer-aided design
	CAM	Computer-aided manufacture
	CFC	Chlorofluorocarbon
	CIM	Computer-integrated manufacturing
	CIP	Cleaning-in-place
	COD	Chemical oxygen demand
	CRS	Continuous rotating shift
	CRT	Cathode-ray tube
	DITO	Dairy Industry Training Organization
	DSD	Duales System Deutschland
	ECR	Effective consumer response
	EPOG	Electronic process operating guidelines
	ERRA	European Recovery and Recycling Association
	EWC	European Works Council
	FD industries	Food and drink industries
	FDA	Food and Drug Administration
	FDC	Food, drink and catering
	FDI	Foreign direct investment
	FDT	Food, drink and tobacco
	GDP	Gross domestic product
	GM	Genetically modified
	HACCP	Hazard Analysis and Critical Control Point
	HPG	High performance group
	ISIC	International Standard Industrial Classification
	ISO	International Standard Organization
	IUF	International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Workers' Associations
	MRP	Manufacturing resource planning
	NEDC	National Economic Development Council
	NIC	National Industrial Classification
	OECD	Organization of Economic Cooperation and Development
	PCB	Polychlorinated biphenyl
	PET	Polyethylene terphathalate
	PLCs	Programmable logic controllers
	QA	Quality assurance
	QAT	Quality action team
	QCC	Quality control circle
	SIC	Standard Industrial Classification
	TQM	Total quality management
	UNEP	United Nations Environment Programme
	VDU	Visual display unit

Exchange rates

The exchange rates for the following currencies against US$1 for the period 1980-95 are given here for ease of reference.


Country	Currency	1980	1985	1990	1995

Australia	A$	0.92	1.22	1.25	1.35
China	Yuan (RMB)	1.58	2.82	4.71	8.41
European Union	Ecu	-	1.411¹	0.830	0.802
Germany	DM	1.76	3.10	1.70	1.51
Hungary	Forint (Ft.)	23.12	51.07	65.50	112
India	Rupee (Rs.)	7.85	12.20	16.80	36.26²
Japan	Yen (Y)	240	248	141	97
New Zealand	NZ$	1.05	2.08	1.72	1.56
United Kingdom	£	0.449	0.855	0.517	0.630
¹ 1986 rate. ² 1997 rate.

1. Recent trends in the food and
drink industries

World population is projected to be 6.1 billion by the year 2000, of which approximately 80 per cent will be found in developing countries.⁽¹⁾ While millions of people in many developing countries, particularly those beset by disaster or war, are still undernourished, the number of such people is estimated to have declined from approximately 920 million in 1969-71 to about 840million in 1990-92.⁽²⁾ Considering that estimated world population grew from 3.7 billion in 1970⁽³⁾ to 5.4 billion in 1992,⁽⁴⁾ the world has been successful in feeding an increasing number of people over the past few decades. The FD industries have contributed significantly to improving global food security over the years through better processing and preservation techniques, more reliable packaging materials and improved distribution systems.

Production

Volume

Owing mainly to improved agricultural technology, per capita food production in developing countries increased by 23 per cent between 1980 and 1993, though it declined by 3 per cent in industrialized countries in the same period. Global per capita production increased by 18 per cent⁽⁵⁾and livestock production and fishery catches grew. By way of example, world beef and veal production increased from 49.7 million tonnes in 1987 to 52.2 million tonnes in 1993. Poultry production climbed from 31.2 million tonnes to 40 million tonnes during the same period.⁽⁶⁾Despite some fluctuation, global nominal fishery catches rose from 100.7 million tonnes in 1989 to 112.9 million tonnes in 1995. The declining rate of growth for the catches in marine areas is increasingly being offset by catches in inland waters, which rose from 13.8 million tonnes in 1989 to 21 million tonnes in 1995.⁽⁷⁾

Table 1.1 presents index numbers for the volume of food production for 1985-95, with 1990 production constituting 100. The rate of increase for the entire period was relatively small in most OECD countries, with the exception of Ireland. This is largely due to the fact that the market in those countries was relatively mature by the mid-1980s. The stagnation and decline in Japanese production in recent years is probably a reflection of domestic food manufacturers being placed under increasing pressure from cheaper imported products as a result of increased trade liberalization.

Table 1.1. Index numbers for the industrial production of food products (ISIC 311), 1985-95 (1990 = 100)


Country/territory	1985	1986	1987	1988	1989	1990	1991	1992	1993	1994	1995

High-income non-OECD
Cyprus	80	83	89	93	98	100	98	104	110	117	121
Germany (former GDR)¹	167	171	171	173	174	100
Hong Kong²	66	70	76	86	89	100	104	109	112	113	113
Israel	79	90	101	101	99	100	101	104	113	119
Kuwait	116	115	114	117	121	100	84	71
Singapore	83	90	91	99	102	100	105	108	112	112	113
United Arab Emirates	72	70	94	93	105	100	102	104
High income OECD
Australia	89	91	96	97	98	100	103	111	119
Austria	83	85	85	88	92	100	106	107	108	112	113
Belgium	82	85	88	90	97	100	103	105	106	105	110
Canada	102	102	102	102	98	100	102	104	104	108	109
Denmark	93	97	95	97	97	100	109	107	107
Finland	93	95	97	99	100	100	99	100	103	106	109
France	90	89	92	95	96	100	102	104	105	106
Germany (former FRG)³	81	83	84	87	91	100	107	106	106	105
Iceland	93	95	95	97	96	100	82
Ireland	76	79	90	94	96	100	104	114	120	129	143
Italy	89	91	94	98	99	100	101	103	103
Japan	94	95	94	97	99	100	103	103	103	100	100
Luxembourg	92	92	91	90	96	100	100	97	101	96
