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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
cont
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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.
