Last year the Scottish food and drinks industry launched Ambition 2030, which set out the vision to make farming, fishing, food and drink Scotland’s most valuable industry, with the aim of more than doubling turnover to £30 billion in just over a decade.
The strategy was developed by the Scotland Food & Drink Partnership, an industry-led group of the sector’s main organisations, alongside the Scottish Government.
Graham Young, industry development director with Scotland Food & Drink Partnership, says: “Since the launch a year ago we have been working to develop an action plan with industry stakeholders identifying how to grow.” One potential target is in health and wellness related to food. He says: “It is a real market opportunity. Consumers around the world are interested in food for health so we have commissioned research to see where the opportunities lie.”
The whole area of data processing and blockchain and how that ties in to food authenticity is another which has the potential to benefit the industry, improving supply lines and minimising waste. In terms of quality assurance and authenticity, the technology could be vital.
While growing exports is key to the industry’s success, Young says: “One of the things that has been brought home to us since the launch [of Ambition 2030] is that we need to concentrate on the UK market too – it is not all about exports.
“We run regional showcases to put suppliers in touch with buyers from both home and abroad in a sort of speed-dating opportunity, which has been very successful.”
The industry is also pursuing the massive opportunities offered by tourists. Young says: “There are people who come to Scotland because of its food and drink, particularly its whisky, but we could really maximise that by working jointly with the Scottish Tourism Alliance. An increase in this type of visitor would be a win-win for both industries.”
In terms of overseas sales, the project employs people around the world, from California to Japan, to promote Scottish food and drink.
It has received positive feedback and results, so funding is being sought to continue.
Achieving targets for growth will be a result of working at both macro and micro levels.
Young says: “Although the bigger picture is that we want to double the value of the industry by 2030, this involves working with different sectors to see where the opportunity lies in each.
“We have already worked with the fruit, vegetable and potato sectors to get their response and ideas for 2030, and similarly we have developed a pig and pork strategy action plan. A venison one is on the way, as is craft brewing, and we have been working with the seafood industry, with a dairy action plan in the pipeline.
“In the bigger picture, it involves getting producers – whether salmon exporters, butchers, bakers – into the same room to work together, adding value and reducing costs across their sector and discussing how to keep up with international competition.”
But it is also about smaller initiatives and getting individuals to work together for the common good.
Young says: “Colleagues have brought together honeyberry producers in the north-east to research the development of valued-added products such as yoghurt or gin.
“Speciality cheese makers and chocolatiers can share knowledge and experience. They are competing with each other but some issues are best addressed together.”
In terms of turnover and exports, the strategy is already reaping rewards. Non-whisky exports are growing, which is positive in terms of broadening Scotland’s output beyond.
Equally, dependency on European exports has been around 80 per cent for non-whisky products but the latest figures show that falling as Scotland Food & Drink Partnership staff continue to grow exports to North America and other regions.
Young explains: “We want the cake to grow bigger and have the slices to be more even across the food and drink industry.”
High on the list of ways that the industry can achieve its aims is innovation, in products, efficiency, supply chain productivity and the targeting of new markets.
When a company innovates, it is twice as likely to grow and three times more likely to export successfully, yet just a tiny proportion of the industry’s value is spent on research and development.
Jon Wilkin, lecturer and business development manager in food innovation at Abertay University in Dundee, says: “In an industry such as pharmaceuticals, you will get companies spending around 50-60 per cent of their turnover on research and development.
“If you compare that to the food and drink industry in the UK as a whole, we have a £112 billion turnover but only £334m is used for research and development – around 0.4 per cent.
“Partly this is because we are something of an emerging industry, but investing money in innovation will pay dividends.”
Food and drink producers and manufacturers in Scotland have a world-class research base on their doorstep and many of them already use it fruitfully.
Working with food innovation departments at institutions such as Abertay University, Queen Margaret University, near Musselburgh, and Glasgow Caledonian University ensures a connection of skills and knowledge, which benefits the whole industry.
