The Australian food and beverage manufacturing industry is strong, but 2020 will offer challenges including ever-growing scrutiny from consumers. Australian Food and Grocery Council CEO Tanya Barden writes.
Australia’s food and grocery manufacturing industry has been characterised by its resilience, but in recent times the pressure on the sector has started to take a toll.
And in 2020, there is no doubt the strength of the sector will again be put to the test.
Some of the challenges will remain the same – global economic uncertainty, drought, increasing energy and other input costs, and seven consecutive years of supermarket price deflation will continue to squeeze manufacturers’ margins.
However, an emerging factor that will have a big impact is undersupply, which is expected to drive production prices up and profit margins down.
This is occurring against a backdrop of changing consumer needs and expectations.
Consumers are more empowered and more informed. There is ever-growing scrutiny of our industry’s products and processes, especially in regards to the environment, nutrition, ethical sourcing and supply chains.
Despite the mounting pressures, food and grocery manufacturers still strive to be competitive and are constantly seeking new and innovative ways to keep prices down for consumers.
This is essential to maintain the viability of a sector that makes a huge contribution to Australia’s economy, worth $122.1 billion a year.
