Wales’ food and drink manufacturing sector has grown by over 45% in the past decade, now contributing £1.7 billion to the regional economy. The sector accounts for 14.7% of Wales’ total manufacturing gross value added (GVA), according to new data from the Food and Drink Federation’s (FDF) Powering Communities report.
The sector remains a key employer, supporting 26,500 jobs across 575 businesses in Wales. Employment growth has also been strong, with 3,750 new roles added since 2017.
Investment in automation, innovation, and R&D—particularly around healthier product development—has driven much of the growth. FDF estimates that a further £14 billion productivity opportunity exists UK-wide, if businesses can increase investment in digital technology, robotics, and AI.
However, current momentum is at risk. Industry confidence fell sharply to -47% in Q4 2024, amid rising inflation, trade barriers, and the introduction of Extended Producer Responsibility (EPR) packaging fees. These cost pressures, low investment in innovation and a shortage of skilled workers, are cited as major constraints.
To address these issues, FDF has outlined over 40 policy recommendations to boost competitiveness, improve export performance, and attract talent. It urges all UK governments to support the sector in unlocking further growth potential and ensuring long-term food security.
The report also places the Welsh sector in a broader UK context, noting food and drink manufacturing’s significance in other regions—it makes up 30.8% of manufacturing GVA in Scotland and over 20% in both the East Midlands and Northern Ireland.