Mull-based Island Bakery Organics is on course to grow revenues to £1.8 million in the year to March 2014 compared with around £1m in the preceding year as it feels the benefit of a landmark supply deal with Marks & Spencer.
Co-founder Joe Reade, who failed to win backing for the business from celebrity entrepreneurs on TV's Dragons Den, said much of the increase has been driven by a deal to supply biscuits sold in 260 M&S outlets since October last year.
As this will be extended to 500 stores from next month, further growth is in the pipeline.
Combined with a renewed push into export markets, Mr Reade believes the M&S supply deal could help the business grow turnover to £5m in the medium term.
The deal gave the company confidence to invest £2m in a new bakery that is powered using renewable energy generated on Mull.
The company's growth could help it provide a significant boost to the economy of Mull where it has grown employee numbers from 12 to 20 since winning the M&S contract.
Island Bakery Organics' success underlines the potential for food and drinks firms to help power growth in Scotland by capitalising on demand for goods associated with the country's rich natural heritage.
Last week industry figures showed Scotland's food and drink firms achieved record turnover of £13bn in 2011. The Scotland Food & Drink trade body raises its target for turnover in 2017 from £12.5bn to £16.5 billion. It is targeting exports worth £7.1bn.
Bank of Scotland research found sector players could create more than 5000 jobs in coming years.
While there have been many complaints about big retailers using their muscle to squeeze small suppliers, Mr Reade said M&S had been good to deal with.
He said: "They are very strict on quality but they are out there after something different and special. They are not coming to us for a fast commodity, we are not competing solely on price. We are giving them something unique and they are paying a fair price."
The company's experience shows how minnows can take advantage of strategic developments at giants.
Mr Reade said Island Bakery Organics decided to approach M&S after the retailer launched its Plan A initiative to show its commitment to sustainability.
The contract gave the company the confidence to proceed with what he describes as a "big bang" plan to develop new premises on the island. The new plant provides much more capacity than the firm's old premises and is powered using using hydro-electricity and wood chippings produced on the island.
"This gave us a USP that gave us an advantage and it turned our remote location that was not very practical into a real advantage," said Mr Reade, who founded the business with his wife Dawn in 1994.
The company produces 80,000 biscuits a day. Products range from Shortbread to Melts infused with lemon oil.
It received a £1m grant under the official Food Processing Marketing and Cooperation scheme towards the £2m cost of the development.
Triodos bank provided debt.
Mr Reade said it was very hard to persuade other banks the company should go for such a big investment.
The farmers' son failed in an attempt to prise funding from celebrity entrepreneurs on TV's Dragons Den programme in 2009.
"The dragons just thought I was bonkers to be building a bakery on a Hebridean island," said Mr Reade, who added he forgot to tell the dragons how much he wanted. "They're really only interested in projects that can make a fast buck."
Mr Reade's parents are dairy farmers and makers of Isle of Mull Cheese.
Island Bakery Organics also sells to independent retailers in the UK. The country generates around 10% of its sales in export markets including Holland and the USA.