Food and beverage exports feeding the world
Is the meat pie Australia’s national food? Considering the strength of our wheat and dairy sectors, the flour and butter in the pastry may be the world’s best. And the meat? Top quality beef, with the whole thing accompanied tomato sauce grown from Australian fruit.
There’s no beef about it, Australia’s global reputation punches well above its weight in the food and beverage sector.
This industry accounted for $28 billion in exports last year, according to figures released by the Australian Bureau of Agricultural and Resource Economics. And that’s just the stuff we grow. Add food and grocery manufacturing and the figure is closer to $50 billion, the Australian Food and Grocery Council (AFGC) reveals in its report State of the Industry.
“The importance of our reputation can’t be understated,” says Stuart Castricum, manager of export advisers at Austrade, specialising in the food and beverage sector. “Products such as grain and meat and dairy all enjoy a reputation for quality and reliability of service internationally.”
According to Castricum, Australia is the world’s second largest beef, sheep meat and barley exporter, the fourth largest wine, dairy and sugar exporter and the world’s fifth largest wheat exporter, which “gives you a context about our reputation as exporters as well as deliverers of food and beverage”, he says. By association, value-add products from these categories also enjoy a good reputation.
“Countries familiar with Australia regard us as being a source of high quality produce,” agrees Ian Harrison, chief executive of the Australian Made, Australian Grown (AMAG) campaign. “Our environment is recognised as clean and green, and our standards for food preparation, from growing to the production line, are recognised as being very high.”
He notes our strengths in the dairy sector, particularly in Asian markets, as well as a solid reputation for quality wine and beer.
This is good news for new exporters, who can leverage Australia’s positive reputation in this industry. And it isn’t just the quality for which we’re renowned, says Castricum, “more importantly it’s the rigour of the process behind it, the food safety aspects”.
Before would-be exporters get too excited though, Castricum recommends they consolidate their domestic business first because this “underpins their ability to launch into export in a measured way”, he says.
“They have to do their homework and need to determine the full cost to market through the supply chain. They also need to have clear and definite business practices dealing with the terms of trade and make sure their customers are clear about their ability to supply and deliver.”
Further, new exporters need to be perfectionists, especially for their first sale. “Do it right the first time when launching to market because second chances are rare,” he says. “Never promise what you can’t deliver.”
Fortunately there’s a lot of government support for food and beverage exporters at state and territory level, as well as from the Federal Government. This enables new food and beverage exporters to take advantage of trade show opportunities and industry missions.
For example, AMAG and the Federal Government for the past six years have run a number of promotional activities in the Americas, Asia and the Middle East to boost recognition for Australian product as quality product.
“We’ve even been able to go as far as providing financial support to assist our licensees to participate in some of those events,” says Harrison. “The question is whether export efforts will be assisted by being recognised as Australian. The answer is it is favourable in most marketplaces.”
More established exporters also have a task on their hands. Once you have a profile, the key is to keep it in front of the customer by getting fresh—ideas, that is. “Come up with new products and new versions of products,” Castricum suggests.
“Exporters have to work to defend their established markets and keep that relationship going. There’s always someone around the corner who wants to offer customers something else; exporters need to keep that profile and attention. New product development and innovation is crucial to keeping relevant in a changing world.”
In the less developed markets it’s all very well to leverage Australia’s reputation for quality but in the more mature markets it’s really about refining your marketing and focusing on your unique selling proposition. For fresh product exporters this could be as simple as providing fruit or vegetables to Northern Hemisphere markets in their ‘off’ season.
Truffle growers in Australia, for example, have benefited from having an alternate season as this enables gourmet restaurants in Europe to serve fresh truffles all year round. Australian native products and produce are also at a fledgling stage.
Harrison says that due to our size and higher price point we need to take up a premium niche. “We should not seek to be the lowest priced product on the shelf because we can’t be,” he says.
“While we don’t have the price point or capability to supply a market as huge as China, for example, once you seek the people who are prepared to pay for a higher quality product or produce in that market, it offers a very real opportunity for exporters.”