Changing the menu: challenges and changes in Scotland's food and drink sector

Scottish food and drink - Image credit: Holyrood

The words of Robert Burns’ Selkirk Grace, that ‘some hae meat and canna eat, and some wad eat that want it’, should not still resonate.

But fast forward a couple of hundred years, and while we face an obesity crisis as Scots consume too much of the wrong foods, we also see a rise in foodbanks as other people struggle to afford any food.

All this in a land that is a natural larder of plentiful and healthy food.

These issues are covered in the Scottish Government’s Good Food Nation policy of 2014, which outlines the aim of moving towards a healthier and more sustainable food system.

It sets out the notion that Scotland should be a good food nation not just in what we produce, but also in what we consume – both in terms of being healthy, but also freshness and environmental sustainability.

Among the aims of the strategy are that by 2025, everyone should have access to healthy and nutritious food, that diet and obesity-related preventable diseases will be in decline, that people will know what constitutes good food and those that are serving food, whether shops and restaurants, schools or hospitals, will commit to serving good food.

On the producer side, the 2025 vision is for food production to be a thriving sector of the economy and that what will be produced will be increasingly both healthy and environmentally sustainable.

No small aims, but ones that could make a significant difference to the future of the country, both economically and in terms of its health and wellbeing.

The Scottish Government will launch a consultation on a good food nation bill with a view to bringing this about later this year.

The food and drink industry is a major contributor to Scotland’s economy.

It is worth around £14bn each year and accounts for one in five manufacturing jobs.

Scotland has 18,850 food and drink businesses, which employ around 115,400 people.

It is identified as a growth sector in the Scottish Government’s economic strategy.

As part of the recently published UK industrial strategy, the UK Government has also created a food and drink sector council, which met recently for the first time.

In 2016, the last year for which whole-year figures are available, food and drink exports from Scotland grew by £421m to a record £5.5bn.

Those figures show an eight per cent increase in the value of exports in a year, with fish and seafood recording the largest overall increase of £156m, up 26 per cent, and Europe the leading export destination, worth £2.3bn overall.

Rural Economy Secretary Fergus Ewing said: “Food and drink is now one of the standout success stories in our economy, increasing growth and supporting jobs across the country.”

Whisky is Scotland’s – and the UK’s – single biggest drink export product, making up almost 20 per cent of the sector’s exports.

In 2017 it returned to growth, while export sales of single malt exceeded £1bn for the first time, with the US the biggest single country market.

Figures published last week show that in 2017 Scotch whisky exports from the UK were valued at £4.36bn, up nine per cent on 2016. 

Scotch Whisky Association (SWA) figures for the first half of 2017 report sales to the US were up 8.6 per cent to £388m, while China grew by 45 per cent to £27m.

The EU, though, remains the largest overall destination for whisky, making up nearly a third of the exports. This grew by four per cent to £559m in the first half of 2017.

However, in that period the volume of whisky exports across all markets was down two per cent, with the contrast in the increase in value reflecting a shift from blends to single malts.

Salmon remains both Scotland’s and the UK’s top food export, reaching record levels in 2017.

Exports of salmon grew by £155.5m to £600m in 2017, an increase of 35 per cent compared to 2016.

The USA remains the largest market for Scottish salmon with sales worth £193m, followed closely by France on £188m, China, which took £69m and the Republic of Ireland on £34m.

Earlier in the year France looked set to overtake the USA as the biggest single country market, in a year the industry was celebrating 25 years of holding the Label Rouge, a prestigious French government mark of quality.

The EU as a whole remains Scotland’s biggest export market for salmon, importing £215m worth in the first nine months of 2017.

Commenting on Scotland’s export growth, James Withers, chief executive of Scotland Food & Drink, said: “The growth in overseas markets is testament to the hard work of our trade specialists based across North America, Europe, the Middle East and Far East.

“They are opening doors with leading buyers and forging new opportunities for our Scottish food and drink companies.

“As a result, 2017 is shaping up to be another export record-breaker for food and drink.

He added: “Over the last ten years, Scotch whisky exports have risen over 50 per cent and our food exports have doubled.

“But there still are major opportunities ahead overseas as well as in our home market.

“Yet with two-thirds of our food exports and a third of Scotch whisky exports bound for the EU, the need for a smooth Brexit and protection of our trade relationships there couldn’t be clearer.”

There are concerns about the possible effects of Brexit on the economy as a whole, of course, but food and drink is the sector where particular concerns have been raised.

These worries include a shortage of workers to harvest vital crops, such as seasonal fruit and veg, visions of food going to waste as lorries sit at Dover or other ports waiting to pass customs checks, prohibitive import charges destroying vital export markets and mooted future trade deals with other countries such as the US involving a drop in food safety standards and allowing in chlorinated chicken.

A recent survey by NFU Scotland found that fruit and veg was already being left in fields last year as farmers struggled with a 10-15 per cent shortfall in seasonal workers.

Some of the silliest Brexit stories have also related to food.

These range from the Department of International Trade tweeting about France wanting to buy our “innovative” jams and marmalades – one wag responded on Twitter, “Tell me more about these innovative jams. Are they wi-fi enabled? Future-proof? Self-spreading? What’s the future of jam?” – to Boris Johnson getting into a spat with an Italian minister over who would lose out more in exports in terms of prosecco or fish and chips after Britain leaves the EU.

‘If you’re not at the table, you’re on the menu’ is a phrase that is bandied around regularly in relation to Brexit and the UK’s current and future powers in relation to Europe, but in the case of Scottish food and drink, the fear might be the opposite.

What happens if Scotland’s vital food and drink is not on the menu? Or what if workers are no longer available to even get it to the table?

Nearly 80 per cent of seafood from Scotland is exported to the EU and the sector is the third largest export sector, valued at over £633m in 2016.

