Stuart McCallum

Written by: Stuart McCallum

Stuart McCallum

Partner, Head of Food and Drink

'Brand Scotland': What opportunities and challenges lie ahead for the Scottish food and drink sector?

  • August 2018
  • 7 minutes

The last decade has been a stand out success for the Scottish food and drink sector, with industry turnover up by 44 per cent to over £14bn* in that period. This has been driven by a focus on collaboration across all aspects of the sector – from the farmer who produces the raw material, to the manufacturer who makes the product, to the restauranteur who plates up the food for the hungry diner. 

Scotland Food and Drink and the Scottish Tourism Alliance have worked closely together at a strategic level to drive this collaboration.  The overarching mantra has been around quality, provenance and pride in the source of the product from Scotland. So how have Scottish hotels, restaurants, consumers and retailers been embracing this, and has perception changed in wider markets? 

The restaurant scene

Historically, perception of Scottish food has leaned more towards deep fried mars bars than langoustines, venison, strawberries and gin. But Scottish restaurants are changing this by prioritising provenance, quality and innovation. The Glasgow-based Ubiquitous Chip, for instance, is mirroring the sector strategy by serving an array of locally sourced produce. Dishes draw on heritage and innovation – while the traditional haggis is a menu staple, others such as butternut squash with dehydrated gingerbread explore new realms of culinary creativity. 

Furthermore, recent investment of around £110m in building a 14,000 indoor entertainment venue called The Hydro in Glasgow has increased the volume of visitors, so hotels and restaurants like the Chip are benefitting. Visitors now expect quality in produce, service and facilities and it is fair to say that the restaurant scene in Glasgow has responded with a vast array of venues hitting all these quality marks.  Facilities for visitors, be that attractions or hotels like Crieff Hydro and Gleneagles have also benefited from this growth. 

 

Scotland’s Food and drink industry turnover is now over £14bn.

 

Retail

The Scottish public is becoming increasingly interested in supporting local companies and buying good quality produce in season.  Major retailers like Aldi, Lidl and Tesco are tapping into this trend by offering a wider range of Scottish products and providing healthy alternatives to classic items too – Waitrose for instance, now sells a vegetarian haggis. And one of our clients, a premium bakery ingredient supplier Macphie of Glenbervie, provides a range of ingredients for baked goods including the classic Scottish scone to healthy bread varieties, ensuring provenance is top priority.

However, more can be done to promote healthy items, with these products supplied where and when possible. This is especially true when reaching children – more needs to be done to educate them in healthy eating from a young age. 

So has this been enough to challenge wider perceptions? Down south, certain Scottish products will resonate and are viewed favourably. Salmon is a great example - 60 per cent of production stays in the UK, and it is now the UK's leading food export, exporting to more than 60 countries. Its health perception and macroeconomic reasons (ageing population and demand for healthy food) has seen sales increase throughout the country. The rest of the world is educated in the Scottish brand, with whisky, seafood, shortbread, and oatcakes other standard bearers. Whisky, for instance, is exported to over 100 different countries, and has significant scope to grow in these markets as new distilleries are developed or existing ones enhanced, thereby increasing supply. A number of Whisky groups are also developing Scottish Gin, which is becoming increasingly popular and visible across the UK and Internationally using the brand heritage and equating 'Premium/Super Premium Gins' to single malts which are in great demand. 

 

Scottish salmon is now the UK's leading food export, and Scottish whisky is exported to over 100 different countries.

 

For exporters, as levels of disposable income increase world-wide and people become more attuned to their buying choices, the aspects of provenance and quality will work to Scotland’s advantage. Scotland has created beach heads in certain key markets around the world with whisky, and there is great opportunity to export a wider variety and range of products to these external markets, offering consumers greater choice.

And for local retailers, demand is there – the number of visitors to Scotland continues to rise and spend on food and drink by visitors to Scotland has now reached almost £1billion per annum**.  If Scottish hotels and restaurants can build on the quality, innovative cuisine and dishes they provide, tourists will be keen to experience these again back home, thereby reinforcing the export strategy. 

 

Spend on food and drink by visitors to Scotland has now reached almost £1bn per annum.

 

But what are the challenges?

The first concern is the emerging skills gap. To make the produce, convert and then sell to the end customer, people with a range of skills are required.  Gaps are emerging across the industry, but luckily, we’re seeing increasing focus on education and enhancing the skills of those in schools, colleges and universities.  

Secondly, innovation is a challenge. There is growing investment, but slow digital development. For instance, there are areas of Scotland which still need support to improve their broadband infrastructure. Only then will companies be able to play their part in the global marketplace, especially where marketing is concerned. With consumers increasingly sharing their experiences online, social listening will help businesses enhance the products and services they offer. Technology is quickly being deployed, and it will be key to invest in tools and systems which increase productivity, yet maintain quality.     

All aspects of Scotland Food and Drink – from farm to plate – have developed significantly in the last 10 years to become a real standard bearer for Scotland. Although challenges must be addressed, strategic collaboration will hopefully ensure minimal downside impact. 

Finally, if you have not visited Scotland or experienced some of our national food and drink treasures then do so soon – it has been a relatively well-kept secret to date but as can be seen from the growth in visitors, that secret is becoming more widely known.

Please do get in touch if you’d like to discuss any of these issues further. 

*Source: Scottish Enterprise Scottish Economic Facts February 2017
**Figures correct as of November 2017

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