Stop a shopper on the high street of any town outside Scotland and ask them to reel off food and drink products they associate with producers from north of the border and chances are that after trotting out whisky, salmon, shortbread and haggis, they'll be hard pushed to extend the shopping list.
But while these items may make up the bulk of products exported by Scottish producers both domestically and overseas, they don't tell the full story.
The country boasts a wealth of products that don't necessarily play up their Scottish roots but are Scottish through and through. And its food and drink industry is set to enjoy phenomenal growth over the next few years if Scotland Food and Drink (SFD), the industry-led organisation supported by the Scottish government, has anything to do with it.
The organisation has recently defined a Roadmap for the future of the Scottish food and drink industry and is targeting sales of £12.5bn by 2017 a £2.5bn increase on current total sales of £10bn [Scottish Government Annual Business Inquiry 2009].
Its three-pronged approach around provenance, premium and health is set out in strategy document Fresh Thinking and underlines the global reputation it has built up around individual products such as beef, whisky and salmon but also acknowledges it doesn't have the "gastronomic cachet of Italy nor the all-round reputation of quality of New Zealand". So what are the chances of it hitting this ambitious target and what sectors are likely to contribute most?
To attain its aspirational status of the "land of food and drink", the SFD believes the Scottish food and drink industry needs to stop being a collection of individual companies going in different directions and act as a single entity with common goals. This was part of the thinking behind the recent recalibration of its financial target, says SFD chief executive Paul McLaughlin.
"Our original target was £7.2bn to £10bn by 2017 but those numbers only related to manufacturing," he explains. "What we're trying to do across SFD is be relevant across the whole of the industry so we want to include the primary sectors of aquaculture, agriculture and fishing."
Flora McLean, director of the Scottish Food and Drink Federation (SFDF), a key stakeholder and founding member of SFD, believes the new target is more than achievable. The fundamental ingredients are already in place, she points out. Scotland is the world's second-biggest salmon producer [Scottish Salmon Producers' Association], landing 70% of the UK's fish [SeaFish]. It also has more than one quarter of the UK's beef herd [Quality Meat Scotland Red Meat Industry Profile 2009] and grows 40% of the nation's soft fruit crop [Genesis Consulting Scottish Industry Mapping Research 2009].
In all these areas, provenance is key and the SFD has identified an additional £600m opportunity to grow sales of provenance products by 2017. But, it says, if the industry is to hit this target, food producers will need to learn from pioneering categories such as whisky, which has been successfully exploiting its Scottish credentials for decades.
"For us the provenance message is about communicating to consumers where, when, how and by whom a product was created," adds McLaughlin. "It's about giving an authentic message to consumers about the story behind a product."
Major inroads are already being made in this area, with Scottish game just one success story. These days, it is widely available throughout the UK, but a decade ago most Scottish game went to Germany and was hard to find here, says Richard Barclay, MD of Rannoch Smokery, one of Scotland's leading smokers of meat, game and poultry.
"Scottish game has been marketed heavily across the UK in the past two years and the venison industry has proved successful in upping its level of activity in terms of generating awareness, making it more widely available and breaking down some of the mystery," explains Barclay. "The general trend towards provenance of ingredients and healthy eating has helped the Scottish game industry because venison is the ultimate wild, natural, free-range food with a visible level of accountability from hillside to plate."
Another producer cashing in on provenance is Grampian Food Group. According to Rob Smith, spokesman for Vion, which owns Grampian, the company produces chickens from a fully integrated supply chain that is Scottish through and through. "In terms of provenance we have our own hatchery in Scotland, our own feed mill in Scotland, our own farms and plant in Scotland, and those products are supplied to major retailers throughout the UK."
The company has also been working closely with Asda and Scottish pig producers to produce a range of Scottish pork endorsed by animal welfare charity Scottish SPCA. Cheese is another area that offers plenty of opportunity to play the provenance card, what with consumer and retailer support for Scottish Cheddar in Scotland.
David Bennett, marketing manager of Lactalis McLelland, part of the Robert Wiseman Dairies group, says flying the flag for Scotland is a key part of the marketing mix.
"Scottish consumers are looking for provenance, he says. "They do buy products because they're Scottish and they're proud of their Scottish heritage." However, he adds, it is not the only element. "At the same time the product also has to have great value for money and it has to be a quality product."
