Agrifood – Global trends presentation
Site / company name and logo here
Presenter/s names here
This presentation has been produced with the assistance of funding provided by the Commonwealth Government through the Department of Education, Employment and Workplace Relations.
The material provided in this presentation has been produced in conjunction with our partner Energetics Pty Ltd.
© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.
© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.
Context – resource use and cost at this site (from Baseline tool)
© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.
e.g. Summary for FY 2010
Energy Cost Tonne CO2 -e
$48,135
$300,844 $2,465
$29,664
$906,400
$7,334
$5,771
$186,875
$399
$229,441
Financial Year 2010 Energy Usage, Resources Cost and GHG Emissions
Natural Gas Electricity Diesel Water
© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.
Global trends for the Agrifood sector
© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.
Ecosytem interactions
Biophysical limits
The ecosystem
Society
Technology
Encroachment on biophysical limits
Anthropogenic stressors
• Population increases
• Urbanisation increases
Water systems
Energy systems
Service provision / product
Interactionbetween water, energy and waste systems
Environmental stressors
• Climate change
• Resource use
•Land use
Wastesystems
© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.
Major trends in the Agrifood Sector
• Population growth– Pressure on agricultural land – Employment in regional areas under stress
• Environmental changes– Climate change & adaptation– Water availability and security
© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.
Major trends in the Agrifood Sector
• Import Competition– Decreasing commodity prices– Import / export regulations– Carbon protectionism
• Sustainability Compliance & Labelling– ISO 50001 Energy Management System– Carbon Disclosure Project/ Global Reporting Initiative– Other Customer requirements
© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.
Market dominance by retailers
© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.
Drivers for action by business
• Cost– Rising for energy, water, emerging for carbon
• Competitiveness– Tighter margins, ‘green’ differentiation
• Compliance– Increasing regulatory burden as Governments
seek to overcome market failures to act• Community expectation
– brand reputation• Customer
– Supply chain pressures
© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.
Redefining Business Success
• Not just financial measures• Engagement of a broader range
of stakeholders• Mutual understanding of needs• Understanding how your
business will fit into a new business paradigm
Economic
Social
Environmental
© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.
e.g. Redefining the value chain
© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.
Tim
efra
me
of t
hink
ing
Compliant
Reactive
Proactive
Innovator
Imm
edia
te
Long
-Ter
m
Sophistication of thinking about sustainability impacts
Low High
Denial
Industry development is driven by relative impacts of:• Government Policy
• Industry Innovation • Social Conscience
Organisations will develop at different speeds and early movers will create sustainable competitive advantage
Industry & organisational evolution
© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.
Australian trends, policy and legislation
© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.
Australian Energy Trends
• The cost of energy in Australia has been at a significant discount with respect to the rest of the world for the past decades. This is changing for a range of reasons including:– Water shortages has limited capacity of some large centralized
electricity generation stations • Tarong & Swanbank in QLD limited to 50% in 2007-2008
– LNG exports are causing natural gas prices to rise to world market levels
– Underinvestment in electricity networks• Significant increases in grid electricity out to 2020• Possibilities for distributed generation?
– Increasing scarcity and rising cost of petroleum– Increased renewable energy targets (MRET)
• Land use decisions• Competition by biofuel for arable land
© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.
Energy programs / initiatives
ImprovingEnergy Efficiency
ReducingGreenhouse Gas &Carbon Emissions
IncreasingRenewable Energy
EEOEnergy Efficiency Opportunity Act
Voluntary Greenhouse reduction programs
NGERNational Greenhouse & Energy Reporting Act
MRETMandatory renewable energy
targets
Voluntary Green Power
Carbon TradingCarbon Pollution Reduction Scheme
State Energy Efficiency programs e.g. VEET, ESS, EREP, Sustainability Advantage, ESAP, SESP
State renewable energy targets
© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.
Efficiency to underpin carbon abatement to 2020
Energy efficiency is forecast by the International Energy Agency to be the major source of carbon reductions out to 2020 in industrialised countries
© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.
McKinsey’s MAC analysis agrees
McKinsey’s analysis shows energy efficiency to be among the most cost effective carbon abatement measures
© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.
Australian Water Trends
• Cost increasing – across Australia– Melbourne increase by an average of 20%– Sydney Water increase by 25-34% by 2012 – Queensland – 30% increase of bulk water
• Water - yet to reflect true cost of provision• Businesses
– Water cost increasing but let’s face it - water cost insignificant– True cost
• Future trends– Move to scarcity pricing models– Diversity of water supplies and carbon prices will increase cost– Invest into infrastructure - $30 billion dollars over next ten years
© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.
Water programs / initiatives
ImprovingWater Efficiency Water Management Alternate Water Supplies
EREPEnvironment and Resource
Efficiency Plans
Catchment planningMurray-Darling Basin plans
Irrigation & water licensingextraction, storage
Water re-use / recycling
Harvesting
Water trading schemes
WSAPWater Savings Action Plan
WaterMAPWater Efficiency Plans
Sustainability AdvantageNSW voluntary program
Desalination
WEMPSWater Efficiency Management
Plans
National Water Initiative ($12 bn)
Water discharge quality e.g. EPA license requirements and/or run-off
Stormwater managementFlow attenuation, mitigation
© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.
© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.
Strategic planning
© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.
Where do you want to be?
• What is important to you?• Where do you want to be?• How does the global situation impact you?• Are you prepared?
© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.
Strategy development process
Current status Program development
External trends (environmental scanning)
Contextualising:Internal impactsExisting business plans and initiatives
Strategic GuidelinesPoliciesPlansPrograms
Risks and opportunitiesBusiness goalsDevelopment of strategic questions
Potential status
© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.
Identify business initiatives & plans
• Identify your current initiatives that your business is doing / planning that align with economic, social and environmental performance goals– List business initiatives– Map onto Venn diagram– Where do they fit?– [provides basis for understanding business approach,
defining your current approach, and starting to highlight ‘gaps’ in your systems that you may want to close
© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.
Economic
Social
Environmental
For example
Water efficiency target
TBC
EBIT target
Production volume increase
Master plan process
Parental leave policies
Recycle packaging
Automation of pH sampling of
wastewater stream
TBC
Community clean up
campaignsGreen skills
developmentTBC
© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.
Economic
Social
Environmental
© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.
Tim
efra
me
of t
hink
ing
Compliant
Reactive
Proactive
Innovator
Imm
edia
te
Long
-Ter
m
Sophistication of thinking about climate change impacts
Low High
Denial
Industry development is driven by relative impacts of:• Government Policy
• Industry Innovation • Social Conscience
Organisations will develop at different speeds and early movers will create sustainable competitive advantage
Given these plans, where are you placed on climate / carbon?
© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.
Tim
efra
me
of t
hink
ing
Compliant
Reactive
Proactive
Innovator
Imm
edia
te
Long
-Ter
m
Sophistication of thinking about climate change impacts
Low High
Denial
Industry development is driven by relative impacts of:• Government Policy
• Industry Innovation • Social Conscience
Organisations will develop at different speeds and early movers will create sustainable competitive advantage
Where do you want to be positioned in the future?
© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.
Consolidating the trends and your plans and position….
• The previous activities define the endpoints for:– Business maturity
• This defines where you want to be against your competitors– Positioning
• This defines how you want to achieve your goals
– Combining your review of trends, assessment of your plans, position and desired future positioning, you are now in a position to assess your risks and opportunities for getting there, and to develop your vision and guiding principles for your strategy development