Without the single market, concerns are that delays in getting through customs might affect Scotland’s reputation for fresh, quality seafood.

In December, SNP MSP for Banffshire and Buchan Coast Stewart Stevenson sent a fish pie to UK Brexit secretary David Davies as a Christmas present to wish him a ‘Merry Fishmas’.

The MSP, whose constituency includes Europe’s biggest fishing port, Peterhead, and Europe’s biggest shellfish port, Fraserburgh, wished to highlight the risk to fisheries from Brexit if a trade deal cannot be struck.

He said: “I represent an industry which depends heavily on free access to the single market – with no tariffs, no barriers and relatively easy transit from the north east of Scotland to dining tables all across Europe.

“We don’t want to see Tory ineptitude result in a no trade deal, or see unwanted hurdles erected making it harder to do business across Europe.

“Nor do we want to see lorry-loads of fresh, high-quality Scottish seafood waiting by the lorry-load in queues at Dover for timewasting customs checks.

“It could compromise the freshness of the product – as David Davis might learn to his peril if he doesn’t pick up his Christmas gift from me in time.” 

Yet it may not all be bad news.

The SWA sees India as a potential growth market. It is the third biggest export market by volume for whisky, and the tenth by value, but Scotch whisky only makes up one per cent of India’s spirits market.

The SWA is hoping for a UK-India free trade agreement following Brexit that would bring down the 150 import tariffs on whisky, something it says could make a “massive difference” to exports of Scotch.

In an article looking at the year ahead for 2018, SWA chief executive Karen Betts said: “Brexit presents both challenges and opportunities for Scotch.

“It will bring changes to the ways in which we export and to how the industry is regulated, and the sooner we know what these changes will be, the better.”

Key to responding to the changing needs and threats facing the sector is innovation.

The meteoric rise of gin as a Scottish product has been led partly by changing tastes, but also for pragmatic reasons, since it is easier to produce in small batches and quicker to take to market than whisky – and this boom does not look to be ending anytime soon.

However, last month is was reported in the Wall Street Journal that multinational drinks company Diageo has secret ambitions to change what constitutes whisky, which includes ageing it in old tequila barrels, new blended whiskies with a low-ABV and adding chocolate to the mash during fermentation.

A different kind of innovation is being brought in by Loch Duart Salmon, which recently announced that it is to ‘fingerprint’ its salmon in a bid to fight food fraud, which according to Scottish Enterprise is estimated to affect about 10 per cent of the global food supply chain and cost the UK food and drink industry £12bn a year.

Loch Duart will be working with food origin company Oritain in a bid to protect its provenance, using technology that allows firms to verify the origin of a product at any stage of the supply chain.

Innovation, too, saw Scottish haggis return to the menu in Canada in August last year, ending a 46-year gap, when producers MacSween’s tweaked the recipe for a special Canadian version of the dish without sheep’s lungs, which were banned in Canada in 1971.

However, hopes that a similar veto would be lifted in the US due to President Trump’s Scottish connections have yet to materialise.

But given the size of the populations of both countries, even a small entry to those markets could significantly increase demand for Scotland’s national dish.

Haggis consumption has even been mooted as the solution to a different problem.

In the House of Lords in 2015, Conservative peer Lord McColl of Dulwich initially asked what progress the UK Government was making in persuading the US government to lift its ban on haggis, and then suggested to DEFRA Parliamentary Under-Secretary of State Lord De Mauley that eating haggis could help to reduce obesity.

He said: “Is [Lord de Mauley] aware that the United States’ government are depriving 24 million American Scots of this wholesome food, which satisfies hunger very much more than the junk food the Americans consume?

“It would help to deal with the greatest epidemic they have – the obesity epidemic, which is killing millions, costing billions of dollars, and for which the cure is free.”

If Lord Dulwich is right, this may suggest that Scots themselves are not consuming enough haggis, since 67 per cent of the Scottish adult population is now overweight or obese.

Indeed, this was suggested to McColl by Labour peer Lord Winston.

He responded: “My Lords, I confess to being a little surprised that one of the most senior qualified medical practitioners in the chamber is asking this question, seeing that there is a questionable issue about haggis – which I, personally, find a revolting food. Would not charity be better at home?

“If haggis does indeed deal with obesity, perhaps we should promote it a little in Glasgow.”

And this may be one of the jobs of Scotland’s national chef, Gary Maclean, who was appointed by the Scottish Government last year to help promote local produce and teach communities to make the most of locally sourced food.

This is part of the wider Good Food Nation strategy to deal with Scotland’s difficult and contradictory relationship with food, as a producer of prime products, but at the same time a hearty consumer of processed foods, fat, sugar and salt.

The Scottish Government put its draft obesity strategy in October out to consultation.

It includes measures to restrict the promotion of food high in fat, sugar and salt, particularly multibuy promotions, £40m of funding for weight loss programmes for those with, or at risk of, type 2 diabetes and support for SME food manufacturers to reformulate or develop healthier food products.

The consultation period has just ended, with the final strategy to be published later this year.

Scotland is undoubtedly a country rich in good and plentiful food and drink, but encouraging Scots to choose well will be challenging.

Other nations may be keen to have Scotland’s premium fresh produce on their tables, but attempts to woo the nation away from unhealthy options have already led to controversy, with a long legal battle over minimum unit pricing on alcohol and a public petition against plans by the producers of our other national drink, Irn-Bru, to change the recipe to reduce the sugar content.

Key to achieving this will be changing an embedded culture and getting Scots cooking again with healthy, local produce and thinking differently about what food we eat.

We hae meat – as well as fresh fish, fruit, veg, grains and dairy – and can eat, but what will it take to get Scots to do so?