Positive outlook for Scottish food and drink

Positive outlook for Scottish food and drink

Scotland’s £11bn a year turnover food and drink sector is set for further growth in 2016 as business confidence soars, according to new research.

The latest Food & Drink Report 2016 by BDO LLP found that 79% of those surveyed are positive about the future of the industry, with 86% of firms expecting revenue growth of up to 20% in the next year.

The industry is worth £10.9bn and employs 45,620 people. This comprises a turnover of £5.3bn and 33,030 employees in the manufacture of food products and £5.6bn and 12,590 employees engaged in the manufacture of beverages.

Martin Gill, head of BDO LLP in Scotland, said: “Pressures on pricing and margins remain hugely challenging, but the overall sentiment of the sector is a positive one.

“It’s been a tough few years for food and drink companies, but it appears they are strongly focusing on future growth.

“It is well knows that the manufacturing sector plays a critical role in rebalancing the Scottish economy and driving long-term sustainable growth so it is essential that the sector receives all of the Scottish and UK government support possible.”

He added: “The food and drink sector is hugely important for the Scottish economy and it is vital that it is encouraged to invest and expand in the coming years.

“Scotland is rightly proud of its food and drink products and, as a sector, it will be with us for decades to come so we need to ensure that it is nurtured and developed in the future.”

The report showed operating margins continue to be squeezed, according to 82% of companies, and pricing pressures remain the top challenge for food manufacturers and processors.

Interestingly, attracting and retaining skilled labour was named the second biggest challenge, on a par with the volatility of raw materials.