The Australian Food and Grocery Council (AFGC) has released a new report with the vision to double the size of Australia’s food and grocery manufacturing sector to $250 billion by 2030.
“Sustaining Australia: Food and Grocery Manufacturing 2030” was co-produced between the AFGC and EQ Economics and identified major opportunities, vulnerabilities and potential growth paths for the sector.
As Australia’s largest manufacturing sector, food and grocery manufacturing employs 276,000 people with 40 per cent in rural and regional areas. Opportunities to grow include exports and innovation to meet rapidly changing consumer demand, like in the areas of sustainability and health and wellness.
However, a strategic approach is needed to achieve a high growth path and deliver more jobs, skills and economic output with flow-on benefits to the food and grocery manufacturing and agriculture sectors.
The report suggests building on the Modern Manufacturing Strategy from the federal government and taking steps to secure the sector’s future.
These steps include a new grants program to support advanced manufacturing technologies and developing new and sustainable packaging formats and equipment. Creating a high-tech training centre would also be beneficial to provide workers with skills to use advanced equipment and emerging technologies.
“Australia’s well-deserved ‘clean and green’ reputation will not be enough to ensure our sector remains competitive in either the domestic or export markets into the future,” Australian Food and Grocery Council CEO Tanya Barden said.
“The sector’s growth is contingent on significant investment – in new product development, sustainable packaging, advanced manufacturing and digital technologies – to boost the sector’s competitiveness, agility and resilience.”
Based on analysis from EQ Economics economist Warren Hogan, the report found that:
- Food and grocery manufacturing has strong growth potential in domestic and export markets
- The food and grocery sector is under pressure from declining profitability due to high costs and a highly concentrated retail marketplace, resulting in a decade of stagnant capital investment and low innovation
- Australia faces an uneven playing field through foreign governments providing significant financial incentives and non-tariff barriers to export trade
- Food and grocery manufacturing risks losing global competitiveness unless steps are taken to boost investment in new advanced manufacturing technology to improve efficiency and innovation
- With a strategic focus, the right policies and incentives, the size of Australia’s food and grocery sector can double to $250 billion by 2030, with a resulting 54 per cent increase in employment to 427,000 people.
“Australian food and grocery manufacturing is strong, dynamic and critically important but there are important decisions that need to be made now about the sector’s future,” Barden said.