Turnover and employment are at record levels in Australia’s food and grocery manufacturing sector and exports are also climbing, according to Australian Food and Grocery Council’s (AFGC) latest State of the Industry report. But the figures came with a warning – ongoing pressure on margins and operating costs could weaken the sector’s capacity to invest and grow over the long term.
The report found the sector recorded turnover of $182.6 billion, up 5.5 per cent on the $173 billion reported for 2023-24.
Employment passed 301,000 in 2024-25, an increase of 2.3 per cent on the prior corresponding period (pcp), with capital investment rising 16 per cent to $4.5 billion and exports up 17.4 per cent. The sector now accounts for 33 per cent of all manufacturing jobs in Australia with more than a third of the workforce based in regional communities.
Industry value-added (IVA) – what the sector creates once inputs are paid for – was up a record 8.2 per cent to $43.4 billion. Food accounted for $31.3 billion, beverages $5.9 billion and groceries $6.2 billion.
Nearly a third (30.5 per cent) of all the value Australian manufacturing creates now comes from FMCG.
The best performers were Meat Processing with IVA of $6.8 billion, 14.2 per cent year-on-year (YOY) growth, and 17 per cent three-year CAGR. Confectionery exceeded meat processing in YOY growth at 15.5 per cent, while Cake and Pastry reported a 23.2 per cent three-year CAGR, albeit from the small base of $0.9 billion.
AFGC CEO, Colm Maguire, said the employment share underlines the sector’s importance in domestic manufacturing.
“We account for one in three manufacturing jobs in Australia. That’s our industry supporting communities and livelihoods across the country, especially in regional areas where manufacturing is the lifeblood of local communities,” Maguire said.
“Food and grocery manufacturing is Australia’s largest manufacturing sector and one of the country’s most significant employers.”
Investment reverses last year’s slide
The largest change from the last report was the 16 per cent lift in capital investment to $4.5 billion. In 2023-24, investment had fallen 11 percent to $3.8 billion, which the AFGC had flagged as a drag on productivity.
In 2024-25, $1 billion capital investment was made in beverage manufacturing and $3.7 billion in food. Equipment, plant and machinery accounted for 77.3 per cent ($3.4 billion) and buildings and structures the remainder.
Exports climbed 17.4 per cent to $52.6 billion, outpacing import growth. That is an acceleration on 2023-24, when exports rose 5.2 per cent and imports fell 3.3 per cent, with the US ($11.32 billion) overtaking China ($9.95 billion) as the sector’s largest export market.
“When businesses have confidence to invest, Australia benefits through more jobs, stronger regional communities and greater manufacturing capability,” Maguire said.
“That investment helps businesses grow, improve productivity and create opportunities for future generations.”
The top export industries were Meat Processing $25.1 billion, Fruit and Vegetable Processing $5.3 billion, Cheese and Dairy $3.2 billion, and Wine and other Alcoholic Beverages at $2.6 billion.
Fruit and Vegetable Processing reported 41.6 per cent YOY growth, followed by Cake and Pastry (31.9 per cent), and Oil and Fat (29.9 per cent).
Cost pressure sits outside the reporting period
The AFGC said pressure on margins and operating costs could weaken the sector’s ability to invest and grow over the long term if left unaddressed. It attributed those pressures to supply chain disruption in the Middle East and rising energy and commodity costs.
It’s worth noting that the reporting period ended in June 2025, so the disruption the council is warning about does not appear in any of the results in the latest report.
The $250 billion question
The industry is targeting $250 billion in turnover by 2030. From the 2024-25 base, that means adding $67.4 billion in five years, or compound annual growth of roughly 6.5 per cent. The sector delivered 5.5 per cent in the year just reported, and 5.3 per cent the year before that.
To close the gap, the AFGC is calling for investment incentives, affordable and reliable energy, and what it describes as smarter regulation.
“Australia has the capability, the workforce and the businesses to grow food and grocery manufacturing even further. The task now is ensuring we have the policy settings that allow that growth to happen here,” Maguire said.
The full State of the Industry 2024-25 report and the AFGC’s interactive data dashboard are available on the AFGC website.
