The Australian Food and Grocery Council says its fifth annual State of the Industry 2013 report, an economic snapshot by KPMG, shows strong signs of hope for the beleaguered food and beverage industry.
Though the industry is facing an environment where input costs are rising, regulations are adding to compliance costs and retail price deflation continues to cut margins, there are signs of significant growth potential, said AFGC CEO Gary Dawson.
He pointed to a 26 per cent increase in capital investment in food manufacturing as companies increase investment in productivity initiatives such as automation and other cost reduction programs.
“Solid export growth in processed foods and beverages is also encouraging as suppliers respond to emerging market opportunities including the growing Asian middle class. This has significantly contributed to three consecutive years of improving trade surplus in processed food and beverage products,” he said.
According to the report, industry turnover of $111 billion remained largely flat in 2011-12, with a marginal 0.3 per cent decline. In the 2012-13 financial year, total industry employment declined by 0.4 per cent (1,071 people) to 298,825.
The food and beverage, grocery and fresh produce industries were made up of 25,662 businesses in 2012-13, 170 fewer than 2011-12. Collectively, they spent about $535.8 million on R&D and accounted for $50.8 billion of international trade (an increase of 0.8 per cent).
According to Valentina Tripp, KPMG Consulting National Leader for Consumer Products, the increase in exports for value added foods such as meat processing, grain mill products and fruits and vegetables was encouraging and this trend was expected to continue.
“Exports to China increased by $770m, a 44 per cent increase on the previous year, with the meat processing and human pharmaceutical sectors accounting for 85 per cent of this increase.
“Despite a tough time for the dairy sector domestically, the sector presents strong potential to capitalise on growing global demand, particularly in the Asian markets. Investment in R&D and innovation to leverage Australia’s high quality, clean, green and safe food supply systems is key to long-term sector growth,” she said.
The lastest AFGC State of the Industry report shows encouraging signs for the future.
