This road map focuses on growing manufacturing activities, capabilities and specialisations in the food and beverage manufacturing sector. By delivering on the vision and prioritising opportunities, Australia can help its food and beverage manufacturing sector build scale, and become more competitive and resilient. In line with the key areas of opportunity, the industry-led taskforce identified potential co-investments which could lift the ecosystem to achieve the vision over the lifespan of the Modern Manufacturing Strategy (MMS).
Key actions have been identified below in each of the growth area opportunities outlined in this road map, which will support Government and industry achieving its vision of doubling the value of Australia’s food and beverage manufacturing sector by 2030.
Smart food and beverage manufacturing for consumer-driven products
Target co-investment to support food and beverage manufacturers’ adoption of Industry 4.0 technologies, through pilots, asset replacement or upgrades.
Industry and government will work together to encourage collaboration throughout logistic networks to enable efficiencies and reduced environmental impact.
The Government will support businesses to reduce non-competitive cost pressures to allow businesses to free up capital to invest in industry-led innovation.
Industry and government will invest in capability development such as industry upskills and cross-skills; and develop strategies which are agile and adaptive to market demand.
Industry consultation identified key barriers which limit the food and beverage sector’s ability to be innovative and agile. These include non-competitive costs (such as energy usage), access to affordable testing facilities and access to capital. The taskforce also identified the importance of reducing non-competitive costs which do not contribute to business competitiveness. It was proposed that if non-competitive costs could be reduced, for example through advancing to Industry 4.0, these costs could be reinvested back into business innovation. These technologies will also help underpin innovation, for example through virtual reality and 3D printing that assist with prototyping and understanding the changes needed in production processes.
Industry consultations also highlighted that SMEs faced challenges accessing affordable facilities to test ideas and innovative new products. Making affordable, shared, end-to-end manufacturing facilities available would provide better access to knowledge, information and capital; building a firm’s ability to innovate. For example, RMIT University’s Food Research and Innovation Centre, undertakes fundamental, applied and commercial research in partnership with industry. It offers a full range of services industry can access from product innovation, develop and scale-up solutions, shelf-life testing, packaging design and testing. Other similar examples include Monash Food Innovation and CSIRO’s food manufacturing research and development pilot plants.
Innovative foods and beverages
Industry, government and research will support short and targeted research projects to encourage innovation and keep pace with changes in consumer demand.
Industry, government and research to encourage more circular economy manufacturing practices across production to lead to a sustainable sector.
Government and research to support awareness and adoption of technologies and new innovation processes that reduce risk and increase the pace of consumer led innovation.
Consumer demand for food and beverage products is changing rapidly, including with respect to health and wellness, sustainability and convenience. Taskforce and industry consultations identified research as vital to understanding consumer growth opportunities, especially for emerging sectors. For example, translational development and innovations activities could lead to quicker positive impact for the sector. These activities have a commercial focus with a shorter research timeframe, meaning the results are brought to market while there are still opportunities to reap commercial benefits. This in turn allows the sector to better deliver on what consumers want, and provide a competitive edge for emerging markets on a global scale.
An example could be adoption of circular economy principles throughout the food and beverage manufacturing process. This could include a variety of activities, including finding ways to re-use or increase the value of manufacturing by-products. Acknowledging that many organisations either have or are implementing strategies to support circular economy practices; continued incorporation across the whole sector will help manufacturers better understand how to minimise their carbon footprint and impact, and potentially turn waste streams into value-added resources and products.
Circular economy practices also include the development of sustainable packaging, which can entail research, including into the stability and safety of new sustainable packaging, as well as changes to capital equipment such as moulds and packaging lines. Assisting food and beverage manufacturers to make these changes will also support the growth of the Recycling and Clean Energy priority area of the MMS.
Food safety, origin and traceability systems to enhance quality and assurance required in domestic and international markets
Industry, government and research will support short and targeted research projects to establish new capabilities to capture, manage and analyse data throughout the manufacturing process, providing industry with new insights and opportunities to optimise their manufacturing process.
Industry and research will employ new technologies across industry that will together enable food to be traced through each stage of the value chain, providing verifiable information to consumers and manufacturers on the origin of food and its ingredients. For example, better provenance information to provide to the consumer and reduce food waste through better forecasting of sale predictions.
Government will incentivise 'industry-led' standardisation of data systems with investment to support company level IT infrastructure investment needed to implement the new standards.
Industry, government and research will share more data insights to facilitate greater digital insights.
Research is vital to keep pace with the fast moving sector and for understanding consumers, trends and growth opportunities. Stakeholder feedback suggests the research areas of traceability and digital information across the supply chain and to the consumer in particular are areas of opportunity. FIAL research reiterated this, noting digital technologies offer new opportunities to improve how food can be tracked across global supply chains.
While Australia has well established practices for tracing food origins, this generally relies on record keeping by individual firms within the value chain. This serves an important purpose in food safety. Improving record management presents additional opportunities to appeal to increasing consumer interest in product origins and other attributes such as ethical and environmentally responsible sourcing. This was supported in the Red Meat 2030 report, where provenance verification was seen as a way to maintain Australia’s competitive advantage and meet consumers’ growing demand for information about their food.
Industry stakeholders have identified that the high costs of changing labelling requirements hamper their business competitiveness. It was proposed that as customers uptake more smart technologies, there are benefits to having greater provision of digital information. For the business, this reduces costs as not all information is required on the physical pack. For the consumer, information is readily accessible at any time.
Stakeholders note there is a fragmented approach to consumer data and insights. It was suggested food and beverage manufacturers must use a data driven decision making approach. This means that when a business is undertaking innovation, it is directed by what the consumer wants, not just product improvement without an end-market in mind.
Beyond the 3 focus areas identified, there are opportunities to address the broader food and beverage ecosystem. These are fundamental to the sector achieving scale. They include:
- supporting industry to navigate food and beverage policy responsibilities across all Government levels by working to identify gaps in policy and access to existing industry support
- developing a framework to better support the manufacturing sector and improve cohesion for example through business-to-business collaboration on common opportunities across the value chain
- reviewing appropriate government settings to better support collaboration and reduce the regulatory burden for businesses
- undertaking industry-led research focusing on both domestic and international examples to identify gaps and opportunities for individual subsectors, and transferable best-practice policies for Australia.
Benchmarks of success
This road map focuses on creating transformative change in the sector to achieve growth in higher value activities. The expectation is to see the participants in the MMS growing jobs, exports and profits and expanding Australia’s food and beverage manufacturing capabilities.
To measure our progress against the vision set out in the road map, the following will be monitored over 2, 5 and 10 year periods, dependent on data availability:
- number and value of jobs
- number of businesses in the food and beverage manufacturing sector
- increase in sectoral profitability
- growth in food and beverage exports
- increase in the number of new products brought to market
- investment in food and beverage manufacturing
- business expenditure on research and development.
As the sector evolves and begins value-adding in new ways, it will develop new and innovative measures for identifying and capturing this activity. These new measures will build on traditional systems of classifying and capturing industry activities, such as Australia and New Zealand Standard Industrial Classification (ANZSIC) Codes. Measures will monitor the strength and linkages across the food and beverage manufacturing value chain.