Associate Feature: The evolution of Scotland’s food and drink sector
Food and drink is one of Scotland’s most economically important sectors, and a key pillar of Scotland’s reputation internationally. But what we produce and our attitudes to consumption are changing.
There are macro global trends driving changing consumption patterns in relation to our diets – some of our biggest commercial opportunities fall into these categories and we need to make sure that Scotland’s food and drink businesses are positioned and capable to adapt to change, innovate and capitalise on these market changes.
In fact, recent figures from our Partners at the Scotch Whisky Association demonstrate that distilling, one of the core sectors driving the success of our more than £15 billion industry, continues to flourish on the international stage. Demand for Scotland’s premium products continues to grow globally, presenting a huge export opportunity.
At home, our consumer attitudes are changing too. As recently as 2022, the majority of Scots (57%) defined ‘local’ food and drink as coming from Scotland, but that has shrunk with less than half (47%) taking that view in the most recent polling from our insights body, The Knowledge Bank. Increasingly, Scottish consumers are looking for products that are from their own region or city.
Despite that trend, 86% of Scottish consumers say that they are more likely to buy food and drink products that are made in Scotland, with 60% willing to pay more for products labelled ‘from Scotland’. What these findings demonstrate is that we need to continue to support the industry to access markets and work to secure the business environment that will allow them to do so profitably and sustainably.
Developing markets was a key pillar of the Scotland Food & Drink Partnership’s industry strategy, ‘Sustaining Scotland. Supplying the World.’ which we launched at the Royal Highland Show in June last year with the First Minister, Humza Yousaf. The Scottish Government has supported the implementation of the strategy with £5 million of funding for year one.
The strategy is a 10-year vision for the sector and is accompanied by a comprehensive delivery plan that is being enacted across the Scotland Food & Drink Partnership. It will support us in realising the £4 billion market opportunity that we have to grow the industry, which already directly employs one in every 20 people in Scotland.
We’re less than a year into the new strategy delivery – which focuses on measurable and tangible benefits for the industry – but we’re already starting to see strong progress. For example, our Net Zero commitment has engaged with over 1,000 businesses or individuals, presented at 27 events and handled hundreds of inbound enquiries.
We’re also opening new routes to market. Launched during Scottish Food & Drink Fortnight, our new Scottish online platform through Bidfood Direct provides a direct connection between 100 Scottish food and drink businesses with more than 500 buyers from sectors including hospitality, retail, travel and leisure, business and industry, public sector, and higher education.
There is still more to do, and through initiatives like Showcasing Scotland, the country’s largest global food and drink trade event taking place in March, we are on the right path to realise our ambitions.
We cannot, however, do it alone. To accelerate the positive development of Scotland’s food and drink industry we need the ongoing support and collaboration of both the public and private sectors. A fundamental challenge is access to finance. With 98.6% of Scottish food and drink businesses being SMEs, access to investment is critical, particularly for capital expenditure projects.
Currently, the funding landscape for food and drink businesses is fragmented, and the low margins and productivity that continue to stymie the sector make finding investment difficult . We understand those difficulties and are working on plans that will help businesses find the right sort of investment for their needs.
Many of the challenges that necessitated a new strategy last year remain, but through effective collaboration across the Scotland Food & Drink Partnership, Government and the private sector, we can sustainably grow our industry by as much as £4 billion.
The opportunity is too big to miss.
This article is sponsored by Scotland Food & Drink