Trends and challenges facing Australia's food processing sector
Transcript of Trends and challenges facing Australia's food processing sector
Trends and challenges facing Australia's food processing sector
Gary Dawson
CEO, Australian Food and Grocery Council
The Australian Grains Industry Conference – 31 July 2013
33.3%
66.7%
Were you able to pass through any of the increase in costs from the carbon tax to
your customers?
AFGC Carbon Tax Survey July 2013
NO
YES
Food & Beverage manufacturing sector - Turnover
Meat, meat product mfg
Dairy product mfg
Sugar and confectionary mfg
Bakery product mfg
Other food product mfg
Fruit & Vegetable processing
- $87.4bn (2010-11), down 5%
Food & Beverage manufacturing sector - Employment
Meat, meat product mfg
Dairy product mfg
Bakery product mfg
Beverage mfg
- 222,300 directly employed (2011-12), down 2.5%
Source: Competitive Alternatives / KPMG’s Guide to International Business Location Costs, KPMG (2008, 2010, 2012)
Consumer Price Index for Food
Source: AFGC, State of the Industry 2011-12
Source: AIG Performance of Manufacturing Index, April 2013
-
5,000
10,000
15,000
20,000
25,000
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12
$ m
illi
on
s
Trade Surplus Exports Imports
Imports and Exports of Substantially and Elaborately Transformed Food Products ($ 2011-2012)
- Surplus of $6.8bn in 2011-12
Key cost categories as a proportion of gross sales FY09-12
Source: AFGC / KPMG Competitiveness and Sustainable Growth Report 2013
CAGRFY09-12
(6.0)%
0.2%
(1.6)%
6.4%19.5% 20.8% 22.2% 23.4%
50.6% 48.4% 48.4% 47.9%
23.0% 22.8% 22.4% 23.1%
6.9% 8.0% 6.9% 5.7%
0%
20%
40%
60%
80%
100%
FY09 FY10 FY11 FY12
%
Trade discounts and promotional allowance Cost of Goods Sold Operating Costs EBIT
Capital expenditure split by purpose and Depreciation FY09-12
Source: AFGC / KPMG Competitiveness and Sustainable Growth Report 2013
187.3 240.5 230.3 213.9
122.9
115.4
204.9 239.9
351.7
399.2 464.3 467.2
346.3
388.9 384.5 383.6
-
50
100
150
200
250
300
350
400
450
500
FY09 FY10 FY11 FY12
$ m
illio
n
Stay in Business Cost Savings / Profit Generation / Expansion IT Depreciation
CAGRFY09-12
— 3.5%
(31.4)%
25.0%
4.5%
9.9%
Keys to competitiveness Play to our comparative advantage
Improve productivity
Brand building
Removing trade barriers
Confidence & incentives to invest
Regulatory relief
Agribusiness challenges Large scale, rural/ regional location
Trade-reliant
AFGC Agribusiness Forum Improve cost-competitiveness
− energy, infrastructure, tax
− foreign investment
Increase exports
− increase market access
− remove trade barriers
− Brand Australia
Source: ABARES, Food Demand to 2050: Opportunities for Australian agriculture
70% increase in global food demand by 2050
Representing Australia’s Food,
Beverage And Grocery
Manufacturing Industry