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Scotland's food and drink sector is on a steady growth path, according to Bank of Scotland research which forecasts a ramp-up in investment and job-creation to target new export markets over the next five years.

 

The bank's report – An Appetite for Growth: Ambition and Opportunity for Scotland’s food and drink industry – surveyeyed over 100 Scottish food and drink businesses with an estimated aggregate turnover of £6 billion. 

 

The replies indicted a mean five-year growth expectation of 19% with wo-thirds of companies also expecting to increase their workforce in the next five years. 

 

Of the companies surveyed, respondents were confident of at least new 940 jobs between them over the next five years. If replicated across the wider food and drink production sector, this could mean over 5,600 new jobs, Bank of Scotland estimated.

 

The findings demonstrate that the industry is set to significantly exceed trade body Scotland Food & Drink’s current target of achieving £12.5bn turnover for the industry by 2017, the bank added.

 

Exporting and new product development are expected to be the key drivers for growth in the sector, with over 40% of firms are still planning on expanding their export activities.

 

The report also detected a shift in where Scottish food and drink companies are setting their international sights as they look for higher growth markets. Almost two-thirds of companies named the Far East/Asia as their key area of focus, replacing Western Europe at the top of the list of target markets. 

 

The rapid emergence of countries such as Brazil was also underlined with a 20% increase on last year’s report in the proportion of companies looking at South America.

 

The biggest area of concern for the sector continues to be the cost and volatility of raw materials, cited by almost two thirds of respondents amid greater competition for resources and the threat of poor harvests caused by extreme weather.

 

This is the banks' second annual market survey on the sector, noted Alasdair Gardner, managing director of commercial banking at Bank of Scotland said:

 

"Overall confidence levels remain high and the sector is pushing ahead delivering record growth," he said. "If this level of growth continues we will see levels of growth in the food and drink industry that could soon be alongside oil and gas on the export market."