Netherlands	85	90	90	93	97	100	102	105	106	103	105
New Zealand	85	87	81	100	107	100	111	115
Norway	103	102	103	101	102	100	104	105	106	116	118
Spain	88	87	94	97	95	100	103	99	100	104	102
Sweden	98	97	96	98	100	100	97	93	97	100
Switzerland	91	93	94	95	98	100	102	102	103	106	106
United Kingdom	93	93	96	99	98	100	100	101	102	103	104
United States	91	93	96	98	99	100	102	103	106	109	111
Low-income
Bangladesh	56	70	74	72	96	100	94	91	102	113
Benin	93	95	96	97	100	100	97
Bhutan						100
Burkina Faso	64	53	95	118	91	100	116	101
Burundi	76	86	87	97	92	100	96	101	101
Cambodia	77	79	89	93	96	100	102	107
Central African Republic	74	75	87	89	91	100	102	103
Chad	72	77	77	78	99	100	82	88
Egypt	113	129	109	106	127	100	101	103	124	132
Ethiopia and Eritrea	130	125	125	132	128	100	92	96
Gambia	81	81	108	66	101	100
Ghana	73	71	88	94	84	100
Guyana	185	187	168	128	126	100	123	187	187	195	192
Haiti	143	110	128	133	103	100	65	46	39	39	39
Honduras	61	59	60	74	77	100	125	133	147
India	75	79	82	89	89	100	105	106	99
Indonesia	56	61	66	87	86	100	108	113	152	201
Kenya	80	85	93	99	99	100	101	97	97
Lao People's Democratic Republic	94	98	102	106	95	100	107	117
Lesotho	97	97	97	100	100	100	104	100
Liberia	96	96	108	108	108	100	104
Madagascar	79	79	86	98	103	100	82	83	89
Malawi	74	79	80	78	94	100	92	98	100	92	96
Mali	106	97	72	85	83	100	87	105	93	122
Mauritania	64	83	81	87	92	100	95	95
Mozambique	96	89	85	81	93	100	96	77
Myanmar	116	120	113	94	96	100	93	130
Nepal	69	79	86	91	105	100	109	117
Nicaragua	100	96	95	96	102	100	103	104
Niger	65	79	86	83	103	100	100	103
Nigeria	122	88	99	89	97	100	106	132
Pakistan	102	90	107	111	124	100	114	116	134	131	139
Rwanda	119	102	107	130	100	100	100	130
Sierra Leone	88	88	88	88	97	100	103
Somalia	114	97	117	121	126	100	69	31
Sri Lanka	84	101	89	81	96	100	102	98	117	125	141
Sudan	85	80	90	91	90	100	106	116
Tanzania, United Republic of	116	103	100	114	123	100	120	111	95
Togo	69	72	92	95	98	100
Uganda	54	49	57	73	88	100	130	140	141	177	207
Yemen	96	99	99	100	100	100	101	103
Zaire	79	82	85	94	102	100	105	87
Zambia	82	80	83	90	86	100	102	127
Zimbabwe	79	88	91	90	92	100	102	104	85	90	99
Middle-income (lower)
Algeria	84	92	95	97	99	100	99	94	99	95	88
Angola	199	199	119	119	100	100	119	100	80
Belize	102	93	82	81	91	100	102	100	100	105	105
Bolivia	83	92	97	99	98	100	111	110	117	121	128
Bulgaria	102	105	104	107	110	100	72
Cameroon	86	85	101	103	106	100	98	90
Chile	89	97	93	97	104	100	101	119	123	137	143
Colombia	87	88	90	90	90	100	93	101	105	103	106
Congo	140	106	79	94	106	100	59	82	85
Costa Rica	80	85	91	94	96	100
Cuba	94	89	85	96	90	100	85	85	50
Czechoslovakia (former)	97	99	99	100	103	100	79	69
Côte d'Ivoire	88	103	105	97	107	100	106	138	167	144	111
Dominican Republic	111	113	128	132	118	100	99	104
Ecuador	86	88	93	92	95	100	109	109	108
El Salvador	90	91	93	96	98	100	106
Fiji	77	102	94	90	103	100	103	107	106	116	111
Guatemala	86	75	80	91	95	100	98	99
Iran, Islamic Republic of	112	98	96	89	88	100	110	125
Iraq	106	101	109	95	119	100	77	91
Jamaica	108	99	90	112	97	100	108	102	98	100
Jordan	120	83	86	99	95	100	84	137	123	114
Lebanon	83	84	80	75	78	100	125	124
Malaysia	68	74	79	82	95	100	96	102	112	119	125
Mauritius	104	114	111	102	91	100	98	103	91	80	94
Mongolia	99	102	104	106	109	100	109
Morocco	108	113	94	99	98	100	104	104	115	120	119
Namibia	70	76	87	88	93	100	109	102
Panama	98	96	103	90	96	100	105	111	116	125	136
Papua New Guinea	93	102	108	109	104	100	100	105
Paraguay	72	75	79	71	98	100	71	81	69	80
Peru	99	111	125	118	99	100	97	101	101	117	124
Philippines	65	64	70	83	92	100	114	123	128	147	158
Poland	149	155	158	163	145	100	97	107	124
Romania	102	107	114	114	114	100	83	69	59	67	69
Senegal	61	51	84	109	97	100	58	82	81	92	106
Slovenia	98	101	105	103	99	100	96	78	76	79	80
Swaziland	73	98	85	86	95	100	93	98
Syrian Arab Republic	109	111	97	90	91	100	109	111	105	111
Thailand	96	98	92	89	103	100	84	99	97	90	103
Tunisia	85	90	90	97	98	100	102	107	107	112	113
Turkey	80	80	90	91	95	100	107	105	113	115	115
Middle-income (upper)
Argentina	90	97	99	100	98	100	109
Barbados	88	95	100	95	94	100	108	103	104	107	111
Botswana	84	87	79	100	106	100	94	93
Brazil	92	93	99	97	98	100	104	104	104	106	115
Gabon	74	77	76	84	89	100	101	87
Greece	106	97	92	101	112	100	110	118	117	116	118
Hungary	100	102	105	102	103	100	97	85	82	85	88
Korea, Republic of	64	70	78	88	94	100	109	111	113	122	123
Libyan Arab Jamahiriya	93	86	90	98	104	100	118	121
Malta	89	94	99	98	106	100	104	112	116
Mexico	90	91	92	92	97	100	104	105	106	104	105
Oman	74	78	85	89	96	100	100	104
Portugal	78	80	83	90	93	100	100	93	96	94	97
Puerto Rico	159	141	141	151	133	100	108	97	95	74
Saudi Arabia	88	90	86	93	96	100	100	102
South Africa	93	92	88	87	89	100	99	100	98	94	94
Suriname	156	139	54	68	96	100	67	69
Trinidad and Tobago	98	102	101	99	101	100	103	107	100	106	108
USSR (former)	88	90	93	96	99	100
Uruguay	96	95	93	99	102	100	101	104	100	108	110
Venezuela	25	29	36	44	82	100
Yugoslavia (former)	101	102	105	101	71	100	80
Others
Taiwan, China	91	91	96	98	94	100	104	109	111	117
¹ Former GDR = the Länder of the former German Democratic Republic. ² This report deals with the period up to 30 June 1997, during which Hong Kong was a non-metropolitan territory of the United Kingdom. On 1 July 1997 China resumed the exercise of sovereignty over Hong Kong, which became a Special Administrative Region of the People's Republic of China. ³ Former FRG = the Länder of the former Federal Republic of Germany. Source: UNIDO: Industrial Statistics, 1997.

