Growing Food & Beverage Industry In Australia

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The Growing Food & Beverage Industry

Food. Water. Those are two of human’s basic needs. 

Without sounding like your cliche elementary-grade teacher, we all know that we need food and water (or in this context, beverages) to survive.

As a result, you can expect a stable (if not constantly rising) demand for both, considering how essential they are in our daily lives.

As per various reports, Food & Beverage is the most rapidly growing industry globally. 

This is no surprise, and apart from what was mentioned earlier, the main factors contributing to this are:

(1) Rising Population

Perhaps the elephant in the room.

Australia experiences an average of 1.3% population growth each year.

The Australian population is projected to jump to 28 million by 2030.

This is definitely a good news for those operating in Food & Beverage.

(2) Online Marketing

From that finger-licking, mouth-watering Chicken Parma to that thirst-quenching Bubble Tea, you’ve definitely seen heaps of posts of foods and desserts on social media.

The internet actually (and unsurprisingly) plays an important role in boosting sales in the Food & Beverage industry, considering how often everyone spends time on the internet. 

With the constant uprising of social media, it has never been this easy to sell your products, which is another reason to be optimistic.

(3) Technological Advancements

Somewhat related to the previous point, thanks to how savvy technologies are these days, food production, distribution and (again) sales are made simple.

You can also expect more improvements due to Artificial Intelligence.

(4) Rapid Growth in Tourism 

Australia is one of the go-to countries for tourists.

With the COVID-19 pandemic thankfully ended, more and more people are flocking into the country, and regardless of their purpose of traveling, one inevitable fact is that people will look for food (and drinks). 

Culinary tourism is also becoming a thing these days and is definitely something positive for the Australian Food & Beverage Industry.

As per the Australian Government website, the Australian Food & Beverage industry is getting a boost with the release of the Food and Beverage National Manufacturing Priority road map, which is essentially a plan to pump up Food & Beverage-related activities, mainly manufacturing, over the next decade.

The road map identifies a number of opportunities for future growth:

- Smart food and beverage manufacturing for consumer-driven products

- Innovative foods and beverages; and

- Food safety, origin and traceability systems to enhance quality and assurance

For more information, please visit here.

With the Food & Beverage industry becoming more lucrative than ever, you may be keen on starting your adventure by setting up your business.

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The Future of the Food & Beverage Industry

We can safely assure you that the Food & Beverage Industry is going absolutely nowhere, unless in the distant future humans are able to survive without food and water, which sounds absolutely ridiculous!

There are, however, a couple of tweaks, mainly in terms of trend, in the Food & Beverage Industry in the recent years:

(1) Demand for Healthier and Organic Products

People nowadays are paying more attention to their health and well-being, especially after COVID-19.

There are more demands for more nutritious and organic products which, thankfully, are easy to spot in your local markets.

Meanwhile, “greener” (i.e. plant-based) products are also trending these days. This occurs as more are keen to switch to having plant-based diets, and partially due to the desire to purchase easy-to-prepare meals.

(2) Rise of “Cultured Meat”

AKA lab-grown meat.

The first breakthrough was back in late 2022, where the US Food and Drug Administration (FDA) gave the green-light for the first ever sale of cultured meat.

The motivation behind this is to decrease meat consumption, while eliminating both environmental and ethical impact of livestock farming.

(3) Cheap Eats

Well, not exactly something new.

Considering the economic uncertainties these days, people are more inclined to prepare their own meals at home or opt for takeaways rather than dining in.

This is, however, not an attack on all existing and aspiring proprietors.

What we’re simply saying is that consumers are, if not already, becoming more cost-conscious, and price is becoming a more important factor.

(4) Alcohol

Not a surprise, to be fair.

Aussies are known for their love of alcohol.

It is a must-have before and after football games.

As per latest reports, 67.6% of Australians consumes alcohol, which is a 1.3% rise from the pre-pandemic figure.

And with Australia being one of the world’s major wine producers, this definitely spells good news for all bar tenants out there.

(5) Coffee 

Again, nothing new.

One thing almost every single Australian can agree on is the fact that they need coffee before starting the day.

Our love for coffee is so strong, as if our body runs on caffeine.

Approximately 75% of Aussies drink at least a cup of coffee a day.

Coffee is becoming a staple item these days. Gotta concentrate at work? Get coffee. Planning to meet up with your mates? Meet up at your local coffee shop. Pulling an all-nighter? Guess what, coffee!

In addition, new coffee types and trends are also emerging. A good example is Bulletproof Coffee, which is claimed by many to support your digestive help, manage your blood sugar level, and helps in weight loss.

There is no reason to not expect more coffee innovations, considering how creative and smart people are these days.

Tempted to start your own Food & Beverage Business?

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Key Challenges in the Food & Beverage Industry

(1) Supply Chain Issues

Supply Chain is and will definitely be one of the key challenges faced by every party involved in the Food & Beverage Industry.

With the never-ending political tensions, extreme climate changes and economical instabilities, this challenge won’t go away anytime soon.

These have resulted in delays in supplements of essential resources, and as a result, alternative recipes and other workarounds may be required to ensure continuous production.

