Food and grocery industry marches past disaster

The Australian Food and Grocery Council has released its 2019–20 State of the Industry report, wherein it, as the name implies, outlines the state of the food and grocery industry. Obviously it is a field that met with some serious difficulties, facing the COVID-19 pandemic right on the back of significantly damaging bushfires. The report outlines these difficulties but largely presents a cautiously positive outlook.

During the 2019–20 reporting period, the value of Australia’s food and grocery manufacturing industry has grown by 4% to almost $133 billion. This positive result has been thanks to consumer purchasing increasing due to lockdowns and stay-at-home legislation. Moreover, exports increased by a healthy 7.9%, with China representing a large market for pharmaceuticals.

AFGC CEO Tanya Barden said the increase in food and grocery exports — up 7.9% on the previous financial year to $41.3 billion — showed the importance of export markets to local manufacturers.

“In a period affected by drought, bushfires and the onset of the COVID-19 pandemic, Australian food and grocery manufacturers demonstrated their resilience and resourcefulness by growing the value of this vitally important industry, particularly in overseas markets,” Barden said.

Some unfortunate outcomes of the COVID-19 pandemic are the increased costs that were brought about by COVID-safe requirements and logistical supply chain changes resulting in increased costs to retailers. Additionally and unsurprisingly, consumers were unable to purchase foods from restaurants, which led to decreased sales.

“These cost increases follow a decade where costs have grown at double the rate of wholesale prices and there is a need for the industry to recoup costs going forward to maintain viable operations,” Barden said.

The key findings of the report are:

• A 7.9% increase in the value of exports from the food and grocery manufacturing industry to $41.3 billion.
• A 12.1% increase in the value of imports to $39.9 billion.
• A slight increase in food and grocery’s share of total Australian manufacturing, up 0.4% to 32%.
• A slight decline (0.2%) in total industry employment to 270,801 people.

Image credit: ©stock.adobe.com/au/Monkey Business