A key challenge for Scotland’s food and drink sector has been the build up to, and result of, the European Union referendum.
However, following a period of uncertainty there is positive news, with the Bank of Scotland’s fifth annual food and drink report suggesting that the industry is set to increase its investment in engaging new overseas customers over the next five years, as it seeks to find new markets for quality Scottish produce.
Scotland has worked hard to build its reputation as the land of food and drinkDonald Macdonald
Opportunities for agriculture
Across the food and drink sector, 69 per cent of Scottish businesses have ambitions to win new international customers, while 49 per cent plan to achieve growth by entering new UK markets.
Producers clearly believe in the provenance of their produce and are confident enough to invest in taking their goods to new markets, both at home and across the globe. They are seeking to maximise the opportunities from Scotland’s reputation, especially when it comes to sustainable and quality, traceable produce – which are major selling points to consumers.
There should be opportunities for our farmers, fishermen and other primary producers to capitalise on this confidence within the food and drink sector.
Collaboration is key
Scotland has worked hard to build its reputation as the land of food and drink, and now has a distinctive brand among food-producing countries, with 87 per cent of Scottish businesses already talking advantage of its good reputation in international markets.
With this positive momentum, there is an opportunity to grow activity further by forming partnerships across the supply chain, creating a joined-up approach while sharing expertise and minimising risk, helping to bring food from farm to fork.
And, although there has been increased pressure on farmers through competitive pricing on red meats such as lamb and beef from UK retailers, exports to the EU in general have already seen a recent uplift following a drop in sterling post-referendum.
Taking the next steps
To make the most of an increased demand for Scotland’s quality produce, farmers need to implement a long-term strategy to identify new revenue streams, ideally working with processors, manufacturers and retailers to identify opportunities. Bank of Scotland’s food and drink report should help. By sharing our research and insight with the industry, we aim to inform farmers about the opportunities and challenges they may see and face, thereby helping the sector to plan and, we hope, ultimately prosper.
These next steps will also involve farmers working closely with their professional advisers and lenders of course. Support is readily available to help drive sustainable growth.
Alongside government support, Bank of Scotland is actively working with farmers and advisers to provide working capital funding, longer-term capital investment funding and equipment finance via the bank’s specialist agricultural team – thus helping to make business goals a reality. We can also help farmers with hedging currency exchange rate and interest rate risks.
Looking ahead, there may well be uncertainty, however by all working together we hope that the opportunities identified in our report – both in terms of growing markets and utilising the premium provenance brand Scotland has become renowned for – will ensure the farming community continues to be a part of the ongoing success and goals the wider food and drink industry is striving for in the years to come.
• Donald Macdonald is area director for agriculture, north and west Scotland, at Bank of Scotland