WITH the food and drink sector set to grow by 19% in the next five years and consumers increasingly looking for the right eating experience – whether in or out of the home - there has never been a better time for our food and drink businesses to innovate and expand.
The turnover of the Scottish food and drink sector was £14.3billion in 2013, up 4% year on year and is targeting £16.5billion by 2017.
A thriving food and drink sector is central to Scotland’s economy and supports the whole supply chain from farmers and fishermen to local consumers and visitors.
Growth will come from a number of sources, with 62% of businesses using new product development to grow and 54% targeting new UK markets to achieve growth.
Exploiting innovation and market opportunities is key for businesses of all sizes and focusing on what is important to the consumer supports investment success.
Premium, healthy and provenance are areas of growth – but key to business success is knowing your own customers and innovating to satisfy demand.
Businesses need to take time to look around them, look at other sectors for inspiration and work out where their future growth is going to come from.
SMEs supplying local food and drink should focus on their product provenance and heritage, the story behind their product and how they differentiate themselves in the marketplace.
Developing a unique selling point is, however, important for companies of all sizes but larger, more established companies also face other challenges such as improving productivity, risk management in terms of people and markets, the challenge of building sustainability into their business and resilience into their supply chain.
The growing demand for healthy products and the focus on specific ingredients whether it is saturated fat, salt or sugar is changing consumer demand.
How companies tackle this challenge will determine their future, and product development and innovation are real opportunities.
Innovation and collaboration across the supply chain can provide that all important point of differentiation.
With growing recognition that we need to reduce waste both pre and post farm gate – what are the opportunities for improved efficiency?
How can previously discarded products or by-products be used to develop new products?
What are the opportunities for vertical and horizontal collaboration within the supply chain?
There is still a major opportunity to link food, drink and tourism better and maybe an opportunity to consider regional marketing while capitalising on the Scottish brand?
For me, the growth of innovative and interesting independent processors, retailers, cafes and restaurants, many of which are linked to their source of supply - whether a farm, a boat or a fish farm - highlights the opportunities in this sector as well as the fantastic produce the North-east has to offer.
Having spent 32 years in the sector in a number of different roles I see this as such an exciting time for the sector and the chance to capitalise on its natural assets.
Whatever choices food and drink businesses make, careful consideration of what will be necessary or may happen in the future, will ensure that the business is future-proofed and can capitalise on the opportunities arising in this dynamic and exciting sector.