Gary McDonald – Market Development Manager, Scotland Food & Drink discusses the recipe for success of a scaling-up food or drink business and the importance of the finance function:
What are the attributes of a successful food or drink business?
A successful food and drink business is one which ultimately knows both its market and target customer, and also what makes the product stand out from the crowd (their USP). Having a good product doesn’t make a good business, and having robust research, planning and a marketing plan in order to reach their target audience is essential.
Also, it goes without saying that dedication and having good people within a food and drink business is essential. A clear strategy and plans for expansion and innovation combine to provide an excellent platform to build a successful food and drink business in Scotland.
What are the challenges of scaling a food and drink business in Scotland?
There are a number of varied challenges which are both shared with other countries and also unique to Scotland.
Firstly, there is the size of audience within Scotland. With population levels lower, especially outwith the major cities, audience size can be a challenge. Entering new markets outwith the immediate locality can prove challenging, in particular for small businesses.
Access to people and particular skills and functions relating to the food and drink industry can also be challenging in Scotland. In particular, specialist skills are low in supply and high in demand which can prevent Scottish businesses expanding and scaling at pace.
Lastly, funding and capital for expansion can be difficult, especially with the rising costs and overheads for food and drink businesses.
These challenges however, can be overcome with the help of support organisations such as Scotland Food and Drink, and are key to our delivery of Ambition 2030, by working collaboratively to overcome common challenges.
What is the role of the finance function within a scaling-up food and drink business?
Finance functions are essential in that they are the oil needed by the business engine! Working capital, financial controls, seeking investment options, chasing payments, and day to day financial levers and requirements, provide the engine room with the power to allow a business to function and scale up.
Whether it is purchasing of stock, trading in international currencies, or paying employees on time, finance functions are very much essential in the running of successful and scaling food and drink businesses.
Sound financial planning allows sustainable growth, ensuring the exposure and risk of a scaling business is minimised and proving it with the best chance to flourish and drive commercial success.
What are the barriers and opportunities for scaling a food and drink business internationally?
There are barriers, but in addition there are many opportunities which a lot of businesses may not have visibility or awareness of.
In terms of barriers, the first and most important is that businesses might not be aware of the range of opportunities. Connecting with SDI (Scottish Development International) or Scotland Food & Drink can enable businesses to access market research into where their products are in demand in international markets. This can provide the starting point of a potential international strategy and could be the catalyst for looking into markets which otherwise the business would not have known were potential markets for their product.
Logistics is another obvious barrier, with costs for smaller businesses in particular sometimes prohibitive. However, in the ever connected and shrinking world, we often find there are new solutions and innovate means to deliver to marketplaces. Again, support organisations can provide support in finding solutions and delivery methods which are surprisingly accessible.
Routes to enter markets sometimes can prevent businesses looking into certain markets, but SDI’s in-market specialist service, and large scale events in Scotland such as Showcasing Scotland can help connect buyers to producers easier than you may think.
Again, the overriding advice is to seek support from organisations which are designed to help. SDI, Scotland Food & Drink, and other sector specific organisations are there to help. You are not alone as you embark on international and global domination. It may be easier than you think….
What role does Scotland Food & Drink play in encouraging food and drink businesses to grow?
Scotland Food & Drink plays a key role in growing the food and drink industry in Scotland and helping individual businesses within Scotland to grow.
From an industry perspective, Scotland Food & Drink are the industry leadership organisation, connecting the public and private sector through partnership to deliver the environment that allows food and drink businesses to thrive. The collaborative element allows the private and public sectors to work in tandem - and often together - in the delivery of initiatives and strategy to provide the industry with the framework to flourish.
Scotland Food & Drink is also the leading market development organisation in Scotland, helping connect food and drink producers in Scotland with new market opportunities both within Scottish regional markets, the rest of the UK, and working alongside SDI across the rest of the world in export markets.
Through dedicated support within our membership, we provide the bespoke support and guidance that businesses often require to grow and also represent larger food and drink businesses in both manufacturing and supply chain through our industry leadership role.
In finance and interested in joining a food or drink business? Please get in touch with Kris Flanagan, Associate Director on 0141 648 9150 or firstname.lastname@example.org