Page 11 - Packaging News Magazine May-June 2018

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How do consumers make decisions? Not by beins et eaco.
– Data by hiurs ftouy
May-June 2018 www.packagingnews.com.au
NEWS
Why food and cars have a different fate
Food industry experts Tanya Barden, Terry O’Brien and René Dedoncker bring their insight and wisdom to the table. Lindy Hughson reports.
FROM LEFT: The Australian’s business editor Eric Johnston talks to AFGC CEO Tanya Barden, chairman of Clean Seas and Bundaberg Brewed Drinks Terry O’Brien, and Fonterra Australia MD Rene Dondecker.
“... and the car industry was very heavily subsidised. It was something like about $30 billion up until 2013, so even more since then, where food and grocery manu- facturing gets very little by way of govern- ment assistance, and it has really driven it- self to be much more efficient, investing in innovation technologies, becoming lean and efficient.”
Terry O’Brien was asked to comment on the food industry’s future from the perspec- tive of his recent role as CEO of Simplot.
He made the point that the industry’s fortunes have changed significantly over the last decade, that food manufacturers are ‘back in the game’ as a result of a reduc- tion in wage increases, a more stable Aus- sie dollar, and industry consolidation, among other factors.
O’Brien noted that the current market (with increased export demand for Aussie food products) favours SMEs, with govern- ment grants available as well as education on how to go to export through organisa- tions like Food Innovation Australia Lim- ited – on whose board O’Brien also sits.
There are large companies, of course, who are having success in export markets, and Johnston asked Dedoncker about Fon- terra Australia’s experience of exporting.
Dedoncker said that food produce made in Australia is “incredibly attractive” in China. “I think the provenance story that we have is one aspect that unifies us. And what we’ve discovered is that – it’s not as easy as just making it here. You need to have access to markets. And, in China, the pizza story [alluding to a figure cited ear- lier in the day that one half the pizzas in China are topped with mozzarella made by Fonterra] is driven by the fact that we’ve got people on the ground in 70 cit- ies, and 71 as of tomorrow, that are creat-
ing the opportunity...
“But the fact that they want to buy it
from Australia is because of our prove- nance, because of the quality, and be- cause of the betacarotene in our cheese which makes it yellow – and that makes a huge difference. ■
AT The Australian’s Global Food Forum, a panel of industry leaders weighed in on the question of whether Australian food manufacturing will suffer the same fate as the car industry.
The short answer is “very unlikely”, for although both industries are capital-inten- sive, labour-intensive, and have high fixed costs, the similarities end there.
In a panel session chaired by The Austra- lian’s business editor Erik Johnston, an op- timistic view of our food industry’s future was shared by panellists Tanya Barden, CEO of The Australian Food & Grocery Council; Terry O’Brien, chairman of Clean Seas and Bundaberg Brewed Drinks, and René Dedoncker, managing director, Fon- terra Australia.
In her opening quip, Barden said “I like to think that we’ve always been much bet- ter at making food than Fords...” and went on to qualify why.
“The food and beverage manufacturing industry has always been founded on a comparative advantage that the car indus-
try never had. It’s a sector that has been in- credibly resilient over many years and has a much greater level of competitiveness and efficiency,” she said.
She shared a few key figures to back up her statement, and draw a clear compari- son between the two:
“The turnover of food and beverage man- ufacturing is $105 billion annually, which is six times the size of the car industry.
“It has got a value-add of $29 billion to the Australian economy, which is eight times what the car industry contributed, and... it employs 290,000 people, 40 per cent of which are in regional areas, where car manufacturing, even at its height, em- ployed only about 100,000 people.”
She added that the car industry was very domestically focused, where food and gro- cery manufacturing has a very strong ex- port focus.
“We export about $29 billion of pro- cessed food annually, as well as beverages, and that really builds on [our] comparative advantage... clean, green, safe.
THE AUSTRALIAN