Scaled Management Systems

Feast or Famine

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%.

Market competition

  • 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%.

Opportunities –
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? Book-Processed Food