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How Scotland can make the most of its natural larder

Innovation and collaboration will be key to savouring the potential of Scotland’s natural larder, says Graham Blair

Published: September 1, 2015
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A slice of rich, moist, kiln-smoked salmon. A dram of smooth single malt whisky. A slab of crumbly, buttery shortbread. This is the kind of homegrown produce that food lovers around the world are waking up to, consigning to history the lazy stereotype of Scottish cuisine as anything deep fried, washed down with a good glug of something fizzy.

As a result, the outlook for Scotland’s food and drink sector is hugely optimistic in 2015, the Year of Food and Drink.

And I expect The Scotsman’s Food and Drink Conference on 8 September will be a celebration of the potential of our producers to achieve even greater things.

Last year, Scottish food and drink sales hit a record high and exports soared as producers, from micro operators and SMEs to some of the industry’s biggest heavyweights, continued to make a name for themselves and their nation.

The sector weathered tough economic times exceedingly well and is geared up for further growth, with a bullish outlook that befits an industry on the up.

James Withers, chief executive of Scotland Food & Drink, thinks Scottish producers are right to look to the future with confidence as they are leading the world in their working practices.

He said: “One of the most important catalysts for Scotland’s remarkable food and drink growth in recent years has been the development of a new culture of collaboration.

Competition between businesses in Scotland is healthy, but collaboration opens up new markets and relationships.

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“That is now recognised here," said Withers, "and, as a result, Scotland is increasingly seen internationally as a model to follow in terms of driving the reputation and growth of its food and drink sector.

“One element of Scotland’s reputation for world class produce is our heritage and tradition, but that can still marry well with smart product innovation, tapping into changing consumer and market trends.

“The Scottish industry has the talent and ambition in its business base to thrive in the years ahead. Even greater efforts to innovate and collaborate will be key to grasping its full potential.”

It is striking that a sector that has achieved so much, to an extent by capitalising on its heritage and traditions, is now one of the most forward looking, with innovation and collaboration high on the agenda.

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Food and drink producers are determined to grow their business by developing new products and Scotland is well placed to be a significant player in food innovation and the development of exotic new products. We surveyed Scottish food and drink manufacturers to get under the skin of their ambitions, and found almost two thirds were banking on new product development to achieve business growth.

To support their plans, on average they plan to invest more than a quarter of turnover into research and development over the next five years.

They also recognise that successful investment rarely takes place in a vacuum, so more than half plan to collaborate with partners in the supply chain – a great way of boosting market insight.

Many producers will have their eye on the growing healthy food and drink category, which is already estimated to be worth £20 billion in the UK and more than £300bn worldwide.

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That’s a natural fit for a country renowned for its clean air, clear waters and natural produce, and could transform the image of sea buckthorn, a bush more commonly regarded in Scotland as a weed.

An everyday sight on our coastline, its berries are packed with antioxidants, vitamins and essential minerals, and have the potential to be the first Scottish “superfruit”.

Seaweed also has huge potential, and Britain’s first commercial-scale seaweed farm will begin operating in Scottish waters later this year.

Another superfood, it’s rich in iodine and calcium and contains natural antioxidants, minerals and amino acids. It’s already widely eaten in many cultures, including Japan, and its health benefits are becoming more widely accepted.

The Harris Distillery, on the Isle of Harris, has even developed a gin flavoured with seaweed hand-dived from the seas around the distillery in Tarbert.

Of course, Scottish spirits have long enjoyed a global market. Exports represent around 85 per cent of sales of our national drink.

Now two-thirds of food and drink firms tell us they intend to follow that lead and win new international customers over the next five years.

They are strongly positioned to add further momentum to their growth in export markets.

In 2014 Scotland’s food exports grew 3.5 per cent to surpass £1.1bn for the first time, driven primarily by an increase in fish and seafood, up by £38 million, bucking a decline in total exports.

This reflects an increasing international awareness and appreciation of the quality and provenance of Scottish food, and Scotland’s distinguished heritage as a food-producing nation. That message is also being heard back home, and more than three quarters of firms we surveyed said they believe a “made in Scotland” stamp has a good reputation internationally.

Western Europe remains the top target for our producers, followed by North America, the Middle East and the Far East and Asia.

There are headwinds – a possible exit from the European Union could provide some significant challenges, firms have flagged rising labour costs as a threat and regulation is a perennial bugbear – but overall we are looking at a sector in rude health.

Our research uncovered plans to create more than 14,000 jobs across the industry over the next five years. That will prove life changing for individuals and communities up and down the country.

Scotland is rightly proud that its food and drink producers play a key role in both our cultural development and economic growth.

They are helping create a brighter, more prosperous future for the nation. We really are the Land of Food and Drink.

• Graham Blair is area director of Scotland and head of food and drink at Bank of Scotland. This article was published in partnership with Bank of Scotland

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