On the other hand, many low-income countries have shown little, if any, increase since 1985. Indonesia and Uganda, where production increased continuously and impressively over the ten-year period, are major exceptions. Solid, but more modest, increases were seen in other countries such as Bangladesh, Pakistan and Sri Lanka. The situation is similar in low middle-income countries. While more countries in this group show a steady increase for the entire period, the growth rate is much more modest than that of Indonesia and Uganda in the previous group. The food industry in Chile, Malaysia and the Philippines achieved greater expansion than in the other countries in the group. Of the upper middle-income countries, Brazil, the Republic of Korea and Mexico managed to increase their production over the same period. With the exception of the Republic of Korea, however, the rate of growth in these countries was relatively low.

Table 1.2 presents index numbers for the volume of beverage production for 1985-95. In comparison with food production, more countries in the high-income OECD group saw their production stagnate or decline after 1990. Several countries managed to increase production modestly over the entire period. Many low- and middle-income countries saw their production fluctuate, sometimes erratically, or decline during the period. Many of the countries that recorded a steady or impressive growth in food production showed a growth in beverage production as well, particularly after 1990.

Table 1.2. Index numbers for the industrial production of beverages (ISIC 313), 1985-95 (1990 = 100)


Country/territory	1985	1986	1987	1988	1989	1990	1991	1992	1993	1994	1995

High-income non-OECD
Cyprus	75	73	69	73	87	100	95	98	84	101	97
Germany (former GDR)	167	171	171	173	174	100
Hong Kong	66	70	76	86	89	100	104	109	112	113	113
Israel	79	90	101	101	99	100	101	104	113	119
Singapore	68	71	85	96	92	100	101	113	112	114	114
High-income OECD
Australia	89	91	96	97	98	100	103	111	119
Austria	83	85	85	88	92	100	106	107	108	112	113
Belgium	97	97	98	97	94	100	95	97	90	83	85
Canada	104	98	100	103	104	100	90	100	104	106	106
Denmark	94	96	95	101	97	100	104	107	106
Finland	78	84	86	95	99	100	101	102	107	97	96
France	84	87	90	94	100	100	95	93	95	98
Germany (former FRG)	84	86	85	87	88	100	108	108	103	104
Iceland	80	85	102	126	109	100
Ireland	80	82	81	88	99	100	104	103	104	112	117
Italy	77	86	88	96	101	100	99	98	97
Japan	94	95	98	100	99	100	100	100	98	100	93
Luxembourg	96	101	98	96	98	100	104	108	102	111
Netherlands	83	89	87	82	88	100	111	122	122	129	129
New Zealand	94	86	86	88	101	100	102	101
Norway	89	94	95	98	99	100	101	100	96	100	102
Spain	88	87	94	97	95	100	103	99	100	104	102
Sweden	85	92	97	98	103	100	104	106	110	126
Switzerland	91	93	94	95	98	100	102	102	103	106	106
United Kingdom	92	96	98	97	102	100	95	93	95	97	106
United States	92	94	96	100	99	100	101	105	108	112	113
Low-income
Bangladesh	49	52	59	89	140	100	118	118	139	145
Burkina Faso	146	122	114	120	112	100	102
Burundi	81	88	88	87	90	100	96	101	109
Central African Republic	86	88	93	90	102	100	87	87	62	77
Chad	131	101	92	94	99	100	121	116
Egypt	111	117	122	120	111	100	86	79	79	78
Ethiopia and Eritrea	124	133	132	125	110	100
Ghana	71	90	100	105	104	100
Guyana	93	89	96	104	97	100	95	123	138	131
Haiti	68	103	98	129	85	100	67	73	60	52	52
Honduras	88	99	94	95	86	100	137	197	232
India	112	106	83	88	101	100	109	106	123
Indonesia	61	70	84	86	87	100	119	105	129	149
Kenya	68	80	94	97	97	100	97	111	111
Liberia	64	70	89	104	102	100
Madagascar	81	85	80	67	78	100	79	76
Malawi	74	79	80	78	94	100	92	98	100	92	96
Mali	106	97	72	85	83	100	87	105	93	122
Mozambique	91	94	71	103	97	100	91
Myanmar	237	208	71	41	88	100	125	79
Nepal	70	55	83	91	105	100
Nicaragua	105	102	101	101	105	100
Niger	140	138	136	127	101	100
Nigeria	102	129	85	114	104	100	103	145	214	305
Pakistan	123	125	123	111	100	100	89	100	97	103	123
Sierra Leone	145	76	121	97	97	100
Sri Lanka	84	101	89	81	96	100	102	98	117	125	141
Sudan	85	80	90	91	90	100	106	116
Tanzania, United Republic of	118	105	98	98	97	100	100	107	116
Uganda	55	53	65	90	93	100	114	100	110	147	199
Zaire	95	98	105	109	108	100
Zambia	82	80	83	90	86	100	102	127
Zimbabwe	73	74	83	90	88	100	103	103	97	98	92
Middle-income (lower)
Algeria	84	92	95	97	99	100	99	94	99	95	88
Angola	167	150	120	120	100	100	120	100	80
Belize	77	77	75	73	84	100	108	112	143	152	152
Bolivia	83	92	97	99	98	100	111	110	117	121	128
Bulgaria	105	99	99	106	104	100
Cameroon	105	125	132	119	108	100	103	82	80	74	54
Chile	70	71	69	83	100	100	98	108	115	110	122
Colombia	90	93	100	97	98	100	99	95	105	109	118
Congo	150	136	106	104	104	100	120	129
Costa Rica	77	85	89	88	92	100
Cuba	76	81	91	92	92	100
Czechoslovakia (former)	95	92	95	96	97	100	114	108
Côte d'Ivoire	117	115	125	125	120	100	89	86	81	79	99
Dominican Republic	72	70	93	100	93	100	91	95
Ecuador	88	88	86	95	95	100	113	114	104
El Salvador	86	89	93	96	97	100	104
Fiji	77	102	94	90	103	100	103	107	106	116	111
Guatemala	115	108	126	96	103	100	99	103
Iran, Islamic Republic of	129	109	64	78	80	100	107	108
Iraq	106	101	109	95	119	100	77	91
Jamaica	66	72	78	90	93	100	87	92	95	93
Jordan	92	80	85	92	95	100	116	133	171	178	245
Lebanon	50	50	50	50	110	100	110
Malaysia	68	68	71	80	87	100	102	107	95	110	116
Mauritius	66	68	87	94	93	100	106	107	106	112	110
Morocco	62	65	75	88	95	100	118	116	100	107	117
Panama	77	86	91	80	88	100	107	109	118	125	127
Paraguay	84	85	87	87	90	100	94	90	100	97
Peru	97	144	177	140	99	100	129	123	123	140	144
Philippines	51	52	67	80	88	100	119	127	124	137	159
Poland	117	120	117	118	114	100	108	103	109
Romania	102	107	114	114	114	100	83	69	59	67	69
Senegal	98	66	94	101	99	100	91	96	91	85	103
Slovenia	96	101	99	96	89	100	96	86	82	81	78
Swaziland	73	98	85	86	95	100	93	98
Syrian Arab Republic	109	111	97	90	91	100	109	111	105	111
Thailand	40	33	37	50	68	100	108	124
Tunisia	85	90	90	97	98	100	102	107	107	112	113
Turkey	71	72	71	67	78	100	97	89	102	99	115
Middle-income (upper)
Argentina	109	124	118	96	91	100	134
Barbados	76	76	82	85	88	100	102	98	108	116	118
Botswana	55	58	64	74	83	100	101	109
Brazil	70	87	84	85	98	100	118	99	107	118	138
Gabon	106	112	110	104	95	100	103	98
Greece	87	97	87	94	100	100	101	105	108	116	121
Hungary	100	102	105	102	103	100	97	85	82	85	88
Korea, Republic of	64	70	78	88	94	100	109	111	113	122	123
Libyan Arab Jamahiriya	93	86	89	98	104	100	118	120
Malta	64	65	79	94	96	100	104	109	119
Mexico	90	91	92	92	97	100	104	105	106	104	105
Portugal	60	63	74	81	94	100	102	98	99	92	89
Puerto Rico	41	38	48	67	92	100	92	77	54	54
South Africa	80	86	85	91	99	100	96	98	86	88	93
Suriname	117	93	102	81	96	100	100
Trinidad and Tobago	72	73	85	73	91	100	96	89	84	89	85
USSR (former)	106	79	84	93	101	100
Uruguay	82	93	101	97	100	100	99	106	108	108	84
Venezuela	27	32	43	55	89	100
Yugoslavia (former)	89	96	96	94	89	100	92
Others
Taiwan, China	91	91	96	98	94	100	104	109	111	117
Source: UNIDO: Industrial Statistics, 1997.

Value

Global output of food and drink products, in US dollar terms, is hard to estimate because data for many countries are missing. However, food production in the United States alone increased from $262.8 billion in 1985 to $394.8 billion in 1995, while drink production rose from $38.4 billion to $55.9 billion in the same period. Even in Japan, where the volume of production has declined in recent years, the value of output climbed sharply, going from $98.3 billion in 1985 to $180 billion in 1990 and $289.6 billion in 1995 for food production, and from $17.6 billion in 1985 to $48 billion in 1995 for drink production.⁽⁸⁾ The total output of the food, drink and tobacco (FDT) products of the European Union's (EU) Member States increased from Ecu 337.6 billion to Ecu 521 billion during the 1985-95 period and is expected to reach about Ecu 590 billion by 1998.⁽⁹⁾ The combined output of the 100 largest multinationals of FDT products in the world increased almost sixfold (in current US dollar terms) between 1974 and 1994, going from $143.5 billion to $826.4 billion.⁽¹⁰⁾

Being one of the first industries to develop from the primary sector, the food industry is the major manufacturing industry in many developing countries. It is also one of the most important industries in a number of industrialized countries. Table 1.3 presents the output of the food industry as a percentage of total manufacturing output for 1985-95. With some exceptions, the food industry in low- and middle-income countries tends to claim a greater share of manufacturing output than that in high-income countries. In some countries food production accounts for nearly one-third or more of manufacturing production. The share of the output of this industry usually declines as other industries catering to less basic needs expand. This is well reflected in the trend observed for Singapore, Ireland, Malaysia, the Republic of Korea and Taiwan, China.

Table 1.3. Output in food products as a percentage of total manufacturing output, 1985-95 (1990 = 100)


