Scottish government investment to improve domestic supply chain

By Oliver Nieburg

- Last updated on GMT

Related tags: Drink industry, Scotland

The Scottish government has pledged £300,000 to boost supply chain efficiency for national food processors

The investment will be used by industry-led organisation, Scotland Food and Drink to improve relationships between food processors and retailers. The idea of creating a distribution hub somewhere in Scotland has also been touted.

Anna Davies, the company’s communications and marketing manager, told how food distribution is of real concern to many companies.

Lack of suitable distribution or access to appropriate distribution channels are both often cited as a major barrier to expanding micro, small and mediums sized businesses,”​ she said.

So the key question is: How can Scottish producers get product to market more easily and cheaply?”

The firm is currently undertaking a scoping exercise looking at the possibility of creating a physical distribution hub somewhere in Scotland which is due to report back on 11 June.

The industry targets a £2.5 billion increase in turnover by 2012. According to Davies, the Scottish food and drink industry is currently worth £10 billion per annum.

The Scottish Food and Drink Federation (SFDF) welcomed the investment. SFDF director, Flora McLean agreed that improved supply chains would help Scottish companies to supply their products to a wider customer base. “Many companies in Scotland are based in remote locations so if they are able to improve their distribution networks, they will be able to distribute their products further afield via a wider network of buyers,” ​she said.

Key to economic growth

Under the current economic climate, Paul Mclaughlin, Scotland Food and Drink chief executive said: “Economic growth in the food and drink industry is absolutely vital to Scotland's recovery.”

Rural affairs secretary Richard Lochhead also stated: “Scotland's thriving food and drink sector is one of our key economic strengths and genuine success stories.”

The Scottish government said that sales of national food and drink increased by 21 per cent last year.

Although changing markets and new brands make it difficult to compare with historical figures, Lochhead felt that consumer interest in home-grown produce and Scottish brands had never been greater.

Booming exports

Scottish Development International (SDI) announced on Thursday a record increase in Scottish food and drink exports with international sales reaching an all-time high of £4.06 billion during 2009. SDI said total food export sales to France alone grew by 24 per cent.

Scotland Food and Drink measured the current food and drink exports market at £3.8 billion and have set a target to increase this figure to £5.1 billion by 2012.

The £300,000 funding will also be used to initiate a new marketing and branding development programme and to support food and drink events.

Related topics: Market Trends

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