The federal government has released the Modern Manufacturing Initiative’s Food & Beverage Roadmap with the goal to drive investment in the sector and maximise “every opportunity” to tap into global markets and create jobs on the domestic front.
It is the fourth of six sectors identified as National Manufacturing Priorities in the MMI to have its funding unlocked.
Federal Minister for Industry, Science and Technology at the time of the release Karen Andrews, (Christian Porter will replace Andrews as minister following a cabinet reshuffle on 29 March), said investing in the sector was about maximising “every opportunity” to tap into global markets and create jobs on the domestic front.
“To strengthen our economy, we need to make the most of our natural advantages in agriculture, and that means adding as much value as we can to raw materials through manufacturing.
“The other great thing about food and beverage manufacturing is its imprint on regional Australia – both in where many of the factories are located and the support for businesses right along the supply chain,” Andrews said.
In 2019-20 the sector generated $28.4 billion in gross value, consisting of 14,400 businesses and employing more than 2290 people. In 2018-19, food and beverage manufacturing reported $112.7 billion in total income.
It is the largest single manufacturing sector in Australia and accounts for 27.9 per cent of manufacturing turnover. Subsector turnover in 2018-19 was:
- Total food and beverage manufacturing: $110.3 billion
- Total food manufacturing: $93.3 billion
- Meat and meat product manufacturing: $30.3 billion
- Seafood processing: $0.9 billion
- Dairy product manufacturing: $15.0 billion
- Fruit and vegetable processing: $5.5 billion
- Oil and fat manufacturing: $2.5 billion
- Grain mill and cereal product manufacturing: $7.0 billion
- Bakery product manufacturing: $8.7 billion
- Sugar and confectionary manufacturing: $8.9 billion
- Other food product manufacturing: $14.6 billion
- Total beverage manufacturing: $17.1 billion
The roadmap said Australia’s food and beverage manufacturing sector was different to others because it is mainly made up of SMEs. More than a third (37 per cent – 5248 businesses) are non-employing and 50 per cent (7001 businesses) employ one to 19 staff. The largest enterprises employing more than 20 staff account for 13 per cent (1795 businesses) account for 13 per cent.
The federal government estimates five per cent of businesses that earn more than $10 million are responsible for 54 per cent of the industry’s turnover, the majority of which are multinationals. The report said these companies play an important role in terms of bringing capital, R&D, and capacity to scale operations to the table.
R&D in the sector is relatively low compared to other manufacturing sectors, accounting for only 11 per cent of expenditure despite being the largest employer.
Increasing R&D spending will increase opportunities to commercialise innovation and enhance international competitiveness, the government said.
Funding grants are available in two stream: to turn research and ideas into commercial outcomes; and to integrate products and services into domestic and global value chains. Applications closing on 27 April. More here.
The roadmap identified three major growth opportunities.
1. Smart food and beverage manufacturing
- automation of continuous and batch controls systems, inspection and line control systems
- robotics, including high speed palletising machinery and soft robotic technology
- monitoring systems for temperature, humidity and pressure, sanitisation verification.
2. Innovative foods and beverages
- food and beverages for improved health and wellbeing and enhanced nutritional value
- products for convenience and premium offerings such as ready to eat, pre-portioned meals
- high value add food and beverage products, such as new and enhanced proteins, including fortified breakfast cereals, antioxidant rich breads, soy and other food and beverage alternatives.
3. Food safety, origin and traceability systems
- standardised digital labelling to provide customers (retailers and consumers) with instant information about origin of foods and production methods such as the use of QR codes on packed meat which can be read with smart technology to confirm traits such as certified organic free-range
- blockchain technologies to securely capture and store information on origin and food safety (handling, preparation and storage) for high value add foods.
The roadmap outlines goals for the sector at two, five and 10 year timeframes.
2 years: Increasing use of smart manufacturing, and the onshoring of commercialisation and manufacturing activities to improve processing and packaging through co-investments in translation, integration and collaboration.
5 years: Manufacturers are collaborating and using smart manufacturing to respond to new and emerging food and beverage opportunities, consumer trends and market demands.
10 years: Food and beverage manufacturing value has doubled, cementing Australia’s reputation as ‘world-best’ supplier and manufacturer of premium, safe and authentic food.
The full roadmap is here.