Country/territory	1985	1986	1987	1988	1989	1990	1991	1992	1993	1994	1995

High-income non-OECD
Cyprus	16.98	18.55	17.25	16.40	15.70	15.40	15.62	16.33	17.47	18.50	18.87
Germany (former GDR)	12.07	13.21	13.09	13.17	13.47
Hong Kong	2.93	2.47	2.28	2.44	2.51	2.97	3.11	3.37	3.58
Israel	18.59	19.51	18.35	20.26	18.49	17.22	15.84	15.82	15.30	15.65
Kuwait	3.59	5.29	4.14	4.39	3.33	3.14	9.03	5.61	5.24	6.62	6.62
Qatar			7.46	5.42		4.37	4.10	4.10	4.04	5.01
Singapore	5.98	5.89	4.08	3.72	3.50	2.87	2.82	2.77	2.58	2.46	2.35
High-income OECD
Australia	17.81	17.86	17.70	17.23	16.66	16.56	16.77	17.57
Austria	12.29	12.67	12.59	12.29	11.49	11.29	11.33	11.71	12.39	11.47	11.12
Canada	13.55	13.83	13.51	12.73	12.63	13.35	14.06	14.04	13.25	12.25	12.11
Denmark	31.36	30.53	30.58	30.02	30.26	29.82	28.66	27.76
Finland	16.55	17.77	16.82	16.34	15.27	15.71	17.35	16.72	15.71	13.81	13.29
France	15.54	15.68	15.19	14.73	14.32	14.08	14.24	14.57	14.91	14.39	14.07
Germany							8.74		9.31	9.13
Germany (former FRG)	8.82	8.95	8.59	8.40	8.28	8.30	8.40	8.53
Iceland	56.38	56.27	53.92	51.25	51.21	53.40	54.66	56.79	56.92
Ireland	33.21	34.68	34.77	33.27	31.80	31.81	32.18	32.22	32.33	31.23	29.41
Italy	10.50	10.52	10.55	9.88	9.93	10.41	11.08	11.47	11.78
Japan	8.82	9.25	9.20	8.73	8.30	8.02	7.99	8.56	8.99	8.67	8.43
Luxembourg	5.71	5.70	6.11	5.56	5.08	5.31	6.37	6.42	6.57	6.01
Netherlands	23.61	24.22	23.37	22.05	21.55	20.85	21.54	22.35	24.24	22.62	22.32
New Zealand	25.92	24.81	27.09	28.69	29.43	32.08	30.11	30.11
Norway	19.07	20.19	20.20	20.00	20.16	20.51	21.90	22.59	22.34	22.85	23.01
Spain	17.51	18.14	17.54	17.74	17.25	17.10	17.51	17.65	18.21	17.91	17.00
Sweden	12.44	12.86	12.27	12.14	11.86	11.88	12.24	12.78	12.25	10.78
Switzerland		15.27	15.25	13.90	13.45	13.34	13.88	13.88	14.15	13.67
United Kingdom	13.20	13.70	13.09	12.50	12.12	12.46	13.28	12.82	12.78	12.40	12.28
United States	11.59	11.94	11.65	11.48	11.48	11.78	12.03	11.90	11.92	11.35	11.20
Low-income
Bangladesh	12.53	11.56	13.58	14.50	21.83	23.27	21.66	20.41
Benin					154.54	151.63	161.33	165.54	158.26
Burundi		38.41	37.63	37.51	38.38	42.78	41.68
Central African Republic	14.04	17.06	19.96	19.17	16.93	17.60	21.21	23.04
China	8.67	8.78	8.40	8.53	8.36	8.31	8.23	7.51	6.66	7.32
Egypt	18.37	19.71	18.20	20.72	20.40	22.37	18.46	18.86	21.97	22.82
Ethiopia and Eritrea	19.06	19.97	18.67	18.84	22.07
Ghana	13.16	10.54	13.85						10.63	10.63
Honduras	34.51	36.75	34.64	35.10	35.38	35.43	36.66	37.51	39.15	38.22
India	13.76	14.30	15.07	14.70	15.71	14.91	16.05	15.13	13.85
Indonesia	16.35	16.28	16.28	15.86	14.93	14.74	14.03	15.01	19.32	13.12	15.81
Kenya	37.08	37.77	38.17	36.80	37.04	39.74	40.15	41.08	44.01
Madagascar	25.63	21.14	25.98	25.98
Malawi	34.24	34.10	33.29	24.78	42.40
Mozambique		20.53	16.78				31.24		27.36	29.14
Myanmar	59.12	60.77	62.90	63.02
Nepal		49.44	22.06	20.73	21.54	21.56	22.13		23.31
Niger						43.34	44.71	46.26	44.45	42.17
Nigeria	15.73				18.37	14.70
Pakistan	19.32	19.37	18.29	18.97	17.83	16.60	17.95	17.95
Sri Lanka	22.49	24.10	24.06	23.87	28.92	24.87	19.95	21.01	19.54
Tanzania, United Republic of	22.85	17.44	15.41	14.30
Yemen				53.68	54.05	53.58	52.20	54.87	55.73	64.03
Zambia						24.32				26.43
Zimbabwe	21.71	18.62	23.15	20.08	18.70	18.27	19.12	23.80	22.94	22.22	24.61
Middle-income (lower)
Algeria	20.91	22.16	23.95	26.51	24.21	17.37	16.32	19.01	17.57	17.57
Armenia		12.28	12.21	12.13	12.38	11.27	16.35	10.85	13.94
Azerbaijan						14.89	13.80	11.37	17.93	21.42
Belize					50.61	52.78	49.87	49.34
Bolivia	41.79	26.99	26.93	30.37	29.96	30.50	30.26	31.67	31.26	31.75
Bulgaria	19.70	19.67	18.55	18.39	17.15	18.84	15.45	16.57	17.15	13.47
Cameroon					15.05	11.91	14.44	14.13	12.17	13.88
Chile	20.09	21.90	21.11	20.18	19.15	19.19	21.12	21.23	21.42	23.23	22.96
Colombia	24.24	26.68	22.87	21.72	22.56	23.70	22.93	25.37	24.90	23.63	23.81
Congo	11.38	12.70	13.16	13.53
Costa Rica	41.96	43.87	40.36	41.60	40.21	39.37	40.46	36.44	38.07	37.55
Cuba	36.70	36.44	36.80	37.81	36.51
Czechoslovakia (former)	15.77	15.90	15.77	15.47	18.77	14.77	19.27
Dominican Republic
Ecuador	33.36	31.76	32.57	31.47	31.88	31.39	32.54	31.90	30.05	26.85
El Salvador	18.46						25.07		18.79	29.97
Fiji	50.48	58.33	64.14	58.13	58.93	51.75	49.85	52.09	50.21	51.03
Guatemala	33.62	31.97	36.13	30.06					38.41
Iran, Islamic Republic of	15.19	19.63	18.45	17.68	17.19	14.07	15.14	14.49	16.50
Iraq	18.10	15.95	17.88				25.80	5.88
Jamaica	28.37	29.94	28.91	28.52	28.03	29.61	30.90	31.49
Jordan	10.74	12.33	9.69	11.01	11.27	11.87	11.95	10.96	11.63	13.91
Kyrgyzstan					23.39	22.11	21.48	15.73	18.15	16.08
Latvia		25.20	25.43	25.59	25.56	24.90	25.54	33.84	34.77	34.14
Malaysia	26.17	23.05	22.55	23.51	20.98	16.71	14.77	14.42	12.92	11.87	10.83
Mauritius	42.13	38.42	34.34	31.20	29.94	29.72	28.70	29.43	27.43
Moldova, Republic of		27.69	27.11	27.29	27.88	28.70	30.29	37.03	45.88	47.90
Mongolia						25.52	30.20	30.64	28.24	32.04
Morocco	12.19	12.74	13.61	11.93	12.01	11.56	12.38	12.17	12.87	12.19
Panama	35.15	35.10	35.06	39.79	40.07	36.99	36.88	35.72	35.17	35.51	39.00
Papua New Guinea	46.74	44.40	44.47	45.21	45.21
Peru	16.66	17.41	17.15	16.87	16.94	18.08	19.90	19.80
Philippines	21.87	24.19	23.42	21.65	21.58	24.69	22.07	20.16	19.67	20.67	19.82
Poland					17.11	15.38	17.42	18.52	17.18
Romania	8.48	8.26	8.78	8.60	14.63	15.96	15.85	17.76	20.11
Senegal	45.96		46.03	46.36	49.78	51.46
Slovenia			8.45	7.95	9.91	11.42	12.73	13.41	9.27	8.54
Swaziland	53.32	51.31	46.01	37.39	40.93	40.91
Syrian Arab Republic	17.64	20.14	24.52	26.94	24.36	28.31	27.26	25.26
Thailand		16.77		27.58	15.93	12.01	9.46
Tonga	57.23	51.26	41.67	44.18	39.58	37.25	39.41	38.95	39.35	45.08
Tunisia					16.65	17.86	18.59	20.49	18.96
Turkey	12.92	12.69	11.83	11.64	12.49	12.18	13.39	13.43	13.20	14.92
Middle-income (upper)
Argentina	21.52	20.37	20.55	21.30	22.84	24.51			21.34
Barbados	26.48	27.60	27.22	26.88	31.38	30.45	22.63	19.13	27.33	26.40	27.11
Botswana	37.96	38.48	36.85	28.52				37.09	38.58
Brazil	15.96					14.10		17.24
Greece	16.57	17.77	18.40	17.84	18.91	18.82	19.29	20.40	20.63	20.03	19.80
Hungary	17.16	16.99	17.20	17.48	18.05	20.79	21.48	22.22	21.87	20.41	19.55
Korea, Republic of	8.31	8.00	7.20	6.98	7.16	6.82	6.90	6.97	6.89	6.48	5.95
Malta	14.08	15.54	15.25	14.13	12.74	11.17	10.36	9.42	9.31
Mexico	12.94	13.48	11.62	11.51	12.00	12.28	12.45	12.85	13.00	13.07	13.95
Oman					11.93	3.52	16.31	29.42	27.54	56.61
Portugal	17.59	18.34	18.00	17.03	17.12	15.49	15.66	15.76	15.14	15.39	16.52
Puerto Rico					9.25	8.43	8.16		7.56
Russian Federation							17.21	14.32	17.72	18.53
Slovakia							13.42	14.64	14.72	14.21
South Africa	15.37	15.36	15.23	13.89	13.24	13.69	13.93	14.67	14.43	13.50	12.72
Suriname	50.43	49.68	54.22	39.42	46.76	39.95	36.90	33.39	34.48
Trinidad and Tobago	19.17	22.37	23.72		22.30	20.96	23.48	22.57	22.42
USSR (former)	17.08	17.31	16.83	17.54	17.83	18.54
Uruguay	29.53	26.85	24.00	26.49	29.23	26.84	27.99	27.76	30.31	29.52	31.03
Venezuela	18.73	19.01	17.10	16.93	16.84	16.36	17.73	18.33	17.67
Yugoslavia					17.18	18.70	20.14	23.69		24.86
Yugoslavia (former)	11.43	12.35	12.82	12.41	13.65
Others
Croatia		13.81	14.42	14.55	14.99	17.83	19.20	19.16
Czech Republic	13.50	14.79	14.52	14.20	14.56
The former Yugoslav Republic of Macedonia			8.68	7.54	6.21	8.10	12.00	13.29	15.95	17.06
Taiwan, China	11.04	9.58	8.80	8.31	8.27	8.30	7.95	8.26	7.65	7.95	7.95
Ukraine			25.64	24.82	24.92	26.02	29.72	17.67	25.70	24.27
Source: UNIDO: Industrial Statistics, 1997.

In comparison to the food industry, the drink industry accounts for a much smaller share of manufacturing, as shown in table 1.4. With some exceptions, in low- and middle-income countries, this industry tends to occupy a more important position in manufacturing than it does in high-income countries. When the trends in the shares of the output of the FD industries among high-income OECD countries over the years are compared, the drink industry shows a slight increase in its manufacturing share in a number of these countries, although this still remains substantially smaller than that of the food industry. Nevertheless, when the FD industries are combined, they claim a considerable share of manufacturing output in many countries.

