Ambitious export hopes being realised

Cherries can fetch up to $40 a kilo in Asia. Picture: Stephen Edwards

When we started this global food forum in 2013 our vision was to double food exports.

And I’m proud to say that they have gone from $29 billion to $46 billion in just eight years.

To the point where food is now one of our top exports.

So, congratulations to our magnificent farmers, and food processors – for tirelessly keeping Australia’s food supply lines flowing with safe, quality, affordable food.

And congratulations to the government for its constancy of focus, particularly on free trade agreements.

Since 2013 we’ve seen more than 2000 new food and beverage manufacturing plants started.

And upstream, in farming and agriculture, job advertisements jumped 160 per cent, showing the whole food-growing and processing industry is surging

And thanks to the government’s enlightened accelerated depreciation provisions, we are already seeing additional investment and jobs coming into the food manufacturing sector.

The Prime Minister has met 2020’s historic global disruption by making food and beverage manufacturing one of his six focus sectors for Australia’s post-Covid manufacturing renaissance.

Food production is Australia’s biggest manufacturing sector, with a third of all manufacturing jobs, over 14,000 in food businesses.

With our total food exports going up by 60 per cent since our first Global Food Forum, I’m confident more and more countries will be looking for safe Australian food as global markets realign.

I want to mention five big trends:

●The first is e-commerce.

The internet of food, a term coined by Don Meij, will evolve even more – groceries will be more home-delivered and according to Don Meij up to 50 per cent of restaurant food will be home-delivered – so get a nice box for the unwrapping experience.

Covid has accelerated this. Woolworths’ March 2021 quarter recorded an online sales jump of 64 per cent.

Food’s e-commerce market share has doubled as people spent more of their disposable income on at-home food instead of flying overseas.

And full marks to the supermarkets who’ve done a great job introducing new consumer-friendly online shopping systems, with online grocery spend per trip double the in-store spend.

So, the internet of food is here to stay.

● The second is more value-adding, which is shorthand for food processing.

Put simply: if you sell raw wheat it gets $100 per tonne; but turn it into flour and you get $500 per tonne; make bread and you get $5000 per tonne.

Every extra step of processing from the bulk commodity form to a higher-value food product adds jobs and stimulates more manufacturing investment, which then flows into every area of Australia’s community life.

In short, the multiplier effect for food manufacturing is huge.

We need to encourage even more investment in food value-adding as we move into the next phase of Australia’s manufacturing renaissance.

● The third mega-trend is the rise of plant-based products.

And consumers are also actively seeking more plant-based packaging.

One reason for this plant-based trend is the rising concern about the impacts of food production on climate change, like cattle releasing methane gas.

Bill Gates recently said that five years ago there was “no clear path to carbon reduction in agriculture”. But technological innovations like Beyond Meat and Impossible Foods have changed that. And Bill Gates is an investor in both of them! So that tells you where things are going.

But there’s room for everyone in responding to this by taking an “all of the above” approach.

Thirty-three major traditional meat companies have taken a financial stake in a plant-based protein start-up. And it’s translating into new sales.

This will be accentuated by the ongoing African swine fever problem in China, which has produced a five million tonne animal protein deficit there. This will make all other protein, including Aussie beef and lamb, even more sought-after.

● The fourth is geopolitics.

Today, business and geopolitics have never been more intertwined. Like any good business we need to find more customers so that we are not wholly dependent on just a few.

New markets are springing up, thanks to Asia’s gigantic population.

Our magnificent farmers and food processors have shown a capacity to quickly diversify our markets, such as Japan, Korea, Malaysia, Indonesia and Singapore.

And thanks to the government (for its) constancy of focus on achieving multiple free trade agreements.

The 13 FTAs that the government has on foot have been lifeblood to our food exporters.

And of course, the Chinese market is still huge.

Our protein exports to China are up a mile since we started this forum eight years ago.

And because one of the big challenges in China is getting quality produce with secure “origin of supply” certification (in other words, not fake!), Australia’s safe, clean meat will still be highly sought after in the region.

Another of the biggest opportunities for Australian food exports is online sales of Australian added-value horticulture like cherries to Asia or anywhere, especially countries that are counter-seasonal to us.

Exporting our summer fruit to their winter – whether it be Japan or the UK – is a no-brainer, and I highly recommend we make this a constant focus.

And online could come right into the orchard.

I predict the emergence of a channel whereby an Aussie farmer gets an order on his or her iPhone, picks it off the vine, and sends it to someone’s home – direct to consumer … straight off the vine for next-day delivery. Like Tasmanian cherries.

Compared with the usual “frozen and then defrosted” fruit, our next-day fresh fruit would bring a huge competitive advantage for Australia due to our great quality and proximity to the massive China market – and indeed all of Asia.

Some say this is a pipe dream, but that’s what they said about online food retail.

In fact, some Australian summer fruit exports to Asia command a 41 per cent price premium compared with all other markets.

And cherries can fetch $40 a kilo – there are plenty of Asian customers who will pay this.

This whole idea came from Angus Taylor, whose brilliant paper on food exports was a forerunner to this very forum.

Eight years on we’ve arrived at the future … so it’s now at our fingertips, all part of the digital revolution.

● The fifth is the demand for sustainable and environment­ally friendly food supplies.

Many food buyers now want to know their products are produced responsibly.

And the fastest-growing group of consumers is millennials and Gen-Zs who have a big focus on the environment.

For example, did you know that 57 per cent of millennials actively search out products and companies that use only plant-based packaging?

As you can see, my five trends are intertwined with each other: digitisation helps value-adding, e-commerce leverages trade opportunities, sustainability builds customer trust, and so on.

I hope these ideas will inspire our conversations as we continue to grow this amazing industry for Australia.

Anthony Pratt is executive chairman of Visy.