Current Issues in the Australian Food Industry

The inside scoop on the Australian food industry from Australian Institute of Food Science and Technology President Jo Davey
 Current Issues in the Australian Food Industry

The Australian food industry is one of Australia’s major manufacturing industries.  According to the Australian Food and Grocery Council’s State of the Industry 2010 report, food and beverage processing, grocery and fresh produce had a turnover of $A102bn in 2007/08.  In the same year, the industry employed 289,000 people, a fall of 1.2% over the previous year.  Representing 26% of the total Australian manufacturing industry, its size is comparable to the much discussed Australian mining industry[1].

The Australian food industry has a long history of innovation, driven by its strong agricultural base and its distance from other world markets.  The invention by John Ridley and John Bull of the ‘grain stripper’ in 1843, enhanced by the ‘combine harvester’, Hugh Victor Mackay’s invention in 1882, brought important efficiencies to the grain production industry.  Eugene Nicolle and Thomas Sutcliffe Mort’s development of shipboard refrigeration in 1879 resulted in the export of meat from Australia to Great Britain[2].

Later, in the 1950’s and 1960’s, the landmark work of W. J. Scott and J. H. B. Christian explained the influence of water activity on the growth of microorganisms, which had a profound impact on global food technology and product development[3].

More recently, the industry has seen the opportunity to contribute to nutrition and global food security through the invention of CSIRO’s BarleyMax™ high soluble fibre grain, and the award winning tank-bred tuna system developed by Clean Seas Tuna, selected by Time magazine as the second best invention of 2009[4].

The Australian food industry has much to be proud of.  If offers a safe, reliable, varied, affordable and plentiful food supply to the Australian population and, through its meat, grain, dairy and wine exports, to the world.  Yet for the first time, Australia became a net importer of food and grocery products, with a trade deficit of $A1.8bn in 2009/101.  This statistic is one indication that the Australian food industry is facing significant challenges.  Some of the key challenges for the industry are discussed here.

Environmental, climate and weather challenges over the past decade have produced extreme droughts, floods and pest infestations.  Uneven and often scarce water resources are the subject of conflict and uncertainty across the community, particularly the food production industries.  It is also resulting in wide fluctuations in the supply and cost of food ingredients.  This is extremely difficult for the processed food industry to manage when supplying to a retail consumer market that expects continuous supply and stable prices of packaged goods.

The high Australian dollar, driven by high mineral commodity prices and Australia’s strong economy (resulting in relatively high interest rates) is reducing the Australian food industry’s international competitiveness and could be contributing to the reported food trade deficit.

A concentrated retail sector, together with consumer grocery price sensitivity, is seeing food price discount wars launched between the two major retailers.  Discounting of consumer staples such as bread and milk has recently been cited as the cause of financial losses by major food manufacturers[5].  At the same time, the major retailers can be seen to be supporting small, innovative food companies offering something that satisfies consumer demands for products offering health, identifiable provenance and indulgence.  The size of the retail gluten-free foods category, that far outstrips the reported level of celiac disease in Australia[6], is an example of this.

Like most other western countries, and increasingly in developing economies, high levels of diet related chronic disease such as obesity, type 2 diabetes and hypertension are now of great concern to governments and the Australian community.  After adjusting for age, around 61% of adults aged 18 years and over were either overweight or obese in 2007-08, up from 57% in 1995[7].  Statistics such as these have driven calls from government and community lobby groups for legislation related to fat, sugar and salt content of processed foods, traffic light labelling, banning of advertising of junk food to children and increased taxes on ‘bad’ foods.  The industry is also awaiting the Australian Government’s policy response to 2010’s review of food labelling law and policy.

The food industry has responded in various ways.  It has promoted the Daily Intake Guide labelling system for packaged food as a more balanced approach to nutrition labelling than traffic light labels.  It has developed the Responsible Children’s Marketing Initiative as a means of encouraging food manufacturers not to advertise unhealthy product to children[8].  Increasingly, food manufacturers are reviewing and adjusting their product formulations to assist in reducing individual nutrients of public health concern such as fat, saturated fat, salt and sugar.  This initiative is being promoted by the Australian Government’s Food and Health Dialogue with the Australian food industry[9].

 While many argue that the food industry could and should do more to reduce diet related chronic disease, the industry remains concerned that the responsibility falls too heavily on its shoulders.  These diseases are caused by complex societal changes, of which manufactured food is just one factor.  Consumer education, levels of physical activity, improved public transport, safe neighbourhoods, quality family time and understanding of food provenance all contribute to healthy food choices and healthy populations.

Attracting appropriately qualified employees to the industry has become an increasing challenge.  The growth of and wages in the mining industry are drawing potential food industry employees out of regional areas.  Of equal concern is the declining interest in science as a profession, and a perception amongst students that food science in particular is more about cooking and hospitality than a serious scientific career.

A survey by the Food Technology Association of Australia (FTAA) has shown that skills of food science and technology graduates are not aligned with industry expectations[10].  The Australian Institute of Food Science and Technology (AIFST) is responding to this problem through its development of a Continuing Professional Development program designed to build the skills of food science professionals so that they are equipped to tackle the challenges ahead.

The challenges facing the industry and their potential impact on the community have been recognised by the Australian Government, which is presently conducting a number of important policy reviews.  The primary activity is the development of a National Food Plan, which aims to “integrate food policy by looking at the whole food supply chain, to protect Australia’s food security, and to develop a strategy to maximise food production opportunities”[11].  Informing this plan are a high level National Food Policy Working Group and the Food Processing Industry Strategy Group.  Both groups are comprised of representatives from industry, R&D and government bodies.

Many of Australia’s food industry professionals are actively contributing to these reviews, with the hope and confidence that they will result in support and structural reforms that will assist the industry to flourish in the future.

[3]Technology in Australia, 1788-1988 by the Australian Academy of Technological Sciences and Engineering at

[10]The Food Technology Association of Australia (2011) Skills demand survey analysis Report, Frankston Heights, Victoria Australia

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