“Take in both the volumes of food being consumed, as well as the changing types of food,” ANZ’s Head of Food, Beverage and Agribusiness Australia expands. “It gives you an incredible firsthand perspective of both the challenge and the opportunity.”
"We sit geographically on the cusp of South East Asia. Sixty per cent of the world’s population live in our time zone.” - Hanrahan
Australian food producers continue to benefit from Asia’s growth as demand for agricultural commodities remains largely buoyant. But now the market is being urged to think beyond the farm gate and look to value adding and brand building to win a greater share of an ever-expanding prize.
Hanrahan the sector is almost certain to enjoy continued strong demand from Asia, given the region’s burgeoning middle class population. But factors such as changes in consumer preferences and bolstered competition from other exporting nations mean there is little room for complacency.
“It’s a broad opportunity with well-understood demand dynamics,” he says. “We sit geographically on the cusp of South East Asia.”
“Sixty per cent of the world’s population live in our time zone and these populations are continuing to grow rapidly and are increasing their spending power.”
ANZ estimates the current value of Australian agricultural output at $A61 billion, about three-quarters of which is exported.
“We think as a base case scenario the industry will reach $A89 billion by 2030, a 40 per cent increase on today’s level,” Hanrahan says.
“It sounds ambitious but industry output has grown 35 per cent in the last decade, so we believe it can grow by a further 40 per cent if we get the settings right.
“Under an aggressive-case scenario where productivity improvements and the impact of technology exceed our current expectations it is possible we could see industry output hit $A100 billion in this timeframe.”
One imperative is consumers need to be confident about the origin and quality of Australian food: “Australia plays well with its strong international reputation for food safety and provenance,” Hanrahan says.
“We are starting to see the difference where some people are taking advantage of the opportunity, through areas such as new technologies and enhanced marketing, while others are yet to capitalise on this.”
Among the successes Hanrahan singles out is the diverse horticulture sector – now Australia’s fourth biggest soft commodity export by value – and the cotton industry.
The latter’s efforts have resulted in an especially strong foothold in China, where it has a strong reputation for quality despite recent production challenges as a result of the drought.
“The meat industry continues to be a key Australian exporter,” according to Hanrahan. “In particular, sheep meat exporters have done a good job to get the message out about the quality of their produce in a competitive market, while our beef exports maintain a global reputation for being a premium product.”
Just like the sheer diversity of Asian cuisines and food cultures, the most appropriate business model is endlessly variable.
“Some customers have developed processing capacity offshore, some have developed in-house sales capabilities while others have formed agency relationships and are investing in these parties,” Hanrahan.
“There are no right or wrong ways to go about it.”