North-east food and drink producers have shown tremendous agility and resilience in the face of disruption to markets, consumers and all aspects of doing business since March 2020.
“The challenge was the total unknown of Covid and lockdown, and the loss of hospitality and foodservice sales,” said Jane Mackie of Rora Dairy.
The business makes live yoghurt using milk produced on the Middleton of Rora Farm, near Peterhead, with locally-grown ingredients and minimal processing.
“There was a pause of breath but then orders kept coming in,” Ms Mackie said, adding: “The local and broader Scottish retail markets were very supportive.
“We’d recently secured a listing with Sainsbury’s, which we were very blessed to have. Staff in the business were great, and we’ve pretty much been all go throughout.”
Ms Mackie has participated in Opportunity North East (One) business growth, meet-the-buyer, and mentoring programmes.
She has also used a One Enterprise Fund loan to invest in new equipment, streamline production and increase volumes.
There was a pause of breath but then orders kept coming in.”
Jane Mackie, Rora Dairy
Ms Mackie said: “We did pause investment plans last year but then pressed ahead later in 2020 to increase production capacity.
“We also continued with new product development and recently launched our fresh fudge yoghurt, with more lines to follow this year. Our Greek yoghurt has been on trend for cooking at home.”
Established firms have had to be equally nimble. A household brand across the UK and now approaching its fifth decade, family-run Dean’s produces premium quality Scottish shortbread from its base in Huntly.
The business exports to around 30 countries, including China, the US, Australia and many parts of Europe.
‘Cost inflation in all areas’
Managing director Bill Dean expects fallout from the pandemic to disrupt many aspects of the industry for some time but has also seen the practical benefit of investment in e-commerce, automation and new product development.
He said: “UK and international logistics are still hugely disrupted, with little guarantee on delivery timescales – along with four-times higher shipping costs.
“We see cost inflation in all areas, including ingredients and packaging. Labour and skills shortages are a persistent issue, especially seasonal staff.
“There are many challenges on our plate and will be for some time to come as these issues work through.”
When the pandemic initially hit, Dean’s export, foodservice, and tourism-related sales dropped, and even its core retail sales stopped when only essential goods were moving.
Mr Dean said: “Fortunately, we had already invested a bit in our online sales channel and fulfilment centre in Huntly, and had jointly resourced a digital marketing post via a knowledge transfer partnership.
“This side grew strongly and by the final quarter of 2020 was doing very well. It also gave us the flexibility to repurpose product destined for other sectors that were closed.”
Dean’s focus on automation allowed it to flex production in busier periods, and further investment will soon deliver a new production unit in a converted warehouse.
Mr Dean added: “There are good opportunities ahead for the sector. We need to do everything we can to ensure businesses can make the most of them.”
This is a world-class industry, with a vital part to play in our future economy.”
Stanley Morrice, One food, drink and agriculture board chairman
Food and drink is the UK’s largest manufacturing sector. It provides in excess of 22,000 direct jobs in the north-east alone and more than 20% of Scotland’s total economic output.
Over the past five years, One has created and delivered business growth, market development, export, technology, mentoring and leadership development programmes to give businesses the insights, tools and connections to grow.
The economic development partnership works with more than 150 food and drink businesses across the north-east, has supported in excess of 50 new starts and boasts more than 20 senior industry leaders mentoring high-growth firms.
Region punching above its weight
One food, drink and agriculture board chairman Stanley Morrice said: “This is a world-class industry, with a vital part to play in our future economy.
“The north-east punches above its weight and we have some real success stories – companies including Mackie’s of Scotland, Farmlay, Mackintosh of Glendaveny, International Fish Canners and Thistle Seafoods have grown retail sales and market share, invested and created new jobs through the pandemic.
“At the other end of the scale, we are continuing to see a large number of exciting start-ups.”
Mr Morrice, who also has executive and board leadership roles with Garrets International, Strachans and Van Hulle, added: “Opportunity North East sits at the heart of a cluster of well-connected businesses, with able and ambitious leaders within a sector which is a priority for the future economic growth of north-east Scotland.”