Table 1.4. Output in beverages as a percentage of total manufacturing output, 1985-95


Country/territory	1985	1986	1987	1988	1989	1990	1991	1992	1993	1994	1995

High-income non-OECD
Bahamas		18.05	25.13		46.37	49.11	53.40
Cyprus	5.76	6.23	6.20	6.20	7.00	7.08	6.65	7.20	7.29	7.97	7.80
Germany (former GDR)	2.72	2.97	2.94	2.97	3.02
Hong Kong	1.16	1.00	0.83	0.94	1.05	1.17	1.15	1.13	1.29
Israel	1.02	1.33	1.50	1.54	1.41	1.51	1.64	1.50	1.75	1.63
Kuwait	0.97	1.28	1.11	1.15	1.01	1.00	0.79	1.56	1.73	1.36	1.36
Qatar			1.44	1.25		1.25	1.22	1.06	1.43	1.51
Singapore	0.83	0.98	0.89	0.84	0.85	0.72	0.70	0.72	0.64	0.55	0.52
High-income OECD
Australia	2.96	3.01	3.04	3.01	3.09	2.90	3.24	3.29
Austria	2.44	2.52	2.63	2.60	2.41	2.53	2.62	3.00	3.13	3.14	3.04
Belgium
Canada	1.99	2.04	1.95	2.01	1.80	1.73	1.90	2.02	1.90	1.69	1.66
Denmark	2.54	2.50	2.59	2.55	2.39	2.39	2.66	2.70
Finland	1.19	1.53	1.52	1.53	1.56	1.68	2.02	1.86	1.53	1.35	1.25
France	1.64	1.80	1.77	1.77	1.80	1.94	2.06	1.96	2.14	2.00	1.94
Germany							2.10		2.32	2.20
Germany (former FRG)	1.91	1.99	2.00	1.95	1.87	2.02	2.05	2.08
Iceland	1.36	1.55	1.72	1.91	2.16	2.43	2.61	2.31	2.21
Ireland	3.66	3.81	3.67	3.70	3.61	3.80	4.26	3.85	3.71	3.59	3.19
Italy	1.51	1.56	1.46	1.57	1.41	1.64	1.60	1.61	1.63
Japan	1.58	1.69	1.74	1.69	1.52	1.44	1.38	1.44	1.53	1.55	1.40
Luxembourg	2.43	2.64	2.91	2.72	2.56	2.82	2.99	3.15	3.14	3.29
Netherlands	1.83	2.03	1.96	1.89	1.91	2.03	2.14	2.25	2.43	2.46	2.38
New Zealand	2.49	2.54	2.55	2.61	2.64	2.90	2.72	2.72
Norway	1.63	1.80	1.92	1.92	1.89	1.96	2.13	3.54	3.56	3.55	3.51
Spain	3.72	4.16	4.28	3.92	3.79	3.88	3.78	3.93	4.05	3.98	3.78
Sweden	0.91	1.05	1.08	1.09	1.13	1.25	1.40	1.52	1.38	1.41
United Kingdom	2.58	2.94	2.66	2.67	2.66	2.67	2.79	3.27	3.30	3.23	3.47
United States	1.69	1.81	1.73	1.68	1.63	1.64	1.74	1.71	1.68	1.62	1.59
Low-income
Afghanistan	1.91	1.93	2.12	1.91
Bangladesh	0.40	0.38	0.37	0.24	0.34	0.15	0.12	0.32
Benin					25.12	27.57	30.37	35.61	29.67
Burundi		14.67	14.38	14.33	14.66	16.34	15.92
Central African Republic	7.00	8.51	9.96	9.56	8.44	8.78	10.58	11.49
China	2.00	1.99	2.24	2.32	2.21	2.30	2.34	2.28	2.17	2.22
Egypt	3.06	3.06	2.78	2.40	1.52	1.13	1.44	1.39	1.35	1.30
Ethiopia and Eritrea	14.36	14.33	14.48	15.32	15.54
Ghana	8.78	9.70	8.21						7.10	7.10
Honduras	9.46	10.10	9.92	9.72	9.27	8.16	9.14	9.90	10.24	10.83
India	0.72	0.79	0.77	0.80	0.71	0.77	0.83	0.78	0.89
Indonesia	1.02	1.00	0.93	0.94	0.80	0.64	0.65	0.73	0.68	0.84	0.75
Kenya	3.68	4.11	3.54	3.35	3.28	2.51	2.45	2.68	2.57
Madagascar	10.32	10.92	9.63	9.63
Malawi	9.74	12.11	12.68	13.33	9.72
Mozambique		6.15	6.35				8.32		12.32	16.98
Myanmar	8.83	9.08	9.39	9.41
Nepal		2.09	5.92	3.87	3.61	4.83	3.49		4.61
Nigeria	9.40				59.59	51.88
Pakistan	1.23	1.34	0.96	1.03	0.93	0.82	0.94	0.94
Sri Lanka	4.76	6.00	6.17	5.21	5.28	5.19	5.08	5.06	5.71
Tanzania, United Republic of	6.12	4.72	4.41	4.25
Yemen (northern part)		7.01	5.67	4.96
Yemen (southern part)	14.39	13.67
Zimbabwe	8.46	9.05	8.03	7.88	7.35	8.22	8.21	7.07	8.07	7.46	7.05
Middle-income (lower)
Algeria	4.32	4.58	4.95	5.47	5.00	3.59	3.37	3.93	3.63	3.63
Armenia		5.85	5.50	5.68	5.16	3.99	9.39	6.08	4.22
Azerbaijan						12.33	14.31	5.97	1.97	1.60
Belize					11.22	9.39	10.78	10.04
Bolivia	7.23	9.94	12.49	9.68	10.64	7.64	9.07	9.66	8.51	8.70
Bulgaria	3.20	3.19	3.00	2.99	2.78	3.03	3.18	3.82	4.16	4.56
Cameroon					21.54	20.99	21.27	24.03	20.84	14.13
Cape Verde	0.00	0.00	0.00	0.01	0.02	0.02
Chile	3.08	3.41	3.34	3.24	3.12	3.62	4.01	4.32	4.27	3.98	4.18
Colombia	9.16	8.21	8.02	7.67	7.84	7.65	8.04	7.10	7.41	7.44	7.88
Congo	28.10	31.37	32.51	33.41
Costa Rica	6.79	6.66	6.82	6.51	6.85	7.50	8.25	8.32	7.83	8.35
Cuba	2.69	2.66	2.62	2.66	2.82
Czechoslovakia (former)	1.71	1.61	1.61	1.59	1.90	1.74	3.17
Ecuador	4.09	3.53	3.62	3.06	3.21	3.49	4.55	4.12	5.07	3.30
Fiji	11.82	10.31	9.57	10.72	8.38	9.47	9.09	9.12	9.28	9.17
Guatemala	6.12	7.45	8.07	5.43					12.87
Iran, Islamic Republic of	2.01	2.39	2.03	2.06	1.68	1.47	1.11	1.32	1.59
Iraq	3.16	3.02	4.36				7.04	2.69
Jamaica	8.18	9.43	9.07	9.45	8.95	9.51	8.40	8.34
Jordan	2.37	1.97	2.92	2.69	2.51	2.66	2.74	2.02	2.80	3.29
Kyrgyzstan					1.04	0.97	1.31	1.47	0.94	1.20
Latvia		0.98	0.89	0.96	0.94	0.89	1.44	2.51	3.63	5.15
Malaysia	1.29	1.34	1.18	1.00	0.91	1.06	0.84	0.74	0.61	0.61	0.56
Mauritius	4.47	4.30	4.33	4.72	4.85	5.00	5.20	5.20	5.18
Moldova, Republic of		10.80	11.55	11.57	11.22	10.57	9.93	6.97	8.50	9.92
Mongolia						5.62	7.66	7.91	5.57	2.65
Morocco	5.25	5.56	6.88	6.71	6.96	5.77	2.70	3.09	3.19	6.52
Panama	6.92	7.43	7.93	8.38	8.60	8.07	8.17	7.62	7.78	7.72	7.92
Papua New Guinea	11.23	9.39	9.02	9.88	9.88
Peru	5.80	6.72	8.12	6.14	6.95	5.77	7.40	8.43
Philippines	6.27	6.42	6.58	6.54	6.78	5.64	5.83	5.79	5.30	5.36	5.54
Poland					5.43	4.82	6.90	7.63	7.04
Romania	4.36	4.24	4.51	4.42	2.76	3.57	4.10	4.77	5.18
Senegal					2.04	2.14
Slovenia			1.14	1.10					1.91	1.90
Swaziland	4.94	3.61	8.58	22.30	21.93	23.12
Thailand		7.88		3.41	3.95	4.54	1.83
Tonga	4.18	3.74	3.04	3.22	2.89	2.72	2.87
Tunisia					1.81	1.85	1.99	1.96	2.17
Turkey	1.49	1.39	1.52	1.63	1.83	2.01	2.46	2.18	2.19	2.37
Middle-income (upper)
Argentina	3.41	3.86	4.19	3.61	3.60	3.22			5.35
Barbados	10.65	11.10	11.58	11.20	9.77	9.49	11.08	15.42	13.79	13.90	14.01
Botswana	20.33	18.56	15.29	13.92				15.27	13.23
Brazil	1.06					1.40		1.77
Greece	3.56	4.02	4.10	4.44	4.19	4.27	4.44	4.99	5.23	5.50	5.58
Hungary	2.17	2.30	2.21	2.02	2.19	2.66	3.05	3.05	3.66	3.41	3.27
Korea, Republic of	1.78	1.66	1.59	1.58	1.57	1.55	1.48	1.42	1.30	1.42	1.30
Malta	5.53	5.11	5.82	5.98	5.10	4.89	4.53	4.11	4.31
Mexico	6.30	7.34	6.65	6.59	6.80	7.12	7.84	8.38	8.87	9.29	9.92
Portugal	1.59	1.75	1.81	1.87	2.12	2.81	2.82	2.95	3.06	3.09	3.11
Puerto Rico					9.92	10.18	10.88		10.19
Russian Federation							1.31	1.06	1.05	1.08
Slovakia							1.96	2.33	2.65	2.79
South Africa	4.18	4.19	4.81	4.67	4.78	4.85	4.96	5.62	4.95	4.94	4.92
Suriname	15.24	15.86	14.72	24.03	20.20	19.72	19.39	22.26	19.40
Trinidad and Tobago	4.88	6.32	5.90		5.01	4.98	4.84	5.28	5.55
USSR (former)	2.15	1.53	1.46	1.57	1.61	1.51
Uruguay	4.88	5.81	5.87	5.56	5.20	5.79	6.62	7.86	9.13	8.23	6.61
Venezuela	4.61	4.80	4.48	4.55	4.08	3.94	4.44	4.94	5.62
Yugoslavia					1.82	2.61	2.94	3.24		4.61
Yugoslavia (former)	1.64	1.91	1.71	1.62	1.78
Others
Croatia		1.96	1.75	1.69	1.84	2.42	3.47	3.58
Czech Republic	1.48	1.46	1.46	1.48	1.51
The former Yugoslav Republic of Macedonia			1.90	2.15	2.30	2.81	2.62	2.69	2.97	6.98
Taiwan, China	1.56	1.53	1.49	1.44	1.50	1.63	1.59	1.70	1.65	1.64	1.64
Ukraine			1.60	1.65	1.75	1.75	2.85	1.34	1.78	1.76
Source: UNIDO: Industrial Statistics, 1997.

