More than 5,000 jobs could be created in the Scottish food and drink sector over the next five years, according to a detailed study of the industry by the Bank of Scotland.
The lender, part of the Lloyds Banking Group, used its second annual Appetite for Growth report to highlight the ambition of the nation’s food and drink producers ahead of the start of Scottish Food and Drink Fortnight on Saturday.
Exporting is targeted as a priority by many, with the Far East and Asia now overtaking Western Europe as the key target market for high-quality produce with strong Scottish branding and provenance.
However, challenges include rising ingredients prices and insecurity of supply of raw materials.
The report also highlights the impact of the horsemeat scandal, with new pressures as businesses are forced to reexamine their supply chains.
Bank of Scotland regional managing director of commercial banking, Alasdair Gardner, said exports continued to be a major area of focus for the industry as it seeks to emulate the worldwide success of Scotch whisky.
“Our findings show the rising cost of raw materials remains the biggest concern for Scottish producers,” he said. “Uncertainty over global economic conditions also continues to be a major issue.
“However, despite the challenges, there appears to be an upbeat mood in the sector with most firms planning ahead for growth and job creation and almost half looking to break into new export markets.”
The report reveals two-thirds of the 100 companies it surveyed expect to increase their workforces over the next five years as the market for Scotland’s food and drink sector continues to expand.
More than a third expect double-digit business growth in the same time period and with respondents “confident” of creating a total of 1,000 new jobs between them, as many as 5,600 roles could be created across the industry as a whole.
Opportunities in food science and process engineering are likely to increase, it is claimed, as the industry seeks to improve productivity, minimise costs and create healthier products.
The report also found the incentivisation of investment through an annual tax relief allowance had prompted more food and drink businesses to buy into their futures.
Around one in 20 of the companies which responded said they would consider floating on the stock markets to support growth, a measure described as “encouraging” by the bank which noted only two Scottish food and drink firms are listed.
Scotland Food and Drink chief executive James Withers said the industry is at a “game-changing” moment.
“Signs that confidence is starting to return to the domestic economy are encouraging but it is the potential for the industry to build on progress to date in overseas markets that holds the most potential,” he said.
“Food and drink exports have already risen by 50% since 2007. Increased global awareness of Scottish produce and a growing appetite for high-quality food and drink means the potential market is continuing to expand significantly.”