The document discusses the Australian food industry and its participation in global value chains. It notes that Australia needs to focus on global opportunities to achieve economies of scale due to its small domestic market. Food exports contributed $30.5 billion to Australia in 2010-2011, making it a top ten exporter. However, to seize opportunities and meet its goal of increasing food exports 45% by 2025, Australia must expand industry clusters, innovate through research connections, improve supply chains, and develop a unified food brand that highlights its strengths.

1. Food – The Australian food industry and GVCs
John Lochery
17 April 2015

2. Food– The Australian foodindustryand GVCs
Presented By John Lochery
Growth Services Business Advisor – Domain Specialist – Food
Ausindustry – Business
2nd Australian Cluster Conference
Sydney, Friday the 17th April 2015.

3. AustraliaNeedstoParticipateintheGlobalValueChain
• Our domestic market is small, limiting growth for Australian
food manufacturers and producers. (Population predicted to
be 27 million by 2025 - Commonwealth of Aust 2010).
• In contrast to the domestic market, the shift in the world
economy from West to East will see approx. 1.4 billion people
emerge from poverty to middle class by 2020 (Kharas 2010).
• 85 % of this population growth will be in Asia.
• To achieve the required economies of scale and scope,
Australian Food businesses must focus on global
opportunities.

4. What’sthePrize?
• Food exports contributed $30.5 Billion to Australia in 2010 – 11,
this equates to 11.5% of Australia’s total merchandise trade.
• Our Food surplus (difference between exports and imports) for
the same period was $19.2 billion ranking Australia in the top
ten countries in the world.
• The National Food Plan white paper has set an achievable goal
for 2025 of increasing our agriculture and food related exports
by 45% (in real terms) - This would value food exports at
approx. $44.2 billion dollars.

5. StrengthsofOurFoodIndustry
• We are already a successful exporter.
• We are recognised globally as producing food with high levels
of safety and freedom from disease.
• We are well positioned geographically to meet Asia’s growing
demand for fresh and processed food products.
• We are globally recognised as being innovative and reliable
producers of high quality , clean/green, processed foods and
agricultural products.

6. ObstaclesforOurFoodIndustry
• Strong competition from other food exporting nations.
• Constraints on our natural resources – water as a prime
example.
• A fluctuating exchange rate.
• Understanding cultural requirements of overseas markets –
Just because it sells here in that pack does not mean it will
overseas.
• Competition for land use as our population grows.
• Opportunities for development of Northern Australia

7. Ensuringwe“SeizetheMoment”
• Expand and link industry clusters , co ordinated and lead by
FIAL for the food and agriculture sector and linked to the
national strategy to enable the development of an Australian
Food and Agri-business cluster and inturn brand.
• Ensure we innovate by connecting industry to education and
research developments.
• Link industry clusters to government programs such as the
Entrepreneurs Infrastructure Program (www.business,.gov.au)
• Look for supply chain improvements (may start locally then
expand). Build infrastructure to support.

8. Ensuringwe“SeizetheMoment”
• Sharing and coordination of market information between
industry networks, education and government.
• Develop an Australian Food Brand that encapsulates our
strengths and supports export development – New Zealand do
this well. (Refer Australia Unlimited – Australian Trade
Commission)
• Ensure our practises are sustainable.
• Reduce trade barriers.

9. Summary
• If we accept that Clusters are groups of inter-related industries
that drive wealth creation in a region, primarily through the
export of goods and services – then we can use the term to be
a descriptive tool for a regional economic relationship that
provides a richer more meaningful representation of local
industry drivers and regional dynamics.
• This will then link the local clusters with government and
education and through these connections, develop a vibrant
and innovative Food Sector that is well positioned to
participate successfully in Global value Chains

10. ContactDetails
John Lochery
E Mail j.lochery@latrobe.edu.au
Phone +61 449 210 515
Web Site www.business.gov.au
Web Site www.melbournesnorth.com.au

11. Thank You