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Scotland's Food and Drink Supply Chain

11 May 2015

Procurement Skills Gap

An Interview with James Withers

    

Name: James WithersFocus Life Science

Title: CEO

Company: Scotland Food & Drink

 

 

James WithersA lack of scale can be a real challenge, particular for exports. The competition is no longer down the road, it’s across the globe, therefore collaboration is key to be successful in the export market.

 

Following the recent announcement that Scottish farmed salmon accounts for 40% of the total value of exports, what do you believe to have been the key factors for the growth of Scottish farmed salmon exports?

The starting point is the fact that it is a world class product.  Global seafood buyers voted it the best farmed salmon in the world in 2013. However just being good isn't enough. The salmon sector has worked well together to raise awareness in key markets - and within those markets, they are focused on the exact customers they want. Critically, salmon is now presented as part of a wider seafood and food and drink offering from Scotland. I'm just back from Hong Kong where we have been pairing salmon with different whiskies in front of leading Asian buyers, linking the UK's biggest drink export with what is now the UK largest food export and using one to sell the other. It works!

 

How is the industry embracing innovation within the supply chain field? Are frozen food suppliers in Scotland using fuel efficient trucks to get their products from A to B faster and more economically?

If we rewind to 2009, we were putting the finishing touches to the first Scotland Food & Drink industry strategy, which was developed jointly by industry and government. Innovation was put at the heart of that and it still is. The level of R&D spend by Scottish food and drink companies has more than doubled since then.  But the market is moving at lightening pace so we need to pick up the pace still further.  In some case that is about practical things like fuel efficient trucks, in other cases it's about innovation in branding, labelling and leadership.

 

What geographies have the highest demand for Scottish products and what are producers doing to get their product to these markets?

The UK is our biggest home market not surprisingly. But there are real extremes between different sectors. About 96% of our whisky production is exported beyond the UK, but it's just 8% in dairy. However, we have a new export strategy already bearing fruit, with new trade specialists on the ground in places like Tokyo, Shanghai, Hong Kong, Paris, Toronto etc. They are building new relationships for companies here to exploit. However, I couldn't stress strongly enough the value of companies who maybe aren't exporting yet finding the time to go out to overseas markets. That way they'll best understand what opportunities there may be.

 

What have been the main hurdles for the Scottish food and drink industry over the past couple of years and what have been the key learning outcomes from these?

One hurdle can be the fact that Scotland is a nation of small companies. Our food and drink businesses are mostly very small. A lack of scale can be a real challenge, particular for exports, but also tapping in to the London market too.  The answer here is collaboration. That might mean working together on consolidation and shipping (like the craft brewers are doing) or developing new marketing and research for their product (like rapeseed oil producers have done).  But there are advantages of being small too - the old cliche "small is beautiful" rings true for many buyers who want an authentic, unique or artisan provenance story their customers can buy in to.

 

Due to varying legislation and barriers to entry, supply chain on an international scale adds a whole new dynamic to a business. Is there a specific method that has been applied to allow the Scottish food and drinks export market to grow?

Beyond the points about collaboration and appointing new trade specialists above, one of the disciplines we've had to adopt is really strict prioritisation.  We have limited resources and we certainly have limited product, so we need to target markets carefully.  That why we've chosen to appoint specialists in the markets we have, because they represent the best cross-sectoral opportunity. Even looking within markets like China, Shanghai is the size of an average European country in itself so identifying just a few top hotel groups to work with can have a massive impact on our performance.

 

As an organisation representing the Scottish food and drink industry what would be your recommendation to SME’s out with this sector to expand into exporting? If they do not have a body like Scotland Food and Drink which has a developed network?

I'm going to sound like a broken record, but collaboration is the key. By having an export strategy, our concept of 'the competition' has changed. The competition is no longer down the road, it’s in other countries. In international markets, there is a joint interest promoting Scotland and product categories.  After that, individual companies can compete for contracts for sure. Whisky and salmon have taught us that and new collaborations are proving it is just as effective.  The other thing I would say to sectors beyond food and drink is to organise yourself as best you can.  Get trade bodies together, round the same table with government and agree a single plan.  Its worked for us, the foundations are now laid in tourism too, and I link it can be transformational. We're by no means the perfect model, we're still having to work really hard to align activity and eradicate duplication. But eight years into our journey, what began as a theory on better collaboration, now has some hard evidence (40% growth in total turnover) to back it up.

 

Please feel free to comment below on any key points of the interview or any questions you many have. Make sure to check back next month where we will be interviewing another procurement and supply chain thought leader.

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Read the other interviews in our "Interview With" series:

 

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