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AFGC's State of the Industry Report 2014: what does it mean?

Supplier: Matthews Australasia By: Mark Dingley
10 November, 2014

The Australian Food and Grocery Council (AFGC) recently released its annual "State of the Industry Report". Here Matthews Australasia strips it back to reveal the seven key facts you need to know.

The report's sixth edition focuses on five key issues in the food and beverage manufacturing industry: turnover, employment, international trade, capital expenditure, and research and development.

As with the other reports, it draws on data mainly from the Australian Bureau of Statistics for 2013-14, and 2012-13 where necessary.

Here's what's up, what's down and what stayed the same:

Turnover is up – slightly. Only by about 0.9 per cent on the previous year, but the sum represents 28.9 per cent of Australia's total manufacturing industry turnover.

Dairy and fresh produce are on the rise. Without moving much, meat and meat processing make up the largest share (24.6 per cent) of the food and beverage sector turnover, but dairy increased its share by 9.1 per cent to a total of 14.7 per cent. Fresh produce also increased its share of the total turnover by around 12.3 per cent.

Employment is down… but not by much, and the food and beverage sector still employs more people than the mining and transport-equipment-manufacturing industries employ – combined.

We're exporting more. About 8 per cent more, dominated by meat-processing exports, with dairy also seeing a huge rise in exports. The weakening Australian dollar and growing global demand for our processed meat, seafood, and cheese and other dairy products make it all look very promising moving into the future.

We trade with the same countries. The industry's top 10 trading partners hasn't changed over the past year, but the United States is now our largest overall trading partner, taking over from Japan as our largest export market. And what they're after of ours – isn't that surprising!

Fresh produce imports from NZ are up. The USA and New Zealand are our top import partners for goods into Australia, and we're buying more from the Kiwis. Interestingly, 86.8 per cent of all fresh produce grown in Australia in 2012-13 stayed here.

Capital investment flat lined. The industry really needs some capital, but… it's flat lined, with potentially heavy consequences for manufacturers who need to keep pace with technology, machinery and processing improvements to improve their efficiencies and meet global demand. (SPCA's story is an interesting reminder on what capital investment and innovation can achieve. Check out the blog and the link.)

Read the full article, including more details, the bottom line and the decreasing employment level's impact.

Originally published on the Matthews Blog