Technological advancement may actually come in handy in combatting this challenge.

(2) Inflation

The good ol’ classic.

As per the ABS, annual food inflation sits at 7.5% as we speak.

The frontrunners are Dairy, Bread and Cereals, and NECs, with 15.2%, 11.2% and 11%, respectively.

This comes to no surprise considering the demand and supply of the aforementioned.

With this problem not going anywhere anytime soon, this is definitely something worth considering for all Food & Beverage vendors, who should be more cautious with their pricing and spending.

(3) Skill Shortages in the Food & Beverage Industry

Food & Beverage vendors are actually struggling in terms of hiring, despite the ongoing unemployment.

As per the ABS, 51% of businesses are unable to find suitable staff to fill jobs.

This doesn’t mean that the Hospitality workforce isn’t big enough, but there isn’t enough skilled labour in the industry.

Perhaps this is why the Australian Government has opened up multiple pathways to attract international workers to fill up the shortages in the industry.

There are obviously other steps that can be taken, such as the provision of more training/onboarding for new staff, or perhaps vendors can be more lenient in their hiring process, considering skill and experience take time to be honed.

(4) Digitalisation and Automation 

Putting aside the previous point regarding skilled human labour, there is actually a foreseeable resurgence, or perhaps threat (depending on how you see it), of digital and automation technologies. 

Vendors are starting to consider replacing human labour with machineries/equipment.

Think about the last time you’ve seen robots serving food to customers in a restaurant or café. The answer is probably recently, or not long ago.

While we are definitely still in the early stages, with more significant investment, as stated by the Australian Food and Grocery Council, is required to compete with the demand for imports, we can guarantee that more vendors will be looking more into this as means of creating efficiencies and cost-cutting.

(5) Quality Control

More of an ongoing, and not upcoming, challenge in the industry.

Vendors must ensure effective quality controls, especially with climate changes and the resurgence of diseases we’ve been experiencing lately.

Effective Strategies to Grow Your Food & Beverage Business

(1) Investing in Technology

Improvise. Adapt. Overcome. 

You’ve definitely heard of this statement.

While people often take this as a joke (thanks to those memes you see on the internet), this is actually true and applicable in this context.

Technology is already well-integrated into our daily lives, becoming more and more inevitable.

Vendors need to adopt a mindset of embracing it, rather than avoiding or fearing it.

Strategies, such as staff training and integration of technology into their daily operations, can be implemented.

Employees, meanwhile, shouldn’t see this as a threat to their jobs. 

Technologies are far from perfect, and humans are still needed to ensure effective operations. 

In fact, employees should look forward to this, as it will, in a way, make their jobs easier.

(2) Effective Financial Planning

Not only applicable to Food & Beverage vendors, but to every one of you out there.

With the ongoing global economic uncertainty, effective financing, including cash and liquidity planning, should be considered to ensure long-term continuities.

(3) Adapting to Changes

Somewhat related to the first point regarding technology.

The Food & Beverage Industry is extremely volatile. 

Today consumers prefer spending on X, the next day might be something else.

Vendors also need to remember that demand is highly influenced by seasons (therefore “seasonal demands”). This is why some businesses tend to do well in certain seasons, and less on others.

We are, however, not suggesting vendors to completely restructure their businesses and services; simply understanding what is/are currently high in demand and ensuring different needs are catered for are essential to perform well.

A good starting point is to look carefully at current trends, mainly in social media, to grasp a better understanding of consumers’ point-of-view.

(4) Branding

Can’t emphasize enough how critical branding is.

Ask yourself: What is your brand? What does your business offer? What differentiates your brand from others? Why should consumers choose you over others?

There are loads of questions to be asked, but you get the idea: It’s about the identity of your business.

This is actually one of the reasons why some businesses fail. They are unable to establish a business identity, and correspondingly, failed to gain competitive advantages in the market.

Consumers have heaps of concerns, such as quality, sustainability, and ethics, and placing a strong emphasis on branding adds value to your business.

(5) Effective Customer Relationship Management (CRM)

Doing so shows that you actually care about your customers, and not only about their money.

This includes collecting customer details for marketing, loyalty programmes, promotions and offers, and many more. 

Perhaps you should consider investing in CRM systems available out there.

Tempted to start your own Food & Beverage Business?

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Sustainable Practices in the Australian Food & Beverage Industry

What is Sustainable Food?

It’s simply referring to foods that are processed in an environmentally friendly way whilst trying not to waste any natural resources. 

Ideally, the quality (or taste) of the food itself shouldn’t be compromised.

The formal definition of Sustainability itself is “avoidance of the depletion of natural resources in order to maintain an ecological balance”.

To put in simpler term, it simply translates to certain practices which ensure conservation and protection of natural resources, or environment, in general.

Fortunately, Australians are getting more conscious regarding this matter, and are practicing the following sustainable food practices:

(1) Nose to Tail

This technique refers to utilizing every (or almost all) edible parts of an animal when preparing food with the aim of, you guessed it, reducing wastes.

This isn’t actually something new in the culinary world; perhaps you’ll associate Chinese dishes when talking about this technique.

