As drinks industry gathers in Glasgow, is the glass half empty or half full? - Andrew Walker

In just over a week, Scotland's inaugural conference for the drinks industry, In Drinks, takes place in Glasgow, with thousands of delegates expected to attend over two days on March 8 and 9.

Many of us going to the event will be asking whether the glass is half full - or half empty.

There's no shortage of clouds on the horizon for those with a stake in the Scottish drinks sector, be they primary producers, manufacturers or distributors.

For starters, the tough economic conditions look set to continue. Inflation, alongside the soaring cost of raw materials, packaging and energy, continue to put pressure on businesses - even those who have been savvy enough to negotiate rates with providers into the next financial year. Businesses will need to be agile and look closely at cost management and efficiencies for the foreseeable.

Andrew Walker is a Partner and Head of Corporate Growth at Morton Fraser

But according to the annual Food and Drink industry survey from accountancy firm Johnston Carmichael, published recently, that's not the only thing occupying the minds of business leaders in the sector.

Many respondents used the survey as an opportunity to raise concerns about divergence on trade policy. They report that importing and exporting with our European neighbours remains more costly and difficult following Brexit, while differing policies within the UK itself are creating their own short-term pressures.

One example is the Deposit Return Scheme. Designed to improve recycling rates and reduce waste and littering, it will require producers to update packaging and processes in time for August of this year and is likely to create significant cash flow issues - especially for smaller businesses.

Respondents also cited ongoing concerns about the difficulty in recruiting and retaining skilled staff, an issue which has only continued since leaving the EU. Larger businesses responding to the survey reported pivoting by making significant investments in automation, but a full one-third of respondents - many of whom are SMEs - had not yet made any such investment at all.

But with a world-beating reputation and a sector with a track record of innovating to beat the odds, it's far from last orders.

And it's not all about Scotch whisky, which recently went from strength to strength with exports reaching over £6 billion for the first time ever.

One source of optimism cited in the Johnston Carmichael survey was investment in new product development as a route to success, and there are plenty of fresh ideas and businesses pushing the sector forward on that front.

The ten finalists in the In Drinks Catalyst accelerator competition, who will be pitching their proposals live in Glasgow for the chance to win expert marketing and legal support to take their fledgling businesses to the next level, offer some insight into the breadth of new products coming to market.

They include health drinks catering to the burgeoning wellness market; drinks made from sustainably sourced primary produce to challenge more carbon-intensive incumbents; and products created for true aficionados, made with exceptional craftmanship and respect for provenance.

Additionally, there is plenty of finance out there for businesses looking to grow.

The economic conditions are attractive for many private equity firms out there, which have significant money to spend, as well as business angels with cash to invest. The challenge for businesses is to make the right connections and put their best foot forward.

For the more ambitious, it's a plum time to acquire businesses and valuable brands, thereby creating a sector portfolio. There are also government grants available if you know where to look. The important takeaway for management teams is that robust financial planning and forecasting, and availing themselves of appropriate relevant finance, will unlock potential for their business.

With all this swirling around, In Drinks in Glasgow will prove to be an unbeatable opportunity to share insight and a welcome opportunity for nascent drinks businesses to shine the spotlight on themselves. By working together we'll grasp the opportunities available in the face of the challenges before us. Let's raise a glass to that.

Andrew Walker is a Partner and Head of Corporate Growth at Morton Fraser.