Cost Pressures and Competition hindering Australian food industry innovation

Posted by AFN Staff Writers on 12th October 2015

Australian Insitue of Food Science and TechnologyAustralia’s food industry will be left behind the rest of the world if it does not embrace innovation, according to a key food industry leader.


Russel Rankin, the founder of Food Innovation Partners and a principal innovation advisor and government sectors for the past 30 years, says innovation in Australia’s food sector had virtually ground to a halt, and has called on new Prime Minister Malcolm Turnbull to support the industry.


“Slim margins exacerbated by the cost of materials, labour, and logistics are making it extremely difficult for companies to invest in innovation. It is crucial that businesses make investment in innovation a priority, to ensure the Australian food industry continues to thrive and survive in the competitive global industry,” said Mr Rankin.


“I hope that prime Minister Turnbull and the new Minister for Industry, innovation and Science, Christopher Pyne, continue the support shown for innovation and growth in the food and agribusiness sector. this is the sector that can deliver economic growth for our country, to replace the declining contribution from the mining sector.”


Mr Rankin will be hosting the Australian Institute of Food Science and Technology’s annual innovation masterclass – ‘Innovate or Evaporate!’ – on 20 October at the William Angliss Institute of TAFE in Melbourne.


He says while Australian businesses were well supported by comprehensive network of innovation providers including CSIRO and Universities, government agencies, and financial providers, and further boosted by the recent establishment of the Federal Government’s new Food and Agribusiness Growth Centre, more still needed to be done.


“This latest initiative, along with others, will not be enough to reverse, or even slow, Australia’s declining food innovation scorecard. We need to connect all the current resources together in a cohesive way to deliver innovation at a business level,” said Mr Rankin.


“All players should be acting as facilitators, working together to develop and commercialise innovation that is driven by deep market and consumer insights.


“It is important to remember that innovation is only a success when a product is purchased by a consumer.”


Mr Rankin has highlighted two small companies as shining examples of recent success in Australian food innovation.


AvoFresh, ready to spread avocado in tube and pots, uses high pressure processing (HPP) to provide an extended chilled shelf life to a minimally processed product without affecting flavour, colour, taste and micronutrients. It also introduced innovative packaging to deliver the product in a convenient, ready-to-use format.


five:am yoghurt has taken organic yoghurt from a health food niche to mainstream. The product was underpinned by innovative packaging, flavours, and branding, which had seen the company grow to an $80 million dollar business in just five years.


“The elements that make them both a success include a deep understanding of the consumer and market they operate in, together with innovation that provides a competitive advantage,” said Mr Rankin.


“Innovation in Australia’s food industry needs to focus on assisting manufacturers to provide food products for exports markets that deliver on food safety, provenance, shelf life, traceability, and integrity, allowing them to capture a price premium.”


Mr Rankin said innovations were likely to come in the form of packaging technologies that maximised shelf life and quality, new processing technologies such as HPP (as in the case of AvoFresh), as well as new business models that allowed value to be captured from different supply chains designs.


Mr Rankin’s AIFST masterclass will explore how food businesses can create a culture of innovation in their businesses and identify collaborations that will help them achieve the innovation required to survive in the highly competitive food industry.