Food and drink sector sets sights on further growth and jobs boom

According to a new report from the Bank of Scotland, the nation’s producers are on course to deliver a 19 per cent increase in turnover on average between now and 2020.

The BoS prediction would mean the sector will continue be a vital component of the nation’s ecomony.

BoS’s report – Fresh Opportunity & Growth – comes just as Scottish food and drink firms get ready to promote their products during a four-day Scottish showcase at Expo Milano in Italy next month.

BoS research found innovation high on the agenda among Scottish food and drink firms, with almost two-thirds (62 per cent) planning to develop new products.

Three in five (62 per cent) said they hoped to secure new international customers in the next five years. Two thirds (66 per cent) were planning to create new roles in the next five years, which if replicated across Scotland could mean more than 14,000 new jobs by 2020.

Nearly half of firms said hiring extra staff would help boost sales. Additionally, almost two-thirds are looking to develop new products to help generate growth.

On average, businesses within the sector plan to re-invest 27 per cent of their current turnover back into research and development during the next five years.

More than half expect to form partnerships or explore other forms of collaboration to develop new products, streamline manufacturing and boost productivity.

Western Europe is top of the hit list for new sales, followed by North America, the Middle East and then other parts of Asia.

The report also highlights big challenges for the industry, including increasing regulation and a possible exit from the European Union.

“Scottish food and drink manufacturers of all sizes are making ambitious plans for significant growth,” Graham Blair, area director and head of food and drink, BoS, said.

James Withers, chief executive of Scotland Food & Drink, said the new era of co-operation has been crucial in jump-starting the sector to its current position as Scotland’s best-performing manufacturing industry.

“Different sectors, from seafood to red meat to whisky, now work together to build our national reputation,” Withers said.

“So too individual businesses work together, and we have a public sector responding to industry leadership. Competition is healthy but collaboration opens up new markets and relationships.”

The value of Scottish food exports rose to a record £1.1bn last year, making this a key driver within the sector. Fish and seafood sales were up by 92 per cent, driven by expansion into growth markets such as China.

However, the value of drink exports dropped to £4bn, down from £4.2bn in 2013. The figures were dragged down by a 7 per cent decline in Scotland’s top individual export, whisky, which fell to £3.95bn.