Scotland is known worldwide for its food and drink. From whisky to seafood, its natural larder is both a point of pride and a major driver of the economy, supporting over 129,000 jobs and generating £5.4 billion a year. And now, with a national strategy aiming to grow the sector from £16 billion to £20 billion by 2028, the industry’s future hinges on whether Scotland can make it genuinely sustainable.
Pressures of climate change, rising costs, and supply chain disruptions are intensifying, but some parts of the industry are making strides nonetheless. Many businesses, however - particularly those with fewer resources - are struggling to keep up due to differences in opportunities and support. For instance, larger distilleries like Glenmorangie are leading the way by investing millions in green technologies, such as low-carbon hydrogen energy. But, for many smaller producers, access to capital remains a significant barrier to achieving such progress. Indeed, 73% of food and drink businesses report difficulty securing funding for sustainability initiatives, making it harder to achieve their ambitious goals.
In addition to funding challenges, the sector is facing a range of macroeconomic and microeconomic pressures that threaten its sustainability efforts. Some manufacturers have seen energy bills soar by up to 400%, as fixed-price contracts end and suppliers collapse, driving up grocery prices and squeezing profit margins. While reforms like zonal pricing may offer some relief, Scottish producers are still burdened by some of the highest energy rates in Europe.
Despite these challenges, there’s much to be optimistic about. Local sourcing is gaining traction, reducing dependence on volatile global markets and supporting local producers. The Scottish Government’s Food Waste Reduction Plan is also helping households and businesses reduce waste, emissions, and costs by encouraging better food waste management practices and providing financial incentives for waste reduction. Meanwhile, Scotland’s growing reputation as a testbed for sustainable food innovation is attracting investment in vertical farming, climate-smart aquaculture and carbon-capture brewing - a process currently being used by Tennent’s Lager.
It's clear that the sector has made notable progress in sustainability but, to truly lead globally, these efforts need to be scaled and integrated across the whole industry. Improving how we measure and report environmental impact is an essential step in this process. Better data collection and transparent reporting will not only track progress, but also build trust with consumers and investors, reinforcing Scotland’s position as a leader in sustainable production.
Collaboration across the supply chain is equally crucial. Farmers, distillers, processors, and retailers must work together, sharing risks such as price volatility, coordinating investments, and unlocking efficiencies. This collaborative approach will ensure that sustainability is embedded throughout the supply chain, creating a more resilient system for all.
Real changes, such as these, will ensure that sustainability is at the core of every business and should be integrated into governance and decision-making - not just marketed as a strategy. Because, when sustainability becomes part of a business’s DNA, it drives innovation, strengthens reputation, and creates long-term value - ensuring competitiveness in an increasingly green-conscious global market.
To secure the future of Scotland’s food and drink sector, the path to sustainability must be clearer and more accessible for all. This means creating long-term financial solutions for smaller producers, fostering innovation in green technologies, and ensuring that the entire supply chain collaborates to share risks and resources. By scaling these efforts and embedding sustainability into the very fabric of the sector, Scotland can not only safeguard its position as a world-renowned producer, but lead the global conversation on sustainable food and drink production.
This article was originally published in The Scotsman.
