To achieve our 2030 vision and unlock our £30 billion potential will require huge ambition, commitment and investment from both industry and government
— The Scotland Food and Drink Ambition 2030
The growth of the food and drink sector has made a huge impact on the Scottish economy in recent years and this is set to increase further, however, this is dependent on our ability to embrace change, identify emerging opportunities and transform the sector accordingly.
For years Scotland has had a powerful brand- around people, products and places- the challenge now is to enrich it, to build momentum and make the Scotland brand stronger and richer than before.
For businesses that are resilient, agile and progressive, each change within the sector offers a new way to grow. Undertaking and understanding industry and consumer research is an essential part of marketing for businesses to be able to capitalise on these opportunities as they arise. It is impossible to predict what life will look like in 2030 but what is certain is there will be new markets, new ways of selling and new opportunities that don’t exist today.
Global insights food & drink debrief
With this in mind, and looking to gain valuable insights for our clients, Genoa Black Commercial Director Alan Kinloch attended the ‘Global Insights Food & Drink Debrief’ – an event held by Scotland Food and Drink invited delegates to join some of the key players in the industry, such as Fergus Ewing (Cabinet Secretary for Rural Affairs), Simon Briggs (Loch Fyne Oysters) and Chris Millar (Craft Beer Clan), for two days of deep diving into the strengths, weaknesses and opportunities for Scottish food and drink producers to export their products to a global market.
One of the key insights that Alan took from the day was, as a small country with a strong national identity and culture; we should embrace the popularity of Scots culture from a global perspective. Many Scots take a dim view of the tartan-wearing, bagpipe-playing national stereotype, but for export there are some advantages to be had from focusing on our produce’s unique Scottishness.
In France, which is Scotland’s number export market, seafood and salmon are the dominant exports and our providence is one of the biggest selling points of our produce. The French are knowledgeable buyers and consumers who will pay for quality but only if they recognise it. Brand building and using local people on the ground to ensure market support is key to successful export there and investment in the market is crucial to driving sales.
Germany on the other hand doesn’t tend to differentiate between England and Scotland, though of their population of 82 millions, 10.6% are foreigners, of which 16.7% are Scottish or have links to Scotland. Regional variations in consumer trends across the country make it easier to break into niche markets, rather than the mass market so considering alternative specialist retailers who focus on UK products are a good route to explore.
Norway, Sweden, Finland & Denmark
For the Nordic countries, Norway, Sweden, Finland & Denmark, there is a collective population of 26 million. Though these are distinct countries and should be treated as such, Nordic consumers tend to want the story behind the products, place importance on providence and demand high quality packaging, brand and designs. Barriers to the Nordic markets are fairly small, although the Norwegians have an agricultural policy in place to protect local produce and this can result in high taxation on imports.
The advice in Holland was to showcase a Scottish flag on packaging to help promote the product’s Scottish roots and differentiate us from the rest of the UK. To sell well in the Dutch market place there is an emphasis on bringing something new to the table. They value variety and difference and the products need strong packaging and a strong brand to fare well in the marketplace.
Spain is the fourth largest market for UK exports and there are opportunities in gifting, tea and chocolate. Craft beer and whisky are popular, though not a huge demand for gin as this market is saturated since Spain is the 2nd largest gin market in the world. Spanish E-commerce is only 1.7% of all sales so consideration should be given to the experience that shoppers can have in-store.
For the Italians, there is evidence that they prefer Scottish products to British ones and, no matter the reason, this provides an opportunity for Scots looking to export in that region. There are potential opportunities in the gin market as there has been large growth in this sector in recent years. Italians view eating as a family event and tend not to eat out as often as other counties, this is why retail accounts for 82.7% of all sales in food and drink. The top three retailers in Italy hold a massive 35% of the market share and focus purely on Italian products. There are a few hypermarkets and 8000+ small independent stores which means that a potential route to market is through gourmet and specialist stores through importers and distributors.
In Japan, there is little knowledge of Scotland’s culture, or even it’s existence as a country in its own right, but there is a great deal of affection for two of Scotland’s proudest inventions… whisky and golf. Using the Scots national identity here or connecting with international symbols of Scotland could provide a hook to create inroads in Japan. When doing business deals, Japan often looks for long-term commitments and quick responses from partners to ensure strong working relationships. This knowledge, along with a good product story, providence and attractive packaging, provides ample opportunity for Scots food producers looking to build relationships and export to the Japanese market.
Across Asia as a whole, millennials are driving imports – they are ambitious, brand driven and digitally focused and they demand aspirational, high quality products. In China, E-commerce is more than just a way to shop – it has become the lifestyle. The E-commerce boom has given rise to a very open marketplace where the top ten retailers only account for 5% of market share. Craft beer has recently exploded onto the Chinese market but one of the challenges for beer producers is to differentiate between premium craft beer and the local beer, which is produced very cheaply and often given away for free in restaurants. This causes problems for Scottish beer producers as imported beer has a heavy price premium; though Chinese consumers will pay a premium cost for other imported beverages such as gin, whisky and mineral water. With this in mind, a focus for Scots export could be on large cities where there are some great opportunities in seafood, salmon, whisky, premium groceries and dairy.
Hong Kong has had a number of recent food scandals around local produce and the effect of this is a surge in opportunity for imports, particularly in seafood, grocery and alcohol with the route to market being direct to supermarkets though there may be an ask for exclusivity and listing fees.
At Genoa Black, we have worked with a number of innovative food and drink companies who understand the need to challenge the sector with their marketing.
Innovation is key in establishing Scotland as a place of excellence for food and drink and showcasing our products as world-class global exports. Product development, new technologies and new ways of thinking and collaboration are all essential in the development of this sector.
If you are considering export and need some marketing strategy support, get in touch with us – we’re looking forward to hearing from you!