Value added

In order to compete successfully in a saturated market, manufacturers must be able to market the kinds of products that consumers want. In order to increase turnover in a slow growing market, they must be able to add more value to their products. The key to their growth is how much extra value can be added through product innovation or new products.

Table 1.5 compares the value added in total manufacturing, the value added in the FD industries and the proportion of the value added in the FD industries within that of total manufacturing for the G7 member countries for 1980 and 1994. The proportion of the FD industries in the value added in total manufacturing increased slightly over the period for all the countries, except the former FRG. The small percentage changes indicate that the FD industries in these countries were already quite mature by 1980.

Table 1.5. Total manufacturing value added (MVA), total value added in the FD industries (FDVA) and the proportion of FDVA as a percentage of MVA in the G7 member countries in 1980 and 1994 (US$ million)


Country	1980			1994
Country	MVA	FDVA	%	MVA	FDVA	%

United States	769 899	75 270	9.8	1 611 763	177 796	11.0
Japan	339 234	30 904	9.1	1 257 761	123 886	9.8
Germany (former FRG)	265 588	25 022	9.4	583 069	49 416	8.5
France	161 552	19 438	12.0	268 611	38 850	14.5
United Kingdom	163 790	20 163	12.3	243 653	32 361	13.3
Canada	59 803	7 802	13.0	100 322	14 871	14.8
Italy	97 032	8 034	8.3	128 486	12 072	9.4
Total	1 856 898	186 633	10.1	4 193 665	449 252	10.7
Source: UNIDO: Industrial development, Global report 1996.

Although the share of the FD industries in total manufacturing increased only slightly in most of these countries, the actual amount of FD value added increased significantly. For example, it more than quadrupled in Japan, more than doubled in the United States, almost doubled in the former FRG, France and Canada, and increased by over 50 per cent in the United Kingdom and Italy.

Table 1.6 presents data for the same parameters as above for some ASEAN countries, known for their remarkable industrial development in the last decade. In terms of value added, the FD industries dominated the manufacturing sector in Malaysia, the Philippines and Thailand in 1980, but became much less important in Malaysia and Thailand by 1994 as other industries expanded more rapidly. The importance of the FD industries is likely to diminish further as other industries grow in this region in the coming years. The considerable growth in the proportion of the FD industries within manufacturing in Indonesia indicates that country's late start in economic development compared to the other countries in the table. The low and declining figures for Singapore are an indicator of its relatively advanced economic development. Despite the reduction in the FD industries' share of value added in manufacturing for some countries, the actual value added in the FD industries more than doubled in Malaysia, more than tripled in Thailand and more than quadrupled in Singapore. In Indonesia it grew nearly ninefold. Since these countries still offer much room for expansion, the FD industries there are likely to show healthy growth in the coming years.

Table 1.6. Total manufacturing value added (MVA), total value added in the FD industries (FDVA) and the proportion of FDVA as a percentage of MVA in some ASEAN countries in 1980 and 1994 (US$ million)


Country	1980			1994
Country	MVA	FDVA	%	MVA	FDVA	%

Thailand	9 028	2 721	30.1	47 461	8 627	18.2
Indonesia	4 371	427	9.8	28 605	3 738	13.1
Philippines	4 861	1 164	23.9	12 694	3 302	26.0
Malaysia	3 623	774	21.4	18 560	1 650	8.9
Singapore	4 004	173	4.3	20 593	712	3.5
Total	25 887	5 259	20.3	127 913	18 029	14.1
Source: UNIDO: Industrial development, Global report 1996.

Geographical distribution of production

Although the FD industries in many developing countries have recorded a strong gain in recent years, table 1.7 shows that in 1993 more than three-quarters of the value in the food industry and almost three-quarters of that in the drink industry throughout the world was added in industrialized countries. The share of world value added in food manufacturing for industrialized countries declined from 82 per cent to 77.5 per cent in 13 years, with that in drink manufacturing declining from 82 to 74 per cent in the same period. The sharp decline in Eastern Europe in both the food and drink industries in recent years due to the slowdown caused by major economic reform was offset mostly by a gain by the EU and the North American countries, as well as by some of the fast growing developing countries.

Table 1.7. Distribution of world value added in the food and drink industries, 1980-93¹ (percentages)


Industry (ISIC)	Year	Industrialized countries							Developing countries			World
		All countries	Eastern Europe + former USSR	Western Europe		Japan	North America	Others	All countries	NICs	Others
		All countries	Eastern Europe + former USSR	EU²	Others	Japan	North America	Others	All countries	NICs	Others

Food (311/2)	1980	81.7	27.8	26.1	3.3	7.4	14.7	2.4	18.3	9.4	8.9	100.0
	1985	80.9	28.4	25.3	3.2	6.9	14.8	2.3	19.1	9.6	9.5	100.0
	1990	80.4	27.3	26.1	3.1	6.6	14.9	2.4	19.6	9.8	9.8	100.0
	1993	77.5	18.6	29.7	3.4	7.1	15.8	2.9	22.5	11.1	11.4	100.0
Drink (313)	1980	82.4	29.9	27.4	2.6	7.5	13.0	2.0	17.6	7.2	10.4	100.0
	1985	80.9	26.1	28.8	2.7	7.3	13.6	2.4	19.1	7.8	11.3	100.0
	1990	78.8	21.5	31.0	2.8	7.1	13.9	2.5	21.2	8.4	12.8	100.0
	1993	74.4	16.8	31.5	3.0	6.9	13.5	2.7	25.6	9.1	16.5	100.0
¹ At constant 1980 prices. ² In 1993, including estimates for the eastern part of Germany. Source: UNIDO: International Yearbook of Industrial Statistics 1996 (Vienna, 1996).

Table 1.8 presents the distribution of value added in the FD industries among developing countries. Latin America has been the major producing region of both food and drink products, its share of value added in the food sector constituting nearly half of the developing world total and that in the drink sector over half of the developing world total. However, its share in both industries declined slightly during the period shown, the same being true for most other developing regions. South and East Asia was the only region which increased its share of value added in both industries, reflecting the economic trend in the area in the last decade.