Fortunately, a lot of Scottish food and drink ticks all these boxes creating a compelling proposition for overseas consumers too. "Provenance is very important to the Scottish food industry and there is increasing demand from other countries for genuine original Scottish produce," says Baxters brand manager Elaine Tewnion.
"Baxters is a brand with a strong provenance story. Founded in 1868 with a history that spans more than 140 years and four generations, the brand was founded with the mission to 'be different, be better'. Now in its fourth generation of family ownership, all of the ranges still have their own provenance and sourcing story, making the range stand out."
There is, of course, a danger that if all Scottish producers plastered a Scottish flag on products this could dilute the power of the label especially if lower-grade products were also using it.
The SFDF's McLean is alert to the danger but argues that it's very much a case of horses for courses.
"The Scottish brand is very useful for some products and it will help to sell them," she says. "For example, if a company is selling traditional products to an expat community, Scottish branding is important because it helps draw attention to the product. However, for many added-value products promoting quality, point of difference or health are more important factors. There is already a lot of diversity and innovation out there, but not all companies are specifically promoting their Scottish credentials. Rather they are promoting quality."
High-quality or premium products could be worth as much as an additional £1bn for Scotland by 2017 if marketed and branded correctly, believes the SFD. Again, whisky is the poster child, with recent export figures suggesting the market is still in rude health. "We're looking at the whisky sector to continue its growth but across all of the sectors we're expecting varying degrees of growth," says SFD's McLaughlin. "Part of that can be about volume growth but part is about value growth because one of our three pillars is about premium and trying to get more for what you do."
The remaining pillar of the Roadmap strategy is health. Food trade bodies and the government have worked hard to cast off the lowly reputation of the Scottish diet thanks to those deep-fried Mars bars. For its own part the government published a strategy report earlier this year, Preventing Overweight and Obesity. Part of its remit is around healthy eating, which presents a £685m opportunity for the nation's food and drink producers, according to SFD.
"We've split health into three categories," says McLaughlin. "There are the natural healthy products. In Scotland's larder we have an abundance of fruits, vegetables, berries, meat and fish. The second category we call better-for-you. This is all about doing NPD and innovation around reducing the salt, fat and sugar content of standard products so consumers see them as more healthy or better for them. The third element is food and drinks that are health-enhancing: products that are consumed as part of a normal diet but have confirmed physiological benefits omega-3 in margarines, for example."
The sucess of the latter category will depend on the level of innovation and NPD, an area in which, with the odd exception such as whisky, the Scottish food and drink industry lets itself down at least as far as investment goes. At present the nation spends far too little on innovation 0.2% of gross value added compared with 1.6% for the UK food and drink industry [ONS Research and Development in UK Businesses 1999-2007].
That's not to say no innovation is happening. Despite such damning statistics, McLaughlin believes there is plenty of room for optimism. "We held our excellence awards recently and in the innovation category more than 30 companies applied," she says. "When you look at the number of companies that are innovating and bringing out new products, that presents a positive and buoyant view."
Whisky isn't the only category impressing. Ready meal manufacturer McIntosh, which produces traditional Scottish dishes, has reached out to a younger audience through new pack formats, for instance.
"NPD is a strong focus and driver for the brand and this has led us to expand our existing range into snack pots and larger family packs, with more exciting developments to come," promises McIntosh sales director Ian Clarke.
And Scottish dairy business Rowan Glen, based in Newton Stewart in Dumfries and Galloway, is doing its bit for the health of the nation's kids through the launch of a range of children's yoghurts this month. "Super Doopers children's yoghurts contain the natural vitamins and minerals from whole milk and are bursting with flavour thanks to the real fruit purée in each and every pot," claims Rowan Glen brand manager Suzanne Wallace. "One pot of Super Doopers provides 15% of the RDA of calcium, essential for children's healthy growth and development."
Even traditional shortbread biscuit manufacturers are getting in on the innovation act. Walkers has launched snack packs aimed at the 'grab and go' market, which come in dinky tartan bags, and has switched to new resealable packaging across its traditional biscuit range to "lock in" freshness.
"These eyecatching new packs feature a stylish resealable flap, which makes the range more practical as an everyday luxury item," says managing director Jim Walker. "The seal, along with the protective tray, keeps these biscuits in tip-top condition."
Rival biscuit manufacturer Paterson Arran, which has similar traditional roots to Walkers, has also pushed the innovation envelope. Towards the end of last year the company launched the first portion-controlled children's shortbread snack, which ticks all the health boxes. Orang-u-tangys mixes Scottish shortbread with orange pieces, is low in satfat and doesn't contain any artificial flavourings or colourings.
"We're committed to developing innovative products that are better for consumers while retaining their great taste," says marketing manager Debbie Ballach.
Aberdeenshire-based Deans is another company firmly focused on NPD as it aims to achieve sales growth of £3m over the next three years, taking its total turnover to £10m.
"We're committing to do this via raising awareness of our core range within the UK, boosting our global strategy through NPD, increasing our export locations and being open-minded to new ideas for our product portfolio in light of market and consumer trends while responding quickly to such opportunities," says MD Bill Dean. "This refreshed approach will be fundamental in reaching our financial targets to boost our business growth and the overall Scottish industry."
Even the most traditional of Scottish foods, the haggis, is being rebooted. Halls of Broxburn has introduced ready-to-cook Chicken Balmoral (chicken breast stuffed with haggis), pre-cut haggis slices, a vegetarian haggis and special-edition giant haggis the Chieftain for Burns Night.
These brand variants have helped the company achieve double-digit volume growth over the past two years, according to Rob Smith of Vion, owner of the Halls brand, who says sales growth is currently a bit higher in England than in Scotland.
But while individual companies are performing well off the back of NPD, the whole is arguably less than the sum of its parts because of the sheer number of Scottish food and drink companies that have not yet exploited the export opportunity.
The SFD is looking to grow exports from £4.06bn to £5.1bn by 2017, but McLaughlin says a number of companies not just in Scotland but UK-wide don't export because they believe the barriers to exporting are much higher and the returns are lower than they actually are.
In Scotland this perception can partly at least be attributed to the fact that three quarters of the country's businesses employ 10 or fewer employees [Scottish Government Food and Drink in Scotland, Key Facts 2009] and only 34 food and drink companies turn over more than £50m [SFD Companies House data]. Based on these figures, it's difficult to see how the country will create the scale it needs to become a true global player, which is why the SFD is looking for more Scottish companies to become global businesses and for smaller operators to collaborate more.
"We need to have more scale within our industry," argues McLaughlin. "That can come in a number of different forms. It can be actual scale in terms of mergers and acquisitions or it can be virtual scale, getting more companies to work collaboratively or in co-ops or joint ventures. We need to say how we can start to work together."
An example of a Scottish business that fits the bill on the global front is Highland Spring, which last year acquired the bottled water division of Greencore Group.
"By purchasing the Greencore plant that came with that deal we're now the own-label producers for supermarkets like Sainsbury's, M&S, Asda and Morrisons," says head of marketing Paul Condron. "That has taken Highland Spring overnight from one of the largest brands to the largest bottle water producer in the UK. It brings with it so much more potential for the brands we sell both domestically and overseas."
Highland Spring is on track to generate more than £50m in sales and has set itself the goal of ultimately becoming a £100m-plus company.
But there are still too few companies as ambitious as Highland Spring around and McLaughlin acknowledges the crucial role the SFD needs to play in terms of providing the right levels of support to allow Scottish companies to grow.
The SFDF's McLean says that along with other signatories to the SFD's strategy, the federation will provide all the support it can "but, at the end of the day, it is the companies themselves that will deliver the growth we aspire to".
The will is certainly there, as is government support in terms of funding. The government-funded Scottish Development International (SDI) has allocated extra resources to support the Scottish food and drink industry.
Approximately £2m is being invested annually by the SDI in international trade activities and promotions and last month the Scottish government launched a year of food and drink-focused activity, which runs through to April 2011.
At the same time it announced an additional funding package to the SFD of £300,000, to be used for a number of different projects, including marketing and branding as well as supply chain work to connect food processors and manufacturers with retailers and public and private catering establishments.
This injection of cash, coupled with a diverse industry base and established exporting track record, leaves McLaughlin convinced that the appropriate ingredients are in place to make the Roadmap a reality.
"Economic growth in the food and drink industry is absolutely vital to Scotland's recovery," he says. "Our Roadmap to 2017, based on industry and stakeholder collaboration, can help ensure our industry won't just survive but prosper."
Focus On Scotland