Comment: Diageo's Walsh to Scotch UK deficit with food exports
Diageo CEO Walsh will look to help UK food and drink SMEs export
Can Diageo CEO Paul Walsh sprinkle some Scotch whisky magic on UK food and drink exports?
The drinks industry veteran has been tasked with helping to plug the UK's growing trade deficit with everything from London Pride beer to Melton Mowbray pork pies and Stilton cheese.
Walsh is one the UK government's much-awaited business ambassadors for food and drink. He will be joined by James Townshend, CEO of farm group Velcourt. News of their appointments at the British Business Embassy food, drink and retail summit last week came as fresh figures showed the country's trade deficit has widened to GBP4.3bn, the highest level since records began 15 years ago.
Walsh and Townshend represent the two prongs of this UK government's policy on food exports. On one level, there is a perceived opportunity for hi-tech agriculture and related services as politicians and companies around the world plan to increase food production to feed growing populations.
On a slightly different level, the appointment of Walsh is all about increasing added value exports of finished goods. Before you go scoffing about Britain's economic recovery being built on the crumbly foundations of a Lancashire cheese, it's worth noting that exports of UK food and non-alcoholic drinks rose by a tidy 11.4% in 2011, to GBP12.15bn. That's the seventh consecutive year of record growth.
Walsh, who is already a member of Prime Minister David Cameron's business advisory group, has done a smashing job of expanding Scotch whisky's reach in emerging markets, both as head of Diageo and during his four-year tenure as chairman of the Scotch Whisky Association, which ended in 2011. Scotch exports hit a record GBP4.2bn last year, up 23% on 2010.
Some might question Walsh's ability to adapt from running one the UK's premier businesses to a small-to-medium enterprise outside of alcoholic drinks. One also has to question how much time he will realistically have to spend on this project, although his appointment will only fuel speculation that he is preparing to move on from Diageo in the next couple of years. Most of the smart money is on a switch to the chairmanship at Unilever, incidentally.
For businesses, though, there are two clear positives to having Walsh in this ambassadorial role. Firstly, he's got the stature in business and connections in key emerging markets that are likely to open doors.
Secondly, he is well-acquainted with securing geographical indication rights on added value and premium consumer goods in emerging markets, thanks to his work with Scotch and government officials. That's going to be important for British food exporters. The UK has 48 foods with a European PDO or PGI and extending this protection in, say, China, could improve their prestige and help stifle copycats.
"British companies are in a very strong position," Walsh told the international audience at the British Business Embassy summit last week. "There's a huge opportunity out there."
Sectors: Advertising & labelling, Baby food, Bakery, Canned food, Cereal, Chilled foods, Condiments, dressings & sauces, Confectionery, Dairy, Dried foods, Emerging markets, Fresh produce, Frozen, Ice cream, Meat & poultry, Natural & organic, NPD & innovation, Private label, Retail, Seafood, Snacks, World foods
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