Page 12 - Food&Drink Nov-Dec 2020

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Industry upheaval
No business was untouched by COVID-19 in 2020. Food & Drink Business asked industry leaders about the pandemic’s impact, both immediate and into the future.
landscape. Some of our members used the opportunity to expand online sales, particularly in the functional beverages segment, capitalising on the increased demand for immunity health. Other manufacturers have launched direct-to-consumer e-commerce platforms for ambient product. It shows the speed at which the industry can react in crises.
OUR roundtable members were Australian Beverages Council CEO Geoff Parker, Australian Food & Grocery Council CEO Tanya Barden and Australian Industry Group head – Victoria Tim Piper.
QWhat were the key impacts of COVID-19?
GEOFF PARKER (GP): It brought significant change to several FMCG categories, including drinks, and challenged traditional sales channels that have sustained the industry for decades.
It was clear that seismic changes in consumer behaviour were underway.
TANYA BARDEN (TB):
Australia’s food and beverage sector has faced enormous disruption and huge challenges as a result of COVID-19. While the sector performed well under extraordinary pressure, this year has also served as a warning that there are vulnerabilities in our supply chains, our workforces and our capital stock. We are now working with government and industry to shore up the future resilience of manufacturing.
TIM PIPER (TP): Even for a sector that substantially remained open, it hasn’t been easy. Measures in some factories – especially those
involving meat processing – have been dramatic.
GP: Also, what wasn’t seen or immediately evident was the substantial impact COVID-19 had on wholesale trade, the petrol and convenience segment and metro retail stores, which was a direct result of people working from home unable to commute and socialise.
TB: There have also been less obvious impacts that our sector is still dealing with.
Manufacturers have performed in the face of great disruption to their supply chains, distribution networks and their hours of operation. The reality is input costs have risen dramatically for many businesses. The downturn in the food services sector also flowed through to the food and beverage manufacturers that would normally supply them.
TP: And Victorian manufacturers were working with one arm behind their back as they had trouble transporting goods to retailers, while their interstate competitors had a much easier logistics arrangement.
Distribution was made even harder because they were required to use less staff when they were increasingly busy.
Manufacturers made massive steps forward though and the achievements were significant. But the direct cost to businesses has also been significant when you consider OH&S changes, closures,interstateandoverseas competitors, loss of staff, mechanical breakdowns, logistic difficulties and loss of investment.
GP: In response to a rapidly evolving sales channel mix, many of our members adapted quickly to the evolving consumer
Q
What does the current
adaptation/recovery mindset look like?
TB: It is great the federal government recognised how critical the food and beverage sector is to the economy. We’re at a stage where there’s tremendous export growth potential in Australian food and beverage manufacturing – turnover for the sector was $110 billion in 2018/19 and $31 billion of that was from exports.
However, the potential of these businesses as economic contributors is held back by declining investment and high input costs. Capital investment in the food sector actually fell eight per cent in 2018/19 and it is still below pre-GFC levels. We really need a step-change in investment levels to build the sector, increase employment and grow the contribution it makes to Australia.
And we shouldn’t forget that there have been huge changes at an operational level for many of our members who have developed COVID-safe plans to ensure they can protect their workforces and customers while maintaining those crucial supplies.
TP: Yes, there are major changes food companies are making to their plants, which create inefficiencies but greater safety.
We will reach a COVID-19 normal position but that
will require being alert to potential breaches, continual improvementsand heightened awareness of processes.
We will also have to deal with the inability to bring into Australia some new processing equipment as we may not have specialist engineers to install them. There will be much lower levels of immigration for the
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