A discussion I had recently with a long-standing client about how their business was handling the pandemic prompted a positive but unexpected response. They operate a biscuit factory in Scotland under a global brand, so clearly COVID-19 would have an impact, one way or another, on every link in their supply chain, from their suppliers, employees, and customers to, ultimately, their consumers. The response was an emphatic assurance that their comprehensive disaster recovery planning had included provision for a pandemic.
This shouldn’t surprise anyone in business, in a sense, as pandemics feature in several aspects of commercial life - force majeure terms in contracts and in the details of insurance policies, for example. It's just that a pandemic doesn’t fit into our routine reality or realistic expectations. But it does now.
There are two striking elements of economic activity in Scotland's food and drink sector in 2020. If operators didn’t have a plan for how their business would operate in the current environment, they must have developed one by now, if they have any ambition to survive and flourish. Secondly, that plan needs to be sustainable for the long term.
We've seen many clients in the sector re-engineer their business processes - and some have re-invented their consumer base. This is challenging for our seasonal growers but others with greater flexibility have collaborated more with suppliers or removed links in their supply chain.
One seafood processor with whom we work was experiencing interruption in fresh supplies, so it simply acquired its own boats. That created continuity of raw material and a great provenance story for its marketing team. The disruption in the hospitality and leisure industry has perhaps driven the greatest change. Diners have become restaurant suppliers' customers and, before relaxation of government rules, those restaurant kitchens that could operate reversed service delivery, delivering to homes. If this was the financial market, it might be called "a correction". These changes have the potential to be longer lasting.
To survive and flourish, every alteration of components of a business needs to be tested for its resilience; that is resilience in terms of the proposal working successfully for the operator and their customers and also in terms of being capable of generating longer term profit and growth.
Other businesses are, of course, emerging during this climate. These are not evolving enterprises but operators created from entirely new ideas, some generated by the emergence of alternative demand, new markets, and alternative means of working such as delivering goods and services.
Resilience is key to the sector staying in business, keeping people in jobs and getting Scotland's food and drink activity back on track and growing again.
Scotland Food & Drink's ambitions for the sector's growth this year were largely underpinned by increasing export sales. The pandemic will necessitate a reappraisal of the market, both domestic and beyond, the sector's key pillars and projections and ambitions for it. New challenges will need to be faced. People were, and still are, critical to the sector's plans. Has the pandemic and the consequential job losses created a drain of talent from the sector?
The sector needs resilience; the sector needs its own disaster recovery plan.