Food manufacturing sustainability | ONE

Kathryn Ellaway, market insight manager in the food and drink sector team at Opportunity North East (ONE), points out that 23% of Scottish households are eco-actives – shoppers who are highly concerned about the environment and are making the most of actions to reduce their waste. They feel a responsibility to be more sustainable, follow the topic more actively and have a greater awareness.

“This translates into what they buy. They are highly likely to avoid plastic packaging, choose refillable over single-use products, favour locally-produced meat, fish, fruit and vegetables, purchase products with reduced carbon footprint and animal welfare credentials, and select brands that promote their investment in the well-being of their workforce,” said Kathryn.

“In Scotland, these consumers spend £2.7 billion a year on fast-moving consumer goods (FMCG).”

As a leading food-producing region, it is encouraging that north east Scotland's innovative food and drink manufacturers are at the forefront of the industry's drive to deliver the healthy, nutritious, sustainable products consumers increasingly demand.

Everything from renewable energy systems and state-of-the-art factories to bees and electric bikes contributes to the sector's evolution and transition to net zero.

Peter Cook, director of food, drink and agriculture at ONE, says the focus on sustainability is ensuring businesses meet current and future policy and regulatory requirements while also addressing a fast-growing market opportunity.

"While the squeeze in consumer spending is making many focus on price above all else, the drive towards sustainability – showing a responsible use of the world’s resources – is here to stay. It’s making businesses reduce their waste, increase efficiency and think about their supply chains from end to end. That is good for the environment, future-proofs operations and can improve productivity and profitability in a sector where margins are often tight. Sustainability influences more customers' and consumers' decisions. So, it becomes a powerful marketing tool and increases competitive advantage if you can tell your story well."

Last year, ONE partnered with Scotland Food & Drink to pilot a sustainability project for food manufacturing in the region. The success of that pilot – with 40 businesses reviewing their carbon performance and implementing action plans – has informed the rollout of a national net zero support programme.

"Food and drink is a critical growth sector in our regional economy and the data shows that despite difficult times turnover is growing by over 4% per annum. Working with partners we are committed to helping businesses understand this complex topic, prioritise their actions and tell their great sustainability stories. This can reduce costs and create a marketing advantage. As a region we have to be at the leading edge of this development to turn it from a threat into an opportunity," said Peter.

Food and drink production now employs more than 22,000 people in the north east with an annual turnover of more than £2.4 billion across a sector spanning meat, fruit, vegetables and seafood processing to baking, brewing and distilling.

Sustainability success stories exist across the board.

"Inspiring businesses are innovating and tackling the sustainability challenge and increasingly integrating what they do with their brand. Mackie's, Mackintosh of Glendaveny, Associated Seafoods, Forest Farm, Burn O'Bennie Distillery and Rora Dairy are good examples of businesses addressing sustainability, from energy use and waste reduction to innovations in packaging and processes, and environmentally focused primary production. They are influencing the wider supply chain and helping to change consumers' choices," said Peter.

As a farming and family business, Mackie's is committed to sustainability and produces more than twice the energy it uses through wind turbines, solar panels and biomass boilers. In 2021, it started its single-largest-ever investment with a low-carbon refrigeration system. Benefits have included insulation from rising energy costs, reduced energy consumption and improved production efficiency and product quality with faster freezing. These successes were recognised by Mackie’s winning sustainability awards at the North East Scotland Food & Drink Awards and the Scotsman Scran Awards this summer.

"We secured the Sustainability Award in recognition of our innovation, including most recently installing one of Europe's most efficient low-carbon refrigeration systems. With its completion this year, we're now using sustainable energy sources to cool and store our ice cream. It's an innovative mix of technology and a first for Scotland." said Stuart Common, Mackie’s managing director.

Other Mackie's initiatives include a strong focus on vertical integration – carrying out as much activity as possible on-site – in order to minimise food miles. This has seen Mackie’s take on its own production of honeycomb, fruit sauces and packaging on the farm. These efforts, alongside smaller ones like providing electric bikes for use by staff and development of bee habitats on the farm to boost biodiversity all support Mackie’s corporate vision of being a global Scottish brand and one of the greenest companies in Britain.

Another award-winning north east pioneer is Mackintosh of Glendaveny, a producer of cold-pressed rapeseed oils launched in 2009. Continuous investment and expansion in its production facility near Peterhead have made it one of the UK's largest and most efficient producers.

"We also believe we are among the greenest," explains managing director Gregor Mackintosh. "Environmental factors are a crucial selling point for the business, and we are now operating with a zero waste policy within our production process.

"Our environmental policies and procedures are rooted in the business. We use seed varieties resistant to disease and pests to minimise inputs. After a successful trial last year, we are expanding bee habitats in our field boundaries. The factory is on the family farm, where rapeseed is grown and processed – minimising food miles and ensuring full traceability and oversight from beginning to end. Traditional swathing is also used across our supply chain for ripening instead of glyphosate application.

"Our most recent expansion project has taken the business to a whole new level, bolstering our environmental credentials and overall sustainability of the supply chain and product."

The investment included installing biomass plants, a fully automated seed drying facility, a crushing and filtration system, and expanding the factory to bring all aspects of production under one roof – from the primary intake at harvest to product dispatch. At the same time, plastic reduction involves stripping PVC plastics from its supply chain and replacing them with PET biodegradable and paper alternatives.

"The investment in biomass enabled us to use straw byproduct from our crops to heat the factory's water and offices and, most importantly, dry our rapeseed at harvest – achieving an 85% reduction in fossil-fuel use while drying seed faster and more efficiently with full control of the process to ensure optimum moisture levels for maximum yield and profitability," explains Gregor.

"The new seed extraction and filtration plant increased capacity in a 24/7 process, producing more oil with less energy and increasing oil yield. It has also reduced waste oil in the process, and the byproduct meal is all used in cattle and chicken feed."

The investment is also making the supply chain more sustainable, including for contract growers.

"The new facility allows local farmers to supply seed directly from the field ensuring all seed is dried with our green biomass energy. We currently process 5,000 tonnes, all sourced from home-grown and local farmers within a 40-mile radius, and now can support further growth,” said Gregor.

Sustainability makes for good business, according to Peter Cook, and the £27 million ONE SeedPod industry innovation hub – an Aberdeen City Region Deal project led and co-funded by ONE - being built at Craibstone will provide a focal point for more food manufacturing innovation and growth, demonstrating the region’s leadership in the sector.

“The Mackie’s and Mackintosh of Glendaveny examples show the compatibility of commercially sensible investments and creating great sustainability credentials,” said Peter.