Agricultural Inputs, Food and Beverage IndustryGerry McGookin

30 May 2014

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Overview

1. The Food and Beverage Industry and FIAL

2. Industry engagement with FIAL

3. Live examples

4. Lessons learnt and next steps

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Australian Food & Beverage Facts

1. Australia’s largest manufacturing sector at 23.5% of manufacturing and contributing $24B (2013) to the economy

2. Employs > 200 000 in manufacturing with significantly more when agriculture is included

3. 13000 manufacturing companies, mostly small – medium companies (SME)

4. High business churn (2011-2012 Food)• 1794 entries• 1554 exits

5. Government objective to double manufacturing by 2050

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Agricultural Inputs, Food and Beverage Industry

Federal politicians

Federal Bureaucrat

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State politician

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State Bureaucrat

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National marketRetailers & others

Industry associationsRetailers & others

T&L

Industry associations

T&L

Industry associations: Producers

Producers

Manufacturers

Industry associations Manufacturers

T&L

International marketsRetailers & others

T&L

T&L

Industry internal capability to deliver

Suppliers to manufacturers/producers/retailersT&L Transport and logistics

SMEsMNEs

Networks

Research & Development

(Academia, research institutes)

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Some Dynamics Shaping the Industry• Wealth of intellectual capital and resources which are not being

fully utilised to deliver maximum return for the industry

• Collaboration is key to bridging the geographical dispersion of the industry

• Consumer desires/needs/wants are evolving rapidly and products/services need to keep up

• Focus on incremental innovation (safer and less costly) and not new-to-the world innovations

• Disconnect and lack of cooperation between researchers, education institutes, industry and other support services which restricts their innovative capacity / market opportunities

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What do we do - What business are we in?

F I A LClusters Groups

Partnerships

Facilitating business and cultural change across the whole of Australia’s agriculture, food and beverage industry to become more competitive by

releasing its capacity for transformative change.

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Behaviours to Achieve a Different Outcome

• Communicative and sharing – of information and knowledge• Optimistic, energetic and passionate - about the future of the

industry• Consultative – to enhance and support the skills in the industry• Outcome focused – for industry success• Accountability – to each other and the industry• Integrative and transparent – to establish an environment of

trust and collaboration• Encouragement – of active participation and contribution

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Does the food and beverage industry have an appetite for such an approach to business?

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Networks Across Australia and the world

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Framing a new approach

Entrepreneurs and inventors are no smarter, no more courageous, tenacious, or rebellious than the rest of us – they are simply better connected(Andres Hardadon – How breakthroughs happen – the surprising truth about how companies innovate. Harvard Business School Press 2003)

Key business leaders can increase profitability through increasing connections but increased productivity maximises and then declines with increasing numbers of connections. (Hargraves Institute)

The same is true for businesses

Presentation title | Presenter name

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Goals for a New Business Approach

1. Systems and an approach for innovation for success today and tomorrow – The Australian F&B industry has dynamic and widely adopted processes that

supports and delivers innovation– Businesses in the F&B sector are willing to experience, know how to experiment

and take up emerging innovations and information appropriate for their planned needs to shape their business for success

2. The capacity and capability for performance today and tomorrow– Stakeholders in the Australian F&B industry have the self-confidence, the right

skills and capabilities to apply to both technical challenges and new opportunities

3. F&B industry operates at a new dimension, setting new global benchmarks– The industry sees the world through different lenses and there is a fundamental

shift in the way they approach challenges, markets and investment– Value is no longer linear and fragmented by competitive perceptions but a

network of connections and value

Presentation title | Presenter name

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Progress to date – some examples

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Project- SME Solution Centre

Technical services and technology access and capability, coupled with technical or business training to address a technical challenge or innovation to provide commercialise outcomes for SMEs• One size doesn’t fit all but combined options and capabilities give wider

opportunity for engagement and support• Geographic location has enhanced reach and influence to engagement • Currently 10 projects in consideration or progress from Tasmania to

Cairns covering new horticultural crops to development of new processing technology

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Finger Lime – Caviar of Citrus Fruits

www.wildfingerlime.com

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Project – Collaborative Ring Workshop®

Using a peer learning format where a group of companies share challenges and solutions

• Pilot workshops have been run in several Australian cities where companies were asked to share 2 challenges each with peers from industry, with at least one challenge being export related• For every challenge, there were

2.5 - 4 solutions generated by peers>$20m in potential savings and/or new revenues

• Next steps are ongoing connectivity to continue business support and develop local clusters

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Innovation Catalyst Program®FIAL Food Futures – A Catalyst ApproachTested with 15 Food companies – delivered >$15M in value

Increases the success by empowering businesses through sharing information and building capability over a 6 month duration

• Understanding current performance and identify where to focus to:• Develop people• Build new capabilities for the future• Access new information and contacts

FIAL is supporting:12 ClustersCluster – 20+ companies

15 scholarships in each state for SMEs 5 companies recruited from large companies

Open to all companies in the Australian Food & Beverage sector

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Vital – Allergen Calculator

http://allergenbureau.net/

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Lessons Learnt

• Multiple solutions are needed to support the range of opportunities

• New ventures can create strange bedfellows that need time to learn and work smoothly together

• Start working together assuming positive intent and mutual benefit

• Key leaders are always needed but can’t be the only drivers• While its not always equal in capacity, everyone brings benefits

and capabilities that are needed by the group

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Next Steps

• Form broader, more virtual clusters of practitioners that share learnings and benefits

• Continue to foster the connections from the Collaborative Rings and catalyst clusters

• Complete a base line survey on industry reward for thought change in collaborations and clusters

• Develop additional options for connection and champion cluster initiators where practical

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FIAL’s Vision

Working in 2023: Australia’s food and beverage industry collaborating to drive growth and profitability across the entire value chain.

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w www.fial.com.au

Thank you