Scotland Food & Drink fine-tunes resiliency plans for the sector
As featured in The Herald - Iain Baxter has the task of launching a new game plan to drive further growth across a sector currently valued at £14.7 billion.
The following article was featured in The Herald.
Demand for Scottish produce has never been more robust, yet at the same time the food and drink sector is facing the most challenging circumstances in living memory as labour shortages, supply shortages and soaring costs have merged to create a perfect storm. Against this harsh macroeconomic backdrop, Iain Baxter has the task of launching a new game plan to drive further growth across a sector currently valued at £14.7 billion.
The former whisky industry executive took over as chief executive of trade body Scotland Food & Drink seven months ago, succeeding James Withers after 11 years in the post. Described at that time as the “ideal candidate” to take the organisation forward, Mr Baxter inherited a fresh strategy in the making that will be unveiled at this year’s Royal Highland Show beginning on June 22.
“It’s not a different direction but it’s turning up the volume on some areas,” he said. “It’s still very, very much focused on growth, but what we are doing is focusing much more on resilience and sustainability in this particular strategy.”
Mr Baxter, who has held roles with Glenmorangie, Inver House Distillers and Ian Macleod Distillers, said the last couple of years have obviously been extremely tough as input costs for raw materials and energy have surged. Added to that are labour shortages exacerbated by the loss of EU workers in the wake of Brexit and the pandemic.
“You hear is most keenly when it comes to primary production – picking crops, working in fields, or whether it’s working in seafood, processing, and so forth – areas where you need a supply of labour, often seasonal labour, in rural communities where it’s very often been difficult to get hold of people for that type of work,” he said. “And that’s been true all the way through the supply chain as well – food service has also been affected by that.”
The research behind the new strategy was already underway when Mr Baxter joined Scotland Food & Drink, which has about 450 members drawn mainly from the bigger players within the industry. His group is also part of the Scotland Food & Drink Partnership which includes 19 membership organisations covering 95 per cent of the sector.
The primary areas of concern that came through during consultations were the need for growth, the requirements for the transition to net-zero, and most of all, cost control.
“The squeeze has been on margins, and in particular in commoditised markets where margins have been pushed to break-even or below where people are really struggling,” he said.
“If the forecasts on [easing] energy costs are correct, then hopefully that will put a little bit of slack back into the system. But it is not just resilience in terms of the cost side, we have also got the security of supply chains which have been hit by other factors such as Ukraine, so it’s the availability and cost of materials for input that have been really challenging.”
Raised in Alloway, Mr Baxter later spent nine years in Dundee before his career then took him to various locations throughout Scotland. He worked for nearly 15 years in a number of brand management and marketing roles within the whisky sector before spells with Caledonian Sleeper and then Caledonia Housing Association.
He returned to Ian Macleod Distillers in 2021 as an innovation consultant, his last post immediately prior to joining Scotland Food & Drink.
He said he had some “wonderful times” working outside of the world of whisky which were “really rewarding on all sorts of levels”. However, food and drink is “always where my heart has been”.
“Leaving the drinks industry was probably one of the hardest things I have personally ever done in my career because it was leaving the network I grew up in – all of my senior career had always been in drinks and I knew everyone there, and everyone knew me, so it was quite a wrench,” Mr Baxter explained.
“It was a necessary wrench because I wanted to go and see what the outside world was like, I suppose, and I am glad I did because it certainly made me a more rounded individual, without a doubt.
“But [food and drink] is kind of in my blood, really, and I guess it always has been. So when I came back to the drinks industry it wasn’t so much people asking what brought me back, but people asking why did I ever leave.”
Despite prevailing market difficulties Mr Baxter insists producers are “quite positive” and ready to capitalise on opportunities, particularly in the field of exports which account for some £8bn of the industry’s overall value.
“When we look at growth, there are certainly a lot of new markets to be opened up,” he said. “I guess that Scottish whisky is always going to be seen as the pathfinder, and there is definitely more upside in whisky, certainly on the value side.
“We feel that we are doing incredibly well with seafood, and there are definitely opportunities in the Gulf states, for example. There is always upside in Asia, but at the moment what we are looking through as part of the strategy will be to identify which sectors and which markets are going to have the biggest upside.”
Where do you find yourself most at ease?
In, beside or under the sea. I grew up on the coast and summer holidays here and abroad were always filled with beaches and swimming.
If you weren’t in your current role, what job would you most fancy?
At the moment it’s hard to think of a better job than the one I have, but I’ve always loved travel and would like to find the time to write, so I suppose being a travel writer would suit me well.
What phrase or quotation has inspired you the most?
“Hire good people and good things happen”. I was told this very early in my career and it’s always served me well.
What is the best book you have ever read? Why is it the best?
I honestly think this is an impossible question to answer so can’t give you a ‘best’. When I was a student, I read a lot of South American writers and I suppose 100 Years of Solitude was the gateway to that world for me. For anyone that’s recently become a father The Road by Cormac McCarthy is incredibly powerful, which is true of all of his books.
What has been your most challenging moment in life or business?
Leaving the drinks industry after 16 years was tough, as that was my world and the only industry I’d worked in at a senior level at the time. But, I knew I needed to do it and I don’t have any regrets, and my drinks experience is a huge asset in my job today.
What do you now know that you wish you had known when starting out in your career?
Being young and getting to travel the world for your job is exciting and gives you invaluable experience, but you have to be careful as you can never get back the time you don’t spend with your family. It’s something to keep a really close eye on and balance properly.