Food and drink could rival oil and gas as Scotland’s biggest export

FOOD and drink could be set to “rival” oil and gas as Scotland’s biggest export, with nearly half of the country’s producers eyeing up new overseas markets for everything from whisky and water to salmon, crabs and beef.

New research to be presented this morning to Scottish Government ministers has found that 44 per cent of businesses in the £10 billion industry will target at least one new export market in the coming year, giving further momentum to growth across the sector. The report’s backers have described the economic opportunities as “staggering”.

The “Beyond Borders” research, commissioned by banking group Lloyds, is based on surveys with 100 Scottish businesses with estimated combined sales of £6 billion. Findings indicate the sector is on track to meet increased export targets set last month by trade body Scotland Food & Drink.

Alasdair Gardner, regional director of Lloyds wholesale banking in Scotland, will present the report to a small group of ministers at an informal breakfast meeting.

It should make welcome reading, as food and drink has been identified as a “key sector” to supporting the country’s economic growth. Since 2008, the Government has supplied £38 million of funding to the industry through its Food Processing, Marketing and Cooperation (FPMC) scheme.

“Scotland boasts some of the finest natural resources in the world and its produce is synonymous with quality,” Gardner said.

“Our research indicates that the industry, already a key engine of the Scottish economy, could be on the brink of a golden age where export-driven growth will see it move through the gears, and could soon rival oil and gas as Scotland’s greatest export market.”

More than four-fifths of companies surveyed said “made in Scotland” was vital to their export success, and more than half believe the heritage of their product is key to attracting buyers. Among those contributing to the report were Browns Food Group, Highland Spring, whisky maker Edrington and Orkney Fishermen’s Society.

Industry exports have traditionally relied upon western Europe, but producers are increasingly looking to boost sales in the Far East, the US, South America and Russia.

However, tapping into these markets could be impeded by the fact that just 13 per cent of businesses ship products internationally from orders placed online. Nearly half of those asked said they also needed to improve their credentials in sustainability, a factor that is increasingly important among customers.

Scotland Food & Drink wants to increase the value of sector exports to £7.1bn by 2017, up from £5bn currently. James Withers, chief executive of the trade body, said companies needed to take advantage of rising global demand for high-quality edibles.

“The scale of the international opportunities is huge and it’s encouraging that, despite continuing economic uncertainly, so many Scottish food and drink businesses are clearly moving forward with their exporting plans across such a diverse range of markets,” Withers said.