Page 40 - Food&Drink September 2019

INDUSTRY UPDATE
Victoria: a food manufacturing ‘powerhouse’
Research by the Australian Food and Grocery Council reveals the large role food manufacturing plays in local economies and communities. Kim Berry spoke with CEO Tanya Barden.
AUSTRALIAN Food and Grocery Council (AFGC) CEO Tanya Barden says research by the Council into two regions of Victoria shows the value food and grocery manufacturing brings to the economy and local communities.
While there is “hope and opportunity” for the sector as a whole, it also faces significant challenges and needs “attention and focus” to ensure its ongoing viability, Barden told Food & Drink Business.
AFGC’s research showed that a quarter of all manufacturing in south-east Melbourne is in the food and beverage sector. Food processing is now the fifth largest economic contributor to five federal electorates: Aston, Chisholm, Deakin, Hotham and Isaacs.
In northern Victoria, food and grocery processing is now the second largest contributor in terms of output and the eighth largest employer across the four federal electorates of Mallee, Bendigo, Indi and Nicholls. It generates $9.23 billion a year
and employs 14,221 people. “We’ve looked at where the
sector largely is based and has real impact on communities in terms of jobs and economic contribution. We want to raise the profile of how important this sector is,” she says.
Forty per cent of food and grocery manufacturing is located in regional areas.
“Employers in south-east Melbourne range from major global companies like Chobani in Dandenong or Simplot in Pakenham, through to strong Australian brands like Carman’s Fine Food in Cheltenham.”
HEALTH OF THE INDUSTRY
Barden says overarching figures show a “fairly resilient” industry but there was a drop in turnover in 2017-18 and a “continuous drop-off in capital investment for a number of years”.
“We see pockets of growth, innovation and export growth, but the overarching story is one of some really significant challenges. This is a sector that needs attention and focus if we
“ There is that awareness about how important the sector is, but we want to elevate
the conversation to a ministerial level.”
LEFT TO RIGHT: Federal Member for Isaacs, Mark Dreyfus, and AFGC CEO, Tanya Barden visiting the Chobani plant.
want to keep this manufacturing presence here in Australia and keep those jobs and economic contribution local.
“There is good recognition of how important this sector is at a local and state level, but we want to elevate the conversation to a ministerial level as well,” she says. In the south-east Melbourne electorate of Isaac, 7244 jobs are in food and grocery manufacturing.
Barden says major pressures on the industry at the moment are “the massive increases in energy prices, commodity increases coming through from the drought, and cost increases in a whole range of areas at a time you when have downward pressure on retail pricing”. Manufacturing is getting squeezed in the middle, which impacts its long-term viability.
“The worst case scenario is you lose some of this manufacturing offshore because Australia loses its competitiveness.
“We are keen to have conversations around what to do about cost pressures, particularly energy and needing
EXPORT OPPORTUNITIES
Barden also pointed out there was “hope and opportunity”. “When you look at export, that is really the growth channel for the industry. We see that $32 billion out of $131 billion is exported in the sector. And with the low Australian dollar that creates opportunity for companies, and can help you get some scale, which can then help offset cost pressures domestically.
“From a strategic perspective, that high growth offshore opportunity is a good one. There’s a heavy presence of meat and dairy but we’re seeing more companies explore than opportunity.”
Skills and training is one of the challenges the sector is addressing. For Barden, when a workforce is based in regional communities, it is critical it has access to the right skills that are needed in the workplace.
“There are emerging opportunities in food manufacturing – in the past, jobs people thought about most were packers and line workers, but as we move towards
bipartisan support for a policy that will deliver sustainable but also affordable and reliable energy supply – that is key.”
Capital investment and encouraging companies to invest in Australia at a time when there are these pressures is also challenge. Looking at tax incentives for capital investment in food and grocery manufacturing is important and needs to be raised, she said.
automation, we’re seeing an upskilling of the workforce. “The industry is very
supportive of skills and training and we’re seeing people moving from factory floor roles to managerial roles, or more technically advanced roles.
“Changing the perception people have on opportunities in the industry is something we’re focused on.” ✷
40 | Food&Drink business | September 2019 | www.foodanddrinkbusiness.com.au