Why it is important to keep food manufacturing in Australia

Australia’s food industry is integral to our economy and the prosperity of our people. The sector accounts for around 20 per cent of domestic manufacturing sales and service income and enjoys a reputation both domestically and internationally as a modern, safe, reliable and sustainable producer of food.

The COVID-19 pandemic highlighted the importance of food and grocery manufacturing to all Australians. In such uncertain times, the food and grocery manufacturing sector ran factories around the clock to ensure that supermarket shelves were stocked.

Food and beverage processing is Australia’s largest manufacturing industry. Industry players are diverse in size – from multinationals producing large volume fast-moving consumer goods through to medium-sized manufacturers like Steric, right down to smaller players producing niche gourmet items.

Highly adaptable

The Australian food processing industry is highly adaptable and works to meet consumer demand for diversity, quality and value. This is partly driven by Australia’s ethnic and cultural diversity which is reflected in the food range available. Products with influences from all over the world are made for the domestic and export markets.

To meet the demand, the industry has embraced innovative manufacturing, packaging, product development and marketing efforts. The industry also acknowledges the need for quality and safety with strict safety standards regulated and enforced throughout the supply chain.

Australia has a reputation for supplying clean and natural products with low chemical residues.

Australia’s food processing sector is a particularly important part of Australia’s overall food production. It has been growing at a very healthy rate over the last decade.

As well as the demand for ethnically diverse products, the food processing industry has responded to consumer demands and trends, towards convenient, healthier, fresher, less processed foods, with minimal storage time. Companies like Steric have in-house product development teams that are constantly innovating and bringing new products to the market.

Food and grocery industry growth

According to a report from the Australian Food and Grocery Council (AFGC), Australia’s food and grocery manufacturing sector has seen a growth in value in 2020 and 2021— to approximately $133.6 billion— despite disruptions caused by the global pandemic.

However, the report noted that ongoing pressures on workforces, supply chains, and production costs still pose a challenge to securing the sector’s future as a key growth industry. 

According to the State of the Industry 2022 report, stocking up and panic buying contributed to the spike in domestic spending, with an increase of nine per cent to $99.4 billion, which offset a 17.1 per cent decrease in exports.

Government support

In a recent press briefing, Australian Prime Minister Anthony Albanese highlighted the need for more investments in domestic manufacturing to future-proof the country against potential global supply chain crises. The Prime Minister said that more funding needs to be allocated to foster onshore production and manufacturing in Australia, calling the move a matter of economic protectionism

“One of the lessons of the pandemic is that we need to be more resilient, that we need to be more self-reliant, and we need to make more things here,” Albanese said.

In October 2020, the Australian Government announced a $1.5 billion investment in its Modern Manufacturing Strategy (MMS) aimed at helping Australian manufacturers be more competitive, resilient and build scale in the global market. In the MMS the Government nominated six priority industry sectors with food and beverage amongst them.

The Australian Government says it will be a strategic investor in the MMS to drive productivity and create jobs for Australians, both now and for generations to come.

Employment in the food industry

The food and grocery industry is a significant employer of Australians. In 2019 food and grocery manufacturing employed 276,000 people with 39 per cent of these jobs in regional Australia.

According to the Australian Bureau of Statistics, there were over 9,000 food and beverage manufacturing businesses operating in Australia in June 2019, with over 8,000 of them either non-employing or small.

Unsurprisingly, despite a large number of SMEs in the sector, the majority of the revenue is generated by a small number of large companies, while SMEs account for a small proportion of the sector’s turnover and employment.

And while Australia is a large producer of food and grocery products, a substantial amount of products are imported each year, and the imports are growing despite the concerns about food security. Imports across the sector were $35.9 billion in 2019, only just below the level of exports.

Steric – investing in Australian manufacturing

As an Australian manufacturer, Steric is supportive of the local industry and continues to invest in and grow its business. Steric has a fifty-year history in Western Sydney and remains agile and can respond quickly to market needs.

To learn more about Steric visit www.steric.com.au or call 1800 008 155.