2020: Industry at a Crossroads
In this ‘Food – In Brief’, we take a quick look at some of the unique challenges facing the Australian food sector, previously identified by the Australian Food & Grocery Council’s 2012 research.
Contribution to manufacturing –
- With turnover valued at $108 billion the sector represents 26% of all Australian manufacturing.
- Compare this value with:-
- Equipment / machinery manufacturing at $37.1 billion.
- Primary metal manufacturing at $69.8 billion.
Contribution to employment –
- There are currently 312,000 employees in the sector.
- Salaries paid are approximately $13 billion.
- Since 2005 employment in the sector has declined from 3.2% to 2.8%.
- By 2020 this may have dropped to 180,000.
Contribution to research & development –
- Current R&D expenditure is 0.5% of turnover, about $368 million.
Current versus potential growth –
- Current growth rate for the food & grocery sector is 2.1%.
- Demand for food & grocery is 3.8%.
- Coles & Woolworths share 78% of the supermarket sector.
- Imported foods attract a 25% cost advantage over local produce.
- Imported foods are valued at $25 billion.
- This equates to almost 23% of the sector’s turnover.
- Between 2003 & 2010 private labels increased from 15% to 25% of sales.
- Private label share of the European market averages 45%.
There are considerable opportunities for Australian food processors to gain access to and flourish in an expanding Asian market.
However, there are challenges.
- As an industry are we investing enough in research & development?
- Have we targeted the right areas for that research & development?
- Is the industry innovative enough to be able to compete on the international stage?
- Are we attracting secondary school students who will choose food science at universities only to follow on with a career in the food sector?