The keys to successful food export to Asia

The keys to successful food export to Asia article image

The rise in the Asian middle class presents enormous opportunities to exporters globally.

While makers of high-end lifestyle products may be some of the most obvious beneficiaries of the increasing affluence and changing tastes across Asia, the opportunities for Australian food and beverage exporters are only just being realised.

China alone has a population of over 1.3 billion and is the world’s largest consumer market for food and beverage (F&B) goods, surpassing the US in 2011.

According to a recent study conducted by The Economist, China is the second fastest growing F&B market in Asia, with an average annual growth rate of 30 per cent in the past five years, according to China’s Ministry of Commerce.

Not only is food consumption across Asia, including China, growing faster than anywhere else in the world, but these nations are also experiencing increasing exposure to Western society and its new varieties of foodstuffs.

As a result diets throughout the region are changing.

For example in South Asia, the consumption of milk and milk products is expected to increase by 125 per cent by 2030.

This presents opportunities for Australian primary food producers, in particular those involved with meat and dairy exporting.

Research undertaken by Austrade recently showed there is strong market demand in Asia for Australian suppliers of milk powders (including infant formula), UHT and pasteurised milk, cheese and butter, seafood, chilled or frozen meat, fresh fruits as well as processed foods.

Food bowl for Asia

While there is rising demand for an increased variety of food products across Asia, many countries are not equipped to actually produce the products themselves. Reasons include not having a properly skilled workforce to produce artisan products like speciality cheeses, or not actually having the farmland required to produce the quantities of livestock, fresh fruit or vegetables needed to meet local demand.

A lot has been written in the past about how Australia has a unique opportunity to become the food bowl for Asia.

The Federal Government has positioned Australia as being able to: “Build on our comparative strength in food production … to help our agriculture sector become the “Food Bowl of Asia.”

With vast tracts of fertile farming land and skilled workforces, in theory the opportunities for primary food producers in Australia to export to Asia have never been greater. However, just because there may be a growing market for foodstuffs from Australia across the Asia region, it doesn’t mean that every food producer in the country will automatically become a successful exporter overnight.

Increasing pressures

As the food industry grows and becomes more interconnected across the Asia-Pacific region, it is also becoming more competitive to the extent that some commentators are questioning how much of an advantage the recent Free Trade Agreements with Japan, China and Korea may actually be. 

Mike Steketee wrote for the ABC: “Can the free trade agreement with China help Australia realise its potential in agricultural exports? There's plenty of competition out there, and to date we haven't been keeping up.”

The reality is that Australian food producers face increasing pressures to get their products to market in Asia in a timely manner, along with ensuring that they meet regional food safety requirements. For Australian farmers and food manufacturers it is vital that they move away from manual low-tech processes across their supply chain and towards automation.

Speed matters when exporting fresh

In such a competitive consumer-driven market it is vital for Australian food producers to get the right product in the right quantity at the right time to retailers across the region. Grocery distributors and the wholesalers they work with are less tolerant of missed delivery windows or being sent incorrect products that lead to out of stock store shelves.

This can in turn lead to penalties being handed to grocery distributors for late or incomplete deliveries. Australian food producers need to get goods out of their storage facilities or warehouses and through the supply chain as quickly and accurately as possible, especially in the case of fresh produce export, so that orders are successfully completed.

To increase the productivity of a food producer’s supply chain, technologies such as voice automation should be considered to support the food product “picking” process within a distribution centre.

Voice users report productivity improvements well above 20 per cent, depending on the systems that voice replaces (paper/label systems or handheld scanning). Voice technology increases productivity by making workers more efficient as they no longer need to spend time writing manual reports or scanning a bar code or keying in data on a mobile computer.

By eliminating the need to read a display screen, a paper pick list, or a purchase order, workers obtain their next task en route to the next location, thereby reducing downtime while travelling within the facility. This offers a large increase in a business’ throughput and therefore profits.

The ability of voice systems to deliver picking accuracy in excess of 99.99% also means that the correct food orders are processed for export more often which in turn means that there are fewer returns and credits to process, resulting in a much higher level of customer satisfaction.

Traceability in a regional marketplace

Advances in the F&B industry in Asia, which will grow alongside consumer demand and government regulations, will drive the need for traceability of food products from point of harvest to point of sale.

Logistics providers who are able to offer comprehensive traceability throughout their operations will prove most attractive to advanced Asian food retailers. In order to do this, logistic providers should aim to increase capability in meeting local and international standards, through the use of technologies that facilitate real-time information such as 2D barcodes and smart labelling or RFID.

News of food safety scares, or pathogen outbreaks in Asia from imported foodstuffs can impact on not just one, but many fresh food producers, as it can take weeks to determine the precise location of the outbreak and in the meantime farmers may have to sit back and watch as millions of dollars’ worth of produce spoils as the search for the origin of the outbreak is undertaken.

Advanced barcode and RFID technologies arm Australian food producers with a range of solutions that can be used to create modern labels that detail the date, and individual planted field where an item was picked.

The availability of this kind of label that follows a product at every stage along the supply chain, offers enhanced accountability and in the case of any food safety scares places regulators in a better position to pinpoint the source of pathogen outbreaks much faster. This greatly reduces the scale of what must be recalled, saving millions of dollars in losses for farmers and lessening the stress for concerned consumers.

Exporting for success

As the food industry grows and becomes more competitive across Asia, local food producers will be presented with new opportunities and new challenges. The key question for Australian food producers is what technologies they can implement within their business that will drive efficiencies and help ensure that they get their goods to export markets as rapidly as possible.

Food producers who make an investment in modernising their businesses with technologies, such as voice solutions or barcode and RFID systems, will be much better positioned to meet regional export standards and regulations. They will also be able to get their products to market sooner which will support their opportunities to grow their bottom line.

David Rubie is Manager Industry Logistics at Dematic


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