Highlights from the 2021-22 Federal Budget
- $1.3b to recover water for the environment while maintaining water for irrigation
- $850.4m to help farmers increase farm gate output to $100b by 2030
- $371m over four years towards biosecurity
- $258m to fund new dams and irrigation projects
- $255m in tax relief for small brewers and distillers
- $237.9m to help farmers better understand and manage soil health
- $103m to help develop risk management and regional resilience plans
- $59.5m to help farmers harness new technologies and farming practices
- $29.8m to help attract and retain skilled workers for the “technology-proficient” agricultural workforce of the future
Doubling the value of food & beverage manufacturing in Australia by 2030 is absolutely achievable. We have a number of advantages that make this possible.
Our produce is green and clean, we are close to the fast growing Asian market and we command a premium on international markets. COVID tested all manufacturers world-wide, and our local manufacturers have proven to be agile producers in one of the strongest economies in the world.
The food manufacturing sector is closely aligned with the agricultural industry, which has the aim of increasing farm output to $100b by 2030. That's a 4% compound growth rate. We’re reliable, innovative and prepared to take that next big leap both domestically and internationally.
The food & beverage roadmap focuses on post farm gate foods – which you might automatically assume means more fast food, more sugary food, more processed food. But the sector has come a long way over the last few decades and food manufacturing has an increased focus on better quality product, innovative products, establishing quicker delivery times, and reducing waste.
Innovations in the sector include processes and packaging to improve shelf-life, or data capture to support food provenance. Consumers make choices about their purchases based on how much they trust a brand. When we have worldwide examples of counterfeit food products (for example wine claiming to be Australian to command a better premium), it’s essential that this trust is maintained.
The ability to respond quickly is also essential. The food & beverage sector doesn’t move quite as swiftly as the technology sector, but it can turn on a dime under the right circumstances. Almond milk is a great example of a product that has been around for hundreds of years, but not mainstream until the 2000s. Data from the US says that sales of almond milk increased 79% in 2011 and it surpassed soy as the preferred plant based milk by 2013.
So the more data and real time insight you have, the faster you can respond. And this is particularly true when you're tapping into international markets and you’re much further away from your product and your customers. What is selling, what isn't selling, and where is it selling. This information will inform you where refocus or focus your product development.
The opportunities for the sector are manifold – particularly as our food & beverage sector is dominated by innovative SMEs cornering niche markets. Double edge-sword though! Consumer demand for artisan or alternative food products continues to grow. However, it can be difficult to achieve economies of scale to conquer new markets when you’re going alone.
The focus on collaboration in the roadmaps may make some businesses in the sector a little uncomfortable. But it's important to understand that collaboration can happen on a number of fronts. The key one highlighted by the Government is the innovation hubs which will provide access to pilot plants to test new products using state-of-the-art equipment before a company undertakes the significant investment to recalibrate their own infrastructure. Collaboration could also be at the tertiary sector level, where education skills required for the food & beverage sector are being met. It could come from Government so that policy and regulatory settings for agriculture and food & beverage are aligned. And it could also look like regional collaboration to build local capability, capacity and business. So there are a number of different ways collaboration can help in the sector.
Growth for the agribusiness, food & beverage sector invariably comes at an environmental cost. A smart food & beverage sector can help to reduce this burden. Australians waste about $20b per annum in food, or about 7.3m tonnes per annum. That works out to be roughly 300kg per person or one in five shopping bags. All gone to landfill. By being able to respond more quickly and producing the right food where and when consumers want it provides a great opportunity to reduce waste. And it's not only food. Australians throw away 1.9b tonnes of packaging per annum. Now, most of that would be in the food area. The numbers speak for themselves.
To take advantage of future opportunities we need to address current challenges. The most urgent issue that needs to be tackled is labour availability and flexibility. With the international borders closed for the foreseeable future this is going to require some rethinking in how we either make concessions for international skills to come to Australia, or how we encourage people domestically to turn to a career in agriculture, food & beverage. This is about so much more than just a lack of available labour in regional areas to pick our fruit and vegetables. It's also a skills shortage within manufacturing. A number of manufacturing clients, including some of my clients, are experiencing real problems in being able to source labour. This has the potential to scupper those 10 year milestones.
We also need to support our manufacturers to tap into non-traditional export markets. With innovation, better data, better products, longer shelf-lives and greater investment, it’s time for Australian food & beverage manufacturers to diversify into new export markets. There are some exciting Free Trade Agreements (FTAs) being discussed, with a potential FTA to be signed with the UK mid-year. We hope to see more on the horizon.