Opportunities and issues for Australasian agribusinesses ...€¦ · Opportunities and issues for...

Opportunities and issues for Australasian

agribusinesses

PIX/AMC Conference 2016

Michael RogersManager

Agribusiness Forum

Australian Food and Grocery Council

- $119 billion dollar sector

- 322,000 jobs

- $30 billion in exports

- $32 billion value-add

- 26,550 businesses

- $$11

STATE OF THE INDUSTRY 2015

• Up 0.9% to $119bn

• Food and Beverage $97.4bn (up 2.8%)

• Grocery $15.7bn (down 5.6%)

• Fresh $5.7bn(down 11%)

INDUSTRY TURNOVER

Food and Beverage Sector - Turnover

Australian Industry Group Performance of Manufacturing Index

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Food manufacturing bucks the trend

Profitability of Australian suppliers falling behind global peers

EBIT margin comparison (FY10-13)

Source: KPMG Competitiveness and Sustainable Growth 2014

Strong export growth in food & beverage

Strong export growth in food & beverage

Source: AFGC EY State of the Industry 2015

Free Trade Agreements matter

Challenges for Agribusiness

‘From farm to retail – how food prices are determined in Australia’ (RIRDC) confirms the challenges:

“In response to food shopper sentiment , there has been increased price

competition between major grocery chains over that period to be seen as

providing best value prices on food and groceries”. (page 6)

and

“With rising operating, ingredient and labour costs, the static retail pricing

environment for staple food lines has created significant cost pressure along

many food value chains, most significantly on the performance of food

manufacturers and marketers”.

Reshaping Agribusiness

Major Consumer Trends

Health and Wellbeing Authentic Premium

Indulgence Natural Convenient

Innovation – Premiumisation

Source: ECRA Presentation 2015, Bain & Co

Even on Traditional Commodities

$0.30 per 100G $1.20 per 100G

Source: Coles Website 18/04/2016

Summary

F & G SECTOR

Growth prospects• Export• Online

“Dining Boom”• Not just a commodity

boom• Value add

CUSTOMER

Innovation• Differentiation• Convenience• Premium

Value• Be lowest cost• Scale

Thank you.