Innovation is not just found in product development, although modern twists on traditional ingredients can certainly produce the most eye-catching results.
Such products bring in consumers and open up new markets, but cutting-edge developments are present at every level of production in the industry.
These can add value and, across the board, teams are working on everything from resource efficiency and improving traceability and safety to smarter packaging and adding value to waste.
Wilkin says: “Knowledge exchange is the key to success and generally small companies come to [Abertay University] through companies like Interface or industry seminars and conferences.
“We can offer all sorts of help, from labelling, food safety, new product development.
“Some companies come to us with an issue, for instance their product won’t come out of its container, so we can improve the consistency.”
Wilkin says his department is helping firms across Scotland with a range of projects, from improving the texture in a beef jerky product for a manufacturer in Moray to understanding consumer behaviour in product development of seaweed in Ross and Cromarty.
New and improved processes can also streamline production and thus greatly enhance profits.
The Start-Up Drinks Lab, for example, was set up in 2017 as a contract bottler specialising in small batch soft drinks, ensuring craft soda ideas can be created without the cost risks associated with developing a new product.
And sometimes ideas emerge as a response to regulation. The Waste (Scotland) Regulations implementation, introduced in 2016, tightened restrictions on what could be flushed down drains.
The winner of the innovation category in the Scotland Food & Drink Excellence Awards this year was a product which tackled the problem of waste peelings and starch in chip production.
Developed by Malcolm Wood of Ivan Wood & Sons in collaboration with Abertay University, the Peel Tech system works by taking the waste from the potato peeler, separating the waste skin and compacting the potato starch to allow it to be removed.
After successful trials at the company’s processing plant in Fife, a unit was developed for use in chip shops and is being rolled out across the UK.
Siobhan Jordan of Interface, who work on collaborations between industry and academia, says Peel Tech is a good example of how such relationships can be beneficial. She says: “The company involved had the idea but not the knowledge of how to design that piece of equipment.
“Further on, we worked with them on how they could repackage the captured starch to be a binding ingredient, so they have added two new income streams – in selling the waste product and the equipment itself.”
Organisations such as Interface can also help the industry access funding to develop projects.
Jordan says: “In some instances, the company have the ability to pay for a university’s research but there are a whole raft of funding mechanisms which will help build strategic partnerships.
“Such relationships can really drive a mindset change within the sector around innovation.”
Clustering companies is another innovation that can improve a business’s fortunes. Jordan gives the example of rapeseed oil producers, some of which Interface had worked with individually.
She says: “All were selling at artisan farmers’ markets although none were big enough to crack larger markets, but they did have ambitions to compete in the olive oil markets in Europe.
“We were able to identify a common need for evidence of benefits.
“A study from Aberdeen University on nutrition gave them that credibility and they were then able to form a co-operative and look to the international markets.”
She adds: “Some of the challenges are that companies don’t know what they don’t know.
“But universities can offer a lot more than product development, for instance consumer psychology and every aspect of a product from inception to branding, marketing and exporting.
“Research and development is absolutely the key to hitting 2030 targets.”
Recruiting the right people for the industry is, of course, also important for its success.
Young says: “Workforce upscaling is a big part, and many industries in Scotland will tell you that one of their priorities is to get more people in.
“We work with Skills Development Scotland to target school leavers and those moving from other industries into food and drink.
“For example, we have successfully attracted those leaving the oil industry because of the downturn, and there are comparable careers in food and drink.”
Wilkin agrees that there is a need to get the message out that the industry is crying out for graduates. “At Abertay we have a master’s in food and drink innovation which attracts graduates from diverse disciplines such as biological science or genetics.
“From here, there is a huge range of careers to access, from technical management, production management, new product development or as a buyer for supermarkets.
“It is an expanding industry and likely to continue to grow as a major employer in Scotland.”
This article featured in The Scotsman’s Food & Drink special. A digital version can be viewed here.