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Food in Brief #4 - Feast or Famine

Kevin Stretton - Saturday, July 25, 2015
2020: Industry at a Crossroads

In this ‘Food – In Brief’, we take a quick look at some of the unique challenges facing the Australian food sector, previously identified by the Australian Food & Grocery Council’s 2012 research.

Contribution to manufacturing -
• With turnover valued at $108 billion the sector represents 26% of all Australian manufacturing.
• Compare this value with:-
• Equipment / machinery manufacturing at $37.1 billion.
• Primary metal manufacturing at $69.8 billion.

Contribution to employment -
• There are currently 312,000 employees in the sector.
• Salaries paid are approximately $13 billion.
• Since 2005 employment in the sector has declined from 3.2% to 2.8%.
• By 2020 this may have dropped to 180,000.

Contribution to research & development -
• Current R&D expenditure is 0.5% of turnover, about $368 million.

Current versus potential growth -
• Current growth rate for the food & grocery sector is 2.1%.
• Demand for food & grocery is 3.8%.

Market competition -
• Coles & Woolworths share 78% of the supermarket sector.
• Imported foods attract a 25% cost advantage over local produce.
• Imported foods are valued at $25 billion.
• This equates to almost 23% of the sector’s turnover.
• Between 2003 & 2010 private labels increased from 15% to 25% of sales.
• Private label share of the European market averages 45%.

Opportunities –
There are considerable opportunities for Australian food processors to gain access to and flourish in an expanding Asian market.

However, there are challenges.
• As an industry are we investing enough in research & development?
• Have we targeted the right areas for that research & development?
• Is the industry innovative enough to be able to compete on the international stage?
• Are we attracting secondary school students who will choose food science at universities only to follow on with a career in the food sector? Book-Processed Food
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