It’s an exciting time for the agribusiness, food & beverage industry in Australia. With policy, trade agreements and investment to support growth, businesses are being provided with more opportunities to take the ‘Australian Made’ label to new markets.
While it is exciting, we continue to navigate supply chain disruptions, labour shortages, extreme weather conditions (as well as rising interest rates and inflation), causing prices across product segments to rise. Across manufacturing, farming and retail, businesses are now grappling with the question of whether to diversify their operations, pass costs onto consumers, or consider another method to remain competitive.
Innovating, creating operational efficiencies and leveraging incentives will be key to remaining competitive.
Top trends in Agribusiness, Food & Beverage
Issues impacting businesses in Agribusiness, Food & Beverage
An attractive sector for investors
The Agribusiness, Food & Beverage industry has seen a consistent level of deal activity despite significant headwinds which have impacted the sector and the broader economy. Through our analysis of 1,466 global transactions for the Ag, F&B sector in the 18-month period to December 2022, transaction multiples have remained strong – a pleasing result for businesses undertaking divestment activity. Yet while businesses focused on food manufacturing, food waste minimisation, technology and sustainability are booming, acquisition trends are declining due to increased costs primarily linked to supply chain and inflationary pressures. Read more about M&A and equity markets in our report.
We cut through the complexity of compliance
Why is the Australian agribusiness, food & beverage sector so well respected? It’s because we have stringent requirements around quality and safety – that bar continues to rise as your business grows. Director duties are becoming more complex to cover issues like ESG, sustainability and cyber security. Export provides an additional level of compliance based on the unique requirements for each jurisdiction you operate in. Whether it’s tax, audit or risk, we cut through the compliance and complexity.
Technology as an enabler of change
It’s no surprise that tech advancements and innovation now dominate most sectors. Processes have been enhanced by the introduction of new technologies, enabling a positive change to business and operational efficiencies. These range across streamlining farming practices, using automation and artificial intelligence to drive production and improve harvest results, through to reducing reliance on manual labour and increasing the sustainability of agriculture. This era of digital transformation also means disruption for organisations unable to keep up with the fast pace of change, which can quickly be left behind.
Process optimisation and supply chain resilience supported by funding
With the recent floods, the continuing war in Ukraine and ongoing COVID-19 impacts, disruption is putting pressure on manufacturing and agricultural supplies. With disturbance to production in some countries, global demand for Australian produce has risen due to its perception as a reliable and quality product supplier. Based on Australia’s scale and capabilities, we can leverage current market conditions as an opportunity to improve processes, build strong trade relationships and develop resilient supply chains. The $15b National Reconstruction Fund will be instrumental to support these aspirations and build sustainable economic growth, with $500m allocated towards value-adding across agriculture, forestry, fisheries, food and fibre.
Targeting existing and new export markets
There’s rising demand for premium ‘Australian Made’ products around the world. With growing populations, rising incomes and urbanisation changing consumer preferences, this is a prime opportunity for the Australian agriculture, fisheries and forestry sectors – particularly to export into the Asian market. Beyond producing high value, high quality products, to support your growth trajectory, you’ll need to consider both State and Federal support grant opportunities such as EMDG, customs and trade efficacies, tax planning and transfer pricing.
R&D and commercialising the next great idea
Australia has a long history of innovation in the agribusiness, food & beverage space, ranging from investing in 'better for you' foods and alternatives, to the market using technology across agricultural processes, disease outbreaks or managing waste. However, we know going from concept to commercialisation can be a tricky process. The support and incentives are there, and our experts in innovation incentives understand the nuances to make the system work for you.
ESG transparency high on the agenda
Stakeholders, including investors, customers, and employees are demanding the adoption of environmental, social and governance (ESG) and sustainability practice. With energy prices rising, there’s a push for sustainable agriculture policy, seeking alternative sources of energy, and the adoption of automation to reduce the impacts of energy intensive processes (including storage, irrigation and refrigeration). Alongside this, transparency will be key to demonstrate steps taken and impacts both on the business and communities. While we await ESG disclosure rules from the Government, organisations are encouraged to centre ESG reporting around targets, disclosure of business activities, performance against sustainable finance, and social impact benchmarks.
Creating business opportunities through grant program
Opportunities to grow
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