Scottish food and farming sector lags behind in investment despite strong growth

Scotland’s £24bn food and drink sector — including thousands of farmers and producers — is being overlooked by investors despite record growth and rising global demand.

The issue was highlighted at a recent Food & Drink Investment Roundtable, where industry leaders, investors and policymakers examined why one of Scotland’s most important sectors continues to attract limited private investment.

Convened by Scotland Food & Drink, the discussion pointed to a clear gap between strong performance and weak investment. Despite being Scotland’s largest manufacturing sector, employing 115,000 people, food and drink ranks last for investment, with deal numbers falling 34% between 2022 and 2024.

This comes as the sector reaches a record valuation of £24bn and is forecast to generate an additional £4bn in sales over the next five years, driven by growing global demand for premium Scottish produce. Exports stand at £7.5bn, with food exports rising 200% over the past decade.

Much of the sector is made up of small, family-run farm and food businesses, many of them female-led, which do not fit traditional investment models.

There are more than 17,000 businesses operating across the sector. Most are seeking relatively modest funding, with 58% needing less than £50,000.

Only 17% are considering equity finance, with many instead relying on debt, grants and crowdfunding — which has continued to grow in Scotland despite falling across the wider UK.

Industry leaders warned that the lack of investment risks limiting growth across the supply chain, from primary producers to food manufacturers.

Iain Baxter, chief executive of Scotland Food & Drink, said the sector is “trusted globally, anchored in quality, and primed for growth”.

“We have a £24bn industry… so why isn’t the investment community matching our ambition?” he said.

He added that the roundtable aimed to open up “an honest conversation about the barriers, the opportunities, and the steps we need to take” to unlock investment.

Participants heard that the sector remains underserved relative to its economic contribution, with challenges on both sides.

Businesses often struggle with financial literacy, making it difficult to present clear investment cases or distinguish between funding options such as debt and equity.

Brand development was also highlighted as a weakness, with many Scottish food businesses focused on production rather than building brands that attract investment.

Despite this, there was optimism. Investors indicated that viable businesses exist, but are not being effectively identified or connected to funding.

A key issue is the lack of a clear investment identity, with no dedicated fund, specialist network or obvious entry point for investors interested in food and drink.

Unlike food and farming, sectors such as life sciences benefit from well-established investor networks, despite sharing similar long-term demand and reliance on Scotland’s natural assets and research base.

Baxter said food and drink should be recognised as a strategic investment opportunity.

“You will never lose demand for food and drink,” he said, describing it as “one of the most stable and compelling investment opportunities there is”.

Industry leaders said urgent action is needed to improve access to investment, warning that without it the sector risks falling short of its growth potential.