As we prepare to raise a dram, address the haggis and toast the lads and lassies this Burns Night, we should all stop and take a moment to take pride in the resonating reputation that our food and drink industry has throughout the world.
Last year, during the Year of Scottish Food & Drink, it was announced that in 2014 Scottish food exports broke the £1.1 billion barrier for the very first time. When you included the drink category to that, the figures reach an impressive £5.3bn, easily smashing government targets set for 2017 three years early.
What is most exciting is that it is still our most traditional fare that continues to form the cornerstone of our food and drink exports. Quality products with strong provenance and links to our heritage are coveted by retail buyers and consumers from the US to Singapore.
Whisky remains our biggest hitter. We export 40 bottles every second to 200 markets worldwide, accounting for 80 per cent of Scotland’s food and drink export market. Innovative producers like Edrington, Inver House and Ian Macleod are setting a brilliant example to the wider industry, showing that by taking advantage of our strong cultural currency and showing approaches to new markets, there is strong growth potential.
Another key export is Scottish seafood. Although it has experienced a number of challenges in 2015, Scottish salmon is exported to over 60 countries worldwide and two thirds of the world’s langoustines are sourced in Scotland. The latest government statistics showed an export growth of 6.6 per cent between 2013 and 2014.
It’s also telling that one of our most revered and celebrated foods has seen a real increase in demand internationally. Between 2011 and 2014, Scottish haggis exports grew by 51 per cent. And with the recent news that the US is going to look to revise its ban on our national dish in time for Burns Night 2017, we can only expect to see exports explode. Some would class this as mere speculation, but our American cousins are well known to relish every opportunity to exercise their infatuation with our Scottish heritage.
Confidence amongst Scottish food and drink producers is also at an all-time high. Bank of Scotland’s 2015 food and drink report, An Appetite for Growth, showed that more that 40 per cent of firms planned to expand their export activities in the next year, with almost two thirds of companies identifying maturing markets in Asia and the Far East as their key regions for prospective growth. The report also highlighted that 93 per cent of producers see the origins of their produce as an important selling point for export markets.
However, despite a positive industry outlook, potential headwinds must be recognised in many of Scotland’s key export markets. Instability caused by the slowdown in China and a bumper recession in Brazil will undoubtedly have an effect on global demand for luxury goods, such as premium whisky.
Exporters can look to alleviate these risks in emerging markets by exploring trade financing options as well as more creative solutions such as commodity hedging and mitigating foreign exchange risk. Any of our 24 financial market experts on the ground in Scotland can support businesses with these financing routes.
The export target set by Scottish Food and Drink for 2017 is now £7.1bn. An ambitious target for all concerned. But if exciting young producers, such as the burgeoning Scottish craft beer industry, follow the example of our flagship exporters and focus on celebrating the quality of their products, and the industry as a whole remains mindful of shifting economic landscapes, I would judge that we’ll have no problem hitting that milestone as well.
• Jane Clark-Hutchison is area director, mid markets, for central Scotland at Bank of Scotland