Despite the skepticism surrounding, food vendors are actually more than willing to integrate this so-called strategy into their food preparation process.

In addition, there are tons of health benefits associated with the consumption of, say intestines or even brains. They are rich sources of animal protein, multiple vitamins, zinc, iron, and even omega-3.

(2) Zero-Waste Practices

Nothing new, to be honest.

This includes using biodegradable containers for takeaways, recycling materials, and ensuring that there is absolutely no food wasted on premises.

Perhaps you can name plenty of examples who adopts the aforementioned practices? 

(3) Farm to Table

This involves vendors directly getting ingredients from local farmers or their own farms.

Doing so not only reduces carbon emissions (since less, or even no transportation will be required to deliver ingredients from long distances), but also ensures that ingredients are fresh and delicious.

This is perhaps more common in the coffee industry, where some cafés actually produce coffee beans on their own farms for coffee production. Some even went further and supplied beans to other local vendors.

To further promote sustainable practices, the Australian Food & Grocery Council (AFGC) provides some support to local vendors. 

AFGC takes the lead in identifying model sustainability practices and fostering wider industry adoption of these practices. We work with members to reduce the food and grocery manufacturing sector’s environmental footprint by fostering collaboration throughout the value chain, identifying best-practice and highlighting industry successes and opportunities.

AFGC represents members at the local, state and commonwealth levels, in the areas of strategy and policy development, driving sustainable outcomes.

There are a number of active working groups in the packaging and food waste space, which the AFGC participates in on behalf of members. This keeps government informed of member activity and requirements.

For further information, please visit here.

Tempted to start your own Food & Beverage Business?

Please visit our online form to initiate your registration.

The Influence of Multiculturalism on the Australian Food Industry

What is Australian Food?

This question has been asked by tons of people, even Australians themselves.

Based on a nationwide survey conducted by Continental in 2019, roast lamb was named as the dish which most closely represents “Australia’s National Dish”.

Other dishes that followed were fish ‘n’ chips, meat pies, barbeque prawns, and kangaroos (yes).

However, you may argue that these aforementioned dishes (apart from kangaroos perhaps) didn’t originate from Australia, and we can’t blame you.

In fact, it’s harder to tell considering how diverse the Australian food market is.

Ranging from Asian to Mediterranean, you can find numerous cuisines in Australia.

Try this: pick any busy district or street in your locality and try strolling straight for 5 minutes. We can guarantee you that you’ll find at least 5 different cuisines.

As a result, we can consider migrants as an important factor in the Australian food heritage.

Traveling Through Food

Food, or cuisine in general, tends to expose its consumers to the traditions and customs of where it originates from, and therefore people often use the term “Traveling through food”.

There will be less desire to travel; instead, people will be queueing up at their local brunch spots to “travel”.

Doing so indirectly improves cultural awareness of certain roots, which is definitely great!

Rise of Indigenous Cuisines in Australia

For some reason, Indigenous cuisine is often overlooked when talking about Australian Cuisine.

In fact, Indigenous cuisine can be considered as the fundamental block of Australian’s culture.

Late chef Jock Zonfrillo caused controversy when presenting native Australian ingredients in 2019’s edition of Masterchef as part of the so-called “Mystery Box” Challenge.

He also founded The Orana Foundation, aimed to preserve historical cooking techniques and ingredients of Indigenous Australians.

Another great example is Bundjalung chef Mark Olive, who has been “fighting to embrace Indigenous Cuisine for the past 40 years”, and was also the first Aboriginal chef to bring native cooking to ABC television in the 90s.

Without getting too political, it will definitely be great if more people decide to follow the footsteps of the aforementioned greats, and perhaps one day Indigenous cuisine can be well-integrated in the current Australian food industry.

Impact of Food Delivery Services on the Australian Food & Beverage Industry

Despite the COVID pandemic coming to an end, the number of food delivery service users are still on the rise.

As per Statista, as of May 2023, an average Australian household spends $60 a day on Food Deliveries, with Doordash being the major player/contributor in the industry, followed by Uber Eats and Menulog, respectively.

There are heaps of reasons why consumers prefer food deliveries over dining out, but the top two are:

(1) Convenience

With a couple of clicks and taps, you can literally get any food or beverages you want delivered to you.

(2) Better Access to More Vendors

Again, you can literally access any food, anywhere, anytime.

As a result, vendors will have to reshape their business operations (and luckily lots have done so) to integrate food delivery services into their daily operations. 

Some vendors actually ended up relocating their premise(s) to accommodate this trend. 

Meanwhile, there has been a rise of “Pre-Order” food vendors where, instead of establishing an actual premise, vendors operate at home, and prepare orders at home before being delivered to/picked up by customers.

Similarly, the trend of “dark kitchens”, aka vendors that make use of a kitchen facility for business purposes, instead of a traditional restaurant setting, has been gaining popularity these days.

When being integrated correctly, food delivery services can improve customer loyalty, pump up profits, reach a wider range of potential customers, and overall improve customer satisfaction.

Tempted to start your own Food & Beverage Business?

Please visit our online form to initiate your registration.