The UK is rocking from the aftershocks in the wake of Brexit and the US Election and the implications of both to the UK economy. If anything is certain, it is that nothing is certain except that the sun will set and rise again the following day. The full economic consequences are not known and will change with each passing day. There are some things that will or are likely to happen within the food and drink sector in 2017.
Existing trade agreements will be swept aside, import tariffs will vary – generally up, access to markets will tighten, skilled workers will become more transient, raw material costs from outside the UK are likely to remain higher than before for the foreseeable future and regulation will become more complex.
Scotland is regarded globally as a land of high quality food and drink and these products carry a premium status that presents a tremendous opportunity for the producers, processors and suppliers of such products.
Scotland's food and drink industry can take advantage of its "brand" and of the global economic and political turmoil to expand and consolidate a bigger share of the export market.
It is forecast that sales for the industry will be worth £16.5bn by the end of 2017, with exports making up £7.1 billion of these sales. The growth year-on-year has been staggering but there is still a huge global market untapped.
2017 is the 10th anniversary of Scotland Food and Drink, a not-for-profit organisation created to bring together the diverse sub-sectors within the industry to share resources and knowledge.
It gives Scotland an edge ahead of most other countries around the world because it drives Scotland the "brand" and all Scottish food and drink products benefit. It proves that working together helps everyone.
Collaboration
"Collaboration" has been the catchword for 2016 and will remain so for 2017.
The Scotch Whisky Association acts as a trade association for all of its members and demonstrates the importance of collaboration.
Over 3% growth in Scotch Whisky sales in the first half of 2016 clearly indicates it works.
Working together can and should take many forms whether it's technological improvement or export sales.
A common vision and a written agreement of the obligations and rights of each party is extremely effective.
Innovation
Innovation is a definite key to success – to stand still is to fall behind. Innovation stretches right through the supply chain "from field to fork".
From advances in growth techniques to improved production processes to innovative packaging to brand and new product development.
Scotland is a centre of excellence for Agri-tech – the means by which the world will feed itself as its resources remain static and its population grows, covering everything from new seed varieties to processing machinery to new product flavours.
It may not be the food and drink products that ultimately generate the greatest revenues but the processes that can be licensed to the world.
Capturing, protecting and commercialising such innovation globally can see Scotland's food and drink industry become a world leader.
People
The food and drink industry in Scotland needs a foreign workforce – it currently makes up more than 40% of workers in food and drink production and the service industry.
This is even higher in certain food sectors like meat processing.
These workers need to know how much they are valued. Crops are not sown or harvested, foodstuffs not processed and goods are not packaged and sold without a strong skilled workforce.
Scotland needs to retain and attract more of those that it needs to continue to increase its production, drive its innovation and market its larder at home and abroad.
Support
Finally we need the continued assistance and support from the Scottish Government through ministerial visits abroad, supporting export initiatives via SDI and UKTI, funding innovation in Scotland to be kept in Scotland, encouraging increased collaboration with our academic institutions, reducing red tape to encourage innovation, export and growth.
The challenges, both political and economic, are there and always will be – in some form or another.
The key is to focus on specific areas for 2017 to ensure the continued growth and success of Scotland's food and drink industry.
In short, the sector needs to engage with representative trade associations, collaborate, innovate, keep and grow our workforce and ensure support is sought and provided.
Disclaimer
The material contained in this article is of the nature of general comment only and does not give advice on any particular matter. Recipients should not act on the basis of the information in this e-update without taking appropriate professional advice upon their own particular circumstances.