Table 1.8. Distribution of value added in the food and drink industries among developing regions, 1985 and 1992¹ (percentages)


Industry (ISIC)	Year	Developing regions
		Africa	Latin America	South and East Asia	West Asia and Europe	All countries

Food (311/2)	1985	10.7	55.7	23.7	9.9	100.0
Food (311/2)	1992	10.0	54.5	27.0	8.5	100.0
Drink (313)	1985	18.6	55.8	18.0	7.6	100.0
Drink (313)	1992	16.1 ²	54.0 ²	22.4 ²	7.5 ²	100.0
¹ At constant 1980 prices. ² Refers to 1991. Source: UNIDO: International Yearbook of Industrial Statistics 1996 (Vienna, 1996).

Table 1.9 presents 15 leading food producers among developing countries in 1985 and 1994. Brazil, Argentina and Mexico were the major producers in both years, their shares totalling about 30 per cent. The combined share of the Latin American countries on the list was 36.7 per cent in both 1985 and 1994. On the other hand, the combined share of the Asian countries on the list increased from 23.4 to 30.2 per cent. This is another illustration of the development of the food industry in Asia in recent years.

Table 1.9. Leading food producers among developing countries, 1985 and 1994


1985		1994
Country/area	Percentage of world total	Country/area	Percentage of world total

Brazil	14.1	Brazil	12.6
Argentina	9.1	Argentina	11.2
Mexico	7.1	Korea, Republic of	6.6
Yugoslavia (former)	5.5	Mexico	6.3
India	5.3	India	5.6
Korea, Republic of	4.5	Indonesia	5.0
Thailand	4.3	Philippines	4.2
Taiwan, China	4.1	Taiwan, China	4.1
Turkey	3.6	Turkey	4.0
Philippines	3.4	Thailand	3.1
Chile	2.4	Chile	2.9
Peru	2.2	Peru	2.0
Egypt	1.9	Egypt	1.7
Colombia	1.8	Colombia	1.7
Indonesia	1.8	Pakistan	1.6
Total	71.2	Total	72.6
Source: UNIDO: International Yearbook of Industrial Statistics 1997 (Vienna, 1997).

Consumption

The poorer the family, the higher the ratio of its spending on food items to total household consumption. This ratio, commonly known as Engel's coefficient, can also be applied at national level. As the per capita income in a country rises, the coefficient tends to decline despite an increase in actual expenditures on food. This can be observed in table 1.10 for the United States where actual expenditure on food and drink products is projected to increase by 14 per cent from 1993 to 2005, as opposed to the 2 per cent decline projected in Engel's coefficient.

Table 1.10. United States: Personal consumption expenditure on food and drinkproducts in 1977 and 1993, and projected 2005


Year	Billions of 1987 dollars	Percentage of total personal consumption

1977	441 500	19.2
1993	524 000	15.2
2005	596 700	13.1
Source: J. Pfleeger: "US consumers: Which jobs are they creating?", in Monthly Labour Review (Washington, DC, Bureau of Labor Statistics of the US, Department of Labor), Vol. 119, No. 6, June 1996, p. 11.

Between 1970 and 1988 in the 12 Member States of the European Economic Community, the average ratio of food and drink prices to household expenditure declined from 30 to 21 per cent. It dropped from 39 to 23 per cent in Italy and from 45 to 41 per cent in Ireland.⁽¹¹⁾ The United Kingdom has one of the lowest ratios in the world; in 1993 it was just over 11 per cent, as opposed to over 30 per cent for Portugal.⁽¹²⁾ Its ratio dropped from 17 per cent in 1980 to 11 per cent in 1995.⁽¹³⁾

In accordance with Engel's law, in recent years the growth rate for food and drink consumption has been low and falling in many industrialized countries. In France, for example, food consumption grew by 3.4 per cent per year between 1950 and 1970, and then declined to 2.1 per cent per year during the following decade, further dropping to 0.5 per cent per year between 1991 and 1995.⁽¹⁴⁾ For the EU as a whole the consumption of food, drink and tobacco products increased by 3.1 per cent per year between 1985 and 1990 and by 1.6 per cent per year between 1990 and 1994.⁽¹⁵⁾ This trend has also been observed in Japan, where the food consumption level fell by 3.3 per cent in 1995 from the previous year.⁽¹⁶⁾

One apparent reason for this declining growth rate is that the FD market, particularly in industrialized countries, is already saturated. Another is that consumption has slowed down due to diminishing purchasing power linked to macroeconomic conditions. Another possible reason is changes in lifestyles, leading to different needs for FD products and different eating habits.

Product trends

What many consumers, particularly in industrialized countries, now look for in FD products are convenience and healthiness. Some look for FD products containing certain nutritional values (e.g. fortified multiple vitamins, protein, etc.), while others look for products with low calorie, salt, cholesterol or caffeine content depending on their needs. Given the increasing number of women in regular employment, they have little time to prepare meals and as a result tend to buy convenience foods. Value-added food items have become increasingly affordable to many households with double incomes. The fact that the proportion of single-person households is increasing -- due to lower birth rates, late marriages, higher divorce rates and increased life expectancy -- has also pushed up the demand for convenience foods. Convenience food for pets is another subsector that has expanded with the increase in the number of single-person households. A further factor now being sought in FD products is variety, with ethnic foods becoming increasingly popular among consumers as a result of education and travel.

Hygiene is an essential factor in processed foods today, particularly in developing countries. Consumers have no fear of adulteration and contamination in well-sealed products such as packaged flour. Having the name of the producer clearly indicated on the package is also the surest way to gain the confidence of consumers who will repeatedly return to the same product if it gives satisfaction. To take an example, the current penetration rate of packaged flour in India is less than 1 per cent of the population, but it is expected to be consumed by 140 million people by 2005.⁽¹⁷⁾

The factors that induce more demand for certain FD products than others, as discussed above, relate mostly to industrialized countries. However, they already apply to some population segments in developing countries where, for example, the number of women in paid employment is growing fast, particularly in large urban areas. Rapid urbanization and economic development in such countries will create favourable conditions for FD industries to grow.

Consumers' changing preferences and habits are well reflected in the turnovers of different subsectors of the FD industries. The subsectors producing frozen foods, health foods, snacks, ready-to-eat meals, poultry, fish and non-alcoholic drinks have made a healthy gain over the years, particularly in industrialized countries. Some of these subsectors, such as poultry, fish and non-alcoholic drinks, also grew in developing countries. On the other hand, the consumption of canned fruits and vegetables, red meats, oils and fats, sugar and alcoholic drinks either grew very little, stagnated or declined in industrialized countries, though in some cases continued to grow in developing countries.

The frozen foods sector, with its images of healthier and more convenient food, has grown sharply in many industrialized countries. As freezing technology advances, the sector offers a greater variety of products, including fruits, vegetables, fish, shellfish, meat, poultry, dairy and bakery products and a wide range of desserts that have undergone more than first-stage processing and are often ready to eat. The total value of all frozen foods in the United States, for example, climbed from $7.9 billion in 1970 to $59 billion in 1995.⁽¹⁸⁾ This remarkable expansion was possible as a result of the increased capacity of refrigerated warehouses at below 0^oF. The US national capacity rose from a total of 812 million cubic feet in 1971 to 1.9 billion cubic feet in 1995.⁽¹⁹⁾

In France, since 1982 the growth rate in the frozen foods subsector has been more than double that of the food industry as a whole. This has no doubt been helped by the increased proportion of households with deep-freezes (up 10 per cent from 1990-95) and microwave ovens (up 20 per cent).⁽²⁰⁾ In some European countries total consumption of frozen foods jumped impressively in 1995 over the previous year; it was over 13 per cent in Norway, and over 10 per cent in both Finland and the United Kingdom. Belgium and Italy also recorded a growth rate of almost 10 per cent. The trend is also found in other regions.⁽²¹⁾

The changing preferences of food and drink consumers are also illustrated in the growth of the "natural food" industry, total sales of which rose to $7.6 billion in 1994 in the United States alone. The growth rate accelerated from 7 per cent in 1990 to 10 per cent in 1991, 14 per cent in 1992 and 18 per cent in 1993. In 1995 alone, 889 new organic food products were introduced into the market, 35 per cent more than in 1994. American consumers are reported to be willing to pay from 30 to 200 per cent more for organic products which they consider to be healthy.⁽²²⁾

In regions such as North America and Western Europe where per capita consumption of red meat has traditionally been relatively high, meat consumption has declined in recent years. One of the reasons is that red meat contains more cholesterol and is thus considered as less healthy than, for example, poultry and fish products. To make matters worse for the beef industry, the bovine spongiform encephalopathy (BSE) epidemic in recent years in Europe has seriously affected consumer confidence in its products. In Switzerland, beef prices fell by over 10 per cent in 1996 compared to the previous year. Pork prices increased by nearly 25 per cent, however.⁽²³⁾ In the United Kingdom, the meat processing and preserving sector, with the exception of poultry, declined by 15 per cent in 1996.⁽²⁴⁾ In Australia, too, per capita beef and veal consumption decreased from 41 kg in 1988-89 to 36.5 kg in 1992-93.⁽²⁵⁾

However, the average consumption of protein of animal origin usually rises as per capita income increases. Thus, beef consumption is still rising in developing countries. In India, the combined production of beef and buffalo meat increased from 1.6 million tonnes in 1990 to almost 2.5 million tonnes in 1993. Production is projected to rise to 3.4 million tonnes by 2001-02.⁽²⁶⁾ The consumption of beef increased slowly in recent years in some transitional economies as well. In Hungary, for example, per capita beef consumption had dropped from 9.6 kg in 1980 to 6.5 kg in 1990, mainly due to general economic conditions. It is recovering slowly, however, as it increased to 7.4 kg in 1992 and 8.1 kg by 1994.⁽²⁷⁾ Despite health concerns and the BSE scare in industrialized countries over red meat, there is still considerable scope for demand to rise, particularly in developing countries.

As opposed to the stagnant consumption rate of red meat in many industrialized countries, the popularity of poultry is growing fast throughout the world for health and convenience reasons. While most consumers in the past used to buy a whole chicken, they are now given many choices from first-stage processed products to ready-to-eat frozen meals of many varieties that are of high value added. In the United States, per capita poultry consumption climbed from 28 pounds in 1960 to 72 pounds in 1996.⁽²⁸⁾ In Hungary, per capita consumption increased from 18.1 kg in 1980 to 23.1 kg in 1994.⁽²⁹⁾ National production in India rose from 334,000 tonnes in 1990 to 406,000 tonnes in 1993, and is expected to climb to 1 million tonnes by 2001-02.⁽³⁰⁾ People in developing countries are also beginning to enjoy ready-to-eat chicken products served, for example, in fast food restaurants, the number of which is increasing in urban areas.

The consumption of fish products has also been rising at the expense of meat products, as a result of their lower cholesterol content. World per capita consumption of fish and seafood in 1990-92 was 13 kg, which was a 39 per cent rise from 1980-82. For developing countries as a whole, it was only 9 kg, but this represented a 44 per cent rise from the 1980-82 level.⁽³¹⁾ Consumption in the EU increased from Ecu 6.85 million in 1985 to Ecu 11.94 million in 1994, an average annual growth rate of 5.5 per cent for 1985-94.⁽³²⁾ Production in India increased from 3.84 million tonnes in 1990-91 to 4.75 million tonnes in 1993-94 and is projected to reach 6.5 million tonnes by 2001-02, although only 0.8 million tonnes of this is expected to be sold as processed fish products.⁽³³⁾ Nevertheless, a higher demand for processed fish is expected in the near future as more people in India begin to seek convenience foods.

Another growth area is convenience snacks, particularly in industrialized countries. This is despite the declining trend seen in sugar consumption in recent years, as many people now opt for sugarless products for health reasons. The development of artificial sweeteners that can replace sugar might have contributed partly to the growth of the confectionery subsector. Per capita sugar consumption in the United Kingdom fell from 42 kg in 1986-87 to 38 kg in 1992-93, while that in Germany declined from 35 kg in 1985-86 to 33 kg in 1994-95. In the EU as a whole it decreased from 33.3 kg in 1985-86 to 31.5 kg in 1992-93. On the other hand, the consumption of confectionery products for the entire EU climbed from Ecu 17 billion in 1985 to Ecu 23.6 billion in 1994, and it is expected to exceed Ecu 27.6 billion by 1998.⁽³⁴⁾ In the United States, non-chocolate confectionery production rose from $2 billion in 1987 to $3 billion in 1992, while per capita candy consumption rose from $32.3 to $40.4 for the same period.⁽³⁵⁾ The snacks subsector tends to offer greater opportunities to manufacturers than many other subsectors in the sense that much more value can be added to new products to be developed or to existing products to be improved. For this reason, this subsector is likely to continue to grow, despite the fact that the market is already very large.

As for the drink industry as a whole, the EU and North America have increased their shares of production in overall global output, as have some developing countries, as shown in table 1.7. However, the alcoholic drinks subsector has been feeling increasing pressure from non-alcoholic drinks, as today's consumers also tend to seek a healthy image in drinks. For example, the EU has experienced a negative growth rate in the consumption of alcohols and spirits, the rate being 0.48 per cent for 1985-90 and 0.34 per cent for 1993-94. It has also declined in the wine subsector, from 2.1 per cent for 1985-90 to 0.2 per cent for 1990-94, the rate having fallen as low as 0.95 per cent for 1993-95. The brewery subsector is in a similar position. Its consumption growth rate in the EU declined from 0.87 per cent in 1985-90 to 0.64 per cent in 1993-94. On the other hand, the non-alcoholic drinks subsector, which includes carbonated drinks, lemonade, fruit juice, mineral water, fitness drinks, canned tea and coffee, has experienced a period of rapid expansion in recent years. Its growth rate in the EU climbed from 4.9 per cent for 1985-94 to 6.8 per cent for 1993-94.⁽³⁶⁾

The situation is similar in many other industrialized countries. Beer production in the United States declined from 203.7 million barrels in 1990 to 199 million in 1995⁽³⁷⁾ despite growth in population and in disposable income. On the other hand, the carbonated drinks market rose from 7.68 billion cases in 1989 to 8.39 billion in 1993.⁽³⁸⁾ In Australia, the turnover for the soft drinks subsector rose from A$1.6 billion for 1989-90 to A$1.95 billion in 1992-93, as compared to an increase from A$2.25 billion to A$2.45 billion in the brewery subsector for the same period.⁽³⁹⁾ In Hungary, however, the wine, beer and non-alcoholic drinks subsectors all increased the value of their output; the non-alcoholic industry grew by more than 300 per cent compared to a 75 per cent increase in the beer and a 183 per cent increase in the wine industries for the period 1992-95.⁽⁴⁰⁾

The growth or decline in the demand of certain products discussed above reflects a changing market situation and changes in consumer preferences. It is said that people now consume less alcoholic drinks but consume more drinks as a whole, in terms of value.⁽⁴¹⁾ Food and drink manufacturers must remain attuned to consumers' changing preferences and tastes and be able to adapt flexibly to the market environment if they are to survive and grow in the global market.

Trade

International trade in FD products has expanded considerably during the last decade due to a number of factors. One is that consumption has stagnated or declined in many industrialized countries due to market saturation, which has forced the producers to be more aggressive in exploring new opportunities elsewhere. On the other hand, many developing countries with surplus agricultural production have been making serious efforts to build up their FD processing industries into more value-added, export-oriented operations. Increased trade liberalization has also encouraged the movement of agricultural commodities as well as value added FD products throughout the world. Against the backdrop of these new developments, the competition among food and drink exporting countries is intensifying.

Table 1.11 shows that, except for 1993, the values of both exports and imports of food products expanded during the 1988-95 period in all regions of the world for which data are available. Exports grew by 35 per cent for the world as a whole between 1989-91 and 1995. The fastest growth was achieved by South America, where export value increased by 70 per cent, followed by Asia.

Table 1.11. Index numbers of global food* export and import value, by region, 1988-95 (1989-91 = 100)


Region	Export value
Region	1988	1989	1990	1991	1992	1993	1994	1995

World	88	94	102	104	112	106	118	135
Africa	92	99	103	97	95	94	110	122
North and Central America	96	100	102	98	105	103	108	133
South America	83	88	107	105	115	117	144	169
Asia	89	96	96	108	118	116	137	154
Europe	86	91	103	106	116	105	115	130
Oceania	81	95	103	102	103	109	120	125
USSR (former)	109	114	119	67


Region	Import value
Region	1988	1989	1990	1991	1992	1993	1994	1995

World	88	94	103	103	111	101	113	128
Africa	91	105	101	94	116	107	115	134
North and Central America	82	92	104	104	112	114	123	121
South America	75	87	95	118	133	147	193	243
Asia	89	102	100	98	107	106	123	154
Europe	88	88	104	108	117	99	111	122
Oceania	80	96	101	104	108	112	119	138
USSR (former)	94	105	108	87
Excluding fish products. Source: FAO: Trade Yearbook 1995*, Vol. 49 (Rome, 1996), pp. 5 and 6

Major agricultural producers in the past used to export their products mostly as commodities with little value added. The key to trade expansion in today's competitive world, however, is not how much food a country exports in terms of volume, but how much it can sell in terms of value. Australia, with its vast expanses of agricultural land, has been one of the world's major food producers. Agri-based products accounted for more than 50 per cent of its total manufacturing exports in 1989-90, though the figure declined to less than 40 per cent by 1994-95, as shown in table 1.12. The country's FD industries have been making efforts to add more value to their products before exporting. The value of the exports of highly processed products almost doubled during the period presented, while the value of minimally processed products grew slowly. However, the bulk of Australia's agricultural exports is still unprocessed or minimally processed, which implies an opportunity for the FD industries to engage in increased processing of commodities prior to exportation.

Table 1.12. Australian exports and imports of food and drink products and their proportion of total manufacturing exports and imports, 1989-95 (current prices in A$ million)


Year	Exports		Imports
	Highly processed	Minimally processed

INTERNATIONAL LABOUR ORGANIZATION

Sectoral Activities Programme