A Growth Strategy for Scotland's Brewing Industry
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Brewing Up A Storm A growth strategy for Scotland’s brewing industry Foreword In 2018, a Brewing Industry Leadership Group (ILG) was created, We are determined to raise the profile, image and perception tasked with doubling the value of the Scottish brewing industry. of Scottish beer as a wholesome beverage for adults of all Its members included brewing companies’ leaders and experts ages, genders and backgrounds to choose when they are in from educational, legal and funding organisations with direct a responsible (and legal) alcohol drinking occasion. We’ll also experience of supporting the sector. Also represented were engage better with the hospitality and tourism sectors to ensure suppliers, customers and consumers: the whole supply chain that all ‘beer experiences’ are high-quality ones. And we’ll help from field to glass. to steer the industry through the challenges created by Brexit. Our ultimate goal is to put Scotland back on the map as a nation One of the oldest industries globally, commercial brewing producing great beers and great brewers, and a good place for has been practised in Scotland since the 1700s, supporting investors in the industry. agricultural economies through its use of nutritious, natural ingredients, and also contributing to employment and tax My thanks go to the Brewing ILG for their insight, experience, revenues. Yet beer is an alcoholic beverage and in recent openness and valuable time in creating this strategy. Thanks also years health and society based regulatory influences have to the guest speakers, trade associations and other contributors, not promoted its consumption or image. for challenging our thoughts and endorsing our direction; to Graham, Jennifer and Rachel from Scotland Food & Drink for The Brewing ILG has focused on establishing solutions to unlock their drive and enthusiasm; and to Sarah for her wonderful growth across the brewing industry in Scotland. We want our skill in capturing the pearls of wisdom from the group and ideas to be relevant to all brewing businesses regardless of writing this strategy. shape, size or geography. And not just for the burgeoning ‘craft’ sector – we’re also passionate about the value and contribution Hilary Jones of the established brewers who have successfully flown the flag Chair of the Brewing ILG for Scottish-brewed beer. 2 3 Our goals for 2030 In discussions with industry and public sector about this strategy, five values have come up repeatedly: quality, sustainability, responsibility, engagement and collaboration. They’re worthy goals in themselves, and they’ll also fuel our growth. As an industry, we should weave them into all we do. Scotland is a brewing nation. Go back less than two centuries £500m in turnover each year to the Scottish economy and and we were one of THE brewing nations, exporting to America, supports over 8,000 jobs. Our ambition is to grow this to £1bn QUALITY Australia, Asia and Africa. by 2030, also creating new jobs in urban and rural areas, many of Being known for great beer, people, ideas and natural resources. them high-value. We’ll do this not just by producing more beer but by We were inventive too. We brought technology and chemists into increasing the value of our beer. We want consumers to buy Scottish, our breweries. We brewed porter, stout, Pilsner, IPA and small SUSTAINABILITY rather than imported beer, and to consume beer responsibly. beer. We flavoured our beer with botanicals and cooked chicken Addressing environmental issues such as climate change and water efficiency; (‘cock ale’, if you want to give it a go). Our goals will feed into the ambition to grow Scotland’s food and drink economic considerations such as jobs; and social inputs such as sustaining communities turnover to £30bn by 2030. and contributing to health and wellbeing. But nowadays ask a visitor or Scot what Scotland is famous for, and beer may not make the cut. It will also support the Scottish Government’s economic strategy. We’ll generate inclusive growth in both urban and rural areas. We’ll RESPONSIBILITY Let’s change this. Let’s also drive economic growth in brewing, contribute to export targets and internationalisation. We’ll support Not just environmental and social responsibility, but defining beer’s role and its supply chain, in Scotland. innovation and investment. in a positive food and drink culture and lifestyle. There are different estimates of brewing’s contribution to the We’ll also make Scotland an even better place to brew and drink beer. economy, but the brewing industry believe it is worth around ENGAGEMENT Interacting with tourism, hospitality and education providers to generate a steady stream of consumers and future brewers; engaging with policymakers to create an A target of £1bn by 2030 is environment conducive to growth. ambitious. But Scottish brewing has what it takes – large businesses already selling successfully at home COLLABORATION and abroad, and younger companies Between suppliers, producers and policymakers. It’s been pivotal eager to innovate and grow. If the to the growth of food and drink in Scotland, and will be pivotal to industry and the public sector the growth of brewing too. collaborate for growth, we really can brew up a storm. Our recommendations for growing the sector are guided by, and support these values. 4 5 Draught beer has a special place in the UK. It’s a unique way of delivering Where we are now fresh product, using reusable containers with no packaging waste. Pubs bring social and community Brewing’s a heritage industry in Scotland; it’s also resurgent. benefits. So, our tradition of draught We now have over 130 breweries spread across the mainland beer links well to consumer trends – and islands of Scotland. a real growth opportunity. It’s a growth industry, and we want to grow it further – in terms of turnover, jobs, exports, reputation and the overall contribution it makes to Scotland’s economy. But like any growth industry, it needs nurturing. That’s what this strategy is all about. Breweries alone sustain over 8,500 jobs in Scotland and £571m of GVA The challenges For all of its ambition and vibrancy, the brewing industry, ■ Beer’s image within certain consumer groups and the need to and its supply chain in Scotland faces numerous challenges: enthuse new consumers about beer. ■ Environmental challenges around climate change, packaging The beer and pub trade in Scotland employs over ■ Skills gaps in business management, logistics, cellaring and and access to raw materials including the challenges (and opportunities) around the Deposit Return Scheme in Scotland, 51,000 people selling beer have been highlighted. Risk of visa rules and directly Brexit exacerbating existing skills shortages could also restrict and possibility of schemes in England & Wales. valuable knowledge exchange from other brewing nations. ■ Other regulatory issues could limit our growth prospects if not ■ Additional post-Brexit uncertainties around agricultural policy, developed in partnership with industry, including: access to materials and export trade deals. Outdated arrangements for collecting excise duty on beer. Overall beer and pub activity generates ■ Geographic and scale related constraints on businesses’ Possible restrictions on alcohol marketing growth such as access to infrastructure, and challenges around £1.66bn of GVA and sponsorship. logistics, recruitment and retention of staff, especially for rural (gross value added) across Scotland and island breweries. The impact of business rates on the hospitality sector, a key route to market for beer. 6 7 The 2030 recommendations ABBREVIATIONS This strategy outlines 16 recommendations that will take the industry successfully into 2030; IBH International Barley Hub 7 Promote projects to optimise resource efficiency and use of co-products ZWS, IBioIC IBioIC Industrial Biotechnology Innovation Centre they reflect the framework outlined in the food and drink sector’s Ambition 2030 strategy: ILG Industry Leadership Group SAOS Scottish Agricultural Organisation Society SBPA Scottish Beer & Pub Association 8 Improve keg management to reduce costs and increase resource efficiency ZWS ■ Building our capabilities in terms of people & skills, innovation and supply chain SDI Scottish Development International ■ Developing our markets and the brand of Scottish brewing SE Scottish Enterprise SEFARI Scottish Environment, Food and Review the technical dispense system and infrastructure ILG Agriculture Research Institutes 9 All the recommendations link to one or more of our five key values of quality, sustainability, SFD Scotland Food & Drink STA Scottish Tourism Alliance responsibility, engagement and collaboration. All of them will help to unlock growth for individual SDS Skills Development Scotland 10 Back the brewing sector with innovation support and relevant R&D businesses and the industry as a whole. TBAS The Brewers Association of Scotland ■ UKMD UK Market Development Facilitate access to innovation support through signposting and connecting Make Innovation Happen, TBAS, SFD ZWS Zero Waste Scotland ■ Support the sector to attend relevant international events to gain insights into new trends and knowledge SFD Export Board 1 Set up an Industry Leadership Group to drive progress and ambitions SFD 11 Use research to help Scottish brewers differentiate their beer and compete globally ■ Support research on whether Scottish ingredients can deliver nutritional / environmental benefits SEFARI, Interface Create an information hub to put every brewing business