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Technology offers food and drink businesses a chance to innovate, but Brexit uncertainties persist, says expert

Out-Law Analysis | 15 Nov 2017 | 4:23 pm | 3 min. read

ANALYSIS: Technology is offering businesses in the UK food and drinks sector opportunities to innovate, but industry concerns around Brexit persist.

Those are the main messages to emerge from a recent conference on the future of food and drink in Scotland organised by the Scotsman.

 Held in Edinburgh, the event featured presentations from prominent industry figures, including James Withers, chief executive of Scotland Food & Drink, Karen Betts, chief executive of the Scottish Whisky Association, and Laurent Vernet, head of marketing at Quality Meat Scotland.

 Speakers highlighted some of the innovations emerging in the market, including the potential role technology can play in the industry.

 The restaurant industry was one area identified where technology could make a difference. Restaurants that view the culture of 'eating out' as more of a broader social experience for their customers stand to gain. They might consider deploying smartphone charging points beside tables, and use other technologies to enhance social interaction and make going to their restaurants more than just about sustenance for their customers.

 Similarly, restaurants might be able to use smartphone technologies to help customers understand more about what the food on their plate. In future, customers who hover their smartphones above their food may be presented with information about the ingredients on their plate, such as where they originate from and their nutritional values.

 In this sense, there is an opportunity for restaurant businesses in Scotland to promote locally sourced produce. Provenance is a major strength of the Scottish food and drink industry, and technology offers businesses in the sector a chance to showcase it.

 Developing technology also offers the possibility to take advantage of big data analytics to personalise the customer experience. Solutions could be developed to allow consumers to provide restaurants with a digital note of their allergies, for example, which the businesses could recognise each time the customer visits. Such solutions could build on existing mobile technologies deployed in some restaurants that allow consumers to pay for their bill on their smartphone without having to engage a member of waiting staff for the purpose.

 Innovation was a key theme of the conference and a number of future technologies were mentioned. These included smart labelling - labels that change colour when food is no longer safe to eat, packaging that is easy to use for elderly or infirm consumers, and food grown in laboratories for humanitarian purposes.

 These innovations can work alongside Scotland's main strengths in the food and drink sector, in particular, locally sourced fresh produce. The 'farm to fork' model should be used as a mark of quality that is attractive to consumers and used to boost exports of Scottish produce around the world.

 The challenges one business have faced in marketing their chocolate snacks was also an interesting example of innovation in the market.

 Stirling-based iQ Chocolate has developed what it has marketed as "healthy chocolate", free of refined sugars and fit for people who are nut, gluten, wheat, dairy and soya intolerant.

 The company, however, has had to educate trading standards officers in the UK that their 'superfood' chocolate bars are healthy and can be marketed as such. This has not just been a challenge in the UK. The business has also had to convince authorities in its export markets, and meet local regulatory requirements.

 The experience of iQ Chocolate shows that innovations that challenge traditional thinking – in this case that chocolate is unhealthy – must often overcome cultural and regulatory barriers.

 Brexit presents further challenges to businesses in the food and drinks sector. Some of the issues were discussed at the Scotsman's conference.

 There was widespread agreement that the current uncertainty over the UK's future trading relationship with the EU, and other countries around the world, could have a major impact on businesses in the food and drinks sector if clarity is not provided soon.

 The lack of clarity on Brexit would require businesses to engage in contingency planning on fairly basic issues for importers and exporters such as how they get supplies into the EU.

 One of the particular challenges of Brexit is the potential skills shortage that could arise. While the food and drinks sector is growing in Scotland businesses may have access to a smaller potential workforce in future as a result of Brexit due to new immigration controls. Many workers in the industry currently are EU nationals and perform important, but low-skilled, roles. The current foreign exchange rate, with a weak pound, is already impacting labour availability.

 Businesses in the sector require an urgent agreement on transitional arrangements around Brexit, and subsequent confirmation of the nature of a future trade deal with the EU. UK food and drink manufacturers also want to benefit from existing EU trade deals with third countries if possible, and have stressed that bilateral free trade deals with third countries should be a priority if the existing arrangements cannot be maintained through EU channels.

 In Scotland there is also a particular desire for the protection of geographical indications of certain goods to remain protected post-Brexit. Currently, businesses in other EU countries are prevented from labelling copycat as Scotch whisky, Scotch beef or Arbroath 'smokies', among other products associated with Scotland or specific areas of the country within, due to the protections awarded to those goods under EU law.

George Campbell is a legal expert in the food and drinks sector at Pinsent Masons, the law firm behind Out-Law.com.