Brexit Proof? Three key building blocks to continued exporting success for the Scottish food and drink industry

Brexit Proof? Three key building blocks to continued exporting success for the Scottish food and drink industry

Following a decade of success, the food and drink sector in Scotland continues grow. In this period turnover has increased by 44% to over £14bn. Stuart McCallum, head of Food & Drink in Scotland at RSM, looks at the keys to continued exporting success.

The Scottish Government’s latest statistics released in January 2018, highlighted that the sector continues to be the largest for international exports in Scotland. Now valued at £5.5bn and 18.3% of all international exports.

All commentary on Brexit of course contains the mandatory ‘it depends’ disclaimer. Undoubtedly, there will be challenges to navigate as the negotiations play out. Trade deal or not – three key areas of development are needed to build on export success for the Scottish food and drink sector.

Build provenance – Create a compelling story

Custom and currency changes could present challenges, but this reinforces that successful exporters should not go to market competing on price. Quality products, strong brands alongside the strength of the Scottish provenance is a reason for real optimism and can be developed further. Whisky has of course led the way but seafood and salmon have exceled in developing an authentic story – leading to an increase in export sales of 17% in figures released last year.

Collaborate – Share knowledge and innovate

Whisky continues to blaze a trail, accounting for 73% (£4bn) of Scottish food and drink exports, nine out of every ten bottles produced are sold overseas. Sharing learnings of trade issues, accessing markets, building brands and intelligence with other subsectors will benefit the industry; and this must form the backbone of the food and drink export collaboration charter. The industry must work closer together and engage with a number of key stakeholders including hospitality and tourism, supply chain, universities and government.

Be nimble – to new markets and technology

Despite being 11,000 miles away, Scotland and the rest of the UK could learn a lot from New Zealand. It turned its attention from Australia, and was the first country to sign a free trade agreement with China. Its food and drink brands have made use of the Chinese messaging app WeChat to sell their products which targets 507million users and presents a huge opportunity.

In Scotland, 42% of the value of exports are generated from the EU, however despite growing, that figure is a modest 16 per cent in the Middle East and Asia – this could be where the major future opportunities lie.

Taking an international view will be key to success and Scottish businesses are already on the front foot exploring opportunities in China and the Middle East. Building these relationships is key to understanding the market opportunity and global trends; and is a great way to showcase Scottish products.

The future remains bright

The future remains bright for Food and Drink in Scotland and the rest of the UK. Scotland has many strengths and has punched above its weight to date. Going forward the industry can continue to move up the weight category and continues to support growth in the wider Scottish economy.