The Scottish food & drink industry is a globally recognised brand and continuing to strengthen this brand will be key to reaching the shared vision of the Scotland Food & Drink Partnership outlined in their “Ambition 2030” strategy.
To achieve this, there will need to be collaboration from field to table, and a wide variety of businesses from different sectors will each play a unique role in future-proofing an ever growing and vitally important industry in this country.
So what are some of the areas in which companies may look for support, to assist them in unlocking their own potential and ultimately supporting this burgeoning Scottish industry?
If the company is at a relatively early stage in its lifecycle, then ensuring that there is a firm business plan in place to map out the strategy, the brand and route to market is essential. This will involve preparing a financial model to determine the quantum of investment and trading levels that would be required in order to make the brand viable in the marketplace. Securing the most appropriate early stage investment will form a critical part of this plan, as there can be a wealth of different options available that can include high net worth individuals, banks, mezzanine finance providers and private equity investors. Getting this right from the outset will pay dividends in the future. This same plan can also lead into to thoughts around ultimate exit planning…what are the long term goals, and can a structure be put in place early to make it as tax efficient as possible?
Whatever the stage of the business, it will need to continue to be innovative and open to new developments in technology. The UK has a generous Corporate Tax regime that can benefit food and drink companies seeking innovative means of developing their products. If a company is investing its money and its people’s time into innovation, then the business must ensure it actively secures the tax breaks that can go along side that to reinvest back into growth. In some cases this can involve getting money paid directly to the business, from HM Revenue & Customs…what is not to like about that!
For the business to be successful, it is of course essential to have a motivated and driven management team. Implementing the most appropriate type of employee remuneration and share incentive plan can be a fundamental part of achieving this. Making the management team feel akin to entrepreneurs in their own right, sharing in the business success, can make a significant difference to performance.
In a world where Scottish quality and our food and drink is increasingly becoming a globally recognised brand, capitalising on opportunities internationally with overseas customers can reap considerable benefits. With globalisation of a brand, as with any business, there are numerous factors to consider. Can the product currently be imported into and sold in that marketplace? What is the route to market and what local support may be required? Are there any import duties? What other tax considerations are there in that location for the business in trading there? And that is even before asking any questions about Brexit impact! Although lucrative, international expansion should not be underestimated and ought to be carefully planned and fully understood, so that it is ensured that profit margins are not unexpectedly eroded by unanticipated tax surprises.
Finally, the choice of advisor to a food and drink brand is key. Ensuring that the advisor is knowledgeable in the sector, and also sufficiently specialised so as to be able to offer crucial support with matters such as those noted above, will play a fundamental part in the brand’s success.
For more information please contact Derek Mair (firstname.lastname@example.org) or your usual AAB contact.
To find out more about Derek and the Food & Drink team click here.