Consumer behaviour drives innovation across food and drink 

In a world turned upside down, one thing that remains constant is the impact consumer behaviour has on the food and drink sector – shaping innovation, investment in technology and sustainability across the industry.

The pandemic in many ways has highlighted what’s important and has changed consumer behaviour as more have shopped locally and with the seasons; and explored new products which previously were exported to the EU. Seafood is great example of this where businesses have pivoted to target the UK market with a direct-to- consumer model.

This trend supports the ambitions of many in the food and drink sector to become more sustainable, whether that is through reducing carbon emissions throughout production or developing new packaging solutions.

Scotland’s landscape and abundance of coastline offer the perfect location to install wind turbines to utilise natural resources to power production; and the strong agricultural sector means the raw materials for some can be grown onsite or locally, reducing the carbon footprint on each product.
The heightened focus on the role of plastics in packaging is driving innovation and has led to great strides being made to enhance the recyclability of packaging.

These green credentials are not only the right thing to do to reduce the impact of production, but they draw a higher premium and enhance a brand as consumers are increasingly looking to give their loyalty to ethical businesses. Best practice from within Scotland’s food and drink sector will no doubt be showcased at COP26 later this year.

A key challenge for the sector is staff shortages and competition for the right talent to support future strategies is acute. Manufacturers require a mix of people with a range of skills to make, convert and then sell to the end customer, and uncertainty following Brexit and the global pandemic has reduced the pool of migrant workers upon which many businesses were reliant.

Technology can help but rather than replace roles it means staff need effective training or new recruits need to have a different skillset to strengthen production and improve productivity.

Digital technologies can also help to better manage the supply chain disruption that many are facing post-Brexit through analytics and forecasting software allowing businesses to better understand performance and forecast as accurately as possible. In addition, implementing key block chain software that documents each aspect of the production process and components used increases traceability and demonstrates the quality of products to consumers.

At a time when increases in customs paperwork and errors in documenting the rules of origin of products is slowing down trade, utilising block chain technology could streamline this process. Investing in technology is costly, but the 130 per cent ‘super-deduction’ for capital spending and research and development tax relief announced in the UK budget could bring key tax benefits for food and drink businesses looking to invest and may help to give capital expenditure plans the green light.

And when you consider low interest rates and adjust for inflation, the cost of new debt may well be negative over the lifetime of the debt; so now is the time to act. Pulling forward investments in technology, equipment and intellectual property will bolster long-term prospects and maximise the silver lining that the current financial conditions provide.