Boom time for Australian food and beverage exports

Australia’s food and beverage exports rose by 28% in 2014–15, aided by a falling Australian dollar and improved market access from trade agreements, but further capital investment is required.

That’s the news from The Australian Food and Grocery Council’s (AFGC) annual State of the Industry report for 2015, which also highlighted a positive year on the domestic front, with a lift in overall industry turnover and employment in food and beverages — Australia’s largest manufacturing sector.

“Food and grocery processing makes up almost one-third of Australia’s manufacturing sector and it is encouraging to see growth in both industry turnover and jobs,” said AFGC CEO Gary Dawson.

“An extra 3183 jobs were created last year to bring direct employment in the industry to 322,000, with 41% of those in rural and regional Australia.”

Dawson said growth prospects for the future are strong, reflected in surging food exports in recent years, which saw processed food and beverage exports rise almost $6 billion to $26 billion and the trade surplus almost double to $10 billion.

He attributed the export growth to a falling Australian dollar, FTAs and Australia’s reputation for safe, high-quality food.

“Australia’s food and grocery sector transforms the produce from our farms into the food and other essentials of life needed by every consumer, every day.

“As the national economy transitions away from mining-led growth, the food and grocery sector is one of the key growth sectors for the future. Value-adding to Australia’s high-quality farm produce generates jobs and growth in Australia.”

Dawson said meat exports, particularly to the USA, had been a major driver of the strong export growth in 2014–15, but growth had been recorded across a wide range of food and beverage categories from beef and dairy, to biscuits and confectionery.

However, the report highlighted an area of weakness in capital investment, which is falling at a time when future opportunities indicate the need to scale up.

“Future growth to fully capitalise on improved market access and growing demand from middle-class consumers in the emerging economies of Asia and the Middle East will require a step change in investment in the food and grocery sector,” said Dawson.

Key facts from the State of the Industry 2015 report on the food, beverage and grocery sector:

• Industry turnover $118.8 bn, up 0.9% in real terms (2013–14 data)
• Direct employment 322,900, up 3183 or 1% (2014–15)
• Industry made up of 26,551 businesses (2014–15)
• Capital Investment of $3 bn, down 9% (2013–14)
• Total international trade $61.7 bn, up 12% (2014–15)
• Labour productivity growth of 2